Investment Rating - Maintain BUY rating with a target price of HK$13.00, implying a 39.2% upside from the current price of HK$9.34 [2][3][4] Core Views - The Tank brand, pick-up trucks, and exports are expected to support Great Wall Motor's earnings in FY24E, with projected sales volume increasing by 10% YoY to 1.35 million units and net profit rising by 13% YoY to RMB 7.9 billion [2][3] - PHEVs are identified as key to the company's electrification strategy, while BEV sales volume is projected to decline YoY in FY24E due to a lack of competitive products [2][3] Financial Summary - Revenue is projected to grow from RMB 173.2 billion in FY23A to RMB 197.2 billion in FY24E, representing a 13.8% YoY growth [3][6] - Net profit is expected to increase from RMB 7.0 billion in FY23A to RMB 7.9 billion in FY24E, reflecting a 13.0% YoY growth [3][6] - Gross profit margin (GPM) is revised up by 0.4 percentage points to 18.6% for FY24E, driven by better-than-expected margins from PHEVs [2][3] Sales and Profitability - 1Q24E net profit is projected to be approximately RMB 1.6 billion, with a net profit per vehicle of RMB 5,800, which is 6% higher than in 4Q23 [2][3] - The company’s GPM for 4Q23 is estimated to be around 21%, indicating stable profitability despite a 25% QoQ sales volume decline [2][3] Market Position and Strategy - Great Wall Motor's success in off-road style SUVs has positively impacted PHEV sales and margins, although challenges remain in transitioning to BEVs [2][3] - The upcoming Beijing Auto Show is anticipated to be a positive catalyst for share price, particularly with the debut of new PHEV models [2][3]
PHEVs key to FY24; Earnings likely still resilient