At the online investor reception day attended by Qingdao Doublestar board secretary Wang Bo and CFO Zou Guangfeng, the issues investors were most concerned about was how the company will turn losses into profit and how the business is restructuring in relation to Kumho.
After acquiring Guangrao Jixing under Doublestar, Huasheng Rubber has changed the facility’s name to Heda Rubber. On 18 November, Heda Rubber started manufacturing and the first passenger car radial tyres rolled off the production line. Zhang Shulin, chairman of Huasheng Rubber Group, and Zhao Ruiqing, general manager attended the first tyre roll-off ceremony.
Doublestar said its board director and general manager, Su Ming, submitted his resignation application for personal reasons. The tyre manufacturer has yet to announce who will replace Su Ming as the new general manager.
Doublestar’s board of directors has approved a transaction plan to control Kumho. Specifically, the company plans to purchase assets by issuing shares and paying cash and ultimately achieve the goal of indirectly holding 45 per cent of Kumho’s shares and becoming Kumho’s controlling shareholder. Prior to this, Doublestar’s controlling shareholder, Doublestar Group, and several other Chinese companies jointly held this part of the equity. In other words, Doublestar can officially manage Kumho’s operations after this transaction.
At 2.28 billion yuan (about £250 million; €290 million), Doublestar’s revenue was almost the same year-on-year in the first half of 2024. Doublestar was still in the red during the reporting period. However, compared with the same period in 2023, its losses were further reduced to 57.1 million yuan (about £6.2 million; €7.4 million). According to Doublestar, “PCR product profitability continues to improve” but “insufficient market demand for truck and bus tyres” is why the tyre manufacturer is still losing.
Doublestar has sold its Guangrao-based factory, Guangrao Jixing, to Lubo Rubber for 205 million. The two parties signed a Property Rights Transaction Contract in September 2024, confirming what we published in May 2024.
Doublestar has held a ceremony to celebrate the start production at its Cambodia tyre factory. The factory’s total investment is about US$200 million. It is a joint venture between Doublestar and Zhongqi Holding Group. At total production levels, it will be able to produce 7 million semi-steel radial tyres and 1.5 million full-steel radial tyres per year.
The 19th edition of the China International Tire Expo (CITExpo) opened yesterday in Shanghai. The 2024 iteration of the landmark event in the Chinese tyre industry calendar builds upon the success of the show’s 2023 return from the Covid-induced hiatus that interrupted its annual schedule. As ever, the show welcomes delegates from all around the world, including Tyrepress in its capacity as official media partner.
Several Chinese research institutions recently jointly released the “2024 China Brand Influence Index Report”. In the report’s “Top 10 Tyre Brand Influence” list, Doublestar ranked first.
China’s Qingdao Doublestar intends to sell its entire 100 per cent shareholding in Guangrao Jixing Tire Co. Ltd through a public listing. The company stated it is actively seeking potential buyers but clarified that this announcement does not constitute an offer or a transaction.
Doublestar reduced the registered capital of Guangrao Jixing, a wholly owned subsidiary, on the grounds of “strategic optimisation and adjustment”. Information released by the tyre manufacturer shows that the registered capital of Guangrao Jixing has been reduced from 609 million yuan to 205 million yuan.
The Dongying, Shandong Province-based Huasheng Group is planning to add a Cambodia tyre production plant to its portfolio of five factories. While there are few details at the moment, the even-lower-than-Chinese production costs paired with the company’s desire to increase tyre export sales are said to be the main motivations behind the move. Tyres & Accessories met company representatives during the recent GuangRao Tire and Rubber Auto Accessory Exhibition, which took place between 15 and 17 May in Dongying where the company had no less than five generously proportioned stands exhibiting its range of car, 4×4, light truck as well as truck and bus tyres.
Following the news that it will take control of Kumho as the largest shareholder, Qingdao Doublestar has released details of how it is working to indirectly hold 45 per cent of Kumho’s shares by issuing shares and paying cash in order to obtain strategic assets. After the complex transaction is completed, Qingdao Doublestar will control Kumho. Prior to this transaction, 45 per cent of Kumho was controlled by the wider Doublestar group rather than the tyre manufacturer Qingdao Doublestar itself.
At the end of March, tyre manufacturer Qingdao Doublestar suspended trading on the stock exchange and announced that it was preparing to officially take control of Kumho and resolve competition in the industry. Doublestar said it will disclose further information before April 11.
A number of Chinese tyre manufacturers have stated that their net profits significantly increased year-on-year in 2023. Doublestar is one of the few tyre companies that was still losing money. Jiangsu General turned losses into profits. In terms of net profit alone, Sailun’s 3.1 billion yuan suggest the company gradually widened the gap between itself and Linglong. Currently, ZC Rubber has not officially disclosed its operating data for 2023. Therefore, it is not yet possible to judge who is in the leading position in terms of net profit between Sailun and ZC Rubber.
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