GTC(000589) SINOLINK SECURITIES·2024-10-30 12:17Investment Rating - The report maintains a "Buy" rating for Guizhou Tyre [1][2] Core Views - The company reported a total revenue of 7.84 billion RMB for the first three quarters of 2024, an increase of 11.45% year-on-year, while the net profit attributable to shareholders decreased by 10.8% to 560 million RMB [1] - The performance of the all-steel tire segment is under pressure due to rising raw material prices and weak demand from infrastructure and real estate sectors, leading to a decline in profitability [1][2] - The company is advancing its semi-steel tire project in Vietnam, aiming for a production capacity of 6 million units annually, which is expected to optimize its product layout [1] Summary by Sections Performance Analysis - In Q3 2024, the company achieved a revenue of 2.67 billion RMB, a 2.8% increase year-on-year, but a 2.4% decrease quarter-on-quarter. The net profit for the quarter was 134 million RMB, down 53.6% year-on-year and 39% quarter-on-quarter [1] - The disparity in operational rates between semi-steel and all-steel tires is notable, with semi-steel tires maintaining an operational rate of nearly 80% since March, while all-steel tires dropped below 60% since May [1] Profit Forecast and Valuation - The company is projected to have net profits of 700 million RMB, 805 million RMB, and 973 million RMB for 2024, 2025, and 2026 respectively, reflecting downward adjustments of 28%, 27%, and 23% from previous estimates [2] - The current market capitalization corresponds to PE ratios of 11.39, 9.91, and 8.2 for the years 2024, 2025, and 2026 respectively [2] Business Outlook - The company is positioned as a leading player in the commercial vehicle tire market in China, with a global multi-base production layout that is expected to support steady growth in performance as production ramps up [2]