The Zhitong Finance App learned that Morgan Stanley released a research report, quoting Great Wall Motor (02333) management to break down the non-recurring revenue of 1.2 billion yuan (same below) recorded in the first quarter of this year. Of these, 621 million yuan of government subsidies covered local tax benefits in 2023, and the remaining 600 million yuan included export tax rebates and tax subsidies for overseas production plants. Management believes that if it continues to receive domestic and foreign tax benefits, 50% of its 1.2 billion yuan non-operating income may become recurring income.

According to the report, Great Wall Motor's gross profit margin for the first quarter of this year was 20%, up 4 percentage points year on year and 1.6 percentage points from quarter to quarter, due to a good export mix and increased sales of “tank” cars. The increase in non-operating income due to subsidies and tax rebates is also a major driving factor. But geopolitical uncertainty may overshadow export strength. Great Wall Motor's net profit for the first quarter of 2024 was 3.2 billion yuan, higher than market expectations. Net profit per vehicle in the first quarter more than doubled compared to the same period last year, reaching 11,700 yuan. Non-recurring revenue of $1.2 billion, of which $621 million is related to government subsidies. Great Wall management said it will maintain the 2024 export target of 500,000 vehicles and focus on expanding Latin America, ASEAN, and the Middle East. The expansion of sales channels and model lineup will be the key to the 2024 overseas strategy.