Linglong Tire's profit growth to be nearly 30% in 2024

Recently, Linglong released its full-year performance report. In 2024, Linglong Tire achieved a revenue of 22.058 billion yuan, a year-on-year increase of 9.39%; the year-on-year increase in net profit was an astonishing 26.01% year-on-year, reaching 1.752 billion yuan.

Profit growth exceeded revenue. What breakthroughs did Linglong achieve in 2024? Let us interpret them one by one through the financial report data today.

Sales volume increased, and revenue increased quarterly

From the first to the fourth quarter of 2024, Linglong Tire's revenue was 5.045 billion yuan, 5.335 billion yuan, 5.569 billion yuan and 6.109 billion yuan, respectively, achieving a quarterly revenue breakthrough with a compound growth rate of about 6.6%. Linglong said that the high revenue growth in 2024 came from the increase in its sales. In 2024, Linglong sold a total of 85.4471 million tires, a year-on-year increase of 9.57%. The sales growth came from Linglong Tire's multi-project breakthroughs.

The first is the increase in production. In 2024, Linglong produced a total of 89.1223 million tires, an increase of more than 12%. Institutional data show that Linglong ranks first among Chinese tire companies in passenger car and light truck radial tire production, and ranks among the top five Chinese tire companies in truck and bus tire production. The increase in production is inseparable from the breakthrough in production capacity. In 2024, the Serbian tire factory was put into operation, which was the first to realize the real localization operation of Chinese tire companies in the European market, and provided stronger support for Linglong Tire's supply to the European market.

At present, Linglong Tire has 7 factories in the world with a designed production capacity of 121 million tires, and the production capacity reached about 101 million tires in 2024. In 2024, Linglong's total capacity utilization rate reached about 88% with the support of localized operations. The high capacity utilization rate confirms the order situation of Linglong Tire in short supply in 2024. This is also the second factor we want to talk about to support the growth of Linglong Tire sales, supporting and replacing the dual "markets".

We all know that Linglong Tire has been implementing the business strategy of "supporting to drive retail" in recent years. In 2024, Linglong still adheres to this concept and rides the wind and waves in the supporting market. In 2024, the global supporting volume is nearly 29 million, and the total supporting volume is nearly 300 million, ranking first in China's tire supporting for many consecutive years.

The tire supporting share of China's new energy vehicle market has been firmly in the top spot of China's tires from 2020 to 2024. In 2024, it was awarded the market position certification of "No. 1 in global new energy vehicle supporting tire sales" by the international authoritative consulting agency Sullivan. The financial report shows that the supporting market brought Linglong Tire more than 5.9 billion yuan in revenue in 2024, a year-on-year increase of 5.86%. It accounts for 26.86% of Linglong's total revenue.

However, the replacement market is still the main source of Linglong Tire's revenue (accounting for 72%), reaching about 15.885 billion yuan. The growth in sales not only led to an increase in tire company sales, but also led to an increase in Linglong Tire's profits.

Main profit source of overseas market

In 2024, Linglong Tire's net profit was RMB 1.752 billion and gross profit was about RMB 4.8 billion.

Comparing the profit performance of different markets, it can be found that the overseas market is very important in the profit structure of Linglong Tire. In 2024, the gross profit margin of tire sales in the overseas market was as high as 29.39%, more than double the gross profit margin of the domestic market. In 2024, the profits of the overseas market were also affected by the US double anti-dumping on Thai truck tires, and the cost increased by more than 10%. However, due to the cost advantage of Thai tires and through optimizing price combinations and other means, Linglong Tire still achieved an increase in gross profit margin in the overseas market.

From the data disclosed by Linglong Tire in its financial report, it can be seen that the Thai tire factory had the highest net profit, reaching 827 million yuan, and its ability to make money was more than twice that of domestic tire factories. However, looking at the performance quarter by quarter, it can be found that in the second half of 2024, Linglong Tire was deeply affected by rising costs-although sales rose quarter by quarter, profits declined to a certain extent in the second half of the year.

This is a common challenge faced by all tire companies (including foreign-funded tire companies) in the second half of 2024 - the cost of major raw materials has skyrocketed by 30%. At the same time, because the United States began to implement double anti-dumping on Thai truck tires, it also further affected the performance of most Thai tire factories in the second half of the year.

A good start in the first quarter

The cost increase in 2024 has spread to the first quarter of 2025. In the first three months of 2025, Linglong Tire's net profit fell by 22.78%.

However, driven by a 12.78% increase in sales (21.4096 million pieces) and an increase in the price of single tires in the first quarter of 2025 (the price of each tire in the first quarter of 2025 increased by 5.28% month-on-month from the fourth quarter of 2024, and increased by 0.56% year-on-year), Linglong Tire's revenue increased by 12.92% year-on-year to RMB 5.697 billion.

In addition, on April 25, 2025, Linglong issued an announcement that it plans to invest RMB 8.71 billion in Brazil for the construction of a new overseas factory. It is reported that after the project is fully completed and put into production, the annual output of various types of high-performance radial tires will reach 14.7 million sets, including 12 million sets of semi-steel tires, 400,000 sets of full-steel tires, 200,000 sets of engineering tires, 100,000 sets of retreaded tires, and 6,000 tons of liquid recycled rubber.