| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.27 | 66 |
| Intrinsic value (DCF) | 78.08 | 393 |
| Graham-Dodd Method | 5.66 | -64 |
| Graham Formula | 37.24 | 135 |
Sailun Group Co., Ltd. is a leading Chinese tire manufacturer headquartered in Qingdao, specializing in the research, development, production, and global distribution of comprehensive tire solutions. Founded in 2002, the company has established itself as a significant player in the global automotive parts sector, producing diverse tire categories including passenger car tires, SUV tires, truck and bus tires, and specialized industrial and off-road tires for construction and mining applications. Operating in the consumer cyclical sector, Sailun leverages China's manufacturing capabilities to serve both domestic and international markets with cost-competitive products. The company's vertically integrated operations and continuous R&D investments position it well in the evolving automotive industry, particularly as global demand for reliable and affordable tires continues to grow. Sailun's expansion strategy focuses on technological innovation and market penetration, making it a notable contender in the competitive global tire industry.
Sailun Group presents a mixed investment profile with several attractive fundamentals offset by sector-specific challenges. The company demonstrates solid profitability with net income of CNY 4.06 billion on revenue of CNY 31.8 billion, representing a healthy net margin of approximately 12.8%. With a market capitalization of CNY 48.4 billion and a beta of 0.79, the stock shows lower volatility than the broader market, potentially appealing to risk-conscious investors. The company pays a respectable dividend of CNY 0.53 per share. However, investors should note the capital-intensive nature of the tire industry, evidenced by substantial capital expenditures of CNY -4.02 billion, and moderate debt levels with total debt of CNY 9.4 billion against cash reserves of CNY 5.5 billion. The company's exposure to cyclical automotive markets and competitive global tire industry dynamics present both opportunities and risks for long-term investors.
Sailun Group operates in a highly competitive global tire market dominated by established Western players and aggressive Asian manufacturers. The company's competitive positioning is built on several key advantages: cost-effective manufacturing in China, diverse product portfolio across multiple vehicle segments, and growing technological capabilities in tire R&D. Sailun's vertical integration allows for better cost control compared to many competitors, while its focus on both replacement and OEM markets provides diversified revenue streams. The company's expansion into specialized tires (winter, explosion-proof, racing) demonstrates product development sophistication beyond basic tire manufacturing. However, Sailun faces intense competition from global giants with stronger brand recognition, wider distribution networks, and more advanced R&D capabilities. The company's Chinese origin may present both advantages (cost structure) and challenges (geopolitical considerations, perception of quality in premium markets). Sailun's moderate debt level provides financial flexibility for expansion but may limit aggressive investment compared to better-capitalized competitors. The company's competitive advantage lies in its ability to offer technologically competent products at competitive price points, positioning it well in value-conscious segments of the global tire market.