Great Wall Motors released its report for the first quarter of 2024. The company achieved revenue of 42.9 billion yuan in 2024Q1, +48% year-on-year, mainly due to increased vehicle sales and increased bicycle revenue; net profit of 3.2 billion yuan, +18.5 times the previous year, mainly due to the expansion of the company's sales scale and optimization of the sales structure.
2024Q1 bicycle revenue and bicycle net profit increased year-on-month. 2024Q1 sold 275,000 new vehicles, +25% year over year and -25% month over month. According to our estimates, the company's 2024Q1 bicycle revenue was 156,000 yuan, up 24,000 yuan year on year, up 90,000 yuan from month to month; net bicycle profit was 12,000 yuan, up 11,000 yuan year on year, and 60,000 yuan month-on-month. We believe that the year-on-month increase in bicycle revenue was due to the optimization of the company's product structure. The 2024Q1 high-priced tank brand sold 50,000 units, accounting for 17.9%, +6.9 pct year over year, and +2.0 pct month-on-month.
2024Q1's profitability compared to the previous month was impressive. The company's 2024Q1 net margin was 7.5%, +6.9pct year on year, +3.8pct month on month; gross margin was 20.0%, +4.0pct year on year, +23.2pct month on month. We believe that the increase in the company's profitability is due to the scale effect brought about by the increase in sales volume, the improvement in product structure, and the increase in export sales.
“Ecological going overseas” continues to advance, and overseas sales have increased significantly over the same period last year. 2024Q1 sold 93,000 vehicles overseas, +78.5% year on year; exports accounted for about 34%, +10.1 pct year on year, and +5.2 pct month on month. According to Great Wall Motor's WeChat account, in 2023, the company launched the “GWM” brand in Vietnam, Indonesia, and Mexico, and achieved coverage of the core regional markets of ASEAN countries. Models such as the Haval H6, Haval Big Dog, Weipai Mocha PHEV, Euler Cat, Tank 300, Tank 500, and Great Wall Gun were launched overseas. The company reached a strategic cooperation with the ADM automobile factory of the Uzbek Automobile Group to accelerate the overseas localized production and marketing process. As of March 2024, the company's export models have landed in more than 170 countries and regions, more than 1,000 international sales channels, and more than 1.4 million overseas car owners.
Profit forecast and valuation: We expect Great Wall Motor's 2024/25/26 revenue to be 2145/2594/301.9 billion yuan, net profit to mother 92/114/15 billion yuan, and EPS 1.08/1.34/1.76 yuan. The company's closing price on April 26, 2024 was 26/21/16 times PE, respectively. The company was given the 2024 PEG 1.0-1.1 level, corresponding to 29-32 times PE, the corresponding reasonable value range was 31.11-34.22 yuan, and the corresponding PB level was 3.41-3.75 times. Maintain an “better than market” rating.
Risk warning: The development progress of new passenger car models fell short of expectations, export sales fell short of expectations, and raw material prices rose sharply.