Doublestar has sold the plant in Guangzhao

The company Doublestar announced that it has sold 100% of the shares of the tire plant Guangrao Jixing Tire to Lubo Rubber Technology for 205 million yuan (29 million dollars).

Guangrao Jixing Tire became the property of Doublestar after the purchase of the tire enterprise in Guangrao (Dongying, Shandong, China), which was on the verge of bankruptcy, in 2019, and the deal was estimated at 899 million yuan (128 million dollars), which means that the acquisition of these assets led to significant losses.

In the first two years after the purchase, Jixing did not bring profit, and the total losses for 2020-2021 amounted to 70 million yuan (10 million dollars), which further worsened the financial performance of Doublestar, which has been unprofitable for five years in a row. As of June 30, 2024, the total assets of Jixing were estimated at 804 million yuan, and the total liabilities were 604 million yuan.

In 2023, Doublestar decided to sell Jixing, and although in the last two years the "daughter" began to bring profit, this decision was not abandoned. As Chinese media note, this is due to the fact that the company needs significant funds to implement the project for the absorption of Kumho, which is planned to be integrated into Doublestar, creating a major player in the tire market.