Core Viewpoint - The report from China Merchants Securities International indicates a downward revision of Great Wall Motors' (02333) earnings forecast for 2025-2027 by 2%/5%/4%, reflecting increased sales expense predictions due to new model launches and overseas channel expansion, alongside a rising tax rate due to a higher proportion of overseas business. The target price has been reduced by 8%, from HKD 26 to HKD 24, while maintaining a "Buy" rating [1]. Group 1 - The group's third-quarter profit was impacted by multiple factors, including deferred expenses in Russia, foreign exchange fluctuations, and disturbances in overseas tax rates [1]. - The high-end brand "WEY" has an optimistic guidance for next year, aiming to challenge a monthly delivery of 60,000 units by 2026 [1]. - The export business is expected to see strong growth, with the group forecasting an export target of 500,000 units this year, and a growth rate of no less than 20% in 2026 [1]. Group 2 - The European market is anticipated to see the launch of the EC15 model in the second quarter of 2026, aimed at expanding into new markets [1].

Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 5.59 yuan [6]. Core Views - The company reported a revenue of 1.121 billion yuan for H1 2025, a year-on-year decrease of 26.82%, and a net profit attributable to shareholders of 75 million yuan, down 46.05% year-on-year. In Q2 2025, revenue was 638 million yuan, a year-on-year decrease of 20.38% but a quarter-on-quarter increase of 32.25% [1]. - The sales volume of seamless pipes increased quarter-on-quarter, while welded pipe sales faced pressure due to a downturn in the petrochemical industry [2]. - The demand for fire and nuclear power pipes remains strong, with significant investments and new installations expected to sustain high demand [3]. Summary by Sections Financial Performance - In H1 2025, the company's gross profit margin was 14.41%, a decrease of 2.19 percentage points year-on-year. In Q2 2025, the gross profit margin was 13.00%, down 2.01 percentage points year-on-year and 3.28 percentage points quarter-on-quarter [2]. - The company forecasts net profits of 171 million yuan, 198 million yuan, and 230 million yuan for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 18x, 16x, and 14x [4][5]. Market Outlook - The fire power investment completion amount increased by 51.96% year-on-year as of June 2025, with new installed capacity rising by 72.19% year-on-year from January to July 2025. This indicates a sustained high demand for fire boiler pipes [3]. - The company has successfully passed multiple overseas certifications, positioning its export business as a potential growth driver [3]. Strategic Initiatives - The company is actively implementing a "three-pronged" development strategy to explore new application markets, including nuclear power and coal liquefaction, while enhancing its presence in international markets such as the Middle East and South America [4].