In the first half of 2010, the net profit rate of tire companies is much lower than that of steel cord companies.

For Chinese tire companies, the rapid growth of the Chinese auto market in the first half of 2010 and the improvement of the international tire market are all favorable factors. At the same time, the rise in the prices of natural rubber and other raw materials in the first half of the year has also forced tire companies to increase their prices. In this context, what is the profitability of tire companies? This article will briefly analyze the profit of listed tire companies. (China's three largest tire companies - China Strategic, Triangle, Delicatessen are not listed).

Loss of profit from listed tire companies

The tire companies listed in China are mainly Aeolus, Shuangqin Group, Qingdao Double Star, Yantai Tire A, Giti Tire and Huanghai. The total operating income of these six companies for the first half of this year was RMB 16.18 billion (the same ), an increase of 54.91% over the same period of last year, but net profit decreased by 25.99% to 383 million yuan from 517 million yuan in the same period of last year. The average net margin of these companies in the first half of 2010 dropped sharply from 4.95% in the first half of last year to 2.36%.

A number of companies stated in their financial reports that the unprofitable profitability was due to the substantial increase in the prices of natural rubber and other raw materials, while the small increase in the price of tire products could not offset the increased cost of this part. In addition, companies with large export market shares, such as Jiatong Tire, are also adversely affected by exchange rate fluctuations.

From the perspective of specific enterprises, the Yellow Sea shares that had been in a net loss situation in the first half of last year have further expanded their losses in the first half of this year. Both Jiatong Tire and Qingdao Twinstar had higher net interest rates in the first half of last year, reaching 5.13% and 7.49%, respectively. Both net profit margins fell to less than 1% in the first half of this year. The net profit margin of Aeolus shares and Tire A also fell from 2.5% and 2.71% respectively over the same period last year.

Of the six companies, only the Double Bank Group's net profit rate increased from the same period last year - from 3.44% to 5.29%.

Steel cord company's net interest rate is much higher than that of tire companies

In addition to the reasons for the low profits mentioned by the tire companies themselves, the added value of the products currently produced by Chinese tire companies is relatively low, which is also a major reason why their profits are vulnerable to the external environment such as raw material price increases. In the upstream of tire products, there is a high-tech and high-value-added steel cord, which is increasing rapidly with the radialization rate of Chinese tires and the rapid development of the market.

Tire steel cord companies have much better financial conditions than tire companies. The three major tire steel cord listed companies - Xingda International, Fuxing Stock, and Stellar Technology, although the total operating income only increased by 49.57%, but the total net profit increased by 108.96%, the average net profit rate was 9.64 in the same period last year On the basis of %, it further expanded to 13.47%.

Among the three companies, Xingda International, the leading company of steel cords, had the strongest profitability, and its net profit in the first half of the year had further increased to 18.78% from 13.15% in the same period of last year.

Note:

1. "Shuangqin Group", "Jiatong Tire", "Huanghai Shares", "Qingdao Double Star", "Aeolus Co., Ltd.", "Xiang Tire A", "Star Technology", "Fuxing Shares", "Xingda International" They are Shuangqin Group Co., Ltd., Jiatong Tire Co., Ltd., Qingdao Huanghai Rubber Co., Ltd., Qingdao Double Star Co., Ltd., Fengshen Tire Co., Ltd., Guizhou Tire Co., Ltd., Henan Hengxing Technology Co., Ltd., and Hubei Fuxing. Technology Co., Ltd., Xingda International Holdings Limited.

2. Net profit in this article means "net profit attributable to shareholders of parent company" "net profit attributable to shareholders of listed company".