Market Recovery! The Profit of Tire Enterprises Keeps Improving
Recently, the global tire manufacturers have once again set off a "rising tide". In this regard, the insiders believe that enterprises have high production costs, and there is a need to pass costs to the downstream.
In 2023, with the increase of product prices and the gradual recovery of the market, the profits of tire enterprises are expected to be further repaired. Since December 2022, more than 30 tire enterprises have issued price increase notices.
In terms of price increase, the increase of domestic tire enterprises is mainly between 1% and 5%. The price increase of Bridgestone, Michelin, Pirelli and other international giants is as high as 6% to 10%.
A senior investment consultant believed that high production and circulation costs were the key factors for tire enterprises to raise prices. Recently, the price of carbon black has risen, pushing up the production costs of tire enterprises; In addition, the logistics in some regions was not smooth before, which also contributed to the price increase.
According to the data, in 2022, the price of carbon black hit a new decade high, with an increase of 31.34%. In addition, the insufficient operating rate of the tire industry and the further contraction of the supply side also boosted the expectation of tire price rise.
Previously, affected by multiple factors, the tire enterprises increased their income without increasing their profits. In 2021, the net profits of 9 tire listed companies in A-share market will decline.
According to statistics, the gross profit margin of listed tire companies has been declining from 2020 to the first quarter of 2022. Since then, with the price increase of raw materials slowing down, the gross profit margin of the tire industry has reached a turning point. As of the third quarter of last year, the gross profit margin of the tire industry had risen to 13.94%.
At the same time, the performance of listed companies is also being gradually repaired.
In the third quarter of 2022, 4 of the 9 listed tire companies achieved net profit growth. Relevant personnel of a tire enterprise in Shandong said that since the third quarter of 2021, the sea freight price has dropped significantly, reducing the export cost significantly.
At the same time, the increase in product prices effectively hedged the adverse impact of rising raw material costs. This has played a positive role in the continuous improvement of the company's performance.
Looking forward to the market performance in 2023, the industry is generally optimistic that the profits of tire enterprises will be further repaired.
