Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company experienced pressure on profitability in Q2 2025 due to trade disruptions and high raw material costs, with a net profit decline of 14.90% year-on-year [7] - Despite challenges, the company achieved significant growth in overseas markets, with tire production increasing by 14.66% and sales by 13.32% in H1 2025 [7] - The company is enhancing its international brand influence through increased R&D investment and innovative product offerings [7] - The construction of overseas production bases is progressing well, which is expected to improve the company's global supply chain responsiveness [7] - Earnings per share (EPS) forecasts for 2025-2027 are projected at 1.26, 1.46, and 1.68 CNY, respectively, with corresponding price-to-earnings (PE) ratios of 11.42x, 9.80x, and 8.55x [7] Summary by Sections Financial Performance - In H1 2025, the company reported revenue of 17.587 billion CNY, a year-on-year increase of 16.05%, while net profit was 1.831 billion CNY, down 14.90% [7] - Q2 2025 revenue reached 9.175 billion CNY, up 16.76%, but net profit fell to 792 million CNY, a decrease of 29.11% [7] Production and Sales - The company produced 40.6 million tires in H1 2025, marking a 14.66% increase, and sold 39.14 million tires, up 13.32% [7] - Overseas revenue reached 13.413 billion CNY, growing 18.72% year-on-year, with the Cambodian subsidiary showing a remarkable 70.44% increase [7] Research and Development - R&D expenses in H1 2025 were 537 million CNY, a 14.67% increase, focusing on high-end, intelligent, and green product innovations [7] International Expansion - The company is advancing its overseas production projects in Indonesia and Mexico, with plans for new bases in Egypt and Shenyang [7] - The planned production capacity includes 31.55 million all-steel radial tires and 10.9 million semi-steel radial tires annually [7]

Core Viewpoint - The company aims to create sustainable value for shareholders through high-quality development and enhancing shareholder returns, as part of its "Quality Improvement, Efficiency Enhancement, and Return to Shareholders" action plan for 2025 [1] Group 1: Global Expansion and Production Capacity - In the first half of 2025, the company achieved record highs in tire production, sales, and revenue both domestically and internationally, driven by its global expansion strategy [2] - The company has established new factories in Indonesia and Mexico, with a planned annual production capacity of 31.55 million all-steel radial tires, 109 million semi-steel radial tires, and 467,000 tons of non-road tires [2] - The company ranks tenth in the global tire industry according to the "Top 20 Global Tire Companies" list by Tyrepress and the "Top 75 Global Tire Companies" list by Tire Business [2] Group 2: Technological Innovation and Product Development - The company focuses on a research strategy that combines basic and applied research, creating a comprehensive innovation ecosystem [3] - New products launched in the first half of 2025 include the Liquid Gold tire fashion series and various specialized tires, which have garnered significant industry attention [3][4] - The company’s all-steel tires have received high praise for their quality, with specific products achieving top ratings in rolling resistance performance [4] Group 3: Governance and Compliance - The company held multiple board meetings and committees to enhance governance and ensure compliance with regulatory requirements [6] - It has implemented timely information disclosure practices and conducted compliance training for its executives to improve risk awareness [7] Group 4: Shareholder Returns and Investment Plans - In June 2025, the company distributed a cash dividend of 0.23 yuan per share, with total cash dividends for 2024 amounting to 30.76% of the net profit attributable to shareholders [8] - The company’s controlling shareholder announced a plan to increase shareholding by investing between 500 million and 1 billion yuan within six months [8] Group 5: ESG and Sustainable Development - The company has launched the "eco+" sustainable development strategy, focusing on ecological protection and economic development [9] - It has received high ESG ratings, including an A rating from MSCI and a silver medal from EcoVadis, positioning it as a leader in the domestic tire industry [9]