\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 058 Sailun Group Co.Ltd(601058) )
Event: on March 8, 2022 Beijing time, the US Customs released the US tire import data in January 2022. In January 2022, the US imported 1.38 million passenger car tires from Vietnam, a significant year-on-year increase of 19%. In the past three years, the United States imported 12.07 million, 13.17 million and 14.06 million passenger car tires from Vietnam respectively. Even if covid-19 epidemic occurred in the middle, it maintained a sustained growth.
Comments: the demand of American tire market is stable. The U.S. market is the most important market in the global tire industry, with large market demand, low volatility, and high product specifications and unit prices. Most of the profits of China’s tire industry leaders come from the US market. According to the statistics and prediction of American Tire Manufacturers Association ustma, the demand for passenger car tires in the United States increased from 190 million in 2012 to 230 million in 2022, the demand for light truck and SUV tires increased from 28 million to 39 million, and the demand for heavy truck tires increased from 16 million to 23 million. In the past ten years, the global economic situation has been turbulent. It has experienced a halving of 100 yuan oil price and then back to 100 yuan. It has experienced global trade conflicts and the havoc of covid-19 epidemic. However, the demand of the U.S. tire market has remained stable without ups and downs.
Vietnam’s tire exports to the United States resumed high growth. On March 8, 2022, the US Customs released the US tire import data in January 2022. According to U.S. Customs statistics, in January 2022, the United States imported 1.38 million passenger car tires from Vietnam, a significant year-on-year increase of 19%. In the past three years, the United States imported 12.07 million, 13.17 million and 14.06 million passenger car tires from Vietnam respectively. Even if there was covid-19 epidemic in the middle, it maintained a sustained growth Sailun Group Co.Ltd(601058) Vietnam’s factory produces 13 million passenger car tires per year, and the target market is the US market. According to U.S. Customs statistics, in January 2022, the United States imported 180000 truck tires from Vietnam, an increase of 11% year-on-year. In the past three years, the United States imported 72, 125 and 1.9 million truck tires from Vietnam respectively. Even if there was covid-19 epidemic in the middle, it maintained a sustained growth Sailun Group Co.Ltd(601058) Vietnam factory has a truck tire production capacity of 3.8 million pieces / year (including 2.4 million pieces in the joint venture plant with GUPT), and the target markets are the U.S. market and the European market.
There is a certain time lag between the data of imports from the United States and the data of exports from Vietnam. The revenue is recognized when the Vietnamese tire factory delivers the goods to the ship, which is reflected in the export of Vietnam in the current month, and the goods are included in the data of imports from the United States only after landing and customs clearance at the port of the United States. The time when the goods are transported from Vietnam to the United States leads to the time lag between Vietnam’s exports and imports from the United States, When the transportation capacity is normal, the time lag is usually about one month. In Q4 of 2021, due to the problem of port congestion in the United States, the goods have to wait in line after arriving at the port, and the whole process takes more than two months. Therefore, the January import data updated by the US Customs on March 8 actually reflects the Q4 export of Vietnamese factories.
In order to combat the covid-19 epidemic in 2021, Vietnam conducted a comprehensive blockade in July, August and September, and the export volume plummeted. The US import data reflected the sharp decline in US imports from Vietnam in September, October and November. In December 2021 and January 2022, the import volume of the United States from Vietnam rebounded rapidly, reflecting that Vietnamese factories walked out of the dark moment from Q4 and quickly resumed exports to the United States.
The shipping pressure will subside significantly in 2022: the shipping pressure in 2021 is reflected in the difficult demand of transportation capacity and the rise of freight, which have a great negative impact on Sailun Group Co.Ltd(601058) operation. In 2022, we observed that the port congestion in the United States is easing faster than the market expected, the shipping cycle between China and the United States is returning to normal, and the shortage of transportation capacity will be repaired.
Maersk, the world’s largest container shipping company, released its financial report on February 9, 2022 and realized a net profit before interest, tax, depreciation and amortization of US $24 billion in 2021. It is expected that the current market situation will continue until the second quarter of 2022 and gradually return to normal in the second half of this year. Based on these assumptions, Maersk expects the full year EBITDA of 2022 to be US $24 billion (the same as that in 2021).
By observing the Baltic sea container freight rate index, it can be clearly seen that the index started at the normal level in previous years in early 2021, and then rose several times, showing a trend of low before high. Based on Maersk’s inference of the situation in 2022, it is not difficult to infer that the freight rate index in 2022 will present the mirror image of 2021: that is, the situation of high in the front and low in the back
On February 18, 2021, we were in “bright sword: new white horse, new consumption!” The corresponding valuation of RMB 6018 shares in the report is RMB 800 million. In 2021, although the tire industry experienced the test of covid-19 epidemic and tight shipping, we believe that these difficulties do not affect the long-term growth logic of the tire business, and have been or are fading away. The long-term value of a company does not change with the performance fluctuations caused by short-term difficulties.
Profit forecast and investment rating: we expect the company’s operating revenue to reach 18.522 billion yuan, 24.944 billion yuan and 29.351 billion yuan respectively from 2021 to 2023, with a year-on-year increase of 20.23%, 34.67% and 17.67%. The net profit attributable to the shareholders of the parent company is 1.327 billion yuan, 1.997 billion yuan and 3.08 billion yuan respectively, with a year-on-year increase of – 11.04%, 50.54% and 30.8%. The diluted EPS from 2021 to 2023 will reach 0.43 yuan respectively, 0.65 yuan and 1.01 yuan. The corresponding PE in 2022 is 15 times. Maintain the “buy” rating.
Risk factors: 1. The new production capacity is not put into operation as expected. 2. The risk of sharp fluctuations in rubber prices.
