Kumho consolidation puts Doublestar on track for H1 2026 profit

Qingdao Doublestar expects to return to profit in the first half of 2026 after completing the restructuring of its Kumho Tire investment. The Chinese manufacturer forecasts attributable net profit of RMB 110 million to RMB 160 million for the six months ended 30 June, reversing an adjusted loss a year earlier.

Restructuring drives profit forecast

Doublestar expects net profit attributable to shareholders of between RMB 110 million (£12.1 million) and RMB 160 million (£17.6 million).

The forecast compares with an adjusted net loss of RMB 35.4 million during the first half of 2025. Doublestar has also guided for underlying net profit of RMB 80 million to RMB 118 million.

The figures remain preliminary and have not been audited. Final numbers will be published in the company’s interim report.

Doublestar attributed the improvement mainly to its completed restructuring involving Kumho Tire. It said closer co-operation had improved purchasing, logistics, production planning and access to vehicle manufacturers.

The company added that Kumho’s passenger tyre position had supported a shift towards higher-value products. It also cited closer relationships with established vehicle makers and electric vehicle programmes.

A long-running ownership issue closes

The transaction brings Doublestar’s indirect 45% Kumho Tire holding into Qingdao Doublestar, the Shenzhen-listed tyre company.

Until the restructuring, the investment was held through a separate group-controlled vehicle. This created overlapping tyre interests between the listed business and its parent.

The completed share-and-cash transaction transfers control of that vehicle to Qingdao Doublestar. New shares issued as consideration were admitted to trading in April 2026.

The structure is intended to resolve what the company described as “horizontal competition” inside the wider group. It also gives listed-company investors more direct exposure to Kumho’s operations.

Tyre News previously examined the proposed £509 million transaction giving Doublestar consolidated control of its Kumho holding. The deal represented one of the largest overseas acquisitions undertaken by a Chinese tyre business.

A takeover story stretching back to 2016

Kumho Tire’s ownership process began during the restructuring of the former Kumho Asiana conglomerate. An early Doublestar bid encountered disagreements over valuation and trademark rights.

In 2018, Doublestar’s parent agreed to invest KRW 646.3 billion, then around US$597 million, for the 45% interest. The creditor-backed agreement helped Kumho avoid liquidation and gave Doublestar effective control.

However, Kumho continued to operate separately from Qingdao Doublestar’s listed tyre operations. The latest restructuring addresses that separation rather than representing a new purchase of Kumho shares.

“The restructuring brings the existing Kumho interest into a clearer listed-company structure,” Doublestar said in explaining the expected improvement.

Kumho supports a stronger product mix

Kumho has rebuilt its position through premium passenger tyres, original equipment supply and products developed for electric vehicles.

Its commercial progress provides Doublestar with exposure to segments beyond its traditional value and commercial tyre operations.

Tyre News reported that Kumho achieved record first-quarter sales in 2025, supported by vehicle manufacturer demand and rising electric vehicle tyre supply.

The Korean manufacturer has also expanded its original equipment portfolio. Recent programmes include the Crugen HT51 for Kia’s Tasman pick-up and SUV fitments for Renault Korea.

Kumho is preparing for further regional expansion through a planned tyre factory in Poland. The £443 million development is expected to begin first-phase production in August 2028, subject to project delivery.

These investments give the combined group a broader manufacturing and customer base. They also increase the importance of disciplined capital allocation across both businesses.

Balance-sheet pressure remains

The profit forecast represents an important change after several loss-making years for Doublestar.

The company recorded attributable losses of RMB 176 million in 2023, RMB 356 million in 2024 and RMB 360 million in 2025. Its reported debt-to-asset ratio increased from 78.7% to 85% over the same period.

The restructuring therefore improves Doublestar’s earnings profile but does not remove its financial risks. Investors will be watching cash generation, borrowing costs and the division of profits between shareholders and minority interests.

Raw material and shipping costs also remain significant pressures. Doublestar acknowledged that material costs rose sharply during the first half, despite the forecast improvement.

Cambodia adds production flexibility

Doublestar is also increasing output through its manufacturing operation in Cambodia.

The Kratie facility entered production in 2024 following an investment of about US$200 million. Planned annual capacity includes seven million passenger car tyres and 1.5 million truck and bus tyres.

That factory provides a lower-cost export base in Southeast Asia. It could also support production sharing between Doublestar and Kumho as integration develops.

The group has said it wants to co-ordinate raw material purchasing, specialist rubber compounds, global logistics and tyre production. The test will be whether those measures deliver sustainable cash earnings rather than an accounting-led profit improvement.

A clearer dual-brand structure

The consolidation points towards a more defined position for the two brands.

Kumho brings premium passenger tyres, original equipment relationships and electric vehicle technology. Doublestar contributes commercial tyre products and manufacturing capacity in China and Southeast Asia.

In practice, this could help the group allocate products and production more efficiently across markets. It may also reduce duplication in procurement, export development and factory utilisation.

However, the first-half guidance is still a forecast. Doublestar must demonstrate that the improvement can continue after the initial restructuring effect.

For the wider tyre sector, the result shows how ownership consolidation can alter product mix and financial reporting. It also signals stronger competition from Chinese-controlled manufacturers spanning premium, value and commercial tyre categories.

‍

‍

Tagged with: Qingdao Doublestar, Kumho Tire, tyre industry consolidation, tyre manufacturer profits, original equipment tyres, EV tyres, Cambodia tyre production, tyre manufacturing, Asian tyre market, dual-brand tyre strategy, tyre supply chain

‍