Linglong Tire (601966) Company Review: Heavy Truck Leader Releases Positive Signal for 2020 Sales

Linglong Tire (601966) Company Review: Heavy Truck Leader Releases Positive Signal for 2020 Sales

Event: Recently, leading domestic heavy truck companies (including FAW Jiefang, Dongfeng Group, Sinotruk, Shaanxi Heavy Truck and Beiqi Foton, etc.) have been listed at the 2020 annual meeting, summarized the market performance achieved in 2019, and formulated the heavy truck market operation in 2020The strategy (after our calculations, CR5 heavy truck sales in 2020 is expected to increase by 5% -10% compared to 2019), releasing positive signals for heavy truck sales in the next year.

We believe that Linglong Tire, as a representative of the domestic tire industry supporting market, the development strategy of heavy truck companies will directly affect the sales of Linglong Tire’s domestic steel tire market next year.

Review of sales volume of heavy truck market since this year: According to data from the First Commercial Vehicle Network, from January to November 2019, domestic heavy truck vehicles achieved 107 sales.

440,000 vehicles, an annual increase of 1.

53%, of which heavy truck sales were 9 in November.

410,000 vehicles, an annual increase of 5.

3%, an increase of 3 from the previous quarter.


Since the beginning of this year, heavy truck sales have increased against the trend. We believe that there are two main reasons for this: 1) Supervision of overload incidents has been strengthened and illegal vehicle elimination has accelerated.

Since this year “5.

The 21 ”empty car overload event and the Wuxi elevated overload event occurred, and the policy end strengthened the management of illegal and overloaded vehicles, increasing the elimination of illegal vehicles and the purchase of new vehicles.

With the total amount of cargo unchanged, the policy tends to directly reduce the load of heavy trucks and increase the total demand for heavy trucks.

2) Elimination and replacement of National Three Vehicles.

The “Three-year Action Plan to Win the Blue Sky Defense War” proposes to vigorously promote the early elimination and update of diesel trucks driven by national third and lower emission standards.

According to HC data, there are still about 3 million national triple trucks on the market. These vehicles are expected to be eliminated in the next few years, and heavy truck sales are expected to be well protected.

The heavy truck leader has a more aggressive sales target in 2020, and Linglong Tire may benefit: At present, domestic heavy truck CR5 companies (FAW Jiefang, Dongfeng Group, China National Heavy Duty Truck, Shaanxi Heavy Truck and Beiqi Foton) have a market share of more than 83%.

Since December this year, CR5 companies have successively proposed heavy truck sales plans for 2020. According to our statistics, the top five heavy truck companies plan to transition about 1 million heavy trucks, which is expected to increase by 5% -10% compared to 2019.Sales released a positive signal.

According to the data of the Rubber Industry Association, the number of tires for each medium-duty truck is 11 and the number of tires for heavy-duty truck is 16-22.

We calculated based on the median number of tires for each truck being 16 and the heavy truck CR5 enterprise supporting market is expected to increase the demand for all-steel tires by 800-1.6 million.

As a leading domestic tire industry company, Linglong Tire has a close supporting strategic cooperative relationship with domestic heavy truck CR5 companies. We continue to be optimistic about the development of Linglong Tire and believe that the leading strategic deployment of heavy truck companies in 2020 is expected to drive Linglong Tire’s all-steel tireSales in ancillary markets.

Investment suggestion: As one of the leading enterprises in the domestic 北京桑拿洗浴保健 tire industry, the company has assessed with domestic counterparts that it has a sufficient advantage in the supporting market and is the first to usher in the harvest period.

We are optimistic about the company’s long-term layout in the supporting market, transforming the company’s gradual efforts in the supporting market, and gradually increasing the company’s brand power, further improving the growth space.

In addition, we are optimistic about the sales of the heavy truck market next year, and believe that the total sales of heavy trucks are expected to maintain positive growth.

The company is expected to achieve revenue of 168 in 2019-2021.

7.9 billion, 189.

34 billion, 213.

5.3 billion, an increase of 10 in ten years.

3%, 12.

2%, 12.

8%; net profit attributable to mother 16.

62 billion, 19.

3.1 深圳桑拿网 billion, 23.

0.8 billion, an increase of 40 in ten years.

7%, 16.

2%, 19.

5%, corresponding to PE 16.

07X, 13.

83X, 11.58X, maintaining the “highly recommended” level.

Risk reminder: the risk of fluctuations in raw material prices; the growth of automobile sales is less than expected, and the development of supporting markets gradually anticipates risks.