Investment Rating - The investment rating for the company is "Buy" (maintained) [1][17] Core Views - The company has entered a growth phase, being the only state-owned enterprise in the tire industry listed in China, with a focus on leveraging its platform advantages and technological innovation to enhance profitability and achieve competitive growth [11][16] - The company's Q3 2025 results show a significant increase in net profit, with a year-on-year growth of 168%, indicating strong operational performance [2][6] Financial Performance Summary - For Q3 2025, the company achieved revenue of 2.025 billion yuan, a year-on-year increase of 17.00% and a quarter-on-quarter increase of 7.25% [6] - The net profit for Q3 2025 was 121 million yuan, reflecting a year-on-year increase of 167.67% and a quarter-on-quarter increase of 61.54% [6] - The gross profit margin for Q3 2025 was 16.75%, up by 2.15 percentage points year-on-year [6] - The company’s total revenue for the first three quarters of 2025 was 5.543 billion yuan, a year-on-year increase of 13.58% [5] Production and Sales Insights - In Q3 2025, the company produced 1.6104 million tires, a year-on-year increase of 15.14%, and sold 1.648 million tires, a year-on-year increase of 10.04% [7] - The average selling price of the company's products in Q3 2025 was 1,198 yuan per tire, which is a year-on-year increase of 7.88% [7] Strategic Developments - The company is advancing its 20,000-unit giant tire project, with the first tire successfully produced, marking a significant step in its growth strategy [9][10] - A long-term cooperation agreement was signed with Maersk for the supply of port tires, enhancing the company's market presence in Brazil and showcasing its competitive edge in the international market [13][14] Future Projections - The company is projected to achieve revenues of 75.50 billion yuan in 2025, 78.32 billion yuan in 2026, and 85.23 billion yuan in 2027, with corresponding net profits of 3.09 billion yuan, 4.07 billion yuan, and 5.98 billion yuan [15][16]

Core Viewpoint - Fengshen Tire Co., Ltd. plans to issue A-shares to specific investors, which may dilute immediate returns for existing shareholders, but the company has proposed measures to mitigate this impact [1][2][5]. Financial Impact Analysis - The issuance will increase the total share capital from 72,945,090 shares to a maximum of 94,828,610 shares [3]. - Under three scenarios for 2025 net profit, the basic earnings per share (EPS) will be affected as follows: - Scenario 1 (2025 net profit unchanged from 2024): EPS will decrease from 0.39 to 0.38 [4]. - Scenario 2 (10% increase in net profit): EPS will increase from 0.39 to 0.42 [4]. - Scenario 3 (20% increase in net profit): EPS will increase from 0.39 to 0.46 [4]. Necessity and Rationality of the Issuance - The issuance is deemed necessary to seize industry opportunities, enhance core competitiveness, and solidify the company's market position, benefiting both the company and its shareholders [5][6]. Relationship with Existing Business - The funds raised will be invested in a project to expand the production capacity of high-performance giant engineering radial tires, aligning with the company's main business and market demand [6][8]. Resource Reserves for Investment Projects - The company has a strong talent pool, technical expertise, and market presence to support the successful implementation of the investment projects [9][10]. Measures to Mitigate Dilution of Immediate Returns - The company will manage the raised funds effectively, accelerate business expansion, optimize operational management, and enhance profit distribution policies to protect shareholder interests [10][11]. Commitments from Related Parties - The controlling shareholders and management have committed to ensuring the effectiveness of measures to mitigate the dilution of immediate returns [11].