Linglong Tyre(SH:601966) Guolian Securities·2024-08-27 09:30Investment Rating - The investment rating for the company is upgraded to "Buy" [6][9]. Core Views - The company achieved a revenue of 10.38 billion yuan in the first half of 2024, representing a year-on-year growth of 12%, and a net profit attributable to shareholders of 930 million yuan, up 65% year-on-year [9]. - The significant increase in performance is primarily driven by strong overseas demand, with tire production and sales reaching 43.39 million and 39.91 million units respectively, marking year-on-year increases of 19% and 11% [9]. - The company has made breakthroughs in the matching sector, which is expected to boost replacement market demand in the future [9]. - The Serbian factory's first phase for truck and passenger car tires has entered the capacity release stage, which is anticipated to become a new growth engine for the company's performance [9]. Financial Performance - In Q2 2024, the company reported a revenue of 5.34 billion yuan, a year-on-year increase of 10% and a quarter-on-quarter increase of 6%, with a net profit of 480 million yuan, up 39% year-on-year and 10% quarter-on-quarter [9]. - The company’s cost control capabilities have improved, with a period expense ratio of 10.83% in the first half of 2024, down 0.54 percentage points from the second half of 2023 [9]. - The projected revenues for 2024-2026 are 24.7 billion, 28 billion, and 31.8 billion yuan respectively, with year-on-year growth rates of 22%, 13%, and 14% [9][10]. Market Position and Strategy - The company is committed to a global strategy, currently operating five production bases in China and two overseas factories in Thailand and Serbia, with plans for further expansion [9]. - The company has secured new projects in the domestic and overseas matching sectors, including partnerships with major brands such as BYD and Volkswagen [9]. - The company ranks among the top in the new energy vehicle tire matching sector, which is expected to drive replacement market demand as the ownership of new energy vehicles increases [9].