Prinx Chengshan suffers double-digit drop in earnings despite higher sales

HONG KONG—Prinx Chengshan Holdings Ltd. suffered a double-digit drop in gross profit in fiscal 2021 despite double-digit revenue growth, due in large part to "significant" increases in raw-materials costs and ocean-freight rates.

Gross profit fell 24.7 percent to $163.6 million while revenue jumped 20 percent to $1.17 billion, the company reported, reflecting the addition of a production base in Thailand and an expanding passenger tire portfolio. The profit ratio fell to 14% as a result.

The first phase of the company's production base in Thailand was brought on stream in 2021, the company said, with all production volume, quality and manufacturing cost goals now operating within the expected targets.

Prinx Chengshan's revenue from sales outside of China hit nearly 54 percent of global sales, or about $595 million, as business generated by international distributors jumped 70 percent. The company goes to market with four brands: Austone, Chengshan, Fortune and Prinx.

The company's unit sales volume increased markedly as well, jumping 23.2 percent to 18.6 million units, roughly 45 percent of which were all-steel or semi-steel truck tires.

The company noted that expansion projects at its Shandong, China, and Rayong, Thailand, tire plants are ramping up to their designed capacities.

The latter of these projects should help the company "further explore" overseas markets such as Europe and North America, where it's represented by Prinx Chengshan Tire North America in Los Angeles.

At the same time, Prinx Chengshan is moving forward with plans for a tire factory in Anhui Province.