Guide to this report: The company's Thai base project was adjusted, and another 4 million bars of semi-steel were added. 2024-2026 will usher in a period of capacity release, and the company's growth is strong. The company's intelligent production improves quality and efficiency, strengthens brand building, and helps increase the company's value.
Key investment points: Maintaining the “increase in holdings” rating, the company's base in Thailand will further expand production. Considering that project details have not yet been announced, the company's 2024-2026 EPS will be maintained at 0.44/0.73/0.85 yuan. The company has a relatively large increase in production capacity and strong growth. The company was given 18 times PE in 2024, and the target price was maintained at 7.92 yuan.
Semi-steel production at the Thai base was further expanded, and the growth ceiling was raised. According to the company's announcement, the company plans to change the construction content of the Thai and Chinese high performance radial tire expansion project, from the “annual output of 500,000 all-steel radial tires and 6 million semi-steel semi-steel radial tires project” to a “project with an annual output of 10 million semi-steel radial tires” to further accelerate the international layout, optimize the industrial structure, and enhance competitiveness and profitability in the international market. The project is estimated to increase average annual revenue of 2,466 billion yuan after completion., The average net profit for the year was 459 million yuan, the project financial internal rate of return after tax was 21.34%, and the payback period for the project after tax was 6.53 years.
Industry sentiment continues, with short-term disruptions on the cost side limited. Domestic tire production, sales and exports remain high. Relevant companies said on the interactive platform that orders for semi-steel tires are still full, and that the freight rate index for shipping to Europe has risen sharply due to geographical influence. Considering that domestic tire companies account for a higher share of the North American market and that orders sent to Europe can bypass the corner of good hope, and subsequent new ship launches, the impact or limited impact, as of June 14, was 14,800 yuan/ton, a weekly increase of -2.31%, and the monthly increase of +8.03% for carbon black; yuan/ton , weekly increase 0.00%, monthly increase -8.54%.
Multiple bases and multiple projects have gone hand in hand, and intelligent manufacturing has set sail. GM has implemented the “5X” strategy. Currently, it has three bases in Wuxi, Thailand, and Cambodia. The Wuxi base is currently constructing 9 million semi-steel and 100,000 off-road tire projects, the Thailand base is under construction in Phase II of the 10 million semi-steel project, and the Cambodian base is under construction of the second phase of 750,000 all-steel and 3.5 million half-steel projects. 2024-2026 will usher in a period of release of the company's production capacity, and the company's growth is strong. The company continues to promote the upgrading of the international, intelligent and green industry; the all-steel smart factory accelerates industrial quality and efficiency; the vulcanization “black light workshop” achieves 24-hour uninterrupted production, greatly improving production efficiency and saving energy consumption; the company stopped focusing on brand building, and multi-brand integrated technologies such as “Qianlima and Red Rabbit Horse” reached the level of international advanced water, winning wide recognition from the market. Drastic fluctuations; risk of exchange rate changes.
Risk warning: projects under construction fall short of forecast; trade policy risks; prices of raw materials and shipping costs