According to the Zhitong Finance APP, Guojin Securities released a research report stating that the tire sector is expected to achieve total operating revenue of 55.6 billion yuan in the first half of 2025, a year-on-year increase of 10%; net profit attributable to the parent company is expected to be 4 billion yuan, a year-on-year decline of 30%; overall sales gross margin is 18.4%, a year-on-year decline of 5.2 percentage points; and net profit margin is 7.5%, a year-on-year decline of 4.1 percentage points. The main reason for the decline in profits is the sudden impact of U.S. tariff policies. Considering that the impact of tariffs has gradually been digested in the second quarter, coupled with the relief of costs due to falling raw material prices, profits are expected to recover in the third quarter.
On the demand side, under the background of consumption downgrade, the high cost-performance tire market still has growth potential. The ceiling for market space that domestic tires can capture in the long term will be higher than before. On the supply side, many overseas tire companies have begun to close and reduce some production capacity, while leading domestic tire companies have started a second round of overseas expansion, consolidating their cost-performance advantages while continuing to enhance their risk resistance capabilities.
On the policy side, if the EU anti-dumping tax rate is implemented, then short-term overseas production capacity supply will be relatively tight. Tire companies with global layouts and incremental overseas production capacity are expected to achieve both volume and price increases in EU orders. At the same time, the originally intensifying competition in the U.S. market will also be alleviated, further promoting the optimization of the tire industry structure. We are optimistic about domestic tire companies that have taken the lead in going overseas and have relatively complete overseas layouts.
<h2>Guojin Securities' main viewpoints are as follows:</h2>
Overall demand in the tire industry is supported but structurally differentiated, with export growth slowing down
In the first half of 2025, global tire market demand is expected to grow by 2% year-on-year, reaching 918 million units, of which all-steel tires are expected to grow by 1% year-on-year to 106 million units, and semi-steel tires are expected to grow by 2% year-on-year to 812 million units. From a structural perspective, the fastest growth is in the replacement of semi-steel tires, with a year-on-year increase of 3%.
China's tire export growth is slowing down. In the first half of 2025, the export volume of passenger car tires was basically flat year-on-year at 17.2 million units, while the export volume of truck and bus tires increased by 2% year-on-year to 6.3 million units. In the second quarter of 2025, the export volume of passenger car tires decreased by 3.6% year-on-year to 8.736 million units, while the export volume of truck and bus tires increased by 1.1% year-on-year to 3.33 million units.
From the U.S. market perspective, although there was a sudden tariff incident in the second quarter, the support for import demand remains strong. In the first half of 2025, the cumulative import volume of passenger car tires in the U.S. was 84.91 million units, a year-on-year increase of 3%, with supplies from Thailand, Vietnam, and Cambodia accounting for 41%; the import volume of truck and bus tires was 32.65 million units, a year-on-year increase of 12%, with supplies from Thailand, Vietnam, and Cambodia exceeding half.
Tire sector revenue steadily grows, but profitability declines under tariff impact
In the first half of 2025, the tire sector achieved total operating revenue of 55.6 billion yuan, a year-on-year increase of 10%; net profit attributable to the parent company is expected to be 4 billion yuan, a year-on-year decline of 30%; overall sales gross margin is 18.4%, a year-on-year decline of 5.2 percentage points; and net profit margin is 7.5%, a year-on-year decline of 4.1 percentage points.
In the second quarter of 2025, total operating revenue reached 28.6 billion yuan, a year-on-year increase of 9.9% and a quarter-on-quarter increase of 6.2%; net profit attributable to the parent company was 2 billion yuan, a year-on-year decline of 33%, remaining basically flat quarter-on-quarter; sales gross margin was 18.9%, a year-on-year decline of 4.9 percentage points, but a quarter-on-quarter increase of 1.1 percentage points;
The net profit margin is 7.3%, down 4.5 percentage points year-on-year and down 0.4 percentage points quarter-on-quarter. The main reason for the decline in profits is the sudden impact of U.S. tariff policies. Considering that the impact of tariffs has gradually been digested in the second quarter, coupled with the relief in costs due to falling raw material prices, it is expected that profits in the third quarter will likely recover.
Significant performance differentiation in the corporate sector, with leading domestic tire companies expected to continue increasing market share
Leading tire companies with overseas bases and capacity expansion show stronger operational resilience. In the first half of 2025, Sailun Group's total operating revenue increased by 16% year-on-year to reach 17.6 billion yuan, while net profit attributable to the parent company decreased by 14.9% year-on-year to 1.83 billion yuan. In terms of the overseas expansion of tire companies, after completing the first round of Southeast Asia expansion, leading tire companies have already started the second round of overseas expansion. Sailun's bases in Indonesia and Mexico have already rolled out their first tires in the first half of this year, and a new factory in Egypt has been planned. Zhongce Rubber's factory in Indonesia has already contributed profits, and the factory in Mexico is under construction, while Linglong's factory in Serbia and SENTURY's factory in Morocco are continuing to ramp up production. Unlike the continuous overseas expansion of domestic tire companies, several overseas tire companies have announced plans to close factories and reduce production. Against the backdrop of consumer downgrade, domestic tire companies are expected to seize opportunities to continue capturing global market share.
Investment recommendations and valuation
From a fundamental perspective, although overall industry demand is relatively stable, the semi-steel replacement market has stronger support structurally, and leading companies with overseas base capacity expansion are expected to continue improving their revenues. As the impact of tariffs is gradually digested and raw material prices fall, it is expected that corporate profits will also see a certain degree of recovery.
From a trade risk perspective, U.S. tariffs are expected to be transmitted through terminal price increases in the long term; the EU has officially launched an anti-dumping investigation into imported passenger cars and light truck inflatable rubber tires from China. Tire companies with multiple overseas bases can flexibly adjust orders to mitigate risks. If the determined tariff rates are high, considering the short-term supply shortage and the relatively long construction period for overseas capacity expansion, it is expected that in the next 2-3 years, overseas capacity exporting to EU orders will have good price elasticity and profit margins.
Although the industry still faces risks such as intensified competition, anti-dumping tariffs, and rising raw material prices, from an industrial trend perspective, on one hand, the demand side still has growth potential in the high cost-performance tire market against the backdrop of consumer downgrade, and the ceiling for market space that domestic tires can capture will be higher than before. On the supply side, many overseas tire companies are beginning to close and reduce some capacity, while leading domestic tire companies have already started the second round of overseas expansion, consolidating their cost-performance advantages while continuing to enhance their risk resistance.
On the other hand, if the EU anti-dumping tariff rates are implemented, the short-term supply of overseas capacity will be relatively tight. Tire companies with global layouts and overseas capacity expansion are expected to achieve both volume and price increases for EU orders. At the same time, the originally intensified competition in the U.S. market will also ease, further promoting the optimization of the tire industry structure. We are optimistic about domestic tire companies that have taken the lead in going overseas and have relatively complete overseas layouts.
Risk warning
Raw material prices have fluctuated significantly, international trade frictions, shipping costs have fluctuated significantly, exchange rates have fluctuated significantly, and domestic companies building factories overseas have intensified competition

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Guojin Securities released a research report indicating that the tire industry revenue is expected to grow by 10% in the first half of 2025, but net profit will decline by 30%. Affected by the U.S. tariff policy, profitability has decreased; however, with the decline in raw material prices, it is expected that profits will improve in the third quarter. The market share of leading domestic tire companies is expected to increase, and under the backdrop of consumption downgrade, the high cost-performance tire market still has growth potential. Overall demand support exists, but the industry structure is clearly differentiated

Zhitong

Zhongce Rubber

Sailun Group

SENTURY

Guotai Junan Securities: Under tariff pressure testing, tire companies are beginning to differentiate, and the industry is expected to improve in the second half of the year