Investment Rating - The report recommends a "Buy" rating for Wuling Motors, with a target price set at 0.81 HKD, indicating a potential upside of over 100% from the current price [26][54]. Core Insights - Wuling Motors is accelerating its expansion into the electric vehicle (EV) sector, with a projected revenue compound annual growth rate (CAGR) of 6.0% from FY23A to FY26F. The operating profit margin is expected to improve from 0.7% in FY23A to 2.3% in FY26F, with pre-tax profit and attributable profit to shareholders expected to grow at CAGRs of 54.3% and 83.9%, respectively [3][6][54]. - The company has established a strong customer base in the EV market, including major players like BYD, Chery, Geely, Great Wall, and Foton, focusing on the lower-tier market with over 10 EV models under its brand [5][11]. - Wuling Motors is a key supplier of components for its subsidiary, Wuling New Energy, which is positioned to benefit from the growing demand for EVs and is expected to achieve profitability within 36 months due to its existing production capacity and market support [12][13][41]. Revenue and Profitability Forecast - The report forecasts that Wuling Motors' automotive power systems and components revenue will grow at CAGRs of 10.4% and 7.2%, respectively, from FY23A to FY26F. The overall revenue CAGR for the same period is projected at 6.0% [45]. - The gross margins for the automotive power systems and components segments are expected to improve, with overall gross margin projected to reach 10.6% by FY26F, up from 9.9% in FY23A [45]. - The report estimates that the pre-tax profit margin will increase significantly, with pre-tax profit expected to grow at a CAGR of 53.9% from FY23A to FY26F [45]. Market Dynamics - The report highlights that the decline in EV prices and down payment requirements is expected to stimulate sales growth in the EV market, benefiting Wuling Motors as a major supplier of EV components [51]. - The anticipated increase in total vehicle sales in China, projected to exceed 31 million units in 2024, will further drive demand for Wuling Motors' products, particularly as its key customers set ambitious sales targets for their EV models [43][51]. Strategic Positioning - Wuling Motors has a diversified production capacity across multiple bases, allowing it to respond quickly to customer demands and reduce logistics costs. Its production facilities are strategically located near major clients [32]. - The company is also investing in R&D and technology partnerships to enhance its capabilities in the EV supply chain, including collaborations with universities in Hong Kong [15][41].
五菱汽车：加速向新能源汽车领域扩展