SHANGHAI —Chinese tire maker Jiangsu General Science Technology Co. Ltd. went public on the Shanghai Stock Exchange Sept. 19 with a $130 million initial public offering.
The Wuxi, Jiangsu-based company, represented in North America by Statewide Tires Inc. of West Covina, Calif., said the capital raised will be invested in its Wuxi radial truck tire plant, where it's planning a $115 million expansion of capacity.
That project will add 1 million units of annual capacity—the second phase of a 2 million unit project—and a new research center.
The domestic market takes up the majority of China's TBR market thanks to their price value, according to General Science's prospectus. The company, one of the country's market leaders in short-distance industrial mining tires, looks to obtain a more balanced portfolio covering mid- to short-distance and mid- to long-distance products.
Besides 3 million unit current TBR capacity, the company also has 1.7 million unit annual capacity for bias tires, 6 million for motorcycle tires and 5 million for tire tubes. TBR tires bring in roughly 85 percent of its annual revenue.
Ranked by China Rubber Industry Association as the country's 18th largest tire maker in sales, in 2015 General Science saw its revenue drop by 8 percent year on year to $480 million; net profit declined by 21 percent.
“The falling of natural rubber prices led to a downturn in the company's product price,” the prospectus said.
With business picking up over the first six months of 2016, the company expects slight increases in revenue this year to roughly $500 million and a larger gain in net profit.