輪胎價格揭秘：數(shù)據(jù)喜憂參半保持謹慎

1、Global Research14 January 2020Demystifying tire pricingGlobalUBS Evidence Lab inside: Q4 Mixed data, staying cautiousTakeaway #1: Chinese most competitive; Takeaway #2: healthy US marketWe remain cautious on the tire space and reduce our earnings estimates by c5-10% on a combination of (1) mixed Q4

2、(retail) pricing data, (2) further downside risk on volume growth this year as the current warm winter is likely to weigh on inventory levels for the upcoming season, and (3) higher raw material prices that could put pressure on profitability margins from H2 20 onwards. In terms of tire prices, we c

3、ontinue to see Chinese players as the most competitive (a clear change in trend that we started to evidence from Q319). This is partially offset by broadly flat retail prices in Continental Europe. In the US, the market continues to stabilise at high levels as we saw a small uptick in Q4 retail pric

4、es (vs Q3 19). Michelin and Linglong Tyre are our most preferred tire makers. We downgrade Pirelli to Neutral and Nokian to Sell. Conti stays Neutral.What is most relevant in Q4 for each stock under coverage?Michelin (+): the UBS Evidence Lab price tracker shows (1) retail prices experienced a small

5、 increase in Q4 showing recently announced price hikes are coming all the way through the retail channels, and (2) its price premium vs peers for high value continues to expand further. Conti (+): many investors appear to be worried about Contis pricing behaviour but the price tacker shows Conti sta

6、ys very disciplined. Pirelli (=): the price tracker suggests some support to product mix. Nokian (-): there has been a clear change in pricing trends with retail prices declining by 8-10% compared to a year ago. It has been most pronounced in high value where the discount vs Tier 1 peers has more th

7、an doubled.Connecting our key findings with stocks: Michelin, Linglong most preferred Michelin (Buy, 125) has scope to expand further its profitability margin (solid price premium vs peers and restructuring benefits). We see a path towards a FCF of 2bn around 2022 with limited downside risk, all thi

8、s for a PE of c9.5x. Linglong Tyre (Buy, RMB27.15) should increase further its exposure to foreign OEMs (VW, in particular). Pirelli (downgrade to Neutral, 5.5): we think the price-mix story is losing steam and delays our expectations for NCF potential. We do not see the upcoming investor day as a m

9、aterial catalyst. Nokian (downgrade to Sell, 22): we expect further downside risk to profitability margin this year, which should stay below 20% for longer. ROIC should deteriorate further as investments remain elevated. On that basis, the valuation premium is unjustified in our view.AutomobilesEqui

10、tiesDavid LesneAnalyst HYPERLINK mailto:david.lesne david.lesne+44-20-7567 5815Patrick Hummel, CFAAnalyst HYPERLINK mailto:patrick.hummel patrick.hummel+41-44-239 79 23Sonal GuptaAnalyst HYPERLINK mailto:sonal.gupta sonal.gupta+91-22-6155 6063Nora Min Analyst S1460518050001 HYPERLINK mailto:nora.min

11、 nora.min+86-213-866 8905Kohei TakahashiAnalyst HYPERLINK mailto:kohei.takahashi kohei.takahashi+81-3-5208 6172Eugene JungAnalyst HYPERLINK mailto:eugene.jung eugene.jung+82 2 3702 8801Benedikt Baumann Associate Analyst HYPERLINK mailto:benedikt.baumann benedikt.baumann+41-44-239 1398Sabrina ReehAna

12、lyst HYPERLINK mailto:sabrina.reeh sabrina.reeh+49-69-1369 8267Figure 1: Global tire preference (from most to least preferred) Rating Price targetShareUpside/ Underlying EPS (lcl) Implied PE (x)OldNewOldNewprice (lcl)downside2020E2021E2020E2021EMostMichelinBuyBuy12012511013%11.211.79.9x9.4xLinglong

13、TyreBuyBuy27.1527.152415%1.51.815.6x13.0 xPirelliBuyNeutral6.25.55.25%0.460.5211.4x9.9xApollo TyresBuyBuy21821817128%14.016.612.2x10.3xContinentalNeutralNeutral1301201164%12.414.29.3x8.1xLeastNokianNeutralSell252226-16%1.641.7816.0 x14.7xAverageMedian12.4x11.8x10.9x10.1xSource: UBS estimates; Note:

14、Data as of 13 January 2020 HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities France S.A. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 18. UBS does and seeks to do business with companies covered in its research reports. As a result, inve

15、stors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisGlobal TiresUBS Research THESIS MAP MOST FAVOREDLEAST FAVOREDMichelin, LinglongNokianPIVOTAL QUESTIONSQ: Are recent pricing trends boding well for tire

16、makers near-term profitability?Q4 retail pricing data is quite mixed. Retail pricing is stable sequentially (vs Q3 19) in Continental Europe. However, the Chinese segment continues to be most competitive (trend started in Q3 19). The US market is stabilising at high levels and remains very healthy.

17、Finally, high value (defined as 19) continues to be the segment in which prices are declining the most. MOREQ: Is the competition from Chinese/Budget brands intensifying?Yes. For the first time since the inception of the database, we have evidence that Chinese players have become the most aggressive

18、 segment across rim sizes (15, 17 and 19) and seasons with a yearly decline (vs Q4 18) of up to 2% (stable vs Q3 19). We continue to see less competition from Budget/ Chinese brands as we shift towards high value: larger rim-sizes. MOREQ: Do consumers care about tire brands?Mixed. The main surprise

19、from the consumer survey a year ago was that price is no longer the key purchasing factor. The findings overall are highly supportive of (1) product mix, and (2) the premiumisation strategy of most Tier-1 producers. First, the level of brand awareness is improving with high income consumers. Second,

20、 product quality (safety and longevity) is increasingly seen as a way to differentiate. However, we note that Brand reputation seems to matter much less than in the past. MOREWHATS PRICED IN?Trading at a c10% discount to five-year PE average. The valuation discount reflects investor concerns on the

21、pricing outlook and China competition, in our view. We think the segment is more defensive (limited exposure to China, trade tensions, CO2 targets, etc) than OEMs/suppliers. In the long run, Tires should benefit from electric cars (heavier, stronger torque and larger chassis) and shared mobility/rob

22、otaxis (higher utilisation rate, TCO in focus).UBS VIEWNear term, we are cautious on the segment due to mixed pricing data and weaker volume growth. Medium term, cash conversion should improve since capex peaked about three years ago. Michelin remains our most preferred tire maker, followed by Pirel

23、li. Nokian is our least preferred tire maker. See our heatmap below for more details.EVIDENCEA UBS Evidence Lab survey of 11,000 consumers across five markets gives us some unique insight. In addition, UBS Evidence Lab has built one of the most comprehensive databases tracking weekly retail prices o

24、f six online tire retailers in Europe and the US and has gathered close to 22m data points since November 2016. We have also built an interactive model available on UBS Neo, using the following link, which enables investors to gauge the impact on profitability from higher input costs.Connecting key

25、UBS Evidence Lab findings with stocks UBS heatmapMost preferred Least preferredMichelinPirelliContiNokianRating - newBuyNeutralNeutralSellRating - oldBuyBuyNeutralNeutralPT () - new1255.512022PT () - old1206.213025Overall recent pricing trends: Risk from budget competition: All-season tire opportuni

26、ty:High value opportunity:AverageSource: UBS ResearchGlobal Tire MakersUBS ResearchOUR THESIS IN PICTURESreturn UBS tire retail pricing heatmap in Q419 (vs Q418)All tiresWinter tiresSummer tiresCont. EuropeUSCont. EuropeUSCont. EuropeUSPREMIUM INTERMEDIATE BUDGETCHINESENANANAAPOLLO-VREDESTEIN BRIDGE

27、STONE CONTINENTAL COOPER GOODYEAR HANKOOK MICHELINNEXEN NOKIAN PIRELLISUMITOMONANANANANANANANANANARetail price change for all tires for Continental EuropeRetail prices in Continental Europe have decreased by c1% yoy in Q4. On a sequential basis (vs Q319), prices have stayed broadly stable. US retail

28、 prices are increasing by c2% yoy and improving vs Q3 19 (legend: the greener, the higher the price increase versus peers)2%1%0%0%0%0%0%-1%1%1%0%-1%-1%-2%-2%-3%-2%Takeaway #1: In Q4, the biggest change in trend was coming from the Chinese players. On a yoy basis, the Chinese remain the most competit

29、ive segment. We also note a small yoy increase for the premium segmentPREMIUMINTERMEDIATEBUDGETCHINESE Q419 vs. Q418Q419 vs Q319All tires retail prices quarterly in the US ($)1801751701651601551501451401742016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019Takeaway #2: US retail prices a

30、re returning to slight growth both on a sequential and yoy basis. The market remains extremely healthy and our concerns about a peak being reached in Q3 were overdoneQ4 Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2 Q3 Q4All tires retail prices change in Continental Europe by tire maker in Q419 (vs Q319)APOLLO-VREDESTEIN

31、OTHER PIRELLI MICHELIN GOODYEAR CONTINENTALNOKIAN KUMHO NEXEN BRIDGESTONE HANKOOKTOYO -2%2%1%1%1%0%0%0%0%0%0%0%On a sequential basis, the picture is fairly supportive with most premium players delivering positive growth-2% -2% -1% -1% 0% 1% 1% 2% 2% 3%All tires retail prices change in Continental Eu

32、rope bytire maker in Q419 (vs Q418) (19 ONLY)As in previous quarters, the prices of most players inKUMHO OTHERAPOLLO-VREDESTEINCONTINENTALNEXEN TOYO MICHELIN PIRELLI GOODYEAR BRIDGESTONE HANKOOKNOKIAN -12%1%high value (defined as 19) are declining. We see two-1%-1%-1%-1%-2%-4%-4%-4%-4%1%key reasons:

33、 (1) the strong volume growth of this segment remains highly margin accretive at the group level, and (2) the weight of mass market vehicles within high value is increasing. On a yoy basis, Nokians retail prices continue to decline the mostFor reference, on a sequential basis (vs Q3 19): Michelin an

34、d Conti are performing best whereas Nokian and Pirellis retail prices are declining by c1%-14% -12% -10% -8% -6% -4% -2% 0% 2%Average quarterly retail prices in Continental Europe8%2% -6%6%4%2%0%-2%-4%-6%-8%-10%-8%This chart is a good illustration of what we discussed earlier: over the past three ye

35、ars, high value prices have declined by 8% while standard prices are up 2%2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019Q4 Q1Q2 Q3Q4 Q1Q2 Q3 Q4Q1 Q2Q3 Q4151719Price premium / (discount) vs Tier 1 brands average for 19 in Continental Europe (all segments)Michelin is the clear price

36、leaderDiscount vs benchmark has increased15%10%5%0%-5%Michelin remains the clear price leader in 19. Its price premium vs other Tier 1 players continues to improve quarter after quarter. Nokians discount vs peers has sharply widened-10%-15%MichelinPirelliContinentalNokianGoodyearQ4 2018 Q4 2019Our U

37、BS tire raw material index continues to increaseWe update our UBS tire raw material index. It shows achange of about -3%/-6% on a 3/6-month rolling2802402001601208040Spot3 month averageaverage basis. We expect raw materials to be a tailwind in H1 2020 and turn into a headwind from H2 2020 onwards an

38、d a positive price vs raw material impact for most tire makers.Our updated UBS interactive model (available on UBS Neo: LINK) suggests that emerging players can now afford to reduce prices while being able to keep EBIT constant. This could potentially explain why we are seeing the Chinese players mo

39、re competitive. We will monitor over the coming quarters if we have evidence this is happening.Sources for exhibits above: Company data, UBS Research, Bloomberg, Thomson Datastream, UBS Evidence LabGlobal Tire MakersUBS ResearchTHE MOST RELEVANT CHART FOR EACH STOCKMichelin: small benefit from recen

40、tly announced price hikesAll tires retail prices quarterly in Continental Europe ()112160150140130120110100Michelin announced some price hikes of 1-2% effective from 1 September. In Q3, we could not see any impact on retail prices as it takes several months before the hikes are fully passed through

41、the retail channels. In Q4, we can see a small uptick in Continental Europe, which is reassuring.2016 Q42017 Q12017 Q22017 Q32017 Q42018 Q12018 Q22018 Q32018 Q42019 Q12019 Q22019 Q32019 Q4Pirelli: trying to boost product mixRetail price change since database inception50%Recent pricing trends suggest

42、 some product mix improvement40%30%20%10%0%-10%-20% 36%-5%-9%in Q4. Since the inception of the UBS Evidence Lab database about three years ago, Pirellis mix improvement has been driven by sharp price increases in Standard (+36% since Q4 2016) (which have led to a sharp drop in volume in this segment

43、) and price declines in high value (-9% since Q4 2016) (which have led to solid volume growth).2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019Q4 Q1 Q2Q3 Q4 Q1Q2 Q3Q4 Q1Q2 Q3 Q4151719Nokian: most aggressive on its pricing policyRetail price change since our database inception5%0%-5%

44、-6%Until the end of last year, we can see that Nokian retail prices were broadly stable for 17 and 19 compared to the inception of the database about three years ago.Since the beginning of 2019, there has been a clear change-10%2016 Q4-15%-8%-12%in pricing trends with retail prices declining by 8-12

45、% compared to 1 January 2019. The dynamic even accelerated further in Q4 for its high value range especially.2017 Q12017 Q22017 Q32017 Q42018 Q12018 Q22018 Q32018 Q42019 Q12019 Q22019 Q32019 Q4151719Continental: stability is the name of the gameAll tires retail prices quarterly in Continental Europe

46、 ()112160150140130120110100Conti is widely perceived in our discussions with investors as one of the most aggressive players when it comes to pricing. The price tracker shows very stable trends since Q2 2018 and even a slight increase in Q4 2019.2016 Q42017 Q12017 Q22017 Q32017 Q42018 Q12018 Q22018

47、Q32018 Q42019 Q12019 Q22019 Q32019 Q4Sources for exhibits above: Company data, UBS Research, UBS Evidence Lab. Note: Continental Europe defined as France and Germany, includes all rim sizesFigure 2: Global Tire Makers UBS proprietary interactive model link for the model:Global Tire MakersGlobal Rese

48、archJan 2020 EquitiesGlobal AutomobilesInteractive analysis: Pricing policy required to fully offset raw materialsPlease enter a value or flex inputsFinancial impactsBaseEstablishedEmergingDavid LesneAnalystSales100101101 HYPERLINK mailto:david.lesne david.lesne1. UBS tire raw material indexflexvs B

49、ase1.0%1.0%+44-20-7567 5815Last 3-month change (rolling)-5.0%EBIT15.012.713.2vs Base-15%-12%Patrick Hummel, CFAEBIT margin15.0%12.6%13.1%Analystvs Base (bps)-241-190 HYPERLINK mailto:patrick.hummel patrick.hummel2. Sales bridgePrice impact to maintain EBIT margin (%)-1.1%-1.7%+41-44-239 79 23Change

50、in VolumePrice impact to maintain EBIT (absolute)-1.7%-2.2%Change in PriceBenedikt BaumannChange in MixAssociate AnalystPrice change to maintain EBIT HYPERLINK mailto:benedikt.baumann benedikt.baumann3. Raw materials (% of sales)40%+41-44-239 13 982.0%-4.0%3.0%4. Original Equipment exposure (as % sa

51、les)Established BudgetReset inputsSource for all figures: UBS estimates10%20%10%-1.7% -2.2%-5.0%Established25.0%30%Sabrina ReehBudget40.0%Analyst20% HYPERLINK mailto:sabrina.reeh sabrina.reeh+49 69 1369 82670%-10%-20%-30%-50% -30% -10% 10%30%50%70%90%UBS tire raw material index (last 3 months change

52、)EstablishedEmergingRelated ResearchGlobal Tire Makers Demystifying tire retail pricing07-Oct-2019Click here for the full reportGlobal Tire Makers Demystifying tire retail pricing18-Jul-2019Click here for the full reportThis interactive model w as developed in conjunction w ith the published report

53、listed above; please reference the report for details on the models assumptions. The model provides graphical scenario outputs based on changes the user can make to certain inputs. These outputs are hypothetical and do not reflect the research analysts view s, forecasts or valuations. The model is n

54、ot updated after being first published and therefore may not be current.This material has been prepared by UBS AG London BranchSource: UBS estimatesWhat are our most preferred tire makers?UBS heatmapFigure 3: UBS tires heatmap for Q4 2019Most preferred Least preferredMichelinPirelliContiNokianRating

55、 - newBuyNeutralNeutralSellRating - oldBuyBuyNeutralNeutralPT () - new1255.512022PT () - old1206.213025Overall recent pricing trends: Risk from budget competition: All-season tire opportunity:High value opportunity:AverageSource: UBS estimatesFigure 4: Table with change of EPS estimates and change o

56、f PT (old/new)2019E2020E2021EPrice targetUnderlyingEPSOldNew(%)OldNew(%)OldNew(%)OldNew(%)Conti0.090.12nm12.4311.97-4%14.2313.19-7%130120-8%Michelin10.9810.92-1%11.5011.10-3%12.0911.67-3%1201254%Nokian2.832.830%1.821.64-10%1.781.66-7%2522-12%Pirelli0.440.440%0.550.46-16%0.640.52-18%6.25.5-11%Source:

57、 UBS estimatesGlobal Tires valuationPrice (LC)MarketPT (LC)RatingP/EEV/SalesEV/EBITDAFigure 5: Tire makers peer comparisoncap (m)2020E2021E2022E2020E2021E2022E2020E2021E2022ETire manufacturersMichelin11120,224125B9.9x9.5x9.1x0.99x0.97x0.95x5.2x5.0 x4.9xLinglong Tyre233,65327.2B15.4x12.9x10.9x1.71x1.

58、49x1.31x9.8x8.4x7.2xPirelli5.35,3005.5N11.5x10.1x8.9x1.57x1.46x1.40 x6.7x6.2x6.6xConti11923,801120N9.9x9.0 x8.5x0.70 x0.66x0.62x5.3x4.8x4.4xNokian263,64222S16.1x15.9x14.4x2.10 x2.01x1.91x7.1x6.8x6.5xApollo1691,226218B12.0 x10.1x8.6x0.80 x0.81x0.72x7.2x6.5x5.6xMean (excl. Nokian)11.8x10.4x9.3x1.05x0.

59、98x0.90 x6.9x6.2x5.5xMedian (excl. Nokian)9.9x9.5x8.6x0.80 x0.81x0.72x5.3x5.0 x4.9xSource: UBS estimates, Thomson ReutersFigure 6: Global tire makers valuation vs profitability margin potential18.0 x16.0 xNokianPE 2020E (x)14.0 x12.0 x10.0 x8.0 x6.0 xBridgestone YokohamaKumho ContiGoodyeHaarnkookMic

60、helinPirelli4.0 x5.0%7.0%9.0%11.0%13.0%15.0%17.0%19.0%EBIT margin (2021E) (%)Source: UBS estimatesNote: for the names not covered by UBS (Bridgestone, Nexen, Goodyear, Hankook, Yokohama), we use consensus estimates from Bloomberg or ReutersGlobal Tire MakersUBS ResearchPIVOTAL QUESTIONSreturn Q: Are