Great Wall Motor Company (H)

  • Ticker2333
  • ISINCNE100000338
  • ExchangeHong Kong Stock Exchange
  • SectorAutomobiles & Parts
  • CountryChina

GREAT WALL MOTOR CO.LTD. sees an upgrade to Slightly Positive due to a better fundamental star rating

The general evaluation of GREAT WALL MOTOR CO.LTD. (HK), a company active in the Automobiles industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date June 19, 2020, the closing price was HKD 5.36 and its potential was estimated at HKD 6.17.

UOB
Ken Lee

Automobile - April auto sales return to positive growth, driven by CVs. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance, Yongda and DFM

CAAM estimated April auto sales volume at 2m units, up 1% yoy and 40% mom, the first month of positive yoy growth over the past 21 months, with a 15% yoy spike in CV sales offsetting the 3% yoy drop in PV sales. Both PVs and CVs saw sequential improvement in growth momentum in April. In the PV segment, luxury cars far outperformed the mass market in April, with sales growing 16% yoy. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance, Yongda and DFM.

UOB
Ken Lee

Automobile - Disappointing state stimulus; some local governments started subsidising car purchases

On 1 May 20, the NDRC and 11 ministries and departments jointly announced a stimulus package for the auto industry, which has disappointed the market due to the lack of purchase subsidies or reduction of purchase tax. The state’s only significant policy was to delay the implementation of the National VI emissions standard from 1 Jul 20 to 1 Jan 21. However, six provinces and 15 cities have announced their own stimulus policies. Maintain MARKET WEIGHT. Top picks: Brilliance and Weichai.

UOB
Ken Lee

Great Wall Motor - 1Q20: Results miss estimate with net loss of Rmb650m

GWM unexpectedly posted a net loss of Rmb650m in 1Q20, missing estimates due to an unexpected drop in ASP, bigger-than-expected operating deleveraging and a spike in R&D expense. Management expects sales to recover gradually from 2Q20 in tandem with the reopening of cities and new model debuts in 2H20. We believe GWM will turn around in 2Q20, but earnings will still come under pressure given the price war in the mass market. Maintain SELL. Target price: HK$2.10.

UOB
Eric Wang Zhen ...
  • Jayson Kong
  • Joyce Chan Pui Lai
  • Ken Lee

Greater China Daily: Monday, April 27, 2020

KEY HIGHLIGHTS Sector Automobile China unexpectedly cut EV subsidies and capped subsidised EV sales in 2020-22. Cut target prices of BYD and CATL to HK$35.00 and Rmb55.00. Downgrade BYD to SELL. Results Bank of Ningbo (002142 CH/HOLD/Rmb23.52/Target: Rmb23.16) 1Q20: So far so good, but concerns remain; upgrade to HOLD. Chongqing Rural and Commercial Bank (3618 HK/HOLD/HK$3.11/Target: HK$3.25) 1Q20: Profit drops in line with expectations; deposit structure is deteriorating. Contemporary Amperex Technology (300750 CH/SELL/Rmb131.69/Target: Rmb55.00) 4Q19: Core net profit drops 17% yoy and...

UOB
Ken Lee

Automobile - April auto sales return to positive growth, driven by CVs. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance, Yongda and DFM

CAAM estimated April auto sales volume at 2m units, up 1% yoy and 40% mom, the first month of positive yoy growth over the past 21 months, with a 15% yoy spike in CV sales offsetting the 3% yoy drop in PV sales. Both PVs and CVs saw sequential improvement in growth momentum in April. In the PV segment, luxury cars far outperformed the mass market in April, with sales growing 16% yoy. Maintain MARKET WEIGHT. Top picks: Weichai, Brilliance, Yongda and DFM.

UOB
Ken Lee

Automobile - Disappointing state stimulus; some local governments started subsidising car purchases

On 1 May 20, the NDRC and 11 ministries and departments jointly announced a stimulus package for the auto industry, which has disappointed the market due to the lack of purchase subsidies or reduction of purchase tax. The state’s only significant policy was to delay the implementation of the National VI emissions standard from 1 Jul 20 to 1 Jan 21. However, six provinces and 15 cities have announced their own stimulus policies. Maintain MARKET WEIGHT. Top picks: Brilliance and Weichai.

UOB
Ken Lee

Great Wall Motor - 1Q20: Results miss estimate with net loss of Rmb650m

GWM unexpectedly posted a net loss of Rmb650m in 1Q20, missing estimates due to an unexpected drop in ASP, bigger-than-expected operating deleveraging and a spike in R&D expense. Management expects sales to recover gradually from 2Q20 in tandem with the reopening of cities and new model debuts in 2H20. We believe GWM will turn around in 2Q20, but earnings will still come under pressure given the price war in the mass market. Maintain SELL. Target price: HK$2.10.

UOB
Eric Wang Zhen ...
  • Jayson Kong
  • Joyce Chan Pui Lai
  • Ken Lee

Greater China Daily: Monday, April 27, 2020

KEY HIGHLIGHTS Sector Automobile China unexpectedly cut EV subsidies and capped subsidised EV sales in 2020-22. Cut target prices of BYD and CATL to HK$35.00 and Rmb55.00. Downgrade BYD to SELL. Results Bank of Ningbo (002142 CH/HOLD/Rmb23.52/Target: Rmb23.16) 1Q20: So far so good, but concerns remain; upgrade to HOLD. Chongqing Rural and Commercial Bank (3618 HK/HOLD/HK$3.11/Target: HK$3.25) 1Q20: Profit drops in line with expectations; deposit structure is deteriorating. Contemporary Amperex Technology (300750 CH/SELL/Rmb131.69/Target: Rmb55.00) 4Q19: Core net profit drops 17% yoy and...

UOB
Ken Lee

Automobile - 2019 results wrap-up

Except dealers, China auto companies posted disappointing 2019 results, mainly due to margin squeeze and unexpected provisions in 2H19. Since the posting of 2019 results, we and the street have cut 2020 earnings estimates by 7% and 10% respectively. GWM and Zhengtong should have the biggest risk of 2020 earnings downgrades, while Meidong have bigger potential for 2020 earnings upgrades. Maintain MARKET WEIGHT. Top picks: Yongda and Weichai.

UOB
Greater China Research Team

Strategy - Alpha Picks: Greater China October Conviction List

As we continue to expect market volatility, we maintain exposure to names that have resilient earnings or are expected to enjoy an earnings growth recovery, such as Ausnutria Dairy (1717 HK), CSPC (1093 HK) and Dongfeng Motor (489 HK), and add PICC P&C (2328 HK) to our BUY list.

UOB
Greater China Research Team ...
  • Jayson Kong
  • Johnny Yum Chung Man
  • Joyce Chan Pui Lai
  • Katrina Chen Chucan
  • Ken Lee
  • Nick Liu Sunliang
  • Shaun Tan
  • Tham Mun Hon
  • Zhifeng Shen

Greater China Daily: Friday, August 2, 2019

KEY HIGHLIGHTS CHINA Strategy Alpha Picks: Greater China August Conviction List Add CSPC and Huaneng Renewables to our BUY list. Sector Automobile PV retail sales down 16% in July, worse than expected. Downgrade from OVERWEIGHT to MARKET WEIGHT. Gas Key takeaways from Lujiazui “Energy + Finance” forum. Property Real estate market a tool to stabilise the economy in the medium and long term. HONG KONG Results CK Asset Holdings (1113 HK/BUY/HK$57.20/Target: HK$68.70) 1H19: In line; a diversified yield vehicle. TRADERS’ CORNER Huadian Power (1071 HK): Trading Buy Range Great Wall Mo...

UOB
Carol Dou Xiao Qin ...
  • Daisy Chen
  • Johnny Yum Chung Man
  • Joyce Chan Pui Lai
  • Julia Cheung Pui Man
  • Ken Lee
  • Lee Yuk Kei
  • Michael Cheung Ho Bun
  • Neo Chen Wentao
  • Robin Yuen
  • Sandra Huang Jieqiong

Greater China Daily: Tuesday, March, 26, 2019

KEY HIGHLIGHTS CHINA Initiate Coverage WuXi Biologics (Cayman) (2269 HK/BUY/HK$73.95/Target: HK$103.50) Leveraging the biologics boom. Results Chaowei Power (951 HK/SELL/HK$3.09/Target: HK$1.65) 2018: Earnings beat our estimate but misses consensus. China National Building Material (3323 HK/BUY/HK$5.98/Target: HK$8.44) 2018: In line with our expectations; strong momentum to sustain into 2019 China Shenhua Energy (1088 HK/BUY/HK$18.30/Target: HK$22.42) 2018: Results in line with expectation; guidance of a slower 2019. Great Wall Motor (2333 HK/SELL/HK$5.48/Target: HK$3.00) 2018: Cor...

GREAT WALL MOTOR CO.LTD. sees an upgrade to Slightly Positive due to a better fundamental star rating

The general evaluation of GREAT WALL MOTOR CO.LTD. (HK), a company active in the Automobiles industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date June 19, 2020, the closing price was HKD 5.36 and its potential was estimated at HKD 6.17.

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