General Science's domestic semi-steel tire transformation project and Thailand's second-phase project were launched, accelerating the production capacity of high-performance green semi-steel tires and driving high-quality development.
On June 28th, General Science (SH.601500) held the commissioning ceremonies for its domestic semi-steel tire technological transformation project and the second-phase project in Thailand on the same day. Cheng Jinyuan, the company's general manager, and Gu Yahong, the general manager of the overseas company, respectively unveiled the projects in Wuxi, China and Rayong, Thailand. This important moment marked the accelerated release of General Science's high-quality production capacity for high-performance and green semi-steel tires and achieved a new leap in high-quality development.
It is understood that the designed production capacity of the company's second-phase project in Thailand is 10 million semi-steel tires. Once fully operational, it is expected to achieve an average annual revenue of 2.466 billion yuan and an average annual net profit of 459 million yuan. The domestic semi-steel tire technological transformation project has increased the production capacity by 6 million through the optimization and upgrading of part of the original all-steel tire production capacity. The two projects started construction in September and November 2023 respectively. It took 9 months and 6 months to complete, achieving high-efficiency guarantee, setting a new record in the industry once again and demonstrating General Science's technological strength and team capabilities.
General Science introduced that the two projects put into production this time focus on creating high-performance new energy green products of independent brands, concentrate on the design of sustainable materials to achieve "high quality and low carbon". Meanwhile, adhering to the company's years of manufacturing experience and technological strength, on the basis of the successful operation of the "lights-out workshop" in the first phase, they adopt world-class equipment and integrate multiple intelligent manufacturing technologies such as the Internet of Things, big data and artificial intelligence to build industry-leading digital, intelligent and green factories, which are committed to improving the "human efficiency, energy efficiency and product quality efficiency" throughout the whole process. It is of great significance for optimizing the enterprise's production capacity layout and structure and enhancing the core competitive advantages and profitability.
The global layout ushers in broad growth space
As the prosperity of the tire industry climbs, especially with the continuous increase in the demand for overseas tire markets, the tire industry has maintained a momentum of rising both in export volume and price. According to the statistics of the General Administration of Customs of China, in the first five months of 2024, China's rubber tire exports reached 3.63 million tons, a year-on-year increase of 4.6%; the export value was 64.2 billion yuan, a year-on-year increase of 6.1%. According to the research report of Cinda Securities, taking the United States, a major tire-consuming country, as an example, since 2024, the monthly tire import volume of the United States has been at a relatively high level compared with the same period in history. In April, the number of imported passenger car tires in the United States increased by 7.71% year-on-year. Meanwhile, the sales volume of tire shops has still maintained a high growth trend year-on-year, and the downstream demand for tires is relatively stable.
Combined with the macro situation and the industry development trend, in recent years, General Science has formulated the "5X Strategic Plan", striving to achieve the internationalization goal of five major production bases at home and abroad by 2030. The company has firmly grasped the development opportunities of the "dual circulation of domestic and international markets" and continuously promoted the industrial upgrading in the aspects of internationalization, intelligentization and greening. In 2019, it built the first overseas production base in Thailand. With the full production capacity achieved at the Cambodia base in May this year, General Science has become a tire enterprise in China's tire industry that took the lead in successfully achieving full production capacity at "two overseas bases". The great success in going global has led to a rapid increase in the company's performance. In the first quarter report of 2024, the company's net profit reached 153 million yuan, a year-on-year increase of 1270%, entering the "fast lane" of development.
Empowering the Market and Boosting the Company's Booming Production and Sales
Relying on the iteration and innovation of core technologies and products, General Science adheres to its brand positioning and continuously improves its brand matrix. Leveraging the advantages of its two overseas bases, the company has opened up the pattern of the international market. In recent years, it has continuously increased overseas brand building, deepened cooperation with leading overseas customers, continuously strengthened channel expansion, enhanced the company's brand image and popularity, and expanded its market share.
The company has continuously made appearances at internationally renowned exhibitions such as the SEMA in the United States, the Cologne in Germany, and the Dubai show, presenting itself on the world stage with high-tech and cutting-edge technologies. It has strengthened marketing activities and media publicity, and actively expanded into markets such as Europe, South America, Central Asia, and Southeast Asia through differentiated product strategies. This has not only enhanced overseas customers' in-depth understanding of the company's products but also enabled the company to grasp more new demands from overseas customers and the latest trends in the frontier markets. The reporter has learned that currently, the overseas bases of General Science continue to enjoy booming production and sales. The daily output of semi-steel tires at the Thailand base has exceeded 20,000 at its peak, and that at the Cambodia base has exceeded 17,000. However, overseas orders are still in short supply.
Green Products Lead Consumption in Segmented Markets
According to the "Global Electric Vehicle Outlook 2024" report by the International Energy Agency, it is expected that global sales of new energy vehicles will reach 17 million in 2024, accounting for more than one-fifth of the total global vehicle sales. The sales volume of new energy vehicles in China will increase to around 10 million, accounting for approximately 45% of China's domestic vehicle sales.
General Science has been continuously promoting research and development innovation. The Celimo GA5 has been rated as a national-level green design product. The Celimo GA8 and CHP8 urban SUV tires not only ensure outstanding quiet and comfortable driving experiences but also provide excellent wet handling and grip performance, endowing users with a more comfortable driving and riding experience. The new product, FORTEZZA AS, with its unique 3D groove design, offers excellent grip and anti-skid performance on wet surfaces, effectively solving the pain points for users when traveling on rainy or snowy days. The new generation of soundproof cotton puncture-resistant tires took the lead in adopting patented technologies and were paired with custom-made polyurethane sponges to suppress cavity noise and achieve rapid and automatic puncture repair, providing high security guarantees for new energy vehicle users. Meanwhile, the proportion of the company's large-size products with a diameter of 17 inches or more has increased rapidly, continuously enhancing its sales premium ability and brand influence.
The research report of TF Securities pointed out that the tire industry is entering a stage where the short-term, medium-term and long-term logics are all trending upward. In the short term, the external impacts faced by China's tire industry have been alleviated, and the prosperity of the industry has continued to rise. In the medium term, as Chinese tire enterprises accelerate the pace of "going global", the layout of global factories has been initiated, and their revenues are expected to continue to grow. In the long term, riding on the wave of the development of new energy vehicles, Chinese tire brands will complete the transformation from manufacturing attributes to brand attributes together with Chinese auto enterprises.
The relevant person in charge of General Science said that the company will continue to implement the "5X Strategic Plan", go all out to promote project construction, and strive to achieve full production capacity for the second-phase project in Thailand, the second-phase project in Cambodia, the domestic 6-million semi-steel tire technological transformation project and the 100,000 engineering tire technological transformation project next year. In the future, the company will further promote the site selection and construction of new overseas production bases, provide safer and greener products and services for global users, and create greater value for customers!
