Tire production capacity to expand the tire so hard to increase

Stable domestic demand and strong export industry profit is expected to continue to raise domestic cars in the steady increase in exports is expected to drive rapid growth in 2005 tire industry sales growth of 20%. 2005 is expected to rise in the cost of raw materials, an integrated 2.5 percent, tire production capacity to expand the tire so difficult to price, but we believe that industry sales growth can make up for the decline in gross margin factors.

Economic car demand for the largest proportion of semi-steel radial tire industry is still the profit growth of high oil prices and consumption level of Chinese economic decision-largest car demand is expected over the next 4 years, the domestic economy cars owned 25% annual growth, the demand for car tires in Were up 20%, semi-steel radial tire industry is still the major profit growth point.

All-steel radial tire production capacity surplus saturated domestic market continue to pour out of the all-steel radial truck tires made all-steel construction projects fetal market supply and demand structure, great changes took place, coupled with the rising costs of raw materials, steel products, profit margins decline in births. 2005 all-steel radial tire production in the country 22,000,000 or so, and the market capacity is only 1,800 to 19,000,000, we believe that the child will face all-steel overcapacity, oversupply situation.

The existence of the export of anti-dumping risk adjusted increase in the consumption tax burden on the industry in recent years, Chinese tire exports have maintained a more than 30% of high-speed growth, but export prices lower than the international average export price of 20% to 40%, a number of countries have put forward an anti-dumping investigation. In addition, the radial and bias tire consumption tax may be unified to 3%, due to the radial tire sales than bias tires, increasing the burden on the industry.

Industry investment rating neutral stabilization of the overall industry, but the recent expansion of capacity increase is extremely competitive, the industry tends to decline in gross profit margins and exports face anti-dumping risks, given the industry a neutral rating. At present, the domestic tire companies listed a total of 6, Aeolus share growth and stability, the main profits come from more than 60% of the radial tire, the company share program for 10 to send 4.2, the first priority after the PE was 10.4 times. Birch tires in Fujian took Tong Jia has transformed itself to become the largest steel-tire businesses, we expect its 2005 net profit to grow 50 to 60% in 2005 earnings ratio of 12 times the dynamic, with the major international tire Listed companies on average 13 times earnings ratio of close to the level.