HAINAN RUBBER GROUP(SH:601118) Guoxin Securities·2026-01-25 08:31Investment Rating - The report maintains an "Outperform" rating for Hainan Rubber, indicating a positive outlook for the company in the context of the natural rubber industry [3][4]. Core Insights - Natural rubber has a complex framework influenced by its agricultural and industrial attributes, with short-term price movements expected to be driven by industrial factors [1][12]. - The long-term price cycle of natural rubber is approximately 20 years, primarily determined by the age of rubber trees entering their productive phase [2][37]. - The report anticipates that the price of natural rubber will be difficult to decrease after 2026 due to capacity constraints and rising synthetic rubber prices [2][43]. Summary by Sections Natural Rubber Attributes - Natural rubber is produced from rubber trees and is subject to long-term adjustment delays, making it sensitive to weather disturbances [12][18]. - Approximately 70% of natural rubber is used in tire production, linking its demand closely to the automotive industry [18][20]. Price Outlook for 2026 - The report forecasts that synthetic rubber price increases will support natural rubber demand in the short term, while long-term supply constraints will lead to price stability [2][43]. - The price of synthetic rubber has shown a strong correlation with natural rubber prices, influenced by supply-side factors such as production cuts and geopolitical tensions [24][25][44]. Supply and Demand Dynamics - The report highlights that major producing countries like Thailand and Indonesia are facing production challenges, leading to a projected slight increase in global natural rubber production in 2025 [48][49]. - The long-term supply outlook indicates a reduction in global natural rubber supply over the next decade due to aging trees and declining planting areas [62][63]. Investment Recommendations - Hainan Rubber is recommended as a core investment due to its position as a leading player in the natural rubber industry, benefiting from both rubber and non-rubber business segments [3][4][36]. - The projected net profit for Hainan Rubber is estimated at 100 million, 240 million, and 450 million yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.02, 0.06, and 0.11 yuan [3][4].