1809HKEXThe short version
Prinx Chengshan Holdings Limited
Prinx Chengshan makes 29 million truck and car tyres a year at plants in Shandong and Thailand, sells them mostly through distributors it does not own, and trades at 3.6 times last year's earnings.
The shares closed at HK$8.33 on 8 January 2026 and at HK$6.69 on 30 July — an 18% give-back, part of it the ex-dividend step in late July.
Mkt cap $552.7MNet cash (CNY) ¥643.4M
$0.87
Share price, 3 Aug 2026
$1,662.4m
FY2025 revenue
29.3m
Tyres sold in FY2025
70.35%
Held by the founding family
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Snapshot
Prinx Chengshan Holdings Limited in numbers
Price
HK$6.82as of 2026-08-03
Mkt cap
HK$4.3B
Net cash (CNY)
¥643.4M
12m perf
−9.9%
3m ADV
HK$760.4K
| Year to Dec (CNY) | 2023 | 2024 | 2025 | 2026E | 2027E |
|---|---|---|---|---|---|
| Sales | 9.9B | 11.0B | 11.8B | 10.8K | 11.9K |
| EBIT | 1.2B | 1.4B | 1.2B | – | – |
| EBIT margin | 12.1% | 12.9% | 10.1% | – | – |
| EPS | 1.62 | 2.06 | 1.71 | 1.81 | 2.00 |
| Gearing | −4.0% | −2.2% | −8.9% | – | – |
Consensus: Yahoo Finance analyst estimatesDerived from run data; ratios use the latest price.
IThe business
What it sells
A quarter of the tyres sold produce more than half the revenue
FY2025 revenue by product
All-steel radial (truck and bus)$938.3M56%
Semi-steel radial (passenger)$694.9M42%
Bias$28.4M2%
8.4 million all-steel sets, 20.4 million semi-steel and 0.5 million bias, out of 29.3 million in total.
- Two prices on one factory floor. An all-steel truck tyre realised about $111.7 in FY2025 against $34.1 for a semi-steel car tyre — roughly 3.3 times the revenue per unit.
- Thin per-unit economics. The company kept $5.22 of profit on the average tyre in FY2025, against $6.43 in FY2024. Gross profit per tyre has run between $8.77 and $11.96 across five years.
- Costs below the gross line barely move. Selling, administrative and research spending came to $142.9 million, 8.6% of revenue, so nearly the whole earnings swing since FY2021 sits in gross margin.
Who pays
Distributors the company does not own buy 83.7% of what it makes
Revenue by sales channel
Small raw-material trading revenue excluded. FY2021 is stated on the FY2022 report's restated basis.
- One channel did the growing. International distributor revenue rose 82% in renminbi between FY2021 and FY2025, to $1,097.8 million. The domestic line ended where it started, falling in three of those years.
- The carmaker channel came back hard. Direct sales to vehicle manufacturers jumped 73.9% to $271.2 million in FY2025, as management tilted capacity toward export and original-equipment work.
- Paid for in slower cash. That tilt took receivable days from 67.2 to 75.5 on trade balances, and to 92.6 counting related parties; balances four to six months old went from $0.4 million to $32.3 million.
Where it is made
The smaller plant carries the higher margin and the larger asset base
The production bases, FY2025
| Base | Revenue | Gross margin | Fixed assets |
|---|---|---|---|
| Shandong, China | $1,024.9m | 15.8% | $343.6m |
| Chon Buri, Thailand | $637.4m | 21.8% | $417.6m |
| Kedah, Malaysia | Under construction | — | $299m budgeted |
Segments are defined by where a tyre is made, not where it is sold. Fixed assets exclude deferred tax and associates.
- Thailand punches above its size. The Thai base produced 38.3% of FY2025 revenue and 46.2% of group gross profit, and holds 54.9% of the allocated fixed asset base.
- Duties follow the factory. Anti-dumping rates attach to country of production, so it is the segment split, not the destination split, that trade measures price. The Americas took $549.4m of FY2025 sales.
- A third base is going up. Kedah Rubber City began construction in the third quarter of 2025 on a $299 million budget, with trial production targeted for the fourth quarter of 2026.
IIThe record
The record
Revenue has compounded; what the company keeps has round-tripped
FY2020 → FY2025as reported · ¥
Revenue¥11.8B+8%
Operating margin10.1%−2.8pp
Net income¥1.1B−17%
EPS¥1.71−17%
Free cash flow¥620M−6%
Open the full statements →Statements shown in renminbi, the reporting currency; the dollar figures below are converted at period-end rates.
- Growth, then a give-back. Revenue rose 56.6% in renminbi between FY2021 and FY2025, to $1,662.4 million, while profit for the year went $43.4 million, then $179.7 million in FY2024, then $153.1 million — a 17.1% fall.
- The operating leverage is permanent. Costs below the gross line grew 16.9% in renminbi against that 56.6% of revenue growth, falling from 11.5% of revenue to 8.6%; operating margin rose 6.5 points over the span.
- The balance sheet stayed light. Equity of $1,012.3 million against $96.1 million of bank borrowings, net cash on any measure, and a return on equity of 15.8% in a year management describes as damaged.
The margin path
The profit step-up came from one plant's margin, and it halved in a year
Gross margin by production base
Thailand's premium over Shandong: 1.0 point in FY2021, 11.7 points in FY2024, 6.0 points in FY2025.
- Per tyre, the arc is plain. Profit for the year per tyre sold went from $2.34 in FY2021 to $6.43 in FY2024, then back to $5.22 in FY2025. Volume rose in every one of those years.
- The swing sits in the spread, not the operations. Prices are set by what distributors will pay and by duty schedules, costs by rubber, carbon black and steel cord. One point of gross margin is $16.6 million.
- The completed capital cleared its hurdle. Return on capital employed has averaged 14.2% since FY2017 against the 10% floor written into the 2018 prospectus, with 20.4%, 20.4% and 15.3% in the last three years.
IIIThe story now
The year in the price
The shares peaked in January 2026 and have given back 18% since
Daily closes in Hong Kong dollars, the listed currency, to 3 August 2026. The late-July step spans the record date for the final dividend.
- Where it stands. HK$6.815 on 3 August 2026, about a fifth of the way up a 52-week range of HK$6.40 to HK$8.36, and inside the HK$5.89 to HK$7.50 range indicated at the October 2018 listing.
- The business is not the same one. Revenue is 2.4 times its FY2017 level and profit 6.3 times, on a share count essentially unchanged at 638.6 million.
- Part of the summer move is mechanical. The record date for the final dividend was 30 July 2026, so the 3 August price is already ex. The rest came as the FY2025 report was digested, with the European cases open.
FY2025, decomposed
98.8% of the gross-profit decline sits in one plant
The $31.6m fall in profit for the year: what changed
The two Thailand lines total $36.7 million. Everything the group did outside that plant was, in aggregate, a net positive.
- A trade event, not an input cycle. The Thai base lost 6.69 points of gross margin against Shandong's 1.04, though both buy in the same world markets. The directors' report names North American tariffs as the cause.
- The tax leg does not reverse. Thailand's exemption saved $77.1 million of tax across five years, but a first-year Pillar Two top-up took $10.0 million back in FY2025, and Pillar Two has no administrative review.
- The counter-fact is dated and large. Those tariffs were struck down on 20 February 2026 and the Thai passenger-tyre rate fell to 2.90% in July. Restoring the FY2024 Thai margin is worth $42.6m of gross profit.
The open docket
Europe is a cost in prospect on a small, fast-growing slice of the business
The European measures, as this record stands
| Date | Measure | Status |
|---|---|---|
| Since 2018 | EU duties on China-origin truck tyres, renewed 17 Jan 2025 for five years | In force |
| 21 May 2025 | EU anti-dumping case, China-origin car and light-truck tyres | Open |
| 6 Nov 2025 | EU countervailing case, same product | Open |
| 18 Dec 2025 | Commission declines to impose provisional anti-dumping measures | Done |
| 22 Jan 2026 | Import registration begins | Running |
| Not on record | Definitive EU rate on car and light-truck tyres | Open |
Both cases attach to Chinese origin, so they reach the Shandong base and not the Thai one.
- The exposure is capped by a line the company never breaks out. Every euro of European revenue sits inside "Other countries" — $138.8 million, 8.4% of FY2025 sales, compounding at 37.0% a year against 11.9% for the group.
- Filtered for origin and product, $35m to $89m is exposed. Each 10 points of definitive duty on that range is $3.5m to $8.9m, 2.3% to 5.8% of FY2025 profit — levied on the importer, so only the unpassed share is lost.
- The older measure is the one the filings skip. China-origin truck tyres have carried EU duties since 2018, as per-tyre amounts. No annual report mentions them, and nothing on this record names the group's own rate.
Related-party flows
The controller collected more as a utility supplier than as a 70% owner
Cash to Chengshan Group: as supplier and as shareholder
Dividend share derived at a flat 70% holding; the actual holding rose from 69.43% to 70.35% over the period.
- Five years, two roads. Chengshan Group took $149.5 million from the company as supplier and lessor, against $122.6 million of dividends paid to all shareholders, of which about $36.8 million reached the minority.
- The largest line is the least governed. $138.4 million of utilities has run with no cap, no review and no published price basis since the 2018 agreement lapsed; $2.4 million of smaller contracts get the full treatment.
- The counter-fact is the register. The family bought, from 69.43% to 70.35%. No placement, no dilution, options forfeited on missed targets, the dividend held flat. What is measurable is 3.3% to 6.3% of profit.
IVThe price
What you pay
Strip out everything Thailand adds and the shares still trade at 5.7 times
Price / earnings under progressively harsher assumptions
As reported, FY2025
3.6x
Thai tax benefit removed
3.9x
Thai margin and tax removed
5.7x
Arithmetic stress cases on FY2025 earnings, not forecasts. At $0.87 the equity is worth about $552 million.
- The starting point. 3.6 times FY2025 earnings, 0.54 times a closing book value of $1.60 per share, and roughly two times the company's own EBITDA measure net of cash.
- Read backwards. A flat perpetual stream discounted at 10% makes today's market value consistent with $55.6 million of earnings — 36% of what FY2025 produced, and below the $98 million that survives the harshest case.
- The missing comparison. Of five mainland-listed Chinese tyremakers on this record, only Sailun earns a return near this one, 16.3% against 15.1% on closing equity. No market price for any of them is available.
Where the cash goes
Cheap earnings, committed to capital underwritten at half the old rate
$87.2m
FY2025 free cash flow57% of reported profit
$104.9m
Contracted capital commitmentsfrom $11.0m a year earlier
$455m
Committed build programmeMalaysia and off-the-road, 2026 to 2029
0.90x
Revenue per $1 of new capital1.08x to 2.41x on the six completed projects
- The trough is closing. Three years of free cash flow between $78.7 million and $90.5 million were earned at replacement-level capex. Over 2026 to 2029, the new programme absorbs two-thirds of operating cash flow.
- Both projects clear the hurdle, narrowly. They pay back in 5.5 to 7.4 years on management's 15% to 20% forecast margin band, against the 2.5 to 4.8 years the 2018 prospectus attached to the projects it was funding.
- The counter-fact is what was not built. The Malaysian budget was cut 21% without touching the output plan, and the $422.4 million Anhui project was liquidated in August 2025 with nothing ever paid in.
Who owns it
Tightly held, thinly traded and uncovered — three mechanical reasons for the discount
Ownership and tradeability
| Measure | FY2025 or latest |
|---|---|
| Controller voting stake | 70.35% |
| Held outside the controller and 5%-plus holders | 15.94% |
| Look-through family economics | 26.6% traceable, 48.6% ceiling |
| Average daily turnover, 20 sessions | $0.06m |
| Live consensus estimate or price target | None |
| Company buybacks in FY2025 | None |
The 4,000,000 shares bought on market in FY2025 were for the employee award trust, not for cancellation.
- Insiders own it and keep buying. The Che family's disclosed position rose from 69.43% to 70.35% over five years while the second-largest holder sold. Two of three non-executive seats belong to corporate shareholders.
- Exiting takes time. A position worth 0.5% of the market value, $2.8 million, would need about 234 trading days at a fifth of average volume. Annual turnover runs near 8% of shares outstanding.
- Nobody publishes on it. No aggregator carries a live estimate; the most recent broker target located is $1.11 from July 2025, itself set on 4.8 times forecast earnings.
What to watch
Earning 15% on equity at 0.54 times book, with the free cash flow behind it already committed elsewhere
- 01The FY2026 interim, due by 31 August 2026: whether the Thai segment margin recovers toward its FY2024 level now the reciprocal-tariff layer has come off.
- 02A definitive European anti-dumping or countervailing rate on China-origin car tyres, which lands on the Shandong base rather than the Thai one.
- 03Malaysian trial production in the fourth quarter of 2026 — the first check of actual cost against the $299 million estimate.
- 04A renewed utility agreement with a stated cost basis and an annual cap, which would bound the $30.4 million paid to the controller the way the $2.4 million already is.
This distils a guided study built chapter by chapter — the arena and its rivals, the record, the two plants, the trade docket, and the price.
Compiled from the full report · 2026-08-04 · For information, not investment advice.