Incident Overview: The company released its 2023 annual report: Great Wall Motor's total revenue for the full year of 2023 was 173.21 billion yuan, +26.1% year on year; gross margin was 18.7%, -0.6 pts year on year; net profit after non-return to mother was 4.83 billion yuan, +8.0% year on year; of these, the total operating revenue of 2023Q4 was 53.71 billion yuan, +41.9%/+8.5% year over month, respectively; 2023Q4 gross margin was 18.5%, +0.5 pts/-3.2 pts year over month, respectively; Net profit of 2023Q4 after deducting non-return to mother was 1.03 billion yuan, or +652.0%/-66.4% year-on-year, respectively.
The business performance is steady, and the bicycle ASP is steadily improving. Revenue side: The total operating revenue of 2023Q4 was $53.71 billion, +41.9%/+8.5% YoY, respectively. According to our estimates, the 2023Q4 bicycle ASP was 146,000 yuan, an increase of 0.4/0.3 million yuan year-on-year and month-on-month respectively. Profit side: Net profit of 2023Q4 after deducting non-return to mother was 870 million yuan, +540.9%/-71.4% year-on-year, respectively. Expense side: 2023Q4 sales expenses/management and administrative expenses were RMB 31.64 billion, respectively, and the cost ratio was 5.9%/3.1%, respectively. In terms of sales, 1.231,000 vehicles were wholesale in 2023, +15.3% year-on-year.
The tank's performance is impressive, and the transformation of new energy sources is gradually progressing. In 2023, the Great Wall's new energy transformation progressed steadily, with cumulative sales of 262,000 vehicles throughout the year, +98.7%; the share of new energy reached 21.3%, +8.9pts year on year.
Since 2024, the tank brand has continued to perform well, with cumulative sales of 30,000 units in January-January, +146.6% over the same period last year.
By brand, Haval's basic market performance was steady, with sales of 71.5/104,000 units in 2023 and January-January 2024 respectively, or +16.0%/32.5% year-on-year. In terms of high-end brands, Wey sold a total of 42/ 60,000 vehicles in 2023 and January-January 2024, or +14.4%/181.95% year-on-year.
Overseas sales increased rapidly to expand the South American and Southeast Asian markets. In 2023, Great Wall Motor exported 316,000 vehicles, +82.5% over the same period last year. In terms of overseas layout, Great Wall Motor's sales network has covered more than 170 countries and regions around the world, and has more than 1,000 international channels. Great Wall Motor accelerates international market development through the “vehicle manufacturing+supply chain system” overseas route. With brands such as Euler and Tank appearing in Chile, Peru, Thailand, etc. We believe 2024 is expected to see the Great Wall break through in Southeast Asia and South America.
Investment suggestions: The promotion of the company's new products at home and abroad is progressing smoothly, a new cycle of intelligent electrification has begun, the proportion of new energy intelligent models has increased rapidly, and the high-end intelligent route is becoming more and more clear. Adjusted profit forecasts, the estimated revenue for 2024-2026 will be 2,257.3/2,670.0/301.66 billion yuan, and net profit due to mother will be 95.9/126.8/15.35 billion yuan, corresponding to the closing price of 22.82 yuan/share on March 28, 2024, PE is 20/15/13 times, maintaining the “recommended” rating.
Risk warning: downside risk in the car market; competition in the market where brands such as WEY and Haval are located has intensified, sales fall short of expectations; overseas progress falls short of expectations.