Production and sales in July continued to grow positively compared with the same period last year, the off-season performance exceeded expectations, and overseas sales reached a new high this year.

On August 8, 2022, Great Wall Motor announced the production and sales of KuaiBao in July. The company achieved sales of 101920 vehicles in July, + 11.32% year-on-year, + 0.73% in July, + 15.02% in July, and-0.13% in July.

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, the July sales of the tank and Euler brands were the highest compared with the same period last year, while the July sales of the Harvard and WEY brands were positive compared with the previous month. 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, up 7.35% year-on-year, and 10610 Harvard dogs, an increase of 45.36% compared with the same month last year. The July sales of the brand were 3034,-24.26% and + 5.09%, respectively. Great Wall pickup sales in July were 16305,-7.53% year-on-year and-23.27% month-on-month. Among them, Great Wall Artillery 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. Eula brand sold 8829 vehicles in July, + 21.76% year-on-year and-23.33% month-on-month. Tank brand sales in July reached 12473, year-on-year + 128.03%, month-on-month-12.52%, of which 9955 were sold, an increase of 81.99%, and 2518 were sold. Overseas, the company's overseas sales reached 14710 vehicles 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 automotive 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 WEY brand "0 anxiety smart electric" is expected to continue to be verified with the launch of latte DHT-PHEV models, and there is room for further improvement. 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 epidemic in Shanghai 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 H6 DHT version is about to go on sale, the launch cycle of new models begins, and gold, silver and silver are available.

Recently, the Harvard H6 DHT version of the star car of the Harvard brand has been unveiled. 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 Federation of passengers, cumulative sales of the 22H1 Harvard H6 were 123500,-34.6% year-on-year. The Hover H6 DHT version may be available in the third quarter, thus starting the process of mixing the Harvard brand. 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. On July 25, the WEY latte DHT-PHEV is officially launched, with "intelligent DHT series-parallel + coffee intelligence" two core technologies, positioning family users, child-friendly. In the second half of the year, Euler's Lightning Cats, punk Cats, Tank 700s, WEY 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 is 32.09,25.99,19.56 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.