SAILUN GROUP(SH:601058) Donghai Securities·2024-06-05 03:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook based on its overseas capacity expansion and brand strength supported by high R&D investment [7]. Core Insights - The company is recognized as a new leader among domestic tire manufacturers, with continuous capacity expansion driving operational performance. In 2023, the company achieved a revenue of 26 billion yuan and a net profit of 3.1 billion yuan, establishing itself as a leading domestic tire enterprise [9][25]. - The company has established a global presence with production bases in Vietnam and Cambodia, contributing over 60% of its profits. Plans for new factories in Indonesia and Mexico are underway, enhancing its ability to meet market demands and reduce transportation costs [7][9]. - The company has demonstrated excellent management capabilities, with profit margins comparable to international leaders. Its gross margin exceeded 27% in 2023, and it maintained a strong cash flow to support capital expenditures [30][33]. Summary by Sections 1. Domestic Tire Industry Leader - The company is the first domestic tire manufacturer to establish overseas factories, with significant production capabilities in both domestic and international markets. It has a total production capacity of 13.8 million all-steel tires and 56 million semi-steel tires annually [9][23]. - The company has a strong focus on R&D, leading to innovative products like the "Liquid Gold" tire, which addresses key performance challenges in the industry [10][18]. 2. Industry Outlook - The global tire market is expected to grow steadily, with a projected compound annual growth rate of approximately 2.73% until 2026. The company's market share is anticipated to increase as domestic tire manufacturers capitalize on the growth of the new energy vehicle industry [9][36]. - The domestic market is seeing a concentration of leading tire manufacturers, with a clear trend towards domestic substitution in the tire supply chain [9][41]. 3. High-Intensity R&D and Product Development - The company is actively collaborating with research institutions to enhance its product offerings, particularly in high-performance tires. The "Liquid Gold" tire has shown superior performance metrics in various evaluations [10][14]. - The company has successfully developed large non-road tires, breaking through overseas technology monopolies and enhancing its competitive edge in the market [10][14]. 4. Global Expansion Strategy - The company is accelerating its globalization strategy, with plans to expand its production footprint in key markets. This includes establishing new factories in Indonesia and Mexico, which will allow for better alignment with consumer markets and improved logistics [7][9]. - The overseas factories are expected to significantly contribute to the company's revenue and profit margins, with a focus on maintaining high-quality earnings from international operations [30][29].