\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 966 Shandong Linglong Tyre Co.Ltd(601966) )
Core summary: supporting leaders, China has made great efforts in the high-end market and took the lead in the layout of Europe
The core barrier of the tire industry lies in the brand. The key to building the brand lies in high-quality products, strong channels and supporting high-end models Shandong Linglong Tyre Co.Ltd(601966) R & D expenses rank first among Chinese listed tire enterprises, providing R & D support for high-quality products; Take the lead in developing a new retail model in China and enabling sales channels; Passenger cars are equipped with domestic tires, and high-end models continue to make breakthroughs; The company continues to move towards the goal of becoming a world-class tire enterprise. At present, impacted by the rise of sea freight and raw material prices, the overall prosperity of the tire industry is at the bottom. Shandong Linglong Tyre Co.Ltd(601966) takes the lead in laying out in Europe, breaking the tariff and shipping problems. The Chinese market adheres to supporting facilities. At the same time, it has the courage to make a breakthrough in medium and high-end retail. When the industry reverses, the company is expected to accelerate its growth. It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 1.1 billion, 2.2 billion and 3.5 billion respectively, corresponding to pe28, 14 and 9 times, maintaining the "buy" rating.
Accelerated capacity expansion in 2022
It is estimated that the semi steel production capacity will reach 73.5/93/109 million in 2021 / 2022 / 2023, the whole steel production capacity will reach 13.9/159016.7 million, and the total production capacity will reach 88.46/109.99/126.92 million respectively, with a growth rate of 15.11% / 24.34% / 15.39% respectively.
Serbian base to be put into operation
Due to the high transportation cost, the price of local tires in Europe and the United States has increased and the profit has increased greatly. The Serbian base is expected to put into operation some capacity in 2022 and is expected to continue to contribute to the profit increment in 2023. In the long run, the Thai base is expected to see a decline in sea freight.
China's five new and one high products increase gross profit margin
The company puts forward the "five new and one high" strategy, namely "new positioning, new products, new quality, new services, new prices and high returns", and comprehensively promotes channel empowerment around "product + service + value + brand + store + traffic". The essence is to use channels to break through the high-end market. In the first half of 2021, the overall sales volume of China's retail market increased by about 28%. We expect that the increase in the proportion of high-end products is expected to significantly increase the gross profit margin of China's retail end.
The supporting market continues to break through and the price is transmitted downward
The company provides supporting services for Hongqi, Audi, Volkswagen, GM, Ford, Renault Nissan, GAC Mitsubishi, GAC motor, SAIC GM Wuling, Geely, Chery, Byd Company Limited(002594) , great wall and other auto enterprises. It has just entered the Honda supply chain, especially the supporting acceleration of new energy vehicles. The delivery of new energy vehicle tires from January to June of Shandong Linglong Tyre Co.Ltd(601966) 2021 increased by 385% year-on-year. The price of tire is expected to rise and the price of raw materials is expected to rise.
Risk tips: changes in tariff barrier policies in major markets; Covid-19 virus epidemic has led to a long-term downturn in tire demand; The project is not put into operation as expected; The breakthrough of original matching is lower than expected; Sales volume growth did not meet expectations; The price of raw materials fluctuates greatly; Large fluctuations in exchange rates; Safety and environmental protection production; Product quality accident.
