Doublestar, Guizhou Tyre, Linglong, Triangle, and Aeolus publish results forecast

Doublestar, Guizhou Tyre, Linglong, Triangle, and Aeolus recently disclosed their semi-annual results forecasts. Doublestar was in the red in the first half of 2023. The other four tyre companies estimated that their performance would rise. Tyrepress China found that adjusting market and product structure became essential reasons for the net profit growth of several Chinese tyre companies. At the same time, the decline in raw material prices and shipping costs benefited tyre manufacturers in the first half of the year.

Doublestar continued to lose money

In the first half of 2023, Doublestar was expected to lose money, which was between 120 million yuan and 135 million yuan. Compared with the same period last year, the loss of Doublestar has narrowed. From January to June 2022, the tyre manufacturer lost nearly 300 million yuan.

Doublestar has been losing money in the year’s first half for many years. Tyrepress China noticed that the tyre manufacturer lost 21.69 million yuan in the first half of 2021. This company lost 45.4909 million yuan from January to June 2020. The last time Doublestar had a positive net profit in the first six months was in 2019, with a gain of 29.6468 million yuan.

Because the loss range narrowed compared with the same period in 2022, Doublestar described the operating situation in the first half of 2023 as a “substantial improvement in performance” and attributed the improvement to “accelerating the adjustment of market and product structure, as well as the sales expansion of differentiated products”. “During the reporting period, revenue increased by 16% year-on-year, of which the overseas market increased by more than 25%,” the tyre maker said.

Doublestar stated that the next step would be to “accelerate the construction of overseas bases and launch disruptive innovative products to achieve further performance improvement”.

Linglong’s net profit increased significantly

Linglong expects the net profit range in the first half of the year to be 520 million to 600 million yuan, which increased by 410 million to 490 million yuan compared with the same period last year, an increase of 373%-445%.

The increase in sales is an important reason why Linglong showed good momentum in the first half of the year. Linglong said the “continued recovery of (China’s) economic activities” and “increased demand in overseas markets” led to a 23.2% year-on-year increase in product sales.

It is worth noting that Linglong said that the OE market continued to carry out structural adjustments around the three cores. The tyre maker did not disclose the adjustment’s three core points. However, the adjustment of product structure has played an essential role in improving the net profit of this tyre manufacturer.

On the other hand, the decline in raw material prices and shipping costs led to Linglong’s cost reduction during the same period. In addition, the tyre manufacturer’s promotion of cost reduction and efficiency increase has significantly impacted the rise in net profit.

Triangle increased by 174%-183%

Triangle predicts that the net profit in the year’s first half was between 595 million and 615 million yuan, an increase of 174%-183% year-on-year.

Triangle said, “China’s economy recovered and improved in the first half of the year, and the production and sales of the downstream automobile industry proliferated. The demand in overseas markets is strong.” With the market environment improving, Triangle “optimised and adjusted its product and market structure, expanded its brand influence, and achieved significant growth in tyre production and sales.”

At the same time, the tyre manufacturer “continues to strengthen internal management and effectively control product costs, resulting in a substantial increase in profitability.”

The net profit of Aeolus increased by more than 1000%

Aeolus revealed that the net profit in the year’s first half is expected to be between 150 million and 180 million yuan, increased by 1278.74%-1554.49% year-on-year.

Aeolus attributed the increase in net profit to “the improvement of the (China) economy” and “low raw material prices”. In addition, Aeolus mentioned that “the product structure and market structure have been adjusted, and the proportion of products and markets with better profitability has improved significantly.”

Guizhou Tyre’s net profit doubled

Guizhou Tyre stated that its net profit may double year-on-year. The tyre manufacturer estimates that the net profit in the first half of 2023 was between 302 million and 365 million yuan, an increase of 88.58%-127.91%.

Guizhou Tyre attributed the main reason for the substantial increase in net profit to “active adjustment of product structure, expansion of sales channels, and increase in sales volume and revenue”. During the same period, the fall in raw material prices and the increase in the utilisation rate of Vietnam’s factories are also important reasons for Guizhou Tyre’s net profit.