Giti Tire Pte. Ltd. (‘Giti Tire’) is a global tyre manufacturer headquartered in Singapore. It is one of the world’s largest tyre companies, supplying tyres to over 130 countries worldwide.
Giti Tire plans to issue new SGD 5-year sustainability bonds at a final price guidance (FPG) of 5.75%, for accredited and institutional investors only. These senior unsecured bonds are expected to be unrated, while the issuer is also unrated. Proceeds will be used to finance or refinance expenditure directly related to Eligible Green and Social Projects under the issuer’s Sustainable Finance Framework.
(Note to investors: Giti Tire Corporation [SHA:600182] is an indirect listed subsidiary of Giti Tire Pte. Ltd. [the issuer]. While Giti Tire Corporation publishes semi-annual updates, Giti Tire Pte. Ltd. [the issuer] is unlisted, and to our knowledge, does not regularly publish financial updates.)
Steady financial performance in 1H25
(Data as of 1H25 [30 June 2025] in RMB [¥] terms. Growth rates are YoY unless otherwise stated.)
In 1H25, Giti Tire grew its revenues by +5% to ¥11.5b, driven primarily by higher tyre sales volumes. Management disclosed broad-based revenue growth across its main tyre segments (PCR, TBR, & MC tyres), as well as the key China segment (+15%), which accounts for 45% of group revenues today.
Meanwhile, Giti Tire’s cost of sales grew quicker by +11% due to higher raw material costs, resulting in gross profits dipping to ¥2.9b (change: -9% or -¥295m). As for other costs, the increase in administrative expenses was roughly offset by the decrease in finance costs (likely due to falling interest rates). Hence, despite the higher revenues observed above, gross profits and profit after tax both fell YoY in 1H25. Profit after tax came in at ¥421m, still positive but down from the previous half (1H24) (change: -28% or -¥162m).
Notwithstanding higher costs and margin pressures, we think Giti Tire appears to maintain its post-COVID growth momentum, through growing revenues as well as steady (positive) profitability. Management appears confident in sustaining competitive margins versus their peers despite elevated costs.
Cashflow situation weakened in 1H25, but not overly concerning (yet)
Cashflows were generally positive in 2023 and 2024 in its post-COVID recovery. However, in 1H25, Giti Tire saw negative cash outflows primarily due to investing activities linked to increased payments relating to a new plant in Anhui. Operating cashflows also weakened in 1H25 due to the settlement of notes payable in 1H25, which rose in line with higher unit cost prices, aligning with the ongoing margin pressures mentioned above.
We think Giti Tire’s cashflow situation remains manageable for now, with operating segments generating positive cash inflows despite fluctuations in working capital. This may remain supported assuming margins do not deteriorate further, and with cash inflows from the Anhui plant possibly ramping up (first production line started in June 2025, expected full production by 2027).
Credit profile appears stable, though the company remains leveraged
Giti Tire’s credit profile has been fairly stable in recent years. Its cash position (excluding restricted bank deposits) remained elevated compared to previous years (FY23: ¥1.9b / FY24: ¥3.5b / 1H25: ¥3.4b). The increase was more pronounced, looking at cash including restricted bank deposits (FY23: ¥2.4b / FY24: ¥5.4b / 1H25: ¥5.1b).
(Note: Restricted bank deposits may include deposits pledged to secure various payables, reflecting the company’s capital-intensive nature.)
Total debt levels have gradually increased over time since FY23, coming in at ¥11.3b in 1H25 (FY23: ¥10.3b). Nonetheless, the larger increase in cash position led to an improvement in its net debt levels. In addition, management has made progress on deleveraging, with debt ratios largely stabilising (Table 1). Some of these ratios are also included in the bond’s covenants and are showing decent buffers – see ‘About the bonds’ section below.
Giti Tire’s debt maturity profile is somewhat front-loaded, with a significant proportion maturing within the next 2 years. This is partially due to the capital-intensive nature of the business – management has shared that of the ¥4.8b maturing in the next 1 year, only about ¥1.0b is from short-term loans, with the remainder primarily from working-capital loans. This brings about refinancing risks for the company, though for now, we do not see major issues considering the company’s decent financial performance, while management has expressed confidence in rolling over its maturities in the coming years.
Management has reiterated its commitment to maintaining a prudent credit profile. Based on its recent 1H25 results, we do see signs of this prudence and also observe a trend of gradual deleveraging, both of which point toward stability in the issuer’s credit profile. Nonetheless, we highlight that Giti remains a fairly leveraged issuer as a whole (notwithstanding recent stability).
The tyre industry tends to be fairly capital-intensive in general, and Giti Tire is no exception. As a result, changes in working capital requirements are typical and can sometimes lead to a greater need for short-term working capital loans. At the same time, disruptions or downturns in its key markets could also adversely affect Giti’s broader credit profile.
Table 1: Selected credit metrics / ratios of Giti Tire
| Credit Metrics / Credit Ratios | FY22 | FY23 | FY24 | 1H25 |
| Total Debt / Total Equity | 2.8 | 2.2 | 2.0 | 2.0 |
| Total Debt / Total Assets | 0.5 | 0.4 | 0.3 | 0.3 |
| Secured Debt / Total Assets | 0.3 | 0.2 | 0.2 | 0.1 |
| Source: Giti Tire, iFAST compilations, iFAST estimates. Data as of 1H25 (30 June 2025). | ||||
Risks
As the issuer is an unlisted entity, it has no obligation to provide regular financial updates. This means that investors may find it harder to conduct ongoing monitoring of this issuer over the next 5 years (to maturity). As the issuer primarily earns revenues from China and (to a lesser extent) Indonesia, it may be subject to some revenue concentration risks in those geographies.
The issuer also faces liquidity risks from its capital-intensive business model (as referenced above), as it relies heavily on working-capital loans to fund its manufacturing expenses. Nonetheless, the issuer has mentioned that it has gradually improved its inventory turnover over time, helping it shorten its cash conversion cycle (77 days) since FY22 (94 days), which may reduce said liquidity risks.
Furthermore, the debt and cash figures above are on a group basis (i.e. including subsidiaries). If we exclude subsidiaries, Giti Tire held ¥2,098m in debt with just ¥90m in cash including restricted bank deposits (versus ¥10,568m in debt / ¥5,356m in cash on a group level), suggesting it is even more leveraged on a standalone basis.
About the bonds
These bonds come with various bond covenants (Table 2), where the issuer has committed (as long as the bonds remain outstanding) to keep its consolidated equity above ¥3.5b, as well as several ratios below varying limits (e.g. total debt to total assets under 0.6x). There is also a ‘dividend restriction’ covenant, which states that any shareholder dividend should be at most 30% of the company’s consolidated annual profits. We think these covenants are fairly ‘standard’ and provide some sort of investor protection for bondholders.
The FPG of 5.75% makes this Giti Tire bond one of the highest-yielding within the SGD bond universe, with yields higher than even some perpetuals (including AT1s). We think the higher yields reflect the leveraged profile of the company (due to its capital-intensive nature). These bonds would be best suited for aggressive yield-hunters who are comfortable with Giti Tire’s more leveraged profile and are looking for an adjacent exposure to the Chinese autos space (including EVs), while also noting that regular financial updates on the company might be limited due to its unlisted nature.
Table 2: Selected list of bond covenants
| Bond covenants | Actual | Covenants |
| Total Equity | 5.6b | ≥ 3.5b |
| Total Debt to Total Assets | 0.3x | ≤ 0.6x |
| Secured Debt to Total Assets | 0.1x | ≤ 0.5x |
| EBITDA to Finance Costs | 3.1x* | ≥ 2.0x |
| Source: Giti Tire, iFAST compilations, iFAST estimates. Data as of 1H25 (30 June 2025).*Giti Tire reports this ratio as 3.1x in their slides, while a manual calculation based on disclosed finance costs in their P&L statement gives a ratio of 3.4x. The discrepancy is likely due to differences in the calculation of finance costs. | ||
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities.
