Zhongce 2025 H1 Performance
On August 19, 2025, Zhongce Rubber, a leading player in the tire industry, released its first-half report. This report, like a multifaceted lens, reveals both the company's robust expansion momentum and its profit challenges under cost pressure, holding the key to the industry's future development.
I. A "Twinkle and Piece" of Revenue and Profit: A record-breaking 21.8 billion yuan in revenue, but costs drove net profit down 8.56%
Let's first look at the most closely watched financial data—revenue soared to 21.855 billion yuan in the first half of the year, a significant year-on-year increase of 18.02%. This growth rate is quite impressive in the current tire market. But turning to the net profit page, the picture suddenly changed: net profit of 2.322 billion yuan represented a year-on-year decrease of 8.56%.
Why is there "increased revenue but not profit"? The answer lies in costs. Operating costs increased by over 20% in the first half of the year, meaning that nearly 20% of the revenue was consumed by raw materials, production, and other costs, significantly squeezing profit margins. This contrast of "high revenue and low profits" has become the most striking contradiction in this semi-annual report.
II. Capacity Expansion Bears Fruit: 26.93 Million Tires Sold in the Second Quarter, Car Tire Sales Also Rises
Fortunately, the capacity expansion that Zhongce invested heavily in over the past two years is finally paying off. The increased production and sales volume has directly boosted revenue.
For example, in the second quarter of 2025, tire sales increased by 10.36% year-on-year to 26.9379 million units, with corresponding sales revenue increasing by 15.32% to 9.364 billion yuan. Although car tire sales grew more slowly, they still saw a year-on-year increase of 3.96%, with sales of 32.2873 million units and revenue of 1.06 billion yuan, a year-on-year increase of 13.85%. Overall sales revenue in the first half of the year surged accordingly, demonstrating that this wave of capacity expansion was a successful move.
III. Product Price Increases + Structural Upgrades: A Two-Pronged Approach to Boost Revenue
Selling more isn't enough; Zhongce has mastered the combined power of "product upgrades + price increases." In the second quarter of 2025, the average selling price of tires increased by 4.5% year-on-year, with car tires seeing an even steeper increase, at 9.52% year-on-year and even a 1% increase month-on-month.
This is driven by the increasing proportion of "high-value products"—for example, tires that are more wear-resistant and better suited for new energy vehicles—which not only meet market demand but also support prices. This strategy not only demonstrates Zhongce's growing product competitiveness but also strengthens its pricing power in the market.
IV. "Two-Pronged Strategy" for Domestic and Overseas Sales: Domestic sales surged by 23.73%, while overseas sales grew steadily by 11.89%
Looking at market performance, Zhongce's "domestic + overseas" strategy is a true success. Domestic market revenue reached 11.867 billion yuan in the first half of the year, a significant year-on-year increase of 23.73%, a clear "home-field advantage."
This was thanks to the growing competitiveness of its all-steel tires, coupled with its early focus on new energy vehicle applications – the current surge in new energy vehicle demand creates a huge demand for high-performance tires, and Zhongce capitalized on this opportunity.
Overseas markets also performed well, with revenue reaching 9.924 billion yuan, an 11.89% year-on-year increase. Zhongce's ability to maintain stable growth overseas is due to its local factories, R&D, and sales network. This strategy goes beyond simply "selling products" and focuses on understanding local needs. For example, in emerging markets with complex road conditions, specialized tires with high wear resistance and grip naturally attract customers.
V. Is there hope in the second half of the year? Stabilizing costs and upgrading products may lead to a profit recovery.
While the decline in net profit in the first half of the year is somewhat regrettable, Zhongce still has a number of cards in its hand: production capacity is being expanded, products are being upgraded, and domestic and international markets are stable. As long as raw material prices stabilize, costs are effectively controlled, and sales of high-value products increase, we may be able to achieve our goal of increasing both revenue and profits.
For Zhongce, the first half of the year presented more opportunities than challenges. In the second half of the year, as long as we continue the path of "product upgrades + cost control," our leading position in the tire industry will only become more secure.
