Review on the operation of the Board of Directors of Triangle Tire in 2023
() The operating comments of the Board of Directors in 2023 are as follows:
I. Discussion and analysis of business conditions
In the past year, the momentum of world economic growth was insufficient, and the external environment was complex and severe. China’s economic development is picking up and the market demand is gradually recovering. Facing the complicated and severe economic situation and market environment, under the leadership of the board of directors, the company firmly adheres to the strategic direction, scientifically coordinates production and operation, and continuously enhances its core competitiveness and sustainable development capability. The annual operating income continued to grow, the operating profit increased strongly, and the operating conditions showed a good development trend. The main operations during the reporting period are as follows:
(1) Summary of performance
In 2023, the company produced 24.17 million tires of various types, up 7.5% year-on-year, and the capacity utilization rate was about 90%. Sales reached 25.68 million, a year-on-year increase of 15.6%; Realized an operating income of 10.42 billion yuan, a year-on-year increase of 13.0%; The operating profit was 1.62 billion yuan, and the net profit attributable to the owners of the parent company was 1.40 billion yuan, an increase of 89.3% year-on-year. The substantial increase in performance was mainly due to the following factors:
1. Since 2023, domestic economic activities, transportation and logistics have been normalized, automobile production and sales growth and foreign trade demand have continued to be strong, and the sales volume of the company’s tire products has increased significantly.
2. With the recovery and growth of market demand and the strong support of the company’s brand, the product price remained stable.
3. The market price of main raw materials for tires fluctuated downward, falling year-on-year, and the cost pressure eased.
4. The profitability of tire products has been enhanced, the profitability of commercial vehicle tires and passenger car tires has increased, and high value-added products such as engineering radial tires and giant tires have maintained a high level of profitability, with outstanding profit contributions.
(2) Market performance
In 2023, the company grasped the market situation of domestic trade demand recovery and strong foreign trade demand, continuously optimized product structure and market structure, and carried out market expansion activities such as product iteration, channel and brand building from multiple dimensions. Serve end customers with new patterns, new products and high-performance products, and expand supporting business; Give full play to the brand advantages of triangle brand in overseas markets and strengthen cooperation with OEMs in export supporting markets with high added value; Continue to improve the domestic and international marketing network, promote the sinking of channels, carry out business marketing based on APP to serve end users, and support the construction of brand stores; Strengthen the multi-brand strategy and promote the channel construction and product sales of Weili Si Tong and Bailuda brands in weak domestic markets and DIAMONDBACK brand tires in Europe and other overseas markets; Give full play to the advantages of local marketing and technical service teams, be close to the market, go into the field to provide services, and support overseas distributors to carry out brand promotion activities.
In the domestic market, sales in 2023 increased by 20% year-on-year. Benefiting from the recovery of production, logistics and daily travel demand, the sales volume of commercial vehicle tire and passenger vehicle tire replacement market increased by more than 25%; Benefiting from the growth of domestic automobile production and sales, the supporting sales of commercial vehicle tires and passenger car tires increased by more than 12%; Affected by the downturn of the construction machinery industry, the overall domestic sales volume decreased by 5%.
In the international market, foreign trade sales increased by more than 12% in 2023. Among them, commercial vehicle tires increased by more than 4%, passenger car tires and engineering tires increased by more than 14%; Sales in Europe, Middle East and Africa increased significantly.
(C) brand building, perseverance
In the face of multi-level and multi-regional market demand, in 2023, the company continued to launch high-speed rail advertisements, and the Hangzhou Asian Games special train was launched. The advertisements in high-speed railway station stations in hangzhou east railway station, Hangzhou South Railway Station and Hangzhou Station further extended the brand communication of triangle tires; Help the German TriangeSchwerin sailing team sail the 20erJoenkreuzer class regatta; Named "Triangle Tire Cup", the 2023 China-Weihai Super Triathlon Series will continue to enhance the influence of the "Triangle" brand; Further expand the regional markets and terminal channels of sub-brands such as "Power Si Tong", "Bailuda", "Diamond Back" and "Sapphire" at home and abroad; Participated in the 133rd and 134th China Import and Export Fair, the United States, Italy, Germany, the Middle East, Latin America and other countries or regions, as well as international and domestic exhibitions such as the Latakko Conference and the International Rubber Conference, and held new product promotion activities in Europe, Hungary and other places, and the products were widely concerned and favored by customers.
In March, 2023, the company obtained the No.001 green product certification certificate issued by China Quality Certification Center, and in October, it passed the re-evaluation of AA grade of market quality credit rating in china association for quality, and was awarded the "Brand Value List of Key Industries in Shandong Province in 2023" issued by Shandong Brand Building Promotion Association.
(D) R&D and innovation, and strive for it diligently.
1, product innovation
During the reporting period, the company continuously optimized the product structure, continuously improved the product performance and strengthened the iterative evolution of products, and launched 117 new products throughout the year.
(1) Combined with the performance requirements of various regional markets, commercial vehicle tires have focused on developing high-wear and high-performance all-wheel seats and driving products for medium and long-distance freight transportation, and expanded S06 and D09 patterns in series, thus improving the wear resistance and safety of freight products; Improve the series of mining products, and enhance the anti-explosion and anti-load ability; Complete the 3PMSF (three san Snowflake Mark) certification of all series products of snow tires; In the original distribution market, according to the development of new energy vehicles and the change of vehicle models, the performance of tires was improved in terms of energy saving, wear resistance, handling stability, comfort and crack resistance, and it was recognized by main engine plants such as Yutong, Jinlong, Zhongtong and () and entered the standard system of new energy vehicles.
(2) On the basis of streamlining and optimizing the product line and enriching and improving the product performance, the passenger car tire has completed the comprehensive series development of a new generation of ultra-high performance EffeXSportTH202 and silent and comfortable ReiaXTouringTE307 products, which has comprehensively improved the comprehensive performance of the products, especially the wetland safety performance, and the wet and slippery label grade of TH202 new pattern products has been upgraded from C to A; The wet and slippery label grade of TE307 new pattern products was upgraded from grade c to grade b; In the original distribution market, it entered the SAIC-GM-Wuling passenger car system, developed Hyundai Kia, SAIC-GM-Wuling, Geely, Zhengzhou Nissan and Jiangling, completed the performance recognition of Hyundai Kia and Zhengzhou Nissan, and realized the supply of Geely, SAIC-GM-Wuling and other projects.
(3) Through the optimization and adjustment of process, structure, material and formula, the comprehensive performance of giant tire and desert tire products has been further improved. Among them, the new generation of giant tire 40.00R57TB599APRO products, the service mileage increased by more than 10%; Developed the tire products of underground operation transport vehicle; We have carried out high-end supporting cooperation with Caterpillar and Komatsu, and completed batch supporting of new energy vehicles with Caterpillar Qingzhou Factory, Great Wall Heavy Industry, Shanghai Sany and Longgong. With excellent product quality and satisfactory and efficient service, the company won the "Global Excellent Supplier" award from Caterpillar in 2023.
(4) The special tire has completed the development of a new generation of all-terrain off-road tire pattern products, improved the puncture resistance and wear mileage of the tire crown under extreme road conditions, and better met the performance requirements of all-terrain off-road vehicles for supporting tire products; The sidewall scratch-resistant and protective tires complete the domestic multi-environment and multi-climate reliability road test and finalize the identification with the whole vehicle to realize product matching; The 18-inch bead diameter industrial radial tire independently developed by the company has achieved product matching in various types of special vehicles for bridge transportation.
2, new technology, new materials, new process innovation
During the reporting period, through the research, innovation and application of new designs, new materials and new processes, the company effectively improved product performance, improved development efficiency and reduced energy consumption. In the prediction of passenger car tire profile, it realizes high-precision prediction and gets rid of the dependence on experience; In the design and development of commercial vehicle tires and passenger car tires, the application proportion and scope of high-strength steel wire and steel cord such as ST and UT are greatly improved, the product performance is significantly improved, and the product weight and energy consumption are effectively reduced; Adopt a new vulcanization process to reduce the energy consumption level of commercial vehicle tires and radial engineering tires; Expand the application of new materials in engineering tires, and increase the average service life of tires by more than 10%; Form a complete set of silent cotton tire development technology and have mass production conditions.
In 2023, the company’s ultra-high performance tire intelligent manufacturing technology with full electromagnetic induction heating and direct pressure vulcanization, heating nitrogen vulcanization and other new equipment technologies will enter industrial research and application, and the new technologies will further promote the improvement of product process quality and performance and reduce energy consumption; Participated in the project "Key Technology and Industrialization of Manufacturing High-efficiency and Low-zinc Rubber Vulcanizing Activator" won the second prize of the Science and Technology Progress Award of the Ministry of Education.
3. Aviation Tire Project
According to the requirements of civil aviation laws and regulations, the company has established a complete organizational structure of aviation tires, all production equipment has been put into normal use, and it has the compliance manufacturing capacity required for airworthiness certification. The aviation tire quality system has been put into trial operation for six rounds in combination with product trial production, which has basically met the requirements of the Civil Aviation Administration and has the conditions for compliance manufacturing review.
4, technical standards and patent achievements
In 2023, the company presided over the formulation of 2 national standards, participated in the formulation of 13 national standards and 2 group standards, and participated in the formulation of 3 international standards. Obtained 105 patents, including 8 invention patents, 18 design patents and 79 utility model patents, and achieved fruitful results in technological innovation.
(E) the integration of the two, strive for perfection.
In 2023, the company continued to promote the deep integration of informatization, robotics and automation, and strengthened research and application in energy conservation and environmental protection, digital informatization and automation of existing production line equipment. Including the establishment of a CRM unified mobile APP platform to enhance the experience and application of dealers and end users; Continuously optimize WMS, PLM, EAM and mold system, promote the in-depth application of the system, simplify the operation of business personnel and improve the efficiency of product development; Establish HSE system to realize patrol management of safety, environment and fire control risk identification and analysis, hidden danger investigation, operation management, hidden danger management and safety inspection in production site. At the same time, the company adopts new processes, new technologies and new models to carry out equipment innovation and energy-saving technical transformation, and studies and applies automation technology to improve the automation level of equipment in production processes such as rubber core production, carcass cutting joint and tire conveying, so as to improve quality and increase efficiency; The robot is used to realize the automation of rubber block handling and feeding of large mixer platform, which greatly reduces the labor intensity of operators; In the field of quality process control and finished product quality inspection, artificial vision and big data technology are applied instead of manual inspection to realize quality life cycle management, and automatic inspection, online monitoring and online data collection of carcass joint quality are realized in Huayang, providing big data support for process improvement.
During the reporting period, the company was selected into the list of the first batch of digital economy "Morningstar Factory" in Shandong Province and excellent solutions for intelligent transformation of chemical industry in Shandong Province, and obtained the AAA-level integrated management system evaluation certificate; The company’s "Integrated Management and Control Platform for R&D, Production and Marketing of Tire Industry" was selected as the demonstration project of Shandong Industrial Internet Platform, and the "Tire Industry Mold Lifecycle Management System" and "Tire Industry Whole Process Production Management and Control System (Mobile Terminal)" obtained the copyright of computer software.
(6) Low-carbon construction, taking multiple measures simultaneously.
During the reporting period, the company continued to implement the research and application of new technologies for energy saving and consumption reduction, and carried out energy-saving technological transformation and equipment innovation. In view of the high energy consumption of traditional steam vulcanization, the vulcanizing machine was reformed and debugged in the commercial vehicle tire production line, and the application of electric heating nitrogen instead of steam vulcanization technology was studied, and several rounds of process tests and performance tests of finished tires were carried out. At the same time, the thermal pipeline of vulcanizing machine is innovated, which greatly reduces steam energy consumption and equipment maintenance; Aiming at the white carbon black formula tire, the waste gas treatment process of powder spraying+four-stage filtration+double-wheel concentration +RTO combustion with "double-wheel concentration technology" as the core is studied and applied to realize the emission control of internal mixing waste gas. Optimize and update Huayang power system equipment. Compared with traditional compensation equipment, the new high-voltage static var generator reduces its own power loss by more than 50%, reduces line loss and saves power.
Ii. the industry in which the company is located during the reporting period.
(A) the overall situation of the tire industry
In 2023, China’s domestic economy rebounded, and overseas market demand was strong. At the same time, with the rapid growth of new energy vehicle sales, the gradual increase of China’s own brand market share, and the low price of raw materials, China’s tire industry achieved good results. According to the data of the National Bureau of Statistics, in 2023, the operating income and total profit of industrial enterprises above designated size in China’s rubber and plastic products industry increased by 0.5% and 14.6% respectively.
According to the data of the National Bureau of Statistics, in 2023, the output of rubber tires (including motorcycle tires) in China was 988 million, a year-on-year increase of 15.3%. According to the statistics of Tire Branch of China Rubber Industry Association, the total output of automobile tires in China in 2023 was 786 million, up 17.8% year-on-year. Among them, the output of all-steel tires was 145 million, a year-on-year increase of 16.9%; The output of semi-steel tires was 606 million, up 18.6% year-on-year, and the meridian rate reached 95.5%. According to the data of the General Administration of Customs, the export volume and export value of tires in China maintained double-digit growth in 2023. The cumulative export weight of new pneumatic rubber tires (including tires for motorcycles and bicycles) was 8.57 million tons, up 16.4% year-on-year, and the export volume was 616 million, up 11.8% year-on-year, and the export value was 150.113 billion yuan, up 19.5% year-on-year. Among them, the export weight of new pneumatic rubber tires for passenger cars was 2.86 million tons, up 20.3% year-on-year, the export weight of new pneumatic rubber tires for passenger cars or freight motor vehicles was 4.62 million tons, up 14.3% year-on-year, and the export weight of new pneumatic rubber tires for construction, mining or industrial handling vehicles and machines was 540,000 tons, up 34.4% year-on-year.
(2) Upstream main raw materials
In 2023, the market price of main raw materials for tires was basically at a low level, and the market price of natural rubber showed a sideways trend at the bottom, and began to oscillate upward in the third quarter; The price center of gravity of synthetic rubber rose first and then suppressed, and fluctuated upward, while the prices of steel cord and carbon black fluctuated downward. Trend of market price changes of main raw materials:
1. Natural rubber
2. Synthetic rubber
3. Carbon black
4, steel cord
(3) Downstream automobile and construction machinery industries
Automobile and construction machinery industry is the downstream industry of tire industry, mainly including commercial vehicles, passenger cars, construction machinery and other fields. The production and sales of automobiles and construction machinery support the matching market demand of tires, and the quantity of automobiles and various construction vehicles supports the huge market demand for tire replacement, which has great demand and potential for tire upgrading.
According to the statistical analysis of China Automobile Industry Association, China’s total automobile production and sales has been ranked first in the world for 15 consecutive years. In 2023, the production and sales of automobiles were 30.161 million and 30.094 million respectively, up by 11.6% and 12% respectively. The passenger car market performed well, with production and sales of 26.124 million and 26.063 million respectively, up by 9.6% and 10.6% respectively. The commercial vehicle market has stabilized and rebounded, with production and sales of 4.037 million and 4.031 million respectively, up by 26.8% and 22.1% respectively. The production and sales of new energy vehicles kept booming, with 9.587 million vehicles and 9.495 million vehicles respectively, up by 35.8% and 37.9% year-on-year, respectively. China’s production and sales of new energy vehicles accounted for more than 60% of the global total, ranking first in the world for nine consecutive years. In 2023, China’s automobile exports ranked first in the world, with 4.91 million vehicles exported nationwide, up 57.9% year-on-year, including 1.203 million new energy vehicles, up 77.6% year-on-year.
According to the statistics of the Ministry of Public Security, in 2023, the number of cars in China reached 336 million, with 24.56 million newly registered cars. Since 2014, the number of newly registered cars has exceeded 20 million for 10 consecutive years. In 2023, 7.43 million new energy vehicles were newly registered, accounting for 30.25% of the number of newly registered vehicles, from 1.2 million in 2019 to 7.43 million in 2023, showing a rapid growth trend. By the end of 2023, the number of new energy vehicles in China reached 20.41 million, accounting for 6.07% of the total number of vehicles; Among them, the number of pure electric vehicles is 15.52 million, accounting for 76.04% of the number of new energy vehicles.
In 2023, the domestic construction machinery industry is still in a downturn. According to the statistics of China Construction Machinery Industry Association, the main manufacturers of loaders of the Association sold 103,912 loaders in 2023, down 15.8% year-on-year. Among them, the domestic market sold 56,552 units, down 30.1% year-on-year; The export sales volume was 47,360 units, an increase of 11.5% year-on-year; A total of 3,595 electric loaders were sold nationwide, 2,435 more than the same period in 2022, with a sharp increase of 209.9%.
Iii. Business of the Company during the reporting period
(a) the company’s main business and products
Triangle tire is a professional tire manufacturer and supplier integrating tire design, manufacturing and marketing. Its core business is tire research and development, manufacturing and global marketing, and its tire business income accounts for 99% of the company’s total operating income. The company’s products cover commercial vehicle tires, passenger car tires, engineering tires, giant tires and special tires, etc. The product service targets include all kinds of automobile manufacturers, construction machinery factories, mines, engineering projects, group customers and tire dealers and consumers in the replacement market. More than 50% of the company’s products are sold to the international market, and the marketing network covers more than 180 countries and regions around the world.
(2) Business model
The company adheres to the road of global brand building, independent brand, specialized operation, and focuses on the innovation and development of tire science and technology. Through continuous R&D innovation, product upgrading, intelligent upgrading of manufacturing system, global marketing and brand building, and lean management, the company constantly enhances brand value and differentiated advantages of products, takes the road of high quality and sustainable development, and maintains its leading position in the industry.
On the supply chain management side, the company has established a long-term close strategic cooperative relationship with high-quality suppliers, and adopted a flexible procurement method combining forward and spot to control the procurement cost of raw materials; On the sales channel side, the original distribution market has deep cooperation with supporting OEMs from product research and development to production, supply and after-sales service. The retail market is dominated by dealer wholesale and retail of listed stores, supplemented by large-scale platform e-commerce and APP digital distribution channels, and the construction of distribution channels and the global development of brands, marketing and services are promoted by establishing branches and international marketing teams in various regions around the world; In R&D and innovation, we adhere to the product technology development strategy of "developing the first generation, producing the first generation, and reserving the next generation", focusing on original inventions to promote various technical research and innovation, continuously optimizing the product structure, realizing the differentiated advantages of products and highly adapting to various regional markets and market segments around the world; At the manufacturing end, the company insists on market orientation, mainly focuses on sales order production, supplemented by small batch flexible production, and meets different demand for single quantity at the same time, so that the company has good scale benefits; The company’s manufacturing system adheres to the direction of intelligent manufacturing and digital operation, promotes the deep integration of the two, and realizes automation, intelligence and lean management in the tire manufacturing process.
(3) Market position
The company is the leader of scientific and technological innovation in China tire industry, the initiator and forerunner of the development of low-carbon life industry, and a specialized tire enterprise integrating tire design, manufacturing and marketing. Its products serve global users. The company’s project "development of complete production technology and equipment for giant radial tires" won the first prize of national scientific and technological progress.
According to the ranking of "Top 100 Enterprises in china rubber Industry in 2024" published by china rubber magazine of China Rubber Industry Association, the company ranks sixth among tire enterprises in terms of operating income from the fourth quarter of 2022 to the first three quarters of 2023. According to the ranking of the top 75 global tires published by Tirebusiness, the company’s annual operating income ranked 25th in 2022. According to the list of the top 36 tire enterprises in 2023 published by tyrepress magazine, the company ranked 25th in operating income in 2022 and 16th in net profit in 2022.
Iv. analysis of core competitiveness during the reporting period
(1) The brand image lasts for a long time and the brand value continues to improve.
Triangle tire was founded in 1976, and it is an excellent supplier of original tires for internationally renowned automobile and engineering vehicle brands. The company has been honored as one of the "Top Ten Influential Brands in China Tire Industry" and "China Brand Power Index (C-BPI) Ranking" for many years. In March 2013, it became the first batch of national industrial brand cultivation pilot enterprises. In May 2021, the company won the high-end brand cultivation enterprise in Shandong Province in 2021, and was selected as the first batch of "Good Shandong" brand enterprises in March 2022. Since 2010, it has won consecutive awards in Caterpillar’s global supplier quality evaluation project. In 2023, it won the "Global Excellent Supplier" (SER) (the 11th time it won the highest standard evaluation), and won the "Excellent Supplier", "Excellent Quality Award" and "Excellent R&D Award" awarded by (), China FAW, Shaanxi Automobile, Futian Revo, Shandong Lingong, Zhengzhou Nissan and Sanyi. For the 16th time in 2023, we joined hands with BAIC Group to serve the National "Two Sessions"; In December 2023, it was selected into the first batch of national "Thousand Enterprises and Hundred Cities" trademark brand value promotion action list.
(2) Strong R&D strength and strong independent innovation capability.
The company is a national high-tech enterprise, a national intellectual property demonstration enterprise, a national technological innovation demonstration enterprise and an industrial product green design demonstration enterprise. It has established national scientific research platforms including the national recognized enterprise technology center, the national engineering laboratory of tire design and manufacturing technology, the national industrial design center and Post-Doctoral Research Center, and set up a technology research and development center in Akron, USA. With scientific and technological strength, in 2023, the company was listed as "All-staff Innovative Enterprise in Shandong Province" and "Standard Innovative Enterprise Plan Project in Shandong Province".
By the end of the reporting period, the company had obtained 922 patents, including 92 invention patents, 52 international patents, 1 national science and technology award and 16 provincial and ministerial level science and technology awards. Presided over and participated in the formulation of national or industrial standards, 136 items were published, and participated in the formulation of international standards, 11 items were published. He represented China at the United Nations Vehicle Regulations and Standards Forum for 13 times, and was one of the main framers of national and industrial standards in the tire industry.
(3) Deepen the integration of industrialization and information technology and intelligent manufacturing, and realize the digital operation of enterprises.
The new smart factory built by the company is highly integrated with the new generation of information systems (ERP, PLM, MES, WMS, EAM, etc.), Internet of Things technology, big data technology and machine vision technology. The production equipment is highly integrated, intelligent and digital, and the whole production process runs automatically and efficiently. The productivity and production efficiency are greatly improved, and the uniformity and stability of product quality are greatly guaranteed. The indicators such as high speed, durability, noise and fuel saving have reached the international advanced level.
The new generation of information technology is deeply integrated with the marketing system, technology research and development system, management system and supply chain system, and the overall coordination of enterprise management activities is realized, the operation efficiency of enterprises is improved, the operating cost is effectively reduced, and the decision-making process is efficient and intelligent.
(four) product and quality management benchmark international advanced standards.
The company is committed to building a digital, information-based and intelligent management system, and comprehensively improving the quality of its products and management by using innovative quality thinking and mature quality methodology. Absorb the advanced management concepts of excellent OEMs, carry out quality management in the whole value chain, and improve and upgrade the company’s quality management system. The company has passed ISO9001, QS-9000, ISO/TS16949, IATF16949 quality management system certification, providing domestic and foreign consumers with high added value and high quality products and services.
The company’s product design and manufacturing meet the requirements of three international standards, namely, European Union ETRTO, American TRA and Japanese JATMA, as well as advanced market technical standards, such as European Union Labeling Act and US Environmental Protection Agency SMARTWAY. The products have been officially certified by China CCC, EU ECE, US DOT and other major countries or economies in the world; The wet grip, rolling resistance, noise and other indicators of the company’s passenger car tires and commercial vehicle tires have reached the second stage standard of the European Union Labeling Act, as well as the regulatory standards of Japan, South Korea, Brazil, international Gulf organization GSO and Saudi Arabia SASO.
With excellent product quality and quality management ability, Triangle Tire has won the famous brand products in China, the first Shandong Provincial Governor’s Quality Award, China Quality Integrity Enterprise, the first batch of "Three Tong" recognized tire enterprises, AA-level certificate of market quality credit rating, "Taishan Quality" certificate, "Shandong Regional Class A Production Enterprise" certificate, "2021 Shandong Quality Brand", national product and service quality integrity demonstration enterprise, national quality inspection stable qualified products and national quality.
(E) Global marketing layout
1. International market
First, the marketing network covers more than 180 countries and regions around the world, and the developed economies on six continents keep pace with the development of emerging markets. The balanced market layout provides the company with a broad strategic depth to cope with the complex international trade situation and capture market opportunities in different regions of the world in time.
Secondly, the supporting customers and end users in the international market are all over the world, mainly including: American Caterpillar Company, Volvo Construction Machinery Company, Case New Holland Company, Hyundai Korea, Doosan Korea, mackesey Trailer Factory in Australia, () India Factory, Sany India Factory, Terex Italy and ETOP； Slovakia; Mexican Simax Group, Nigerian Dangote Group, UAE Aluminum Group, UAE dubai international airport Company, Swiss Lafarge Haorui Cement Plant and other internationally renowned enterprises.
Thirdly, localized marketing branches and teams have been established in North America, Central and South America, Europe, Australia, Middle East and Africa, Southeast Asia, India and other regions, which has rapidly promoted the global development of brand, marketing and service, and supported local distributors to establish more than 600 triangular brand stores.
2. Domestic market
Supporting business: directly provide supporting services for commercial vehicle tires, passenger vehicle tires and engineering tires for more than 50 automobile manufacturers and more than 20 construction machinery manufacturers such as China Heavy Duty Truck, Shaanxi Heavy Duty Truck, China FAW, Sany Group, (), Yutong Group, Jinlong Group, Jiangling Group, Jianghuai Group, SAIC-GM-Wuling, Zhengzhou Nissan, Geely, Caterpillar (China Factory), Longgong, Xugong and Shantui.
Replacement business: The marketing network model of product lines has been established, and professional marketing teams such as commercial vehicle tire replacement market, passenger vehicle tire replacement market, engineering tire replacement market and giant tire service have been set up, forming a marketing system mainly focusing on dealer wholesale and retail of terminal listed stores, supplemented by other sales models such as direct supply by large group units such as PetroChina, and the marketing network covers more than 80% of counties and cities in the country.
3. Online sales
The company develops new sales models and new markets. In view of the high degree of informationization in the Japanese market and the large number of consumers using online shopping, we have expanded cooperation with Japanese dealers in the passenger car tire market, and adopted online orders, designated delivery locations and instant express delivery to provide timely and efficient services to consumers and enhance market share. In order to adapt to the new trend of consumption in China, Tmall flagship store and JD.COM franchise store will be set up on the mainstream e-commerce platform for marketing to online users, digital distribution will be carried out through self-built professional APP service software, and sales of online purchasing platforms of large groups such as "Guotie Mall" will be actively participated, so as to interact with end consumers through the Internet, understand users’ needs and continuously enhance online brand awareness.
(six) the product range is complete and leading, and it is fast and forward-looking to adapt to the market development.
The company focuses on tire technology research and innovation, and promotes product upgrading and structural adjustment to meet the needs of users and automobile manufacturers in different markets around the world for green, low carbon, safety, comfort, durability, handling and intelligence.
1. Commercial vehicle tires are the company’s dominant products, of which tubeless products account for more than 70%. The main products include: medium and long-distance series with high mileage and low fuel consumption, high wear-resistant and low fuel consumption bus (including new energy vehicles) series for urban or intercity passenger transport, medium and short-distance series with heavy load resistance for national highways, provincial highways and ordinary hard pavements, and industrial and mining series with load resistance and pricking resistance for paved/unpaved roads; In addition, there are special transportation series products with the characteristics of safe and all-weather use for multi-environment adaptability. In 2023, 12.00R20 high-load and high-wear products were developed for the short-distance and heavy-load market. In order to improve the bearing capacity of light truck products in high-speed transportation, 8.25R16LT high-performance light truck products are developed. In view of the demand for medium and long-distance tire products in Europe and other markets, a series of products with high mileage S06 all-wheel position and D09 driving wheel position have been developed. Combined with the special needs of non-market in Southeast Asia and the Middle East, special products for tubeless mining areas have been developed. In addition, a series of products such as new energy bus, ultra-low rolling resistance products for long-distance transportation and wide-base tubeless products have been developed.
2. Providing consumers with a safe and comfortable driving experience is the goal of triangle passenger car tires. Product series: summer tires, mainly including ultra-high performance tire series (including run-flat tire series) with the main characteristics of handling response and sportiness, high performance tire series with the balance of performance, comfort and safety, SUV-HT series with urban pavement as the main use, SUV-AT all-terrain tire series with mixed road conditions of urban and unpaved roads, and economical tire series with high mileage and low fuel consumption as the main goal. SUV-MT mud tires for off-road enthusiasts and outdoor driving, commercial light truck tires with high load and mileage, and high-performance summer light truck tires with good wet braking performance, fuel economy performance and wear balance; Winter tires, mainly including ordinary car snow tires series, light truck snow tires series, as well as car studded snow tires series and light truck studded snow tires series, are widely used in the triangular winter tires in Northeast China, Europe, North America, Japan and other markets, and their safety, energy saving and comfort have reached the international advanced level. In addition, the company has developed high-performance winter tires and all-season tires for the use environment in Central Europe and other regions; According to the characteristics of taxis, a series of special tires for taxis were developed. In view of the rapid development of new energy and electric vehicles, special tires suitable for their working conditions are introduced. In 2023, EffeXSport was introduced to meet the market demand of high-performance tires and special tires for new energy vehicles at home and abroad.ReiaXTouring and EffeXSUV three series of high-performance tire products (including EV and silent cotton series) have been fully introduced to the market. In addition, China-Europe all-season light truck tires will also be launched to meet the needs of regional market segments.
3. According to different working conditions and use environments, Triangle has developed ten series of engineering tire products, which can provide reliable products and services for loaders, rigid dump trucks, articulated trucks, scrapers, graders, mobile cranes and special vehicles, underground mining machinery, road rollers, desert exploration machinery, ports and industrial machinery. The company is one of the most important supporting suppliers of engineering tires for the top ten well-known construction machinery giants in the world. The triangular giant engineering radial tires have broken the international monopoly in the field of construction machinery with excellent technical status and brand advantages, and have been put on the market in an all-round way. In 2023, the company realized mass production of high-speed engineering radial tires and new energy wide-body dump truck tires, and ultra-high load giant engineering radial tires were selected into the list of "Made in Shandong-Qilu Boutique".
4. "Triangle" special cross-country radial tire series products serve the market with quality characteristics such as specification serialization, pattern differentiation, high-speed lightweight and diversified protective functions. At the same time, the special industrial radial tubeless series tire products are matched with various types of beam carriers such as 900-ton and 1000-ton, which actively contribute to the national engineering construction.
V. Main operations during the reporting period
During the reporting period, the company realized an operating income of 10,421,725,100 yuan, an increase of 13.03% over the same period of last year; The operating profit was 1,615,439,600 yuan, an increase of 93.92% over the same period of last year; The net profit was 1,396,563,300 yuan, an increase of 89.42% over the same period of last year; The net profit attributable to shareholders of the parent company was 1,396,308,200 yuan, an increase of 89.29% over the same period of last year.
VI. The Company’s Discussion and Analysis on the Company’s Future Development
(A) the industry pattern and trends
1. Pattern
The tire industry as a whole is a relatively mature market, and the current global tire market has entered a stable stage of total volume. Specifically, the tire markets in Europe and America are in a stable stage, and the increase of the industry is mainly concentrated in Asia-Pacific, Middle East, Africa and South America.
Thanks to the rapid growth of the automobile industry and the huge number of cars, the tire industry in China has developed rapidly, and its output has been ranked first in the world since 2006, accounting for 35% of the total tire output in the world. China tire enterprises continue to exert their efforts in product performance and brand channels, and their competitive strength continues to improve. They compete and coexist with foreign capital and joint ventures in China, and their foreign market share has steadily increased, showing an upward infiltration trend.
In 2024, China tire industry will face great opportunities and challenges. The rapid growth of new energy vehicles in China, the steady increase of market share of China brand passenger cars, the rapid growth of automobile exports and the expansion of overseas layout have brought new development space for China tire industry; However, the increasing trade friction, technical barriers, product homogeneity and the gap between basic research and brand building with international giants also need us to face and make continuous efforts.
2. Trends
(1) The tire industry has entered a new stage of high-quality development.
With the slowdown of the automobile industry and the double carbon strategy, the development mode of domestic tire enterprises has been adjusted from quantitative expansion to high-quality development. As a tire industry with intensive investment, high fixed expenditure and a large proportion of raw material cost, it is gradually changing to green and intelligent. It is becoming the development direction of the industry to use green raw materials and adopt clean production technology to produce green tires, so that the factory can achieve pollution-free and zero emission, and the products can achieve safety, energy saving and environmental protection.
(2) Continuous optimization of tire product structure.
Radial tire has become the leading product in the global tire market, accounting for more than 94%; The tire product structure has been continuously optimized, and the product specifications have been continuously increased. The proportion of large size, high performance and ultra-high performance tires for passenger cars and tubeless tires for commercial vehicles has gradually increased. With "driving experience" and "safety performance" becoming the focus of consumers’ attention, in order to improve the mileage and performance of automobiles, tire products are developing in the direction of light weight, low rolling resistance, durability, safety, environmental protection and comfort, and high-performance and ultra-high-performance tires such as safe tires that run short of air, low rolling resistance tires that save automobile fuel and low-noise silent tires will gradually become the mainstream; With the rapid development of electric vehicles, special tires for electric vehicles have become a new growth point in the tire industry. In recent years, self-repairing tires and smart tires have become popular, and non-pneumatic tires have also entered the stage of research and development, road test and commercialization. The demand for differentiated products in different markets is increasingly prominent.
(3) The concentration of the industry continues to increase.
In recent years, under the background of actively coping with climate change, protecting ecology, controlling pollution, saving energy and reducing carbon, tire and upstream and downstream industries are also in a critical period of "differentiation", "integration" and "reshuffle", and the industrial environment and market order have a tendency to change for the better, and the living space for low-end production capacity and vicious competition will become smaller and smaller. Market resources and industrial resources are accelerating to be concentrated in the leading enterprises with core competence and brand strength through scientific and technological innovation, intelligent manufacturing and optimization of production capacity layout, and the industrial concentration will be further enhanced. In 2022, there were 370 domestic tire production plants included in the National Bureau of Statistics; According to the statistics of Tire Branch of Rubber Industry Association, the number of factories producing radial tires (passenger cars, trucks and construction machinery tires) accounts for about 48% of the total number. The scale of these tire factories is far larger than that of other tire enterprises, and their output accounts for 90% of the total output. In 2022, the output of 110 tire enterprises in member units accounted for about 83% of the national tire output, and the top 10 enterprises accounted for nearly half of the national tire output.
(4) Intelligent manufacturing has become the long-term development trend of tire industry.
The trend of tire consumption is developing towards high-quality, high-performance and environment-friendly tires. In order to ensure the production efficiency and the stability of product quality, advanced tire enterprises are combining information technology with traditional manufacturing fields, and the manufacturing equipment is automated, informationized and intelligent, and the green manufacturing technology has become the development direction. At present, more than a dozen enterprises in China have obtained the pilot demonstration project of intelligent manufacturing of the Ministry of Industry and Information Technology.
(5) Branding and internationalization have become industry trends.
In the face of highly fierce competition, branding and internationalization have become the development trend of tire enterprises. In recent years, China’s tire enterprises have actively promoted the internationalization strategy and laid out in Southeast Asia, Europe, Africa, America and other places. China’s tire enterprises have formed an annual production capacity of nearly 100 million pieces in overseas markets.
(6) Tire raw materials are developing towards low carbon, environmental protection and green.
Due to the constraints of resources and environment, the production capacity or varieties of some tire raw materials are limited, which restricts the selection of product materials and the design cost. New raw materials such as rubber, reinforcing materials, skeleton materials and additives play an important role in the breakthrough and improvement of tire performance. The development and application of new green, environmental protection, high performance and some new bio-based materials are becoming more and more important.
(II) Company development strategy
At present, global inflation is slowing down but still at a high level, geopolitical conflicts have not eased, and international trade barriers and fragmentation have intensified. China is in a critical period to promote the transformation of development mode and the transformation of old and new kinetic energy. With the introduction of domestic active macro policies, the prospect of consumption recovery is clearer and economic development is improving for a long time. In 2024, the company will firmly develop its main business, focus on the national requirements of accelerating the development of new quality productivity and solidly promoting high-quality development, make full use of the domestic industrial system and talent advantages, seize domestic and foreign market opportunities and new energy vehicle development opportunities, take technological innovation as the foundation, adhere to the dual-wheel drive of brand building and market expansion, make efforts to promote digital, intelligent, green and low-carbon transformation, and firmly take the road of global brand and high-quality development.
1, adhere to the independent brand as the core, the main and deputy brands develop together, build a diversified brand system and differentiated promotion strategies, strengthen the orderly and coordinated development of products, brands and channels, and constantly enhance the brand image.
2. Adhere to innovation-driven development. Optimize the technical talent pool, improve the collaborative innovation system for Industry-University-Research, and constantly stimulate and guide the innovation vitality; Based on the global market and technology development trend, combined with the national "double carbon" strategy, focusing on the research and development of new materials, new structures, new technologies and new processes, supported by three innovative platforms, we will focus on carbon reduction projects, develop low-carbon energy-saving tire production technologies, and continuously improve the development level of tire products in terms of lightweight, high-end, green and intelligent.
3. Adhere to market orientation. Strengthen the development and maintenance of channels, further promote the sinking of channels, strengthen the construction of brand stores at home and abroad, optimize the market layout of "all over the sky" and enhance market service capabilities; Pay attention to the iteration of product system renewal, constantly improve the product structure, increase the development and marketing of new energy-specific products, and constantly enhance the differentiated advantages of products.
4. Continue to promote the deep application, integration and innovation of digital technology in manufacturing, R&D, management and operation platforms, promote production and operation efficiency with information technology, improve lean management level and promote the high-quality development of the company.
(3) Business plan
Combined with the current economic situation, market trends and external environment, in 2024, the company will adhere to the development of the main tire industry, take market demand as the guide, adhere to the core of global brand building strategy, take scientific and technological innovation as the driving force, further promote the integration of industrialization and industrialization, continuously improve the level of refined management, and promote the sustained and healthy development of the company. It is planned to produce 26 million tires of various types throughout the year. Focus on the following aspects:
1. Marketing and brand promotion
(1) Continue to advertise high-speed rail, focusing on 26 high-speed rail lines such as Beijing-Shanghai, Beijing-Guangzhou, Longhai, Chengdu-Chongqing and Guiguang, and customer groups in more than 400 cities in 28 provinces, municipalities and autonomous regions across the country, and support and encourage dealers to carry out brand promotion, social welfare and charity activities to enhance brand image and influence; Unify and standardize brand promotion materials, and promote triangle brands through Tik Tok new media, webcasting, WeChat and other channels and means; Hold product launches, participate in exhibitions, sponsor competitions, etc., and expand brand awareness.
(2) Improve the diversified brand system, adhere to the position of the triangle brand, promote the market layout and channel construction of brands such as DIAMONDBACK, Power Si Tong, Bailuda and Veluchi in various regions, and make use of the differentiation of products, channels and prices to complement the triangle brand.
(3) Continue to develop new channels and further enhance channel management capabilities. Maintain and consolidate existing customers and work closely with distributors to expand offline and online sales channels and product promotion models; Further develop weak markets, enrich the network channel system, and implement the construction of new retail terminals; Use digitalization to empower marketing, and use CRM system to improve the operation quality and efficiency of sales business; Continue to promote "tire insurance" to improve channel density and network quality, further promote channel sinking, and lay the foundation for digital marketing; Give full play to the geographical advantages of overseas teams and actively develop end users, group users, bidding projects and retail channels.
(4) Consolidate and develop supporting businesses. Ensure the stable supply of core OEMs and continuously increase the matching share of large-size tire products; Further expand the supporting business of high-end vehicles, special vehicles, electric buses, electric commercial vehicles, sanitation vehicles, road buses and other vehicles.
(5) Continuously optimize the product structure, enhance the performance and market competitive advantage of mainstream products, keep pace with the development of electric vehicles, and speed up the development and improvement of electric vehicle tire product series.
2, technology research and development and innovation
(1) Carry out industrialization research and application of new equipment technologies such as direct pressure electromagnetic vulcanization (including single external temperature) and heating nitrogen vulcanization for passenger car tires; Strengthen the research of belt winding technology and expand the application scope of technology; Promote the improvement of product process quality and performance and reduce energy consumption.
(2) Strengthen the iteration of product system renewal, and improve product performance and market competitiveness through the application of new designs, new materials and new technologies.
① Commercial vehicle tires: continuously reduce the rolling resistance of products, focus on the development of ultra-low rolling resistance, driving wheel position, all-wheel position, mixed pattern and high-load mining products and exclusive products of new energy vehicles (dump trucks, mixer trucks and other heavy-duty vehicles), and expand the development of third-generation public transport products in series to further enhance the market share in the field of new energy public transport; In view of the international market’s demand for 3PMSF product certification, we will continue to improve the wear performance of the products on the basis of the original products.
② Passenger car tires: further optimize and integrate the product line, and accelerate the product update iteration; On the basis of enriching and improving the comprehensive performance of existing products, we will comprehensively promote the design, development, product layout and promotion of new energy automobile tires, and focus on developing tire products with excellent comfort, longer driving mileage, extremely low rolling resistance and good braking and handling performance through brand-new pattern design, contour design, new material application, lightweight design and process technology optimization; In addition, comprehensively improve the comprehensive performance of passenger car tire heavy-duty products to meet the growing market demand for new energy micro-cards/light trucks; Optimize the snow tire product line to meet the differentiated needs of different markets such as Europe.
(3) Engineering tires and giant tires: focus on the development of rigid dump trucks with narrow foundation, underground mining, graders, wide-base transportation and other products; Optimize and improve the comprehensive performance of existing products, and further improve the service life of giant tire and large-size narrow-base radial tire products; Closely around the supporting work with Caterpillar, Sany, Lingong Heavy Machinery Co., Ltd., Longgong, Great Wall Heavy Industry Co., Ltd., we will expand the supporting business of tires for underground operation vehicles.
(4) Special tires: according to the performance requirements of all-terrain vehicles for tire products, expand the specifications and models of a new generation of all-terrain off-road tire patterns and reserve product resources; Develop tire products suitable for heavy off-road vehicles and special off-road vehicles in desertification areas.
(3) For aviation tires, the airworthiness certification of front main tires of C919 and A320 will continue, and the development of front main tires of B737-800 will be carried out at the same time.
3. Deep integration of industrialization and modernization
Continue to deepen the integration of industrialization and modernization. In accordance with the principle of "improving quality, increasing efficiency, reducing staff and reducing consumption", we will use new technologies and new products to promote technological innovation in the field of equipment and automation, continuously improve the level of informationization, automation and intelligence of equipment in each base, reduce the labor intensity of operators, improve the operation quality and competitiveness, and ensure the healthy operation and development of the company; Guided by "digitalization and intelligence", we will promote the deepening and innovative application of information systems and form a virtuous circle of digitalization promoting business innovation. Promote the improvement of information service level, implement the system concept of "no human intervention", improve the stability and robustness of information system, solve the "last mile problem" of software application, and serve the operation and development of the company.
4. Green and low-carbon development
Market-oriented, lean management as a guarantee, effectively integrate internal resources, vigorously promote the development of low-carbon life, continuously improve product quality and production efficiency, and improve market matching rate. Strengthen the technical transformation and filling of equipment, replace the low-capacity machines with the whole machine, optimize and improve the equipment accuracy of conventional machines, streamline the number of machines, reduce the labor cost and improve the overall productivity level; The vulcanizing machine of commercial vehicle tire production line in Hua Mao No.1 District was upgraded. Continue to upgrade the environmental protection facilities, upgrade the sewage treatment station and waste gas treatment facilities of Hua Mao Branch, increase the air cleaning equipment of Hua Mao and Huayang, and improve the waste gas treatment standards.
(4) Possible risks
1. International trade risks
In recent years, the United States, Brazil, the European Union, South Africa, India, Egypt and other countries and regions have launched many anti-dumping and countervailing investigations on China tires, and the scope of the investigation has gradually increased; At the same time, international trade protectionism prevails. Since 2018, the United States has imposed punitive tariffs on tire products produced in China. The deterioration of local economic environment and the tense geopolitical situation in some countries may cause local restrictions on supply and sales, which will adversely affect the company’s business. The company’s products are sold to more than 180 countries and regions, and overseas sales account for more than 50%. International trade risks have a certain impact on the company’s export business. The company will continue to enhance the competitiveness of its products in the global market by developing emerging markets, vigorously exploring blank markets and intensive cultivation in the global market.
2, the global market competition risk
There are many tire manufacturing enterprises in China, with overcapacity. The well-known foreign tire enterprises have obvious brand advantages in the middle and high-end market, and the international trade and technical barriers of tire products are escalating. The tire industry is facing increasingly fierce market competition. Through the advantages of scientific and technological innovation, intelligent manufacturing and global layout, the company actively grasps the market development trend, strives for product quality and performance, and maintains a high level of technological innovation capability.
3. Risk of exchange rate changes
The settlement currency of the company’s export business is mainly US dollars, and the exchange rate of US dollars against RMB fluctuates greatly, which will affect the company’s overseas sales and benefits. The company imports natural rubber, equipment, USD liabilities, etc. to reduce foreign exchange exposure, and at the same time, in the environment of two-way fluctuation of RMB exchange rate, it implements exchange rate locking through various means such as instant and forward settlement, so as to reduce the impact of exchange rate fluctuation on the company’s operation.
4. Risk of cost fluctuation
Natural rubber and synthetic rubber are the main raw materials for tire production, and their prices are affected by many factors, such as international and domestic economy, industry supply and demand, weather conditions, etc. The fluctuation of raw material prices such as rubber and carbon black has a great impact on tire production costs. By establishing long-term strategic partnership with key suppliers, the company judges the price trend of raw materials market, grasps the opportunity of low market price, and timely purchases incrementally to ensure the effectiveness of supply channels. Through a comprehensive and systematic analysis of the fundamentals of supply and demand of raw materials, we can grasp the purchasing rhythm, adjust the resource reserve and effectively control the cost fluctuation.
