① Wang Feng, chairman and president of Linglong Tire, said that the gross profit of the company's domestic supporting business continues to recover, and the Serbian factory plans to produce passenger and light truck tires in 2025. ② Lu Xiaoyan, the company's financial director, said that the company's overseas supporting gross margin was the highest among the four business segments. The company believes that the Serbian factory support side will also maintain a high gross profit margin in the future.
Finance Association, May 13 (Reporter Xiao Lianghua) The gross profit of supporting business and production capacity of the Serbian factory are the focus of attention of Linglong Tire (601966.SH) investors. At the 2023 and 2024 first quarter results briefing held today, Wang Feng, chairman and president of the company, said that the company's domestic supporting business gross profit continues to be repaired, and the Serbian factory plans to produce passenger and light truck tires in 2025.
According to the company's financial data, Linglong Tire's domestic supporting business accounts for 28% of revenue. It is the company's largest business segment, and its gross profit has become the main concern of investors.
In response, Wang Feng said that the gross margin of the company's domestic supporting business is currently the lowest among the four business segments, but through active implementation of “three structural adjustments,” the company's gross margin in this sector has continued to recover. Furthermore, the company began price negotiations with OEMs at the end of 2023, which has achieved certain results.
Wang Feng further stated that with the continuous adjustment of the company's product structure and market structure, as well as the increase in R&D, management, and brand influence, the company's future profitability will continue to increase without significant fluctuations in cost factors such as raw materials and market conditions.
In terms of overseas business, Lu Xiaoyan, the company's financial director, explained that the gross margin of the company's overseas supporting business was the highest among the company's four business segments. Currently, the products of the company's Serbian factory are very popular with automobile manufacturers. Beginning in January 2024, the Serbian factory has passed the VW, MAN, Nissan, Hyundai, Ford, Audi (logistics) and Stellantis audits. Recently, 3 other OEMs are gradually launching audit plans. The company believes that the gross margin of the supporting side of the Serbian factory will also remain at a high level in the future.
In terms of production capacity, Wang Feng said that Jilin Linglong Steel is affected by the market situation, and the capacity utilization rate is low. Furthermore, various projects are still under construction, and the balance of profit and loss has not yet been achieved. The Serbian plant plans to produce passenger and light truck tires in 2025, and the production and sales volume is expected to reach 2 million to 3 million units in 2024.
He said that in the future, the company will continue to actively promote the “7+5” global industrial layout, and strive to exceed 160 million units in production and sales revenue of more than 80 billion yuan by 2030.