Incidents:
On June 3, 2024, Great Wall Motor released its May production and sales report: The company achieved sales of 91,500 vehicles in May, or -9.51%/-3.52%, respectively. Cumulative sales in January-May 2024 were 461,600 vehicles, +11.42% year-on-year. In May, the Haval brand achieved sales of 47,000 vehicles, -15.35%/+0.03% month-on-month; the WEY brand achieved sales of 2,862 units, or -50.40%/-35.80%, respectively; Great Wall Pickup achieved sales of 15,000 units, -18.83%/-16.43% month-on-month, respectively; the Euler brand achieved sales of 6005 vehicles, 43.43%/+28.15% month-on-month respectively; the tank brand achieved sales volume of 20,300 units, same/ring respectively The ratios were +94.90%/-1.14%, respectively.
Investment highlights:
Sales in May were under month-on-month pressure, and new product launches can be expected in the future. According to the official account of Great Wall Motors, in January-May, Great Wall sold a total of 76,700 pickup trucks and 90,000 tank brands, +97.52% over the same period, accounting for the top sales of domestic pickup truck models, hardcore off-road models, and off-road new energy models respectively.
In May, NEV sales were 24,600 units, +3.76%/+9.86% YoY, NEV sales accounted for 26.95%, and +3.44pct/+3.28pct YoY respectively. Due to the pace of product launch, overall sales in May were under month-on-month pressure. Relying on sales restructuring, the share of high-value products increased year-on-year. In May, models over 200,000 yuan sold 23,900 units, +34.48%/-6.60%, or 26.17%, or +8.55pct/month-on-month, respectively. The pace of product launch. On May 13, Weipai's new Mocha Hi4 was officially launched, equipped with a Hi4 performance electric four-wheel drive and Coffee OS 2 smart cockpit, further enriching the product matrix of a large five-seat electric SUV in the 20 to 10,000 yuan range. On May 22, the Great Wall Pickup 2.4T passenger gun and commercial gun were officially launched. Equipped with high-performance fuel-saving configurations, L2+ class intelligent driving assistance, and high-capacity TOD intelligent four-wheel drive, it is expected to drive up the value of the company's pickup truck category. On May 28, all Weipai Blue Mountain, Alpine and Coffee models began a new round of OTA iteration. Version optimization based on user experience feedback enhances user reputation around product user experience, thereby improving brand competitiveness.
Overseas sales increased steadily year on year, and product matrix coverage was further improved. Overseas sales of 34,500 vehicles in May were +37.19%/-4.60%, exports in May accounted for 37.70%, and +12.82pct/-0.43pct/month-on-month, respectively. On May 24, the Great Wall Tank 500 received Australia's ANCAP five-star safety rating, further enhancing the brand's overseas image. On June 1, the company's three flagship products, Weipai Takayama, 700 Hi4-T, and Great Wall Luxury Heavy Industries and Motorcycles, participated in the 2024 Guangdong-Hong Kong-Macao Greater Bay Area Auto Show to strengthen the layout of the Great Wall product technology route from a global perspective. In the future, the company's overseas business will focus on ONE GWM strategy, enriching the full product matrix coverage of all categories, full power, and grade products, which is expected to comprehensively promote the continuous increase in the market share of overseas brands.
Although profit forecasts and investment rating companies' sales volume fluctuated in the short term, looking ahead, the launch of new models and intelligent products is expected to boost overall sales. The company is expected to achieve operating income of 2397, 2743, and 299.5 billion yuan in 2024 to 2026, with year-on-year growth rates of 38%, 14%, and 9%; achieving net profit to mother of 109.5, 137.4, and 19.06 billion yuan, with year-on-year growth rates of 56%, 25%, and 39%; EPS is 1.28, 1.61, and 2.23 yuan. The PE valuations corresponding to the current stock price are 19.9, 15.8, 11.4 times We expect the company's future revenue and other performance indicators to continue to improve, optimistic about the company's future development, and maintain the “gain” rating.
Risks suggest that the automobile (NEV) market sales growth rate falls short of expectations; the new vehicle development process falls short of expectations; international market demand is unstable; exchange rate fluctuations risk; overseas market business development falls short of expectations due to geopolitical factors; and the progress of intelligent development falls short of expectations.