On August 8, Great Wall Motor released July 2022 sales of 101900 vehicles, + 11.3% year-on-year, month-on-month sales of 620400 vehicles,-12.6% year-on-year, in line with expectations.
Among them, Harvard, Euler, tank three major brands contributed increment, more than 200000 model sales accounted for 15.17%, the product structure continues to be optimized. We believe that the company's hybrid technology and various brand reserve models are on the rise, and look forward to the performance in the second half of the year to maintain Great Wall Motor's "buy" rating.
On August 8, 2022, Great Wall Motor released sales for July 2022. Our comments are as follows:
July sales are in line with expectations, Harvard, Euler, tank three major brands contribute increment. In July 2022, sales reached 101900 vehicles, + 11.3% year-on-year, + 0.7% month-on-month, in line with expectations; January-July cumulative sales of 620400 vehicles, year-on-year-12.6% Teng July production of 102200 vehicles, year-on-year + 15.0%, month-on-month ratio-0.1%. In terms of brand, Harvard / WEY/ Great Wall pickup truck / Euler / tank achieved sales of 6.13 / 0.30 / 1.63 / 0.88 / 12500 respectively in July, with year-on-year sales of + 7.1% /-24.3% /-7.5% / + 21.8% / + 128.0% and + 19.5% /-23.3% /-23.3% /-12.5% respectively. Year-on-year sales growth is mainly contributed by Harvard, Euler, tank three major brands. On the export side, overseas sales reached 14700 vehicles in July, a year-on-year high of + 18.27%. Up to now, Great Wall Motor has been exported to more than 170 countries and regions and has nearly 700 overseas sales channels. In addition, in July, Great Wall Motor's sales of models 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.
The tank series continues to be launched, and the Harvard hybrid DHT is expected to be released this year. According to the data we tracked on the "Tank TANK" on the tank APP, at present, the cumulative order volume of new tank models is 57000 per day; the daily average new order for the tank is about 300, and the cumulative undelivered order is 140000, and the order on hand is sufficient. In terms of hybrid models, the most noteworthy is the hybrid model of the Harvard H6. According to the company's plan, the HEV version of the 2022Q3 Hafer H6 will be available soon, and the PHEV version will be launched this year. The market performance of the popular Harvard H6 SUV mixed with lemon is something to look forward to. In terms of pure trams, the layout of Euler brand products has gradually improved. Ballet cats were officially launched on July 12, with a price of 19.3-223000 yuan. Lightning cats, which take into account male aesthetic and meet the needs of families, and the larger Euler retro series of pure electric model punk cats will also be released and listed on 2022H2.
Full reserve of intelligent and power technology, tamping the cornerstone of the company. In terms of intelligence, Great Wall Motor has four intelligent organizations, namely, Product Digital Center, Maomo Zhixing, Xiandou Intelligence, and Nuochuang Technology, mastering the core technologies such as self-developed brand-new electronic and electrical architecture, self-research cockpit system and intelligent ecology, and self-developed self-driving computing platform IDC 3.0. with comprehensive R & D capability from the underlying hardware to the upper software, Great Wall Motor Coffee Intelligence has been upgraded in an all-round way. WEY Mocha is equipped with NOH high-speed intelligent navigation assistance system, which integrates the perception, decision-making and execution of the vehicle with on-board navigation, high-precision map and positioning depth; as of February 2022, the mileage of user-assisted driving has exceeded 5 million km. In terms of power technology, the Great Wall established three major technical routes based on hybrid, pure electricity and hydrogen energy, and focused on the formation of a complete own system: hybrid lemon DHT; power battery, the layout of honeycomb energy; hydrogen energy, the layout of unpotential energy. The complete system capability tamps the company's core technology foundation and provides strong support for the brand.
Risk factors: the release time of new models is lower than market expectations; sales of new models do not meet expectations; tight chip supply affects vehicle supply capacity; price war broke out in the end market.
Investment advice: we maintain the company's annual EPS forecast of 1.03 pound 1.36 won 1.67 yuan in 2022-23-24. The current A-share price corresponds to the PE; Hong Kong share price on 24-18-15, 2022-23-24, corresponding to the PE on 10-7-6, 2021-22-23. We are optimistic about the impact of new products such as the tank 300 on the company's profitability, and believe that the acceleration of electrified and intelligent transformation will help to improve the company's valuation. We estimate that the average annual compound growth of net profit from 2022 to 2024 is expected to reach 25%. With reference to the company's Hong Kong stock PE hub of about 16,18 times in the past 3 years, the company's Hong Kong stock PE is valued at 16 times PE, corresponding to the target price of HK $20. Under the long-term existence of AH premium, the A-share PE center of the company has been about 45 times in the past 3 years, so we give Great Wall Motor (A) 45 times PE in 2022, corresponding to the target price of 47 yuan. Reiterate Great Wall Motor's "buy" rating.