Recently, Linglong Tire received a warning letter from the China Securities Regulatory Bureau, which revealed the tip of the iceberg of failed foreign investments.
As a green and low-carbon tire enterprise integrating tire design, development, manufacturing, sales and service, Linglong Tire mainly produces passenger and light truck radial tires, truck and bus radial tires and off-highway tires. Its products cover passenger cars, commercial vehicles, engineering machinery and other fields.
The company plans to build a production capacity layout of 7 domestic factories and 5 overseas factories to be close to the supporting service radius of the OEM.
However, the radical expansion of production capacity in recent years has not brought about an increase in performance, but has instead given rise to many problems.
In recent years, many of Linglong Tire’s major domestic and overseas projects have been stalled or terminated.
In June 2021, the company disclosed that it planned to build a major project in Tongchuan to produce 15.2 million sets of high-performance radial tires and 500,000 sets of retread tires per year. This project had high hopes of improving the national production capacity network, but the progress was not as expected.
In October 2025, the project had undergone major changes, but the company delayed official disclosure for nearly 7 months, violating information disclosure requirements. Chairman and then general manager Wang Feng, and board secretary Sun Songtao were given supervisory warnings.
As of early May 2026, the company has invested a total of approximately 380 million yuan in this project. Although it is communicating with its partners to recover the money, there is a risk that it will not be able to recover the full amount.
Not only the Tongchuan project, the Anhui project that was reviewed and approved at the end of 2022 has also stalled. Only the construction of the living area and some production supporting facilities has been completed. The main workshop is still in the planning and design stage, and about 140 million yuan has been invested.
The overseas Brazilian project even failed. In April 2025, the company planned to spend 8.71 billion yuan to lay out this overseas investment project, which was planned to be constructed in three phases. However, the implementation process continued to lag behind, and was eventually terminated because it failed to reach an agreement on core terms with the proposed partner.
Behind the continuous cuts in projects is Linglong Tire’s performance decline.
In 2025, the company’s operating income will be 24.642 billion yuan, a year-on-year increase of 11.72%, but the attributable net profit will be 1.369 billion yuan, a year-on-year decrease of 21.88%; deducting non-net profit will be 1.197 billion yuan, a year-on-year decrease of 15%.
In the first quarter of 2026, the performance decline continued, revenue growth remained low, attributable net profit fell 95% year-on-year, and non-net profit was even more of a loss.
The company attributes the decline in performance to the impact of the external environment, but compared with industry leaders, the gap continues to widen.
From the perspective of industry fundamentals, China’s tire industry as a whole will face the challenge of overcapacity in 2025, and the global market has also entered a low-growth range.
In such a general environment, higher requirements are placed on corporate cost control, product high-end, and global layout capabilities. Linglong Tire has obviously failed to keep up with the pace of industry upgrades.
As its performance stalled, its profitability continued to deteriorate, its gross profit margin continued to decline, and its profit margins were compressed.
At the same time, Linglong Tire has also encountered setbacks in its capital market financing. The H-share listing plan was terminated in early 2026, and overseas financing channels were blocked. However, its large-scale investment projects at home and abroad still require continued capital investment, and future development faces many difficulties.
