Tire & Tube Industry 2025: DOMESTIC MARKET CLOUDINESS PERSISTS
Given the difficult development prospects for the domestic market due to increased competition from tires of Chinese origin, we predict that exports—primarily TBR and PCR tires—will continue to be the primary driver of revenue growth for Vietnamese tire makers in 2025, as they were in 2024.While tire selling prices are anticipated to stay low to enhance competitiveness in the context of domestic market uncertainty and initial penetration into major export markets like the US, tire manufacturers' profit margins will remain low, as they did in 2024, due to high input material prices (natural rubber).
With only DRC (NEUTRAL, TP: 27,900 VND/share) on the watchlist, we believe that the maximization of the new plant's capacity (Phase-2 Radial plant) has been reflected in the current market price. Other large projects for PCR tire plants (1 mn tires/year) and TBR plants (4 mn tires/year) lack a solid basis for reflecting in the target price at this time.
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