Zhongtai Securities released a research report stating that major new production capacities are expected to reach full utilization in Q1 2026, with leading companies projected to see an average earnings elasticity of +30%. On the export front, China's monthly tire production/export volume remained flat year-on-year, with December 2025 figures at +1.0% and -3.6% respectively, attributed to small and medium-sized tire enterprises being affected by European anti-dumping and countervailing measures. Since January, the tire sector (export chain) has been oversold. Pessimistic sentiment regarding raw materials (a turning point emerged with price increase notices issued in early March), sea freight costs, and exchange rates has largely been priced in. The main theme of accelerated overseas expansion in 2026 remains unchanged, with sector-wide potential for a Davis Double Click catalyst imminent. Future focus should be on the anti-dumping final ruling result on March 30th, the April earnings season, and breakthroughs in high-end OEM and specialty tire supply agreements. Key views from Zhongtai Securities are as follows:

Individual Stocks: Emphasize tracking the progress of capacity expansion (supply), while also referencing export order trends. Major new capacities are expected to be at full production in Q1 2026, with leading companies seeing an average earnings elasticity of +30%. Zhongce, Sailun, and Sentury are leading the new capacity additions for 2026 (approximately 10-20 million units). The new giant tire capacity from Hai'an Group is expected to see a year-on-year increase of +224% after reaching full production in 2028. U.S. import order counts: February 2026 was a seasonally slow month. Sailun, Sentury, and Linglong showed cumulative monthly year-on-year changes in U.S. import order counts of +4%, +109%, and +64% respectively. Capacity utilization rates: Leading companies' semi-steel tire operating rates are around 95%+, while there is differentiation and room for improvement in full-steel and off-the-road tire utilization.

Sector Beta: Pay attention to import volumes in Europe and the U.S. (demand), while also referencing domestic operating rates and inventory levels. Export trends: China's monthly tire production/export volume remained flat year-on-year, with December 2025 figures at +1.0% and -3.6% respectively, attributed to small and medium-sized tire enterprises being affected by European anti-dumping and countervailing measures. Semi-steel tires: Domestic operating rate was around 45% in February 2026 (due to the Spring Festival holiday). Independent brands' sales growth in Europe was +6% year-on-year in December 2025 (China holds the largest share of EU imports at 59%). Independent brands' sales growth in the U.S. was -2% year-on-year in October 2025 (Thailand and Mexico hold the largest shares of U.S. imports, around 39%). Full-steel tires: Domestic operating rate was around 37% in February 2026. Independent brands' sales growth in Europe was +25% year-on-year in December 2025 (China holds the largest share of EU imports at 20%). Independent brands' sales growth in the U.S. was -10% year-on-year in October 2025 (Thailand and Cambodia hold the largest shares of U.S. imports, at 14%). Off-the-road tires: Domestic mining sector operating rate was 72% in Q4 2025 (stable around 70%). U.S. mining sector operating rate was 84% in January 2026 (stable). Domestic inventory (SME tire makers): Semi-steel tire inventory days were 44 in February 2026, up 7% year-on-year (showing a sequential destocking trend). Full-steel tire inventory days were around 48 in February 2026, up 4% year-on-year (stable).

Cost Side: Trade policy >> Raw materials > Sea freight/Exchange rates. Trade policy changes: Europe/U.S.: The expected implementation of European anti-dumping measures in 2026 is favorable for leading tire companies. The anti-dumping final ruling is due in March 2026, with implementation in June 2026. The countervailing duty retrospective application is in May 2026, with a preliminary ruling in August 2026. Other regions: In 2025, the Eurasian Economic Union, the UK, Brazil, and Colombia initiated anti-dumping investigations/imposed tariffs on Chinese tires, benefiting leading companies (with overseas capacity) in capturing market share from smaller players. Raw materials: As of March 6, 2026, the comprehensive tire raw material price index was at the 55th percentile over the past three years, mainly driven by price increases in natural rubber (81st percentile) and synthetic rubber (57th percentile). Natural rubber prices may face pressure starting from mid-to-late March due to the start of tapping season and the potential impact of European anti-dumping measures. Synthetic rubber prices are expected to potentially weaken in April (new capacity coming online in June, with market reactions typically 1-2 months ahead). Sea freight: Freight rates on major routes have remained low for an extended period; as of March 8, 2026, they have not been significantly affected by Middle East events. Exchange rates: The continued depreciation of the USD and stable EUR allow for some hedging against overseas liabilities; export chain companies typically engage in routine hedging management.

Regarding specific stocks, continued optimism is expressed for the overseas volume expansion of semi- and full-steel tires from Zhongce Rubber, Sailun Tire, and Sentury (reaching full production in Q1 2026) and their potential for valuation increases through high-end supply agreements. The volume contribution from domestic and international giant tire capacity expansions at Hai'an Group and Sailun is also expected to provide earnings elasticity. Subsequent attention should be paid to independent tire makers such as PRINX CHENGSHAN, Triangle Tire, and Linglong Tire.

Risk warnings include fluctuations in raw material prices; slower-than-expected progress in capacity construction; weaker-than-expected demand; uncertainties in international trade friction; potential inaccuracies in third-party data calculations; risks related to untimely information updates.