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There is a simple yet brutal formula in the tire industry: sales growth does not necessarily lead to profit growth.
When raw material prices rise, product prices are pressured, and trade barriers increase, the more companies sell, the greater the cost and financial pressure they may even bear. Therefore, what deserves more attention than revenue growth is whether profits grow synchronously, and whether the growth comes from price hikes, capacity expansion, or improvements in operational efficiency and product structure.
On the evening of August 30, Sailun Group disclosed its semi-annual report for 2026. In the first half of the year, the company realized revenue of 20.027 billion yuan, up 13.88% year-on-year; net profit attributable to shareholders of the listed company was 2.16 billion yuan, up 17.97% year-on-year. Tire production reached 46.97 million units, up 15.70% year-on-year; sales reached 45.01 million units, up 14.99% year-on-year, with both production and sales hitting historical highs for the same period.
Calculated based on semi-annual and first-quarter report data, Sailun realized revenue of 10.57 billion yuan in the second quarter, up 15.16% year-on-year; net profit attributable to shareholders was 1.10 billion yuan, up 39.26% year-on-year. The profit growth rate was significantly higher than the revenue growth rate, becoming the most noteworthy signal in this semi-annual report.
Sales grew by nearly 15%, but Sailun is not making money by raising prices
If looking only at production and sales volumes, this is a typical answer sheet for scale growth. But when price and cost data are placed together, the quality of the growth becomes apparent.
Operating data for the second quarter disclosed by Sailun shows that the comprehensive procurement prices of the company's four main raw materials, natural rubber, synthetic rubber, carbon black, and steel cord, increased by 6.81% year-on-year and 15.85% quarter-on-quarter; meanwhile, the average price of self-produced and self-sold tires decreased by 2.54% year-on-year. This means that Sailun's profit growth in the first half of the year was not built on a general price increase for products, but was achieved in the cracks of "rising raw material prices and pressured average tire prices".
Calculated by operating revenue and operating cost, Sailun's gross margin in the first half of the year was approximately 26.99%, an increase of about 2.45 percentage points compared to the same period last year; net profit margin was approximately 10.79%, an increase of about 0.38 percentage points compared to the same period last year. Net cash flow from operating activities reached 1.03 billion yuan, up 16.89% year-on-year.
The simultaneous improvement in sales volume, gross margin, net profit, and operating cash flow indicates that Sailun is converting new capacity and market orders into higher-quality growth, rather than just trading low prices for scale.
Overseas factories are not just "replicating capacity," but are restructuring trade routes
In the past, the globalization of Chinese tire companies mainly relied on exports: producing domestically and then shipping products overseas. It brought scale, but was also easily affected by tariffs, shipping prices, and changes in regional trade policies. Sailun is trying another path: moving production bases, supply chains, channels, and services closer to major consumer markets together.
Currently, Sailun's Vietnam and Cambodia factories have entered a stable high-production period, Indonesia and Mexico factories continue to increase capacity, and the Egypt project is advancing. According to the plan disclosed by the company, Sailun overseas has a total annual production plan of 12.75 million all-steel radial tires, 89 million passenger car radial tires, and 130,000 tons of off-road tires.
From a layout logic perspective, Sailun's overseas factories are no longer simple replication of domestic capacity, but are separately undertaking regional supply functions for the North American, European, Southeast Asian, Middle Eastern, and African markets. When trade barriers increase, multi-regional manufacturing can reorganize orders, capacity, and delivery routes; when shipping prices fluctuate, localized production helps shorten delivery distances for some markets; when Chinese automobile brands accelerate going global, Sailun also has the foundation to follow vehicle manufacturers to carry out overseas matching.
Globalization is thus no longer just "selling more tires," but gradually becoming a set of infrastructure for Sailun to resist external fluctuations and undertake global orders.
What truly determines the profit ceiling is still the product structure
Scale can determine how fast a tire company can go, while products determine how far it can go.
In the first half of the year, Sailun continued to cover segmented working conditions such as new energy commercial vehicles, long-haul lines, heavy-duty transport, and mining areas in the all-steel tire field; in the passenger car radial tire field, the high-end summer sports UHP product US61 achieved production, and multiple winter tires obtained European TÜV Mark certification; off-road tires continued to upgrade around giant engineering radial tires, wear resistance, and anti-cutting technology.
Sailun US61 Successfully Matched with FAW Hongqi 2026 Model H7 PHEV
These products mostly target markets with higher technical requirements and more segmented usage scenarios. For tire companies, relying solely on production expansion is easily affected by price competition and cost fluctuations. Improving added value through high-end and differentiated products is more helpful in enhancing profitability stability. Sailun's profit growth rate in the first half of the year was higher than its revenue growth rate, at least indicating that its scale expansion did not come at the obvious expense of profitability.
The more factories, the more digitalization is not just "icing on the cake"
After the number of global factories increased, what enterprises face is not just more capacity, but also the complexity of procurement, production scheduling, inventory, quality standards, and cross-regional delivery.
Sailun is advancing AI visual quality inspection, AGV automatic logistics, and APS intelligent scheduling on the production side, and promoting the replication of process standards between different factories through the MTD system; on the supply chain and channel side, it is building domestic dealer B2B, store service systems, overseas B2B portals, and container logistics visualization platforms.
These systems have not yet disclosed separate cost-saving amounts, and profit growth cannot be simply attributed entirely to digitalization. But they solve a very real problem in global expansion: how to make an increasing number of factories operate according to similar efficiency, quality, and delivery standards.
If overseas bases solve "where to produce," then digitalization solves "how to turn global factories into a network." This is also the important capability foundation that allows Sailun to maintain profit and operating cash flow improvement while production and sales volume grow.
From Selling Products to Building Global Credit
Tires are a product that highly depends on safety trust and long-term reputation. The higher the level of original equipment matching and overseas markets an enterprise enters, the more important brand, compliance, and sustainable development capabilities become.
In 2026, Sailun ranked 10th in the Brand Finance Global Most Valuable Tire Brands list, the highest-ranking Chinese tire brand; in the "China Top 500 Most Valuable Brands" list released by the World Brand Laboratory, it ranked 97th with a brand value of 125.19 billion yuan, entering the top 100 for the first time; and was selected for the Fortune China 500 Strong list for two consecutive years.
In the ESG field, Sailun became the first Chinese tire industry enterprise to pass SBTi Science-Based Targets official verification, with an MSCI ESG rating reaching AA level. According to the semi-annual report disclosure, after verification by relevant institutions, the full lifecycle carbon emissions per 1000 kilometers driven for Liquid Gold truck and bus tires and passenger car tires decreased by 39% and 27% respectively compared to ordinary material tires of the same specification.
These ratings and data will not directly become current period profits, but may affect whether an enterprise can enter international customer supply chains, obtain high-end matching projects, and maintain market access in an environment where overseas regulations are constantly tightening.
Industry Comment: What Signal Does Sailun's "Double Increase" Release?
Sailun's performance in the first half of the year indicates that in the stage where the profit space in the tire industry is squeezed, advantages in a single dimension are difficult to sustain continuous growth. The increase in production and sales volume constitutes the direct basis for Sailun's performance growth. At the same time, overseas bases enhance global supply capabilities, product upgrades improve growth structure, and digitalization and ESG construction support the long-term stability of globalization operations.
However, there is still uncertainty in raw material prices, international trade policies, overseas project ramp-up, and digestion of new capacity. In the future, whether overseas factories can maintain a reasonable utilization rate, whether the proportion of high-value-added products can continue to increase, and whether brand and ESG investment can be further converted into market recognition and product premiums will determine the sustainability and quality of Sailun's growth.
From this semi-annual report, Sailun has begun to cross the most common "scale trap" of Chinese tire enterprises: no longer pursuing only capacity and sales, but attempting to combine global manufacturing, technological R&D, product structure, channel services, and brand credit into a set of systemic capabilities. Its growth logic is shifting further from "scale leadership" to "system capability leadership"—this may also be the watershed for the next stage of global competition for Chinese tire enterprises.
