Industry cover the transfer of heat tire business

China's tire industry started relatively late, but the fast development. Beginning in 2004, China's tire production and exports have become the first in the world. At the same time, China's tire production technology improved, scientific and technological achievements are emerging, many of the production process has reached world advanced level. At present, China has been able to produce radial and bias of the structure of the two car tires, truck tires, industrial tires, agricultural tires, and OTR tire series of five over 2000 specifications, has formed a relatively complete system of the tire industry. We have good quality tire production category of listed companies, such as Aeolus shares, Qian Luntai A, Qingdao Double Star and two-share money, and so on.

Tire industry shift to the Asia-Pacific

At present, the Asia-Pacific region, Europe and North America is the world's tire industry's main production areas and consumption areas, a situation of the three pillars. However, the tire industry belongs to labor-intensive and technology-intensive traditional industries in Europe and the United States and Japan and other developed countries, the wage share of the cost of production very high, such as the United States for 33%, Germany 45%. High wage costs brought about by the impact of the competitiveness of their products, compared to, the Asia-Pacific region has a low-cost high quality labor resources.

In recent years, from the development, production in Europe and North America tire sales increase is very small, the tire industry to shift significantly in the Asia-Pacific region. In North America, for example, in 1999 in the region for tire sales 351,000,000, accounting for all the world 976,000,000 of 35.96%; in 2005 for sales in the region 365,000,000, representing 1,082,000,000 of the world's 33.73 percent over the same period Asia Pacific sales were up a greater proportion of.

With the world tire industry in developing countries such as China and gradually transfer to developing countries in the tire manufacturing will be more prominent advantage. From 2007 the world's top 75 tire, Bridgestone, Michelin and Goodyear Tire giant three of the world is still in the first group; mainland China's 16 tires further into the ranking, such as Hangzhou Zhongce in 2006 sales An increase of nearly 50% for the first time more than 1,000,000,000 U.S. dollars, 10.8 billion U.S. dollars, ranking rose from No. 23 No. 14; more than 10 other companies have also ranked on the rise. In this way, China's 16 tires total revenue in 2006 over the No. 4 ranking of Germany's mainland.

China has become the focus of development

In the 1990s, China has become the Asia-Pacific region the focus of the tire industry. Private capital and foreign capital into Chinese tire industry, the world's top 10 tire companies have been in China to invest and build factories. To Bridgestone, for example, by 2005, the Chinese in Shenyang, Tianjin, Wuxi has 3 tire plant, Daya Bay Economic and Technological Development Zone signed a cooperation agreement car tire projects with a total investment of 140,000,000 U.S. dollars. In 2005, Bridgestone in China's passenger car market share of 10%, the company plans by 2010 this proportion will increase to 30%.

At the same time, China's tire production technology improved. This is mainly the performance of tires in the scientific and technological achievements are emerging, many of the production process has reached world advanced level. The tire industry continue to enhance the capacity of independent development, product design has reached world advanced level; pattern of low noise design has reached the international advanced level; use of nanotechnology low heat formula has been the development and application of the mainland close to the German tire company level; rubber mixing process Close to the level of France's Michelin; nitrogen tire curing has reached the world advanced level. In addition, our rate of meridian tires are steadily improve.

But we should also see that the world tire industry, to a large extent by the international large-scale control of the company's tire, the tire giant in the world market share high. In 2005, the world's tire sales 101,000,000,000 U.S. dollars, the company's top 10 tire sales reached 77,742,000,000 U.S. dollars, the proportion reached 76.97 percent. Tires in the future of large-scale enterprises and groups of the growing trend, the tire industry, will further enhance the degree of monopoly. China and the tire business is not strong, especially relative to international giants, the domestic tire of smaller enterprises; at the same time, the state-owned enterprises tire market position needs to be improved.

Key recommendation of the company

Aeolus shares: the world tire industry, the company is in the middle and upper reaches. In the domestic tire companies, the company's competitive advantage in the engineering aspects of child birth and the load. The company's future development will be in the main tire on an extension to the formation of tire rubber-based trade system. Specifically, the company will focus on the establishment of the three major systems: First, the implementation of brand strategy, stringent control over the quality system; Second, the establishment of a market system and sales network, after-sales service system construction; Third, the construction and automobile, chemical industry supporting System characteristics.

In September 2007, due to competition issues, the Aeolus non-public offering of stock issues has not been adopted. To safeguard the rights and interests of shareholders, the company targeted an additional item still be launched as planned, the new projects are launched at the same time, Aeolus with an annual output of 150,000 sets of all-steel radial tire projects and an annual output of 5,000,000 sets used by the radial tire project was completed in September 10, 2007 groundbreaking. Radial engineering project is expected in 2008 will be part of the operation, at the latest by mid-2009 all production, the RMB to the company's annual revenues will exceed 1.5 billion. We expect the second half of 2008 passenger cars at the horse project, 2009 will have a benefit.

The additional amount of less than 2,500 shares, not more than 12,000 shares. The net fund-raising not more than 1,353,500,000 yuan. The major shareholder of Hua Ho Group to subscribe for not less than 2,500 shares, not more than 3000 million shares, the subscription price of 11.82 yuan, and other agencies an additional subscription price of not less than 11.82 yuan. M & A has begun to consider substantive, not diluted, we expect this year's EPS is expected to reach 1 yuan, is expected to reach 1.5 yuan next year. We maintain Fengshen shares a "buy" rating.