20230424-招银国际-长城汽车-02333.HK-New_PHEV_models_appears_to_be_more_exciting_4页_835kb

CMB International Global Markets - Great Wall Motor (2333 HK) Research Summary

Key Recommendations

• Rating: BUY, maintained.
• Target Price: HK$12.00 (+29.9% upside from current price), unchanged from prior target.

Q1 2023 Performance

• Actual vs. Expectations:
  • Revenue: 2% higher than prior forecast, in line with overall performance.
  • Net profit: RMB 174mn, slightly exceeding projected RMB 109mn.
  • GPM: 16.1%, consistent with estimates, aided by resilience amid lower sales and price competition.
  • SG&A expenses: Elevated due to investments in dealer network for PHEV and amortization costs.
• Outlook: Earnings largely aligned with prior view.

Key Drivers and Insights

• PHEV Strategy: WEY Lanshan PHEV well-received from auto show due to lower pricing; this may lead to cost-effective pricing for upcoming Haval Xiaolong, sharing components with existing models.
• NEV Importance: Management emphasizes NEV's role in future growth, highlighted in Q1 earnings call; strategy is viewed positively for market adaptation andcompetitive edge.

Financial Forecast Updates

• Downgrades: FY23E net profit revised down 8% to RMB 5.7bn; FY23E GPM cut slightly due to anticipated aggressive NEV pricing.
• Added Projections: FY25E forecasts incorporated, reflecting longer-term potential.
• Support for Buy Rating: Based on 16x revised FY23E P/E; valuation increased due to enthusiasm for new NEV models' potential.

Key Risks

• Negative Factors: Potential decline in sales volume or margins; slower-than-expected tech transformation; industry-wide de-rating could impact stock performance.

Additional Notes

• Current price: HK$9.24.
• Company: Focus on NEV transition for sustainability and market position.
• Disclosure: Refer to report for detailed data and methods.