SAILUN GROUP(SH:601058) SINOLINK SECURITIES·2025-09-17 10:27Investment Rating - The report indicates a stable overall demand in the tire industry, with a stronger support in the semi-steel replacement market, and suggests that leading companies with overseas production capacity are likely to see continued revenue growth [4]. Core Viewpoints - The global tire market demand is expected to grow by 2% year-on-year in the first half of 2025, reaching 918 million units, with semi-steel tires growing by 2% to 812 million units and full steel tires increasing by 1% to 106 million units [1][12]. - China's tire export growth is slowing, with passenger car tire exports remaining flat at 172 million units and truck tire exports increasing by 2% to 63 million units in the first half of 2025 [1][27]. - The U.S. market shows strong import demand, with passenger car tire imports increasing by 3% to 84.91 million units and truck tire imports rising by 12% to 32.65 million units in the first half of 2025 [1][45]. Summary by Sections Industry Review: Demand Support and Slowing Export Growth - Global tire demand is slightly increasing, with the semi-steel replacement market showing stronger support [12]. - China's passenger car tire exports are stable, while truck tire exports are growing [27]. - The U.S. continues to rely heavily on tire imports, with significant contributions from Southeast Asian countries [45]. Sector Analysis: Revenue Growth and Profitability Decline - The tire sector achieved total revenue of 55.6 billion yuan in the first half of 2025, a 10% increase year-on-year, but net profit fell by 30% to 4 billion yuan [2][61]. - The overall sales gross margin decreased by 5.2 percentage points to 18.4%, and the net profit margin declined by 4.1 percentage points to 7.5% [2][65]. Company Performance: Notable Divergence in Results - Leading domestic tire companies are expected to continue increasing their market share, with SaiLun Tire's revenue growing by 16% to 17.6 billion yuan, despite a 14.9% decline in net profit [3]. - Companies with overseas production bases are showing stronger operational resilience, while many foreign tire companies are announcing factory closures and production cuts [3][4]. Globalization of Leading Tire Companies - Leading tire companies are expanding their global presence, with new production bases in Indonesia and Mexico, and ongoing projects in Egypt and Serbia [3][4]. - The report highlights that domestic tire companies are seizing opportunities to capture global market share amid the closure of foreign competitors [4]. Future Outlook and Investment Recommendations - The report anticipates a recovery in profitability as tariff impacts are gradually absorbed and raw material prices decline [4]. - The potential for price increases in the EU market due to anti-dumping investigations is noted, which could benefit companies with flexible order management [4].