According to the research report released by Morgan Stanley on June 19th, Great Wall Motors' (02333) stock had a beta-driven rebound with a 5% increase. The stock's recent price has outperformed the Hang Seng Index, attracting market attention. Maintain the target price of HKD 11.5 and a 'Market Perform' rating.

The bank stated that the market had previously predicted that Great Wall Motors' second-quarter profits would remain flat or slightly decrease. However, the market is optimistic that Great Wall Motors' tank and export business will continue to grow, pushing second-quarter profits to around RMB 4 billion. Morgan Stanley predicts that Great Wall Motors' second-quarter profit will reach RMB 3.1-3.3 billion, based on a quarterly wholesale sales volume of 286,000 units, a growth rate of 4% from the previous quarter. The proportion of high-profit models will increase to 21%-23%, and exports will account for 37%-39%.

In addition, a product portfolio with high gross margin rates can improve vehicle profit margins and reduce the impact of non-recurring income on profits. Non-recurring income is mainly driven by government subsidies, and Morgan Stanley expects it to decrease by about 50% compared to the previous peak quarter.