Maintain “Buy” and the TP of HK$16.00. Considering Great Wall Motor’s (GWM or the "Company") strong sales performance, especially overseas sales, continuous innovation of its sub-brands, and significant cost advantage over its peers, we maintain our 2024-2026 EPS forecasts of RMB1.24/ RMB1.56/ RMB1.83. We give the Company an 8.6x 2025F PE and maintain the TP of HK$16.00 and our "Buy" rating.
GWM’s high GPM advantage is significant among peers. Sales of Haval and Tank remained strong. GWM’s GPM in 3Q2024 was 20.8%, an increase of 1.9 ppts yoy, with average revenue per vehicle increasing to RMB173,000, a yoy increase of 20.0% and a mom increase of 1.0%, setting a quarterly record, mainly due to the improvement in sales structure and the increase in export sales. In 1-10M2024, GWM’s average monthly export sales jumped by 49.2% yoy to 36,866 units. The Haval brand and the Tank brand in 1-10M2024 continued to witness strong sales, especially the facelift Haval models, which had total sales volume of 72,675 units in October, marking the highest monthly sales so far this year and returning Haval models monthly sales to more than 70,000 units. GWM’s NEV sales accounted for around 24.9% of total sales in 1-10M2024, up 4.8 ppts yoy, which overall falls behind other direct peers in China.
In the field of intelligent NEVs, GWM continues to improve its technical strength and market position. In terms of product structure, GWM’s multiple sub-brands continue to launch a number of new models to meet market demand. The Haval series has successively launched models such as the 2024 Haval Raptor, Haval H6 Classic Edition and the second-generation Haval H9, opening a new era of family off-road vehicles. The Tank SUV brand's Tank 400 gasoline version was also officially unveiled. Based on differentiated sectors and market demand, the Ora brand launched models such as the 2024 Ora Good Cat and the Ora Good Cat GT Mulan Edition. In 3Q2024, Great Wall Pickup launched models such as the 2.4T Off-Road Cannon and the Shanhai Cannon Crossing Edition. WEY Brand continues to focus on the fields of intelligent driving, launching the Blue Mountain model and accelerating the realization of urban NOA nationwide coverage. The Company actively promotes intelligentization transformation and will pair high-end intelligent driving with models below RMB 200,000 next year.
Tank's overseas sales are promising. GWM continues to deploy overseas business. GWM's overseas sales in 1-3Q2024 have exceeded last whole year's overseas sales, accounting for around 7.5% of China's PV exports (an increase of 1.1 ppts yoy), ranking fourth among China’s OEMs. Among them, GWM's Tank brand witnessed very strong overseas sales. In 1-3Q2024, the Tank brand's sales accounted for approximately 12.0% of GWM's overseas sales. In addition, GWM continues to accelerate the establishment of overseas plants, and the Company already has plants in Brazil, Thailand and other countries around the world. In 3Q2024, GWM's Indonesia and Malaysia CKD projects were officially completed, and the CKD project in Vietnam was also officially signed. The Company actively promotes the development of overseas export business through channel expansion reforms and production localization. The Company has more than 1,300 overseas sales channels across Europe, Africa, Central and South America, the Middle East, Australia and Southeast Asia. We expect that GWM's export sales will continue to maintain a high growth trend in 2025.
Risks: 1) The NEV industry competition may exceed expectations; 2) sales of new vehicle models may fall short of expectations.