Incident Overview

The company released the August production and sales report: August automobile sales were 0.0945 million vehicles, -17.21% year-on-year, and production was 0.0979 million vehicles, or -16.10% year-on-year. The cumulative annual sales volume was 0.7454 million vehicles, cumulative year-on-year +0.4%, and cumulative production was 0.7442 million vehicles, or -1.87% year-on-year.

Key points of investment

Sales in August were under year-on-year pressure, with a slight increase from month to month, and tanks remained steady. The company sold 0.0945 million vehicles in August, -17.21%/+3.48% year-on-month, respectively. By brand:

The Haval brand sold 0.0562 million vehicles in August, -15.57%/+6.09%, respectively; the WEY brand sold 0.003 million vehicles in August, -46.58%/+8.54%, respectively; Great Wall Pickup sold 0.0137 million vehicles in August, -19.50%/14.05%, respectively; the Euler brand sold 0.0052 million vehicles in August, respectively. 0.0164 million vehicles, +11.42%/-12.48%, respectively.

Furthermore, in August, Wei brand's new Blue Mountain was launched. As the first NOA smart six-seater flagship SUV, the new model accelerates the company's NOA Kaecheng plan, and is expected to achieve “nationwide driving” in the fourth quarter.

The sales structure continued to be optimized, and tank brands accounted for 20.27% in January-August. The company's tank brand's cumulative sales volume in January-August was 0.1511 million units, accounting for 20.27% of total sales, an increase of 8.62 percentage points over the previous year. Among them, tanks accounted for 17.31% in a single month in August, an increase of 4.45 percentage points over the previous year. The product matrix of the 300/400/500/700 and Hi4T models currently on sale covers the 0.2-0.7 million yuan market. At the same time, with Great Wall Motor's deep cultivation in the SUV market, we believe that the tank brand will continue to maintain its leading position.

Overseas sales reached a record high in August, accounting for 42.83%. The company sold 0.0405 million vehicles overseas in August, +31.60% year-on-year, accounting for 42.83% of the company's monthly sales. From January to August, the cumulative overseas sales volume was 0.2801 million vehicles, accounting for 37.58%. In August, the company launched the GWM regional brand conference in Montevideo, the capital of Uruguay. Four major brands, Haval, Euler, Tank, and Great Wall Gun, debuted; Tank 300 and Weipai Blue Mountain appeared at the Brazilian Interlagos Auto Festival to release a limited edition of the Eula Good Cat GT.

Investment advice

Maintain a “buy” rating. Net profit due to mother is expected to be 12.205/13.51/15.386 billion yuan in 2024/2025/2026, respectively, or +73.83%/+10.69%/+13.88% year-on-year, respectively.

The PE corresponding to the closing price on September 3, 2024 was 15.69X/14.18X/12.45X, respectively.

Risk warning

Macroeconomic cyclical fluctuation risk; industrial policy risk; industry competition risk; new energy and electrification transformation risk; exchange rate fluctuation risk.