Analysis of Triangle Tyre (601163) Limit-Up: Valuation Repair Driven by RMB 3.2 Billion Cambodia Plant Construction Project

Triangle Tyre (601163) surged to a limit-up on January 16, 2026, closing at RMB 15.53 with a gain of 9.99%. The direct catalyst for this limit-up was the major overseas investment announcement released by the company in the evening of the previous trading day (January 15) [1][2][3]. From a timing perspective, the investment announcement was released after the trading session closed, ensuring the market had sufficient time to digest the information and reflect it in the next day’s stock price, which demonstrates the timeliness and compliance of the listed company’s information disclosure.

Triangle Tyre released an overseas investment announcement, planning to invest RMB 3.219 billion to build a new high-performance radial tire project with an annual output of 7 million units in Svay Rieng Province, Cambodia, including 6 million semi-steel tires and 1 million all-steel tires [1][2][3]. The project is expected to start construction in March 2026 with a construction period of 17 months; upon completion, it is expected to generate annual revenue of RMB 2.585 billion with an investment return rate of 15.1%. Regarding funding sources, the company plans to use RMB 1.288 billion of its own funds and RMB 1.931 billion in bank loans [1].

The core strategic value of this investment lies in effectively evading trade barriers on Chinese tires imposed by Europe and the US. In recent years, the US has imposed a 77.24% tariff on Chinese light truck and passenger car tires, and a 78.98% tariff on truck and bus tires; the EU has imposed anti-dumping and countervailing (AD/CV) duties on Chinese truck and bus tires since 2017, and launched a new round of AD/CV investigations into Chinese light truck and passenger car tires in 2025 [1]. The Cambodia project will enable Triangle Tyre to own its first overseas production base, significantly improving its competitive position in core markets such as North America and Europe.

The trading volume on the day reached 30.24 million shares, a 605% surge compared to the average daily volume of 4.29 million shares, with a turnover of approximately RMB 460 million [0]. Such an abnormal volume surge indicates a strong market reaction to the news, representing a typical event-driven volume-driven limit-up. The 7-fold increase in volume combined with the limit-up price shows that bullish forces are absolutely dominant, and there is obvious willingness of off-market funds to chase the price rise. Judging from the nature of the capital, the large-scale volume is more likely due to concentrated position building by institutional investors rather than scattered transactions by retail investors.

From the analysis of technical indicators, the current stock price shows mixed bullish and bearish characteristics [0]:

Indicator	Status	Signal Interpretation
MACD	Golden Cross Pattern	Mid-term trend is bullish
KDJ	K=49.1, D=36.0, J=75.2	Short-term bullish, but J value has entered overbought zone
RSI (14)	Overbought Zone	Technical pullback risk exists
20-day Moving Average	RMB 14.41	Current price is far above the moving average with a large deviation rate
50-day Moving Average	RMB 14.61	Important short-term support level
52-Week High	RMB 15.68	Only RMB 0.15 below the previous high

: [RMB 14.41, RMB 15.67], the current price has touched the upper edge of the range and hit the limit-up.

Triangle Tyre had no overseas production bases before, and its international business expansion has long been constrained by geopolitical tensions and trade protectionism [1][2]. The construction of the plant in Cambodia marks an important milestone in the company’s strategic transformation from “Made in China, Sold Globally” to “Made Globally, Sold Globally”. This transformation not only helps evade existing trade barriers but also enables the company to establish localized supply capabilities for four core markets: North America, Europe, Middle East & Africa, and Southeast Asia [3].

From the perspective of industry competition pattern, leading domestic tire companies such as Linglong Tire and Sailun Tire have already laid out overseas bases earlier. Although Triangle Tyre’s “going global” strategy seems delayed, the Cambodia project may have late-mover advantages in terms of policy preferences and construction costs.

The company currently faces certain pressure on fundamentals: its net profit fell 21.03% year-on-year in 2024, and performance continued to decline in 2025 (43.54% drop in Q1, 35.31% drop in H1, 22.77% drop in Q3) [1]. Revenue has declined for 7 consecutive quarters since January 2024, with ROE of only 6.65%, indicating weak profitability.

However, the valuation shows obvious attractiveness: the P/E ratio is only 13.78x, and the P/B ratio is only 0.91x (below 1), which is in the historical low valuation range [0]. This reflects the market’s overpricing of the cyclical nature of the tire industry and the impact of trade frictions, while the Cambodia project may become a catalyst for the inflection point of the company’s fundamentals.

Notably, the auto parts sector fell 0.37% overall on the same day [0]. Triangle Tyre strengthened independently against the backdrop of weak sector sentiment, which further highlights the event-driven nature of its limit-up. This indicates that the market’s reaction to a major positive news of a single company can transcend the overall industry sentiment, forming an independent valuation repair market.

The RSI indicator has entered the overbought zone, and the stock price has a large deviation rate from the 20-day moving average, creating a demand for technical correction [0]. If the limit-up cannot be effectively maintained, short-term profit-taking orders may flood out in a concentrated manner.

Overseas plant construction involves a 17-month construction period, during which there are multiple uncertainties such as construction delays, failure to reach expected production capacity, policy changes, and exchange rate fluctuations [1]. Nearly 60% of the RMB 3.219 billion investment relies on bank loans, which may increase the company’s financial expense burden.

The company’s net profit and revenue have declined for multiple consecutive quarters, with a 22.77% year-on-year drop in net profit in Q3 2025 [1]. If the project returns cannot be realized as expected, the valuation repair market may degenerate into theme speculation.

Upon completion of the Cambodia project, the company will own its first overseas production base, which is expected to contribute RMB 2.585 billion in annual revenue [1][2]. Considering the company’s current annual revenue scale, the project is expected to drive significant revenue growth after production starts.

The P/B ratio is only 0.91x, which is lower than the industry average and historical average, providing a high margin of safety for medium- and long-term investors. Under the expectation of a performance inflection point, the valuation repair space is considerable.

Subsequent disclosures of milestone information such as project commencement, construction progress, and regular announcements may form continuous catalysts for the stock price.

Time Horizon	Risk/Opportunity Level	Key Focus Areas
1-2 Weeks	High Risk	Stability of limit-up maintenance, sustainability of trading volume
1-3 Months	Medium Risk	Project commencement progress, annual report data
6-12 Months	High Opportunity	Project construction progress, 2026 performance changes

Triangle Tyre (601163) surged to a limit-up on January 16, 2026, driven by a major overseas investment announcement, closing at RMB 15.53 with a 9.99% gain and a 605% surge in trading volume to 30.24 million shares. The company plans to invest RMB 3.219 billion to build a tire project with an annual output of 7 million units in Cambodia, which is expected to start production after 17 months and contribute RMB 2.585 billion in annual revenue [1][2][3]. The core value of the project lies in evading the high tariff policies imposed by Europe and the US on Chinese tires (US tariffs of 77-79%, EU AD/CV duties), marking a major breakthrough in the company’s globalization strategy.

From the market reaction, capital has priced this strategic move positively, and the 7-fold increase in volume shows that institutional funds are actively entering the market. However, the overbought RSI on the technical side signals short-term pullback risk, while the sustained pressure on fundamental performance (21% drop in net profit in 2024, continued decline in 2025) [1] provides limited medium-term support. Valuation-wise, the P/E ratio of 13.78x and P/B ratio of 0.91x offer a certain margin of safety.

: The current price of RMB 15.53 is close to the 52-week high of RMB 15.68. The first support level is RMB 14.41 (20-day moving average), and the strong support level is RMB 14.12. The subsequent trend will depend on the smooth progress of the project and performance stabilization.

Disclaimer: This report is based on analysis of public information, for reference only, and does not constitute investment advice. Investors should make independent decisions based on their own risk tolerance.