Tianfeng Securities Co., Ltd. recently conducted a research on Great Wall Motor and issued a research report entitled "steady growth of production and sales in July, continuous repair of supply chain, Golden Nine Silver and Ten prospects". This report gives a buy rating to Great Wall Motor, and the current share price is 31.63 yuan.

Great Wall Motor (601633)
Production and sales continued to grow positively in July compared with the same period last year, with off-season performance exceeding expectations and overseas sales hitting a new high this year.
On August 8, 2022, Great Wall Motor announced the production and marketing of KuaiBao in July. The company achieved sales of 101920 vehicles in July, + 11.32% year-on-year, + 0.73% month-on-month, and 102226 vehicles in July, + 15.02% year-on-year and-0.13% month-on-month. A total of 620445 vehicles were sold from January to July in 2022,-12.58% compared with the same period last year. Among the five sub-brands, tank and Euler brands led the year-on-year growth in July sales, while Harvard and WEY brands showed positive month-on-month growth in July sales. Specifically, the Harvard brand sold 61279 vehicles in July, + 7.14% year-on-year and + 19.51% month-on-month, of which Harvard H6 sold 27638 vehicles, an increase of 7.35% over the same period last year, and 10610 Harvard dogs, an increase of 45.36% compared with the same period last year. The July sales of the WEY brand were 3034, year-on-year-24.26%, month-on-month + 5.09% Great Wall pickup trucks sold 16305 vehicles in July,-7.53% year on year and-23.27% month-on-month. Among them, Great Wall Gun sold 10490 vehicles, an increase of 4.84% over the same period last year, with a cumulative sales volume of more than 10,000 in 24 months, continuing to lead the Chinese pickup market. Euler brand sold 8829 vehicles in July, + 21.76% year-on-year, month-on-month-23.33%. Tank brand sales reached 12473 in July, with year-on-year sales of + 128.03% and month-on-month sales of-12.52%, of which 9955 were tank sales, an increase of 81.99% and 2518. Overseas, the company's overseas sales reached 14710 in July, an increase of 18.27% over the same period last year and a new high for this year. July is the off-season for production and sales in the automobile industry, and we believe that the company's production and sales performance exceeded expectations in July, taking into account seasonal factors.
With the steady progress of intelligence and electrification, sales volume continues to climb along with production repair.
In July 2022, the company's sales of vehicles worth more than 200000 yuan accounted for 15.17%, intelligent models accounted for 88.32%, and models based on lemon, tank and coffee smart brands accounted for 75.8% of sales. Tank brands accelerate the volume, and high-end off-road products are expected to promote the continuous optimization of the company's products and profit structure. WEY brand firmly electrified transformation, its "coffee series" models as the carrier of Great Wall Motor's intelligent achievements, we believe that the category strategy of "0 anxiety smart electric" of the Wei brand is expected to continue to be verified with the launch of the latte DHT-PHEV model, and there is room for further improvement in sales. Euler brand accurate positioning of female users, deep cultivation of market segments, unique brand and product positioning is expected to help Great Wall Motor form a differentiated competitive advantage and occupy a place in the fierce competition in the domestic new energy vehicle market. We believe that the July production and sales data can reflect the steady recovery of the company's production capacity and material supply since the Shanghai epidemic in April, and the supply of chips and other key materials may no longer cause a major disturbance to the company's production and sales in the fourth quarter. Harvard H6DHT version is about to go on sale, the launch cycle of new models has begun, and gold, silver and silver are expected. Recently, the Harvard H6DHT version of the star car of the Harvard brand has been exposed. the new car is expected to carry a hybrid system of 1.5T engine and motor, and support L2 self-driving system, providing integrated automatic parking (IAP), automatic reversing assist system (ARA), intelligent evasion system (WDS) and other functions. As the company's sales of fuel cars, in the wave of electrification, Harvard H6 sales have declined. According to the data of the Federation of passengers, 22H1
Harvard H6 sales totaled 123500,-34.6% year-on-year. The Harvard H6DHT version may be available in the third quarter.
As a result, the mixing process of Harvard brand begins. We believe that the company has sufficient technical reserves in the hybrid field, and the hybrid of star models is expected to accelerate the electrification process of the company, which is of great strategic significance. In the second half of the year, the company starts the launch cycle of new cars. Haverku, another blockbuster product of the Harvard brand, went on sale on July 18 and will be officially launched on August 10. DHT-PHEV, a latte under the Wei brand, is officially launched on July 25, with two core technologies of "intelligent DHT series-parallel + coffee intelligence", positioning family users and child-friendly. In the second half of the year, Euler's Lightning Cat, punk Cat, Tank 700, Wei Brand Dream, Salon and other new models are also expected to be released and put on the market one after another. We believe that the stock of new cars is abundant in the second half of the year, the launch of new cars will help maintain the popularity and influence of the brand, supply chain and capacity repair are expected to support sales growth in the second half of the year, and the company's performance in the coming peak season is worth looking forward to.
Investment suggestion: according to the company's 22-year cumulative sales volume and net profit margin, considering factors such as chip shortage and rising raw material prices, and considering the company's post-epidemic production and marketing repair situation and follow-up model planning, we predict that the company's 22-24 net profit will be 9.074 billion yuan, 11.203 billion yuan, 14.887 billion yuan; 22-24 PE corresponding to 32.09 times, 25.99 times, 19.56 times. We are optimistic about the positioning ability of the company in market segments, the strategy of "category definition brand", the layout of the company in the intelligent field, the upward transformation of the brand, the company's hybrid DHT scheme, high-end intelligent electric salon brand, and firmly increase R & D investment in intelligent and electric fields, all of which contribute to the company's long-term development.
Risk tips: the company's new car delivery volume is not as expected, the permeability growth of new energy vehicles is not as expected, the supply of components such as chips and power batteries is unstable, the price of raw materials is rising too much, the epidemic affects vehicle sales, and the launch of new products is not as expected.

Based on the research data released in the past three years, the Securities Star data Center calculates that the Minsheng Securities Shao researcher team has studied the stock more deeply, with an average forecast accuracy of 89.05% in the past three years. Its forecast net profit is 9.549 billion in 2022, and the forecast PE is 30.41 based on the current price.

Details of the latest profit forecasts are as follows:

A total of 33 agencies have rated the stock in the last 90 days, 24 have bought ratings and nine have increased their holdings, with an average price target of 47.51 over the past 90 days. According to the financial report data of the past five years, the Securities Star valuation analysis tool shows that Great Wall Motor (601633) has excellent competitive moat in the industry, average profitability and mediocre revenue growth. There may be hidden financial worries, and the financial indicators that should be paid attention to include: accounts receivable / profit margin, accounts receivable / profit margin growth in the past 3 years. The stock has a good company index of 3 stars, a good price index of 2 stars and a comprehensive index of 2.5 stars. (index is for reference only, index range: 0 ~ 5 stars, maximum 5 stars)

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