GTC(SZ:000589) Huachuang Securities·2025-04-30 06:14Investment Rating - The report maintains a "Strong Buy" rating for Guizhou Tire (000589) with a target price of 5.20 CNY, compared to the current price of 4.36 CNY [3][7]. Core Views - The company achieved steady growth in production and sales, focusing on structural improvements and actively advancing the Vietnam Phase III project [2][7]. - In 2024, the company reported a revenue of 10.691 billion CNY, a year-on-year increase of 11.35%, while the net profit attributable to shareholders decreased by 26.08% to 615 million CNY [7][8]. - The company plans to produce and sell 10.45 million and 10.35 million tires in 2025, respectively, representing growth of 8.7% and 7.8% compared to 2024 [7][8]. Financial Performance - In Q4 2024, the company achieved a revenue of 2.848 billion CNY, with a year-on-year increase of 11.06% and a quarter-on-quarter increase of 6.72% [7]. - The company’s tire production and sales reached 9.611 million and 9.602 million units in 2024, with year-on-year increases of 7.4% and 11.8% respectively [7]. - The average price of tire products in 2024 was 1,113.4 CNY per unit, showing a slight decrease of 0.4% year-on-year, indicating stable pricing [7]. Vietnam Operations - The Vietnam operations saw significant growth, with production and sales of 2.1163 million and 2.0601 million tires, respectively, marking increases of 65.3% and 64.0% year-on-year [7]. - The revenue from the Vietnam operations was 1.789 billion CNY, a year-on-year increase of 45.7%, with a net profit of 232 million CNY, down 3.2% year-on-year [7]. Profitability Metrics - The company reported a gross margin of 17.94% and a net profit margin of 5.81% for 2024, both showing declines compared to the previous year due to rising raw material costs [7]. - In Q1 2025, the gross margin and net profit margin were 14.19% and 2.65%, respectively, reflecting a year-on-year decline primarily due to increased raw material prices [7]. Future Outlook - The company is optimistic about the domestic economic foundation and expects a recovery in the commercial vehicle tire market, which will support its growth [7]. - The report adjusts the net profit forecasts for 2025 and 2026 to 618 million CNY and 806 million CNY, respectively, with a new forecast for 2027 at 1.024 billion CNY [7][8].