20230626-招银国际-长城汽车-02333.HK-Surging_PHEV_sales_at_cost_of_FY23E_net_profit_4页_821kb

Financial Research Report Summary: Great Wall Motor (2333 HK)

Analyst Recommendation: BUY (Maintain) with a target price of HK$12.00, implying a potential upside of +38.6% from the current price of HK$8.66.

Key Financial Highlights:

• Market Cap: HK$73,554 million
• Total Issued Shares: 8,494 million
• Ownership: Wei Jianjun controls 60.7%, others 39.3%
• Recent Performance: 1-month absolute return -4.1%, 3-month relative return -2.9%
• Projected Earnings: FY23E net profit expected at RMB 1.6 billion (down 72% year-on-year), due to lower-than-consensus estimates driven by PHEV sales starting from 2Q23E.

Reasoning for BUY Recommendation:

• Despite a projected net loss for FY23E, the buy recommendation is supported by the potential for Great Wall Motor's NEV market share to surpass the industry average in 4Q23E, acting as a positive catalyst.
• Financial projections show revenue growth of 28.1% year-on-year for FY23E to RMB 175,986 million, with a P/E ratio of 41.1x (based on revised figures).
• Key risks include lower-than-expected sales volumes, margin deterioration, slower EV transformation, and sector-wide de-rating.

Growth Potential and Risks:

• The target price is based on a 20x FY24E P/E, assuming successful EV transformation could justify a higher valuation.
• Risks include challenges in achieving expected profitability through cost controls in SG&A and R&D expenses, alongside uncertainties in PHEV sales and pricing.

Summary Conclusion: The analyst maintains a BUY rating due to recovery potential from current pressures, primarily driven by NEV sales momentum and market share gains. However, fiscal issues or external factors could impact performance.