Core Insights - The global tire industry is facing significant challenges in 2025, with major companies reporting declines in performance due to weak end-market demand and ongoing cost pressures [1] - Several international tire giants, including Michelin, Bridgestone, and Goodyear, have reported net losses, while many Chinese tire companies anticipate profit declines of up to 80% [1][2] - The industry is undergoing a deep adjustment phase, with structural changes becoming a common strategy among large tire manufacturers [4] Financial Performance - Michelin reported a revenue of €13 billion, a year-on-year increase of 3.4%, but a net profit decline of 27.9% to €840 million [2] - Bridgestone's revenue was $14.3 billion, down 2.8%, with a net profit decrease of 42% to $776.4 million [2] - Goodyear's revenue fell to $8.7 billion, a decrease of 4.47%, resulting in an adjusted net loss of $59 million [2] - Continental's tire business generated $7.6 billion in revenue, a 1% increase, but net profit dropped by 3.1% to $971 million [2] - Pirelli achieved a revenue of €3.499 billion, with a 4.4% increase in sales and a net profit growth of 3.53% [2] Market Pressures - The tire industry is facing three main pressures: rising raw material costs, particularly natural and synthetic rubber, and increased energy costs for European manufacturers, which now account for over 20% of total production costs [2][3] Competitive Landscape - Chinese tire companies, such as Zhongce, Sailun, Linglong, and Senqilin, are intensifying price competition in the market due to their cost advantages and flexible channel strategies [3] - The industry is witnessing a shift from scale expansion to value creation and sustainable development, with a focus on high-value segments and supply chain optimization [9][11] Strategic Adjustments - Major tire companies are implementing structural adjustments, such as Bridgestone closing its long-operating European factories and Goodyear divesting non-core assets to optimize their balance sheets [4] - Kumho and Pirelli have managed to achieve growth by focusing on high-value segments, with Kumho's sales reaching a record high of 1.2213 trillion KRW in Q2 2025, reflecting a 7.9% year-on-year increase [5][6] Growth Strategies - Kumho's growth is driven by global expansion, high-end product strategies, and green manufacturing initiatives, with significant sales increases in Europe and North America [6][7] - Pirelli focuses on the ultra-high-performance tire market, which constitutes 82% of its business, maintaining an EBITDA margin of 18% [7]

Financial Performance - In the first half of 2025, the company achieved a revenue of 397.51 million yuan, representing a year-on-year increase of 244.67% [2] - The cost of goods sold was 284.75 million yuan, up 151.60% year-on-year [2] - The net profit attributable to shareholders was 72.89 million yuan [2] Product and Market Strategy - The company is shifting its product focus from low-margin mobile products to high-margin products such as handheld devices, tablets, laptops, and automotive displays [3] - The current capacity utilization rate is around 50%, with a total monthly production capacity exceeding 7 million units across two factories [4] - The company aims to expand its international presence and attract more global top-tier clients [4] Contribution of Nintendo Switch 2 - The overseas revenue reached 275 million yuan in the first half of 2025, a staggering year-on-year growth of 1669.71%, largely driven by the Nintendo Switch 2 [3] - The gross margin for the main products in the first half of 2025 was 28.31%, with potential for future improvement [5][6] - The Nintendo Switch 2 has sold over 5.82 million units by the end of June 2025, setting a record for the fastest sales in Nintendo's history [7] Competitive Position - The company maintains a strong position as the sole supplier of backlight modules for the Nintendo Switch 2, supported by technological advantages and cost competitiveness [8] - The proprietary compression molding technology has reduced production costs by 30%, enhancing competitive strength [8] Future Outlook - Future gross margin growth will depend on order scale effects and optimization of revenue structure [6] - The company will continue to monitor the impact of the Nintendo Switch 2 on its overall financial performance, with detailed results to be disclosed in future reports [7]