Guosen Securities International released a research report stating a 'buy' rating on Great Wall Motor (02333), bullish on Great Wall Motor's high-quality development global strategy, with its performance gradually improving, raising the target price to HK$17. The company achieved revenue of 50.83 billion yuan in Q3, a 3% year-on-year increase and a 5% quarter-on-quarter increase, achieving a net income attributable to non-controlling interests of 2.72 billion yuan, a year-on-year decrease of 11% and a quarter-on-quarter decrease of 25%. Q3 performance meets expectations.

The main points of the report are as follows:

In the third quarter, per unit revenue reached a new high.

In Q3, the company's gross margin was 20.8%, an increase of 1.9 percentage points year-on-year. Revenue per unit was 0.173 million yuan, a 20% year-on-year increase, a 1% quarter-on-quarter increase, reaching a quarterly high. The increase in per unit revenue and profit was mainly due to an improvement in sales structure, increased tank and export sales. The Bank is optimistic about Great Wall's development in overseas markets, as it is currently in a harvest period. Great Wall Motor has taken the lead in opening up a new ecological overseas route, establishing 3 full-process vehicle production bases overseas, and owning 5 KD factories in Ecuador, Pakistan, and other places. With over 1300 overseas sales channels, its footprint covers more than 170 countries and regions in Europe, Australia, Africa, Central and South America, Southeast Asia, and the Middle East. In the future, Great Wall Motor will continue to promote its international "Four Localization" strategy, focusing on localizing production capacity, operations, brand transculturalism, and supply chain security, accelerating the high-quality overseas process. Great Wall Motor's overseas sales target for 2024 is 0.45 million units, with plans to achieve sales of over a million units overseas by 2030.

The Full-size SUV platform Hi4-Z further consolidates its leading position in the off-road market.

In October, Great Wall Motor released the Hi4-Z Full-size SUV architecture, segmenting off-road vehicles into City SUV, Full-size SUV, Strong SUV, and Super Strong SUV, where the Full-size SUV category can meet daily urban commuting needs and be used for non-extreme off-road scenarios such as desert crossings and outdoor camping. The Hi4-Z is equipped with a large-capacity battery of nearly 60kWh, enabling it to achieve a pure electric range of over 200 kilometers under WLTC conditions, meeting a week's urban commuting needs. The Hi4-Z will bring full-speed range engine direct drive effects through the deep integration of 3-speed DHT and stepless transmission, reducing power transmission loss. The Tank brand will fully incorporate this technology in 2025 and launch Hi4-Z products.

Risk warning: Increased industry competition; prices lower than expected.