Tire Makers Report Robust Earnings in Q3
Year:2009 ISSUE:32
Click:339    DateTime:Nov.18,2009
Tire Makers Report Robust Earnings in Q3     

Qingdao Doublestar Tire Co., Ltd. (SZ: 000599) on October 22nd reported third-quarter sales rose 18.95% to RMB1.31 billion, and net profit rocketed 1624.97% to RMB97 million.
   In the first three quarters of the year, sales were RMB3.015 billion, down 15.67% from a year earlier. Net profit gained 332.64% to RMB225 million.
   Other major tire maker in China, Guizhou Tire Co., Ltd. (SZ: 000589) said its third-quarter sales rose 3.71% to RMB1.297 billion, while net income soared 242.06% to RMB96 million.
   In the first three quarters, sales added 0.87% to RMB3.365 billion while net income jumped 165.02% to RMB208 million.
   Industry analysts attributed the upbeat results to the domestic robust auto market, which spurs demand for tires.
   On September 11th, the United States announced it will slap special duties on Chinese-made tires, which raised concerns among domestic tire producers. According to 2008 survey by the Chinese tire association tracking 43 companies, exports accounted for 45% of China's total output. And it is estimated that 30% of the exports went to the US, or about 13% of China's total production.
   Qingdao Doublestar said sales in the US market accounted for less than 2% of its business revenue in the first eight months of the year, while Guizhou Tire put the figure at 18%.
   The duties by the US will have a long-term impact on the global competition picture and China's growth mode in the tire industry, Guizhou Tire said.
   Aeolus Tyre Co., Ltd., (SH: 600469), also one of China's major tire makers, said on October 20th that it had a net profit of RMB124.85 million in the third quarter, representing a more than 10-fold increase.
   In the first nine months, net profit rose 170.01% to RMB254.4 million. It reported revenue of RMB1.54 billion in the same period.
   Aeolus Tyre attributed the surging profit to a sharp decline in costs. The company's net cash flow jumped 303.73% in the third quarter.
   Market analysts said that it is the rubber prices, which were near record low levels in the first half of the year, helped the tire industry to recover better than thought.
   Aeolus Tyre said earlier in the first half of the year that it planned to invest RMB1 billion for a new 5 million pcs/a passenger car tire plant. The company's another 150 000 pcs/a radial tire plant has been started production this September, with full-capacity operation expected in November 2009.
    Aeolus Tyre mainly produces heavy-duty tires and off-the-road tires for engineering and construction vehicles. Such types of tires are not involved the tariff-levied tires by the US government in September.