SAILUN GROUP(SH:601058) Changjiang Securities·2025-08-22 04:42Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Views - The company is expected to achieve a net profit of approximately 1.83 billion yuan in the first half of 2025, a decrease of about 320 million yuan or around 15% year-on-year. The non-recurring net profit is projected to be around 1.81 billion yuan, down by approximately 240 million yuan or 12% year-on-year. For Q2 2025, the estimated net profit is around 790 million yuan, reflecting a year-on-year decline of 29.2% and a quarter-on-quarter decline of 23.8% [2][6]. - The company is a leading domestic tire manufacturer with significant advantages in integrated production, research, and development, and its technology and quality are globally recognized. The ongoing expansion of domestic and international production capacity, coupled with strong tariff advantages, positions the company to enhance its brand strength and drive continuous growth in performance and brand recognition [2][11]. Summary by Sections Performance Overview - The company's performance in the first half of 2025 is under pressure, primarily due to international trade barriers and rising raw material costs. The additional 25% tariff on tire exports to the U.S. has impacted gross margins, while the costs of key raw materials such as natural rubber and synthetic rubber have increased [11]. - The company plans to optimize its overseas capacity layout and promote high-value-added products to mitigate external impacts. With the normalization of U.S.-China tariffs and a potential decrease in raw material prices, profit margins are expected to recover [11]. International Expansion - The company announced plans to invest in a new production facility in Egypt, with an annual capacity of 3.6 million radial tires, including 3 million semi-steel tires and 600,000 all-steel tires. The total investment is approximately 290 million USD (about 2.09 billion yuan), with expected annual revenue of around 190 million USD and net profit of approximately 34.77 million USD [11]. - The strategic location of Egypt, being at the crossroads of Asia, Africa, and Europe, allows the company to tap into the growing tire market in Africa, which is the third-largest automotive market on the continent [11]. Product Innovation - The company's self-developed "Liquid Gold" tires have received international recognition for their superior performance, addressing the challenges of rolling resistance, wet slip resistance, and wear resistance. According to TÜV Rheinland, the carbon emissions of these tires are significantly lower than those of conventional tires, indicating a large potential market [11]. Capacity Expansion - The company is actively expanding its global production capacity, with ongoing projects in Vietnam, Cambodia, Mexico, and Indonesia. By the end of 2024, the company plans to have a total production capacity of 27.65 million all-steel tires, 106 million semi-steel tires, and 44,700 tons of non-road tires [11]. - The continuous expansion of domestic and international production capacity is expected to drive revenue and profit growth [11]. Financial Projections - The projected net profits for the company from 2025 to 2027 are 4.15 billion yuan, 5.23 billion yuan, and 6.24 billion yuan, respectively [11].