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% to $163.6 million while revenue jumped 20% 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% of global sales, or about $595 million, as business generated by international distributors jumped 70%. 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% to 18.6 million units, roughly 45% 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.