According to the Zhitong Finance APP, Zhongtai Securities released a research report stating that since March, the tire sector has fallen to a 9x PE (10x absolute bottom) due to skyrocketing oil prices. The pessimistic sentiments regarding raw materials, shipping costs, and exchange rates have been fully released. The main theme of accelerating overseas expansion in 2026 remains unchanged, and the catalyst for a sector-wide Davis double hit is imminent, with the performance period in April leading to the anti-dumping results on May 4, and breakthroughs in high-end matching and track tires.

The main points of Zhongtai Securities are as follows:

Individual stocks: Pay attention to capacity progress (supply) tracking, and also refer to export order trends

Capacity progress: The newly added capacity in Q1 2026 is expected to reach full production, with the average performance elasticity of leading companies in 2026 expected to be +25% (in a pessimistic scenario). Zhongce, Sailun, and Sentury lead the new capacity in 2026 (1-20 million tires), with Haian Giant Tire expected to achieve a year-on-year increase of +224% after reaching full production in 2028.

Orders to the U.S.: In the off-season month of March 2026, the cumulative year-on-year increase in import orders to the U.S. for Sailun, Sentury, and Linglong is +9%/+17%/+59% (the specific number/value of each order varies, for reference only).

Capacity utilization rate: The operating rate of leading semi-steel manufacturers is about 95%+, while there is differentiation and room for improvement in full steel and non-road sectors.

Industry β: Pay attention to import volumes from Europe and the U.S. (demand), and also refer to domestic operating rates and inventory levels

Export trends: China's production/export volume remains flat year-on-year, with December 2025 showing +1.0%/-3.6% year-on-year, affected by the double-reverse investigation on small and medium-sized tire companies in Europe. Exports in February 2026 increased by +28% year-on-year (anti-dumping postponed to April for retroactive effect). ① Semi-steel tires: Domestic operating rate in March 2026 is about 77% (down 6 percentage points year-on-year); self-owned exports to Europe slowed, down 9% year-on-year in January 2026 (China accounts for the largest share of EU imports at 59%); self-owned exports to the U.S. remained flat, up 2% year-on-year in October 2025 (Thailand and Mexico account for the largest share of U.S. imports at ~39%). ② Full steel tires: Domestic operating rate in March 2026 is about 69% (up 1 percentage point year-on-year); self-owned exports to Europe increased by 9% year-on-year in January 2026 (China accounts for the largest share of EU imports at 20%); self-owned exports to the U.S. decreased by 10% year-on-year in October 2025 (Thailand and Cambodia account for the largest share of U.S. imports at 14%). ③ Non-road tires: Domestic mining industry operating rate in Q4 2025 is 72% (stable at about 70%); U.S. mining industry operating rate in February 2026 is 85% (stable).

Domestic inventory (small and medium-sized tire companies): ① Semi-steel tires: Inventory days in April 2026 are 42, down 3% year-on-year (decrease compared to the previous month); ② Full steel tires: Inventory days in April 2026 are 38, down 8% year-on-year (stable year-on-year, decrease compared to the previous month).

Cost side: Trade policy >> raw materials >> shipping costs/exchange rates

Changes in trade policy: ① Europe: The expected implementation of the double-reverse investigation in Europe in 2026 is favorable for leading tire companies, with the final ruling on anti-dumping on May 4, 2026, and execution on June 18, 2026, with retroactive effects for countervailing duties starting in May 2026 and preliminary rulings in August 2026; U.S.: On April 25, 2025, tariffs of +25% were imposed on global semi-steel tires, and on August 25, 2025, full steel tires were included in the 232 tariffs at +25%, with the ruling on fentanyl and reciprocal tariffs deemed invalid in February 2026. ② Other regions: In 2025, the Eurasian Economic Union, the UK, Brazil, and Colombia initiated double-reverse investigations/increased tariffs on Chinese tires, benefiting leading companies (with overseas production capacity) to capture tail-end market share Raw Materials: As of April 26, 2013, the comprehensive price index for tire raw materials is at the 80th percentile over the past three years and has retreated from a high level. In March, this was mainly driven by the surge in oil prices, leading to price increases in ① natural rubber (80th percentile over the past three years) and ② synthetic rubber (79th percentile over the past three years). Natural rubber is expected to start harvesting in mid to late March, and the implementation of anti-dumping measures in Europe may suppress prices. Synthetic rubber is expected to weaken in April (increased load in April/increased capacity in June → market reacts in advance).

Shipping Costs: Freight rates on various routes have remained low for a long time, and as of April 13, 2026, there has been no impact from the Middle East events.

Exchange Rate: The US dollar continues to depreciate, while the euro remains stable. There are certain hedging opportunities for overseas liabilities, and export chain enterprises have normalized hedging management.

Risk Warning: Risks of price fluctuations in raw materials such as rubber and carbon black; construction progress of new production capacity not meeting expectations; downstream tire application demand not meeting expectations; uncertainties in international trade friction; brand building not meeting expectations; risks of data distortion from third-party sources and calculation deviation risks; risks of outdated or untimely updates in publicly available information used in research reports