Investment Rating - Maintain BUY rating for Great Wall Motor with a target price increase from HK$13.00 to HK$14.00, reflecting a revised FY24E EPS multiple of 11x [2][5]. Core Views - Great Wall Motor's 1Q24 net profit of RMB3.2 billion exceeded forecasts, leading to a 25% increase in the FY24E net profit forecast to RMB9.9 billion, representing a 41% year-on-year growth [2]. - The company needs a high-volume New Energy Vehicle (NEV) to enhance investor confidence in its electrification strategy, especially after previous PHEV model failures [2]. - The introduction of a lower-priced PHEV is anticipated to drive sales, while the pricing strategy for the new Wey Lanshan AD version is considered crucial [2]. Financial Summary - FY24E revenue is projected at RMB202.33 billion, a 16.8% increase year-on-year, with net profit expected to reach RMB9.92 billion [4][9]. - The gross profit margin for FY24E is revised to 18.9%, up 0.3 percentage points from previous estimates, due to better-than-expected performance in 1Q24 [2][9]. - The company’s sales volume forecast for FY24E remains at 1.35 million units, reflecting a 10% year-on-year growth [2]. Quarterly Performance - In 1Q24, Great Wall Motor reported a revenue of RMB42.86 billion, a 47.6% increase year-on-year, with a gross profit margin of 20% [2][8]. - The net profit for 1Q24 was RMB3.23 billion, marking a significant increase of 1,752.5% year-on-year [2][8]. Market Position and Strategy - Despite strong performance in off-road SUVs and overseas markets, the company lacks a competitive NEV to validate its electrification capabilities [2]. - The upcoming Beijing Auto Show is highlighted as a key event for investors to monitor developments in the NEV sector [2].
1Q24 NP beat provides room for transformation