Kenda Provides Substantial Guarantee to Safeguard Overseas Subsidiaries

Recently, Kenda Industrial (2106.TW) announced that it would provide bank financing guarantees totaling approximately 2.359 billion New Taiwan dollars for three overseas subsidiaries to support daily turnover of overseas operations and ensure stable operations of global bases. The guarantee covered two UK subsidiaries and one Indonesian subsidiary. As a tire company with a global layout, Kenda assists overseas subsidiaries in production expansion and operations through parent company credit, aligning with their supply schedule. The announcement also highlighted corresponding recourse risks, and Kenda will continue to track the debt repayment status of the subsidiaries.

Behind the massive guarantee safeguarding the subsidiaries is the performance support from Kenda reversing its fortune in the first half of 2026. During the period, the company's consolidated revenue was 18.245 billion New Taiwan dollars, up 2.72% year-on-year; net profit attributable to the parent company after tax was 311 million New Taiwan dollars, achieving a turnaround from loss to profit compared to the same period last year, with EPS reaching 0.33 New Taiwan dollars. In the industry environment of "increasing production and revenue without increasing profits", Kenda managed to make profits positive. Among them, overseas business is the core of profitability, with non-Asian regions accounting for over 50% of revenue, and segment profit reached 308 million New Taiwan dollars. In July 2026, Kenda's US factory officially opened. Currently, it owns 3 wheel manufacturing plants and 6 assembly centers in the US, and is preparing to build a German assembly plant as a European R&D center.

The secret to Kenda reversing its fortune lies in a precise product structure: actively contracting in the passenger tire track and concentrating resources on the overlooked "two-wheeler" golden track. In the first half, motorcycles and bias-ply tires contributed revenue of 9.265 billion New Taiwan dollars, a significant increase of 26.4% year-on-year; bicycle tires also increased by 10.5%, with the two-wheeler category accounting for nearly 60% of total revenue. This highly matches the massive replacement demand brought by approximately 350 million electric two-wheelers in the domestic market.

While consolidating the two-wheeler base, Kenda is positioning itself in two high-value four-wheeled niche tracks: off-road tires and new energy EV tires, seeking profit breakthroughs and forming a strategic rhythm of "two-wheeler ensuring scale, four-wheeler ensuring profit".

Although challenges such as EU anti-dumping tariffs and domestic overcapacity remain, with this "dual profit increase" interim report and the huge guarantee supporting overseas operations, the market has seen a Kenda with stronger risk resistance capabilities and a different Kenda.