Linglong Tyre(601966) 中泰证券·2024-05-17 01:30Investment Rating - The report maintains a "Buy" rating for the company [1][2] Core Views - The company's 2024Q1 revenue increased by 15.04% YoY to 5.045 billion yuan, with net profit attributable to the parent company rising by 106.32% YoY to 441 million yuan [2] - The tire industry is experiencing a recovery, with the company's tire sales volume and average price both increasing in 2024Q1 [2] - Raw material price declines have driven profitability improvements, with the company's gross margin rising by 6.47% YoY to 23.43% in 2024Q1 [2] - The US Department of Commerce's final ruling reduced the company's anti-dumping duty rate from 21.09% to 4.52%, enhancing competitiveness in the North American market [2] - The company's "7+5" global strategy is progressing steadily, with the Serbia project expected to contribute new growth [2] Financial Forecasts and Valuation - Revenue is projected to grow from 20.165 billion yuan in 2023 to 31.610 billion yuan in 2026, with a CAGR of 16.1% [1] - Net profit is expected to increase from 1.391 billion yuan in 2023 to 3.167 billion yuan in 2026, with a CAGR of 31.6% [1] - EPS is forecasted to rise from 0.94 yuan in 2023 to 2.15 yuan in 2026 [1] - The company's P/E ratio is expected to decline from 24.3x in 2023 to 10.7x in 2026, indicating improving valuation attractiveness [1] Strategic Developments - The company is expanding its production capacity with new bases in China (Shaanxi and Anhui) and overseas (Serbia) [2] - The Serbia base is expected to complete 1.6 million truck and bus tire capacity in 2024 and 12 million passenger and light truck tire capacity in 2025 [2] Industry Analysis - The global automotive industry is recovering, with China's automobile production and sales reaching record highs of 30.161 million and 30.094 million units in 2023, respectively [2] - The tire industry is benefiting from increased demand due to the recovery of travel activities and the global automotive supply chain [2]