Aeolus and Doublestar both report sharp declines in net profit

Aeolus and Doublestar recently reported operating results for the first half of 2022. Both show sharp declines in net profits for the two companies that have controlling interests in global tyremakers Prometeon and Kumho respectively.

According to preliminary estimates by Aeolus’s financial department, the net profit in the first half of 2022 will be between 8 million and 11 million yuan, a year-on-year decrease of 56.34%-68.25%. Net profit after deducting non-recurring gains and losses was between -12.2 million and -15.2 million yuan.

Doublestar’s loss is between 260 million and 320 million yuan, more than ten times that of the same period in 2021. From January to June 2021, Doublestar’s net profit attributable to shareholders is -21.69 million yuan. After deducting non-recurring gains and losses, the tyre maker’s deficit in the first half of 2022 was between 290 million and 350 million yuan.

As an integral part of the manufacturing industry, a decline in profits of Chinese tyre companies is expected. Due to the epidemic, the demand for tyres in the Chinese market has shrunk to a certain extent. Meanwhile, the production costs of tyre companies have also suffered severe challenges, with raw material prices, energy prices and shipping costs all remaining high.

It is worth noting that the strategies adopted by Doublestar and Aeolus to reduce losses in the future are basically the same. Doublestar is ready to take innovation as the entry point to adjust the market structure and carry out product upgrades. Aeolus said it would continue to promote marketing and technological innovation and accelerate product upgrades.