Doublestar shifts focus to overseas markets

The 2022 annual report that China’s Qingdao Doublestar published on 31 March shows stable revenues and growing losses. While operating income amounted to 3.91 billion yuan (about £460 million; €530 million), an amount fundamentally unchanged from the previous year, the bottom line net loss attributable to shareholders grew 87.93 per cent year-on-year to 601.9 million yuan (approximately £70.82 million; €80.57 million).

Doublestar manufactured 12.4214 million tyres in 2022 and sold 12.5458 million, with tyre sales, production and inventory figures all declining compared to 2021. Tyre manufacturing revenue accounted for about 94.4 per cent of Doublestar’s total in 2022, reaching 3.69 billion yuan (about £440 million; €500 million). It is worth noting that Doublestar divested its machinery manufacturing business during the year; in 2021, machinery accounted for 0.51 per cent of Doublestar’s revenue.

International sales overtake domestic

The scales tipped in favour of export business in 2022. While Doublestar still relied heavily on its domestic market in 2021, with sales withing China accounting for 64 per cent of total revenue, in 2022 domestic sales were just 48.73 per cent of the total, with international sales accounting for 51.27 per cent. The company stepped up efforts to develop overseas markets in the past year, with foreign sales increasing by 41.88 per cent year-on-year. Doublestar believes that the introduction of a range of highly differentiated tyres has laid a solid foundation for the company to further expand its overseas market share.

In addition, the proportion of original equipment sales in Doublestar’s revenue declined rapidly in 2022, dropping 53.42 per cent compared with a year ago and accounting for just 16.36 per cent of total revenue. The figure for 2021 was 35.01 per cent of total revenue.

Only profitable in Guangrao

Among Doublestar’s main branch operations, Guangrao Manufacturing Factory was the only profitable enterprise; it respectively achieved revenue and net profit in 2022 of 890 million yuan (about £110 million; €120 million) and 10.73 million yuan (about £1.27 million; €1.44 million). The Qingdao factory and the Shiyan factory lost 250 million yuan (about £29.51 million; €33.57 million) and 180 million yuan (about £21.25 million; €24.17 million), respectively.

At the same time, the two tyre sales companies under Doublestar each lost tens of millions of yuan as well. Doublestar did not disclose information pertaining to the Kumho Vietnam factory. In addition to operating three manufacturing bases in China, Doublestar also holds a 42.41 per cent stake in the Kumho Vietnam plant.