Analysis of Linglong Tire's Failed H-Share Listing and Response Strategies for the Tire Industry's Export Pressures

Based on the information searched, I will conduct a detailed analysis of the reasons for Linglong Tire’s failed H-share listing and the coping strategies for the tire industry’s export pressure from multiple dimensions.

According to public information, Linglong Tire (601966.SH) submitted a prospectus to the Hong Kong Stock Exchange on June 30, 2025, proposing to issue H-shares to achieve “A+H” listing, with CITIC Securities and China Merchants Bank International serving as joint sponsors. However, as of December 30, 2025, the prospectus had reached the 6-month mark with no follow-up progress and officially lapsed, marking a major setback for the company’s H-share listing sprint [1].

From an institutional perspective, Huaxin Securities made significant changes to its 2026 profit forecast for Linglong Tire in two research reports released in August 2024 and September 2025:

This sharp downward revision of the profit forecast directly reflects the market’s concerns about the company’s profitability, especially against the backdrop of international trade frictions, which have significantly increased the uncertainties facing the company [1].

Although Linglong Tire’s main business revenue has maintained growth in recent years (revenue was RMB 17.006 billion, RMB 20.165 billion, and RMB 22.058 billion in 2022-2024 respectively), its profit performance has been volatile, mainly affected by the following factors:

• Additional cost pressure caused by US tariff policies
• Significant pressure on gross profit margin
• Geopolitical risks facing the Brazil base (expectation of possible additional tariffs imposed on Brazil by Trump)

For the Hong Kong Stock Market, which has a higher degree of internationalization, investors are more sensitive to changes in the international trade environment. The addition of risk warning statements such as “international trade frictions” and “exchange rate fluctuations” in the latest research report reflects that the market’s concerns about Linglong Tire have undergone substantive changes [1].

According to relevant data, China’s rubber products exported to the US are subject to additional tariffs of 10%-185.28%, with the anti-dumping tax rate on unprocessed rubber magnets as high as 185.28% [2]. This policy has led to:

• The share of China’s tire exports to the US dropped from around 25% in 2015 to
  less than 3%
• The share of all-steel radial tire exports to the US is only
  2.4%

In June 2025, the International Trade Administration Commission of South Africa (ITAC) ruled to impose a six-month provisional anti-dumping duty on new pneumatic tires for passenger cars, light trucks, and trucks imported from Thailand, Vietnam, and Cambodia. This measure directly affects enterprises including Sentury Tire, Huayi, Prinx Chengshan, Linglong, General Rubber (all Thai subsidiaries), and Sailun Vietnam [3].

• Fluctuations in raw material prices such as rubber affect the stability of the cost side
• Finished tire inventories continue to accumulate
• Tire manufacturers mainly replenish inventories of raw materials such as carbon black at low prices based on rigid demand [3]

• The number of domestic tire enterprises in 2024 decreased by 23% compared with 2020
• The market share of the top 10 enterprises in the industry increased to 65%
• Small and medium-sized rubber enterprises are accelerating their exit from the market due to cost pressure [2]

Leading enterprises are avoiding trade barriers by building production bases in Southeast Asia:

According to industry data, in 2024, tire exports from Thailand and Vietnam to the US accounted for more than 40% of the total US tire imports [2].

• Qingdao Sentury Tire built an intelligent factory in Spain to directly supply the European market
• Linglong Tire’s Serbia base is expected to be completed in 2025 with a capacity of 12 million semi-steel radial tires
• Sailun Tire’s Mexico factory, with an annual capacity of 6 million tires, is expected to be completed in 2024

The export structure has shifted from relying on the US to regions such as Russia, Brazil, and the Middle East:

• In 2024, the share of China’s semi-steel radial tire exports to Russia reached
  5.72%
• The share of China’s truck and bus tire exports to Mexico was
  6.24%
• The South American and Middle Eastern markets have become new growth drivers due to low tariffs and growing demand [2]

In June 2025, multiple Chinese automakers including FAW Group, Dongfeng Motor, GAC Group, BYD, and Xiaomi announced that they would unify supplier payment terms to within 60 days. This measure is expected to:

• The annual settlement capital of the entire industry can increase from RMB 16 billion to RMB 24 billion
• Liquidity will improve by approximately 50%
• Tire brands such as Linglong, Sailun, Continental, Giti, and Maxxis are expected to benefit [3]

• Sentury Tire launched graphene tires, reducing rolling resistance by 30%
• Zhongce Rubber developed EV-specific tires to meet the needs of new energy vehicles
• New products such as liquid gold tires and non-pneumatic tires are expected to account for 30% of the market share by 2030 [2]

• Triangle Tire introduced an AI visual inspection system, increasing the yield rate to
  99.3%
• Double Star Group built an industrial internet platform, improving inventory turnover efficiency by
  40%
• The industry is shifting from price competition to technology-driven competition [2]

• Natural rubber procurement has expanded from Southeast Asia to Africa, with the share of African natural rubber imports increasing from 5% to 12% in 2024
• In the synthetic rubber sector, imports of Russian nitrile rubber increased by 18% due to price advantages
• Sailun Tire leveraged Cambodia’s advantage as the world’s sixth-largest natural rubber producer to achieve localized procurement [2]

• Hainan Rubber Group laid out natural rubber plantations in Southeast Asia
• Sailun Tire’s production chain integration rate increased to over 60%
• The Kampot Special Economic Zone project plans to introduce leading enterprises in rubber new materials and waste rubber recycling and processing [2]

• Through the RCEP agreement, the import tariff on natural rubber from Thailand was reduced from 20% to 5%
• China-Mexico free trade negotiations promoted tariff exemptions for rubber products exported to Mexico

• The export tax rebate rate for tires was increased to 13%
• The 2025 “Ten Measures for Stabilizing Foreign Trade” clearly stipulates tax deductions for goods subject to additional tariffs imposed by the US

Against the backdrop of global supply chain restructuring, the US is promoting “friend-shoring”, requiring tire enterprises to use natural rubber from North America (including Mexico), and China’s production capacity in Southeast Asia is facing pressure from supply chain reshaping.

• The EU Carbon Border Adjustment Mechanism (CBAM) and the US Clean Competition Act require tire enterprises to disclose full-life cycle carbon emissions
• Continental Tire’s proportion of sustainable materials is expected to reach 29% in 2025, with a target of exceeding 40% within 5 years
• The “14th Five-Year Plan for the Rubber Industry” requires green products to account for more than 50% of the market by 2030

• Optimize existing capacity utilization and improve production efficiency
• Strengthen supporting cooperation with automakers, shorten payment terms, and improve cash flow
• Intensify efforts to develop emerging markets such as Russia and the Middle East

• Accelerate the construction of the Serbia base to avoid potential risks in the European market
• Evaluate the possibility of strategic adjustment of the Brazil base
• Increase R&D investment in new energy vehicle tires

• Build a “domestic + overseas” dual circulation system
• Increase the proportion of high-value-added products (targeting over 30%)
• Strengthen ESG construction and lay out R&D of sustainable materials

[1] IFENG Finance - “Linglong Tire Suffers Major Setback in H-Share Listing Sprint, Huaxin Securities Sharply Cuts Performance Forecast” (https://finance.ifeng.com/c/8pqVv1E621f)

[2] Carbon Black Industry Network - “From ‘Passive Pressure’ to ‘Active Breakthrough’: China’s Rubber Industry Responds to Trade Barriers” (https://m.tanhei.com/news/industry/202504/43333.html)

[3] Cinda Securities - “Tire Industry Special Report (June 2025): Prices of Raw Materials Such as Rubber Continue to Decline” (http://pdf.dfcfw.com/pdf/H3_AP202507041702966252_1.pdf)