Recently, Wanli Tire Co., Ltd.’s IPO application on the Shenzhen Stock Exchange’s main board has been officially accepted. This IPO is sponsored by Cathay Haitong Securities and plans to raise 2 billion yuan.
As the leading tire manufacturer in China, the operating data and business structure disclosed in Wanli Tire’s prospectus have attracted widespread attention both inside and outside the industry.
Public information shows that Wanli Tire is mainly engaged in the research and development, production and sales of semi-steel radial tires and all-steel radial tires. It owns many well-known domestic and foreign tire brands such as Wanli, Diamond, Wanlishing, R&F, SUNNY, APTANY, etc. Its sales network not only covers the country, but is also exported to more than 160 countries and regions around the world. It also provides supporting tire services to many leading domestic vehicle manufacturers.
According to the 2024 Chinese tire company rankings released by “China Rubber” magazine, Wanli Tire ranks among the top 10 Chinese passenger car tire companies in 2024. According to certification from the China Rubber Industry Association, its semi-steel radial tire sales rank fourth among Chinese tire companies in the domestic market, making it a veritable leading company in the domestic tire industry.
Financial data shows that from 2023 to 2025, Wanli Tire achieved operating income of 5.588 billion yuan, 6.022 billion yuan, and 7.028 billion yuan respectively, and the revenue scale maintained steady growth; during the same period, net profits were 409 million yuan, 417 million yuan, and 418 million yuan respectively, and the profit growth rate has slowed down.
It is worth noting that during the reporting period, Wanli Tire’s domestic and overseas distribution gross profit margins continued to decline: domestic distribution gross profit margins were 11.80%, 10.93% and 9.85% respectively, and export gross profit margins were 22.06%, 19.44% and 18.69% respectively.
Wanli Tire stated that the decline in domestic gross profit margin is mainly affected by the high price sensitivity of customers in the replacement market and intensified industry competition. The export gross profit margin is also affected by multiple factors such as raw material price fluctuations, changes in overseas demand, sea freight and exchange rate fluctuations. In extreme cases, the risk of operating profits in the year of listing falling by more than 50% compared to the previous year cannot be ruled out.
As a typical export-oriented manufacturing company, Wanli Tire’s domestic and foreign sales revenue gradually dropped from 58.31% to 53.63% of its main business revenue during the reporting period, but it still accounts for half of the total revenue. Its business structure, which is highly dependent on overseas markets, also makes it face more uncertainties in the current environment of frequent international trade frictions.
In order to circumvent trade barriers, Wanli Tire has deployed overseas production bases in Cambodia and plans to build new factories in Malaysia. However, the relevant challenges are still severe: taking the Brazilian market as an example, the local Foreign Trade Commission has ruled on the third anti-dumping sunset review of automobile tires originating in China. Wanli Tire will continue to be levied anti-dumping duties for a period of five years, with the tax amount ranging from US$1.25 to US$1.77/kg.
Wanli Tire admitted in its prospectus that if the international trade policy of the tire industry changes in the future, it will have an adverse impact on the company’s operating performance.
In addition, the cost pressure caused by fluctuations in raw material prices is also one of the core challenges faced by Wanli Tire.
It is understood that the main raw materials required for Wanli tire production include natural rubber, synthetic rubber, carbon black, steel cord, etc. In each reporting period, the proportion of direct materials in the main business costs was 68.98%, 71.52% and 73.37% respectively, and the proportion continued to rise.
Since entering 2026, affected by the short-term rapid rise in international crude oil prices, the prices of synthetic rubber and carbon black have increased, further driving the price of natural rubber higher. If subsequent raw material prices continue to rise sharply, and the company cannot effectively transmit cost pressure to the downstream, profit margins will be further compressed and have a negative impact on operating performance.
