Event: The company released the May 2024 production and sales report: the company's wholesale sales volume was 910,000 units, -9.5% month-on-month; of these, Haval 47,000 units, -15.3% yoy, +0.0% month-on-month; Wey brand 50,000 units, -50.4% yoy, -35.8% month-on-month; 15,000 pickup trucks, -18.8% yoy, -16.4% month-on-month; Euler 60,000 units, 4.4% month-on-month, +28.1% month-on-month; 20,000 tanks, +94.7% month-on-month.
Tanks maintained strong growth and continued to gain strength in high-end tanks. The company's wholesale sales volume in May was 910,000 units, -9.5% YoY and -3.5%; of these, New Energy in May was about 25,000 units, +3.8% year on year, +9.9% month-on-month; in May, NEV accounted for 27.0%, +3.4 pts year on year, and +3.3 pts month-on-month. 2024M1-5 sales volume was 106,000 units, +60.0% year on year; by brand, tank sales continued to be strong in May, with wholesale sales of 20,000 units, +94.9% year over month, -0.7% month over month; 2024M1-5 tank sales volume of 90,000 units, +97.5% year over year; Haval sold 47,000 units in May, and 2024M1-5 sold 252,000 units, +7.9% year over year. In terms of high-end, the 2024M1-5 models over 200,000 yuan sold 11,000 units, +108.73% over the same period last year. In 2024, Great Wall Motor's high-end products, mainly tanks, showed strong performance, which is expected to boost gross profit margins and open up profit margins.
Overseas sales continued to grow year on year, and globalization progressed steadily. In May 2024, the company's overseas wholesale sales volume was 34,000 vehicles, +37.2% year over year and -4.6% month over month. Overseas wholesale sales in January-May 2024 were 163,000 units, +65.2% YoY. On May 21, the company announced that the Euler brand launched Globalization 2.0, with the goal of impacting 100 countries and regions around the world. The product lineup reached the coverage of all car models, and the overseas travel model was advanced from single product to ecological overseas. The company's global strategy plans to sell more than one million vehicles overseas by 2030. We believe that the company's fuel and hybrid products have high-quality product capabilities and are highly competitive in overseas markets. I am optimistic that the accelerated expansion of the company's overseas layout will lead to a continuous increase in sales volume.
Intelligent in-depth layout product capabilities have been comprehensively advanced. In terms of intelligence, the company has an in-depth layout. The business covers many fields such as electronic architecture, smart cockpit, intelligent driving, smart ecosystem, cloud platform, etc., and focuses on building two major intelligent products: CoffeeOS smart cockpit and Coffee Pilot intelligent driving. On May 28, all models in the Wei brand coffee series began a new round of Coffee OS OTA upgrades and iterations. In terms of new products, the Wei Brand New Mocha Hi4, 2.4T passenger pickup, 2.4T commercial pickup, 2024 Euler Good Cat, and 2024 Euler Good Cat GT Magnolia Edition, which are positioned as five-seater electric SUVs, were launched in May. 2024 will be the first year of urban assisted driving. The company is expected to seize the opportunities of technological change and increase sales through advanced intelligent technology and product capabilities.
Investment suggestions: The company's new products are being promoted smoothly at home and abroad, a new cycle of intelligent electrification has begun, the proportion of new energy intelligent models has increased rapidly, and the high-end intelligent route is becoming more and more clear. The estimated revenue for 2024-2026 is 2,257.3/269.6/301.66 billion yuan, and net profit to mother is 108.2/135.6/14.55 billion yuan, corresponding to the closing price of 25.98 yuan/share on June 3, 2024, PE is 21/16/15 times, maintaining the “recommended” rating.
Risk warning: downside risk in the car market; competition in the market where brands such as WEY and Haval are located has intensified, sales fall short of expectations; overseas progress falls short of expectations.