[Core Conclusion] The company's revenue for 2024-2026 is estimated to be 2386/2868/329.7 billion yuan, respectively, +38%/+20%/+15%; net profit to mother is 132/156/17.3 billion yuan, respectively, +88%/+18%/+11%, corresponding to the current stock price PE16.3/13.8/12.4X. Maintain a “buy” rating.

[Report Highlights] We believe that with the completion of channel integration for various brands and the acceleration of the pace of intelligence, the company will continue its advantages in the SUV category and gradually expand from the household economy to the high-end luxury market. At the same time, in the future, the new energy hardcore off-road launch+the entire brand ecosystem will go overseas, which is expected to stimulate new momentum for the company's growth and drive continued growth in brand sales.

[Main logic]

New energy and hardcore off-road growth can be expected, and the Great Wall Tank defines a new pattern in the industry. The company has core competitiveness on the hardcore off-road model circuit. Hi4-T technology empowers all tank brand models to accelerate electrification and solve the core pain point of fuel consumption of off-road models. As the core model of the sub-brand, the Tank 300 has a competitive advantage in the price range of 20-30 thousand yuan. After subsequent large-scale launches, it is expected to become the core driving force for the brand's sales growth, helping the company further consolidate its dominant position in the hardcore off-road market. We expect sales of the company's hardcore off-road models to reach 275,000 units in 2024, +53% over the same period last year.

Following the general trend of vehicles going out to sea, the Great Wall embarked on a new ecological journey to sea. The company focused on the “ONE GWM” strategy and built a “vehicle manufacturing+supply chain system” ecosystem to go overseas. Overseas sales volume in 2023 was 320,000 vehicles, +82% over the same period last year. At present, the company has completed full-process capacity deployment in Russia, Thailand and Brazil, and KD plants around the world continue to increase. Overseas sales are expected to be 47/600,000 vehicles in 2024/2025, +49%/+28% over the same period last year. Furthermore, the price advantage of overseas models is prominent. Overseas gross margin was 10.5 pcts higher than domestic sales in 2023. It is expected that the company's profitability will continue to improve in the future as the share of overseas sales increases.

The pace of intelligence accelerates, and technology empowers brand growth. Coffee Intelligence built the company's global intelligent solution. In April of this year, the Blue Mountain Smart Driving Edition was unveiled at the Beijing Auto Show. Coffee OS 3.0+ full-scene NOA will officially be mass-produced and launched during the year. In the future, it is expected that mid-range and high-end models such as the WEY+ tank brand will be installed one after another, and the level of brand intelligence will be fully advanced.

Risk warning: New model sales performance falls short of expectations; new round of car market price war; overseas sales performance falls short of expectations.