General Triangle and other tire companies go public, China has become the world’s largest tire producer

GM shares, triangleTiresThe listing of A shares expandedTiresThe business camp. Prior to this, Huayi Group (formerly "Double Money"), Linglong Tire, Qian Tire A, S Jiatong, Qingdao Double Star, Sailun Jinyu, Fengshen shares and other tire companies have successively landed in the capital market.

The domestic market demand continues to grow, and the global tire industry is shifting to the domestic market. China has become the world's largest tire producer. Statistics show that during the 10 years from 2005 to 2015, my country's tire production has an average annual compound growth rate of 8.5%, and the total output in 2015 reached 565 million tires. With the rapid development of the domestic tire industry, two factors are playing an important role: one is the price fluctuation of the main raw material rubber; the other is the constant international trade frictions. 　　Rubber price fluctuation risk Rubber is the main raw material for tire manufacturing, which usually accounts for about 30% of production costs or even higher. Take the two recently listed companies as an example. In the first half of this year, natural rubber accounted for 29.12% of GM's main business costs, synthetic rubber accounted for 7.08%, and the two data of triangle tires totaled 41%. Changes in rubber prices strongly affect the gross profit margin of the tire industry. According to Wind statistics, the average gross profit margin of the tire industry from 2009 to 2011 was around 10%; since 2011, due to the decline in the prices of natural rubber and synthetic rubber, the industry's average gross profit margin has increased to 13%-16%. In the first half of this year, GM’s gross profit margin was 17.04%; in the first quarter of this year, Triangle Tire’s gross profit margin was 26.62%. The closing price of natural rubber futures on the Shanghai Futures Exchange showed that the price of natural rubber at the beginning of 2011 was close to 45,000 yuan/ton, and then fluctuated downward. The current price is around 10,000 yuan/ton. Although it has been on a downward trend, the price of natural rubber has been volatile in recent years due to factors such as international economic conditions, natural conditions, and the development of alternative materials. Fluctuations in the price of natural rubber will lead to increased pressure on the company's cost control, resulting in increased risk of gross margin fluctuations, income fluctuations, working capital occupation risks, and inventory value fluctuations. If the future continues to fluctuate sharply, it may have a certain impact on the operation of tire companies. 　　International trade frictions continue Continuous international trade frictions also strongly affect the development of the domestic tire industry. At the beginning of this year, the United States launched a "dumping and anti-dumping" (anti-dumping, anti-subsidy) investigation on truck tires and bus tires from China. The U.S. Department of Commerce issued a preliminary ruling in June and determined that China’s export of tires to the United States has dumped. The compulsory respondent’s dual-currency share subsidy rate is 17.06%, and the compulsory respondent’s Qian Tire subsidy rate is 23.38%. Other Chinese tire exporters Or the manufacturer's subsidy rate is 20.22%. The final ruling is expected to be released in November. The United States is a major exporter of Chinese tires, and the "double reverse" investigation will have a certain degree of impact on the development of my country's tire industry. Triangle Tire analyzed in the prospectus that the "double reverse" investigation will significantly reduce the number of passenger and light truck tires (both semi-steel tires) sold to the United States, and will cause a large number of foreign tires that hit the wall to flood into the domestic market. The saturated domestic market has become more competitive, especially the replacement tire market, which will accelerate the pace of my country's tire manufacturing enterprises to "go global" and avoid the impact of "double reverse" by building factories overseas. Not only in the United States, in November last year, the Russia-Belarus-Kazakhstan Customs Union implemented anti-dumping measures on truck tires from China; the European Union, Brazil, India, Egypt and other countries and regions have successively initiated multiple anti-subsidy and anti-dumping investigations against the Chinese tire industry. This will undoubtedly have an adverse effect on the Chinese tire industry.According to the disclosure of "China Rubber", in 2015, my country had noInner tubeThe annual output of all-steel radial tires is about 40 million, and more than half are exported overseas.

Another example is Triangle Tire. From 2013 to 2015, the company's export business income accounted for 54.66%, 58.24%, and 57.94%, respectively. Triangle Tire said that if the international trade friction in the tire industry intensifies, it may have a certain impact on the company's tire exports and operating results.