Linglong Tyre(601966) 华创证券·2024-10-31 05:17Investment Rating - The report maintains a "Strong Buy" rating for Linglong Tire (601966) with a target price of 28.80 CNY, compared to the current price of 19.72 CNY [1]. Core Insights - Linglong Tire achieved a revenue of 15.949 billion CNY in the first three quarters of 2024, representing a year-on-year increase of 9.77%. The net profit attributable to shareholders reached 1.712 billion CNY, up 78.39% year-on-year. In Q3 2024, the company reported a revenue of 5.569 billion CNY, with year-on-year and quarter-on-quarter growth of 5.22% and 4.39%, respectively. The net profit for Q3 was 786 million CNY, reflecting a year-on-year increase of 97.30% and a quarter-on-quarter increase of 62.39% [1]. Summary by Sections Revenue and Profitability - In Q3 2024, Linglong Tire produced and sold 22.33 million and 21.43 million tires, respectively, marking year-on-year increases of 8.4% and 10.7%. The production and sales rate remained stable at over 95% [1]. - The average selling price of tires in Q3 2024 was 257.3 CNY per tire, with year-on-year and quarter-on-quarter increases of 4.3% and 2.2%, respectively. The gross margin and net profit margin for Q3 were 27.4% and 14.1%, showing quarter-on-quarter increases of 5.3 and 5.0 percentage points [1]. Cost and Expenses - The company reported a period expense ratio of 9.41% in Q3 2024, which is a decrease of 3.02 and 0.36 percentage points year-on-year and quarter-on-quarter, respectively. The financial expense ratio was -0.57% in Q3, indicating a positive impact from exchange gains [1]. Strategic Developments - Linglong Tire is increasing investment in its Serbia factory, which is expected to become a significant growth engine due to its advantageous location and industrial support. The company is also optimizing its supply chain and has made breakthroughs with several well-known automotive manufacturers [1]. - The report adjusts the profit forecast for 2024-2026, with expected profits of 2.184 billion CNY, 2.813 billion CNY, and 3.500 billion CNY, respectively, corresponding to PE ratios of 13.2x, 10.3x, and 8.2x [1].