Jiangsu General Science Raised Product Prices Across The Board At The End Of September, Products From Thailand Factory Still In Short Supply

Product demand was strong in the first half of the year, and Jiangsu General Science (601500.SH)'s performance increased significantly. Can the industry's high prosperity be sustained? At the performance briefing held this afternoon, the company's chairman Gu Cui said that the company's Thai factory is still booming in production and sales, and the supply of products exceeds demand. At the end of September, the company's prices for all-steel and semi-steel products increased.

In the third quarter, the tire market continued to gain momentum. Gu Cui said that the company's dual-base advantages in overseas factories have gradually emerged and the company has continued to expand its international market share. "Currently, the company's Thailand factory is booming in both production and sales, and supply exceeds demand. Orders far exceed the factory's existing production capacity, and profit margins have increased steadily. The Cambodian production base was officially put into production on May 22, and is currently accelerating the release of production capacity. It is expected to reach full production in 2024. “

The current market demand for large-size tires is stronger and the profit margins are higher. Regarding the current proportion of the company's semi-steel tires with large-size specifications, Bian Yabo, secretary of the company's board of directors, said that as of the end of June this year, the company's domestic semi-steel tires with a size of 17 inches or more accounted for more than 40%, and overseas semi-steel tires with a size of 17 inches or more accounted for more than 60%. . In the future, the company will further optimize its product structure and continue to increase the proportion of high-margin products.

At the meeting, some investors noticed that domestic factories have low profit margins. Gu Cui introduced that the company has accelerated the "internal to external" market layout, strengthened cooperation with international importers and traders, increased the proportion of domestic base exports; and promoted end-to-end cost reduction and efficiency improvement to continue to improve profitability.

In addition, since September, the prices of main raw materials for tires such as styrene-butadiene rubber, butadiene rubber, and carbon black have increased significantly. The tire industry has set off a wave of price increases, and some investors have expressed concern about the company's product price increase plans.

In this regard, Gu Cui said that the company has decided after research to increase the price of all-steel tire products by 2-3% and the price of semi-steel tire products by 3-5% starting from September 28, 2023. The company will adjust the prices of products based on various factors.

A reporter from https://www.cls.cn noticed that since September, many tire companies have issued price increase notices. As of September 18, there have been more than 30 tire companies, including Tire and Huasheng Rubber, announced price increases in September or early October. The price increases by different companies and different products ranged from 1% to 6%.