Core Viewpoint - Great Wall Motors is at a critical juncture as it approaches its 35th anniversary in 2025, facing intense domestic competition and the need for transformation in the fields of new energy and smart technology [1] Financial Performance - In Q2 2025, Great Wall Motors achieved a record revenue of 52.348 billion yuan, marking the best second-quarter performance in its history; net profit reached 4.586 billion yuan, a year-on-year increase of 19.46% and a quarter-on-quarter increase of 161.91%, setting a new high for quarterly net profit [1] - The recovery in profitability is attributed to a strategic optimization of its product mix, leading to significant improvements in average selling price (ASP) and gross margin [1] Brand Strategy - Great Wall Motors operates six brands that effectively target specific market segments, with the Haval brand maintaining a strong presence in the SUV market while the Wey brand focuses on high-end smart electric vehicles [2] - The Tank brand has become a leading player in the high-end off-road vehicle market, with cumulative global sales exceeding 700,000 units, establishing a high-profit niche [2] - The company’s strategy of multi-brand collaboration has allowed it to avoid internal competition and effectively capture value across different consumer segments, contributing to a significant increase in net profit despite industry-wide price wars [2] Supply Chain and Ecosystem - Great Wall Motors has developed a "forest ecosystem" that integrates key components from electric systems to smart driving, providing a robust cost defense and enhancing strategic value [3] - Subsidiaries like Honeycomb Energy and Honeycomb Automotive have achieved stability in core component supply and cost advantages, allowing the company to gain more control in supply chain negotiations [3] - This ecosystem is also generating new profit growth points by supplying parts to external clients, including major brands like BMW [3] Global Expansion - The company’s overseas sales reached 106,800 units in Q2, accounting for over one-third of total sales, indicating a strong growth trajectory in international markets [4] - Great Wall Motors is not merely exporting vehicles but is implementing a comprehensive "ecological export" model that includes R&D, production, and supply chain services [4] - The establishment of full-process production bases in countries like Thailand and Brazil has enabled the successful introduction of high-value models to global markets [5] Strategic Outlook - Analysts, including those from Guohai Securities, express optimism about Great Wall Motors' future performance, citing its solid competitive advantages overseas and high profit certainty [5] - The company’s Q2 report serves as a test of its industrial model amid rapid technological changes and market uncertainties, highlighting a divergence in strategic approaches within the automotive industry [6] - Great Wall Motors is pursuing a heavy asset strategy aimed at achieving full control over core technologies and applications, which requires substantial capital investment and operational efficiency [6] Future Challenges - The potential rewards of this strategy include unparalleled cost control, faster internal collaboration, and the ability to create highly differentiated products [6] - The competition in the automotive industry will increasingly revolve around contrasting organizational models and business philosophies, with Great Wall Motors' approach being a significant gamble that could redefine its future [6]

Investment Rating - The report maintains a "Buy-A" rating for the company [6] Core Views - The company is expected to achieve a revenue of 923 billion yuan in the first half of 2025, representing a year-on-year increase of 1.03%, while the net profit attributable to shareholders is projected to be 63.4 billion yuan, down 10.2% year-on-year [1] - The second quarter of 2025 saw a revenue of 523.5 billion yuan, an increase of 7.8% year-on-year and 30.8% quarter-on-quarter, driven by new vehicle launches and improved overseas sales [2] - The company is entering a new growth phase with the launch of new models and a focus on direct-to-consumer channels, which is expected to enhance brand value and sales [4] Summary by Sections Financial Performance - In Q2 2025, the company achieved a net profit of 45.9 billion yuan, up 19.1% year-on-year and 161.9% quarter-on-quarter, while the non-recurring net profit was 21.1 billion yuan, down 30.1% year-on-year [3] - The average selling price (ASP) per vehicle in Q2 2025 reached 167,000 yuan, a decrease of 2.1% year-on-year but an increase of 7.3% quarter-on-quarter [2] Market Outlook - The mainstream market for new vehicles is expected to see an upward sales trend, supported by the successful launch of new models and a comprehensive marketing strategy [4] - The company has significant potential in the off-road vehicle market, with the Hi4Z technology expected to enhance product offerings and profitability [4] - The company has a diverse product range and strong technological capabilities, indicating substantial export potential as new models and powertrains are introduced [4] Valuation and Projections - The report forecasts net profits for 2025, 2026, and 2027 to be 140.3 billion yuan, 174.0 billion yuan, and 209.6 billion yuan respectively, with corresponding price-to-earnings ratios of 13.4, 10.8, and 9.0 times [4][10] - The six-month target price is set at 32.79 yuan per share, reflecting a 20 times price-to-earnings ratio for 2025 [4]

Core Viewpoint - The company reported a significant increase in vehicle sales for June and the first half of 2025, driven by strong performance in key brands and a focus on new energy vehicles [1][2][3][4]. Group 1: Sales Performance - In June, the company's total vehicle sales reached 111,000 units, representing a year-on-year increase of 12.9% and a month-on-month increase of 8.3% [1][2]. - For the first half of 2025, total vehicle sales amounted to 570,000 units, showing a year-on-year growth of 1.8% [2]. - The sales breakdown for key brands in H1 2025 includes Haval at 321,000 units (+7.2%), Wey at 34,000 units (+73.6%), Ora at 14,000 units (-56.2%), and Tank at 104,000 units (-10.7%) [2]. Group 2: New Energy Vehicles - The company sold 36,000 new energy vehicles in June, marking a year-on-year increase of 39.4% and a month-on-month increase of 11.5% [3]. - Cumulative sales of new energy vehicles for the first half of 2025 reached 160,000 units, reflecting a year-on-year growth of 21.2% [3]. - New energy vehicles accounted for 28.2% of total sales in H1 2025, an increase of 4.5 percentage points year-on-year [3]. Group 3: International Expansion - In June, overseas sales reached 40,000 units, a year-on-year increase of 5.2% and a month-on-month increase of 16.0% [3]. - Cumulative overseas sales for the first half of 2025 were 198,000 units, showing a slight decline of 1.9% year-on-year [3]. - The company plans to launch its Brazilian factory in H2 2025, initially producing three models with a capacity of 50,000 units, which will eventually increase to 100,000 units [3]. Group 4: Financial Projections - Revenue projections for 2025, 2026, and 2027 are 242.7 billion, 281.2 billion, and 310.7 billion yuan, respectively, with year-on-year growth rates of 20%, 16%, and 11% [4]. - Net profit attributable to the parent company is expected to be 14.1 billion, 16.4 billion, and 18.4 billion yuan for the same years, with growth rates of 11%, 16%, and 12% [4]. - The projected EPS for 2025, 2026, and 2027 is 1.65, 1.92, and 2.15 yuan per share, with a CAGR of 13% [4].

Group 1 - The second-generation Xiaolong MAX achieved 8,000 sales in May with an average daily order of over 200 [1] - The Gaoshan model is expected to sell over 5,000 units in June, while the Lanshan has an average daily order of 150 [1] - The Menglong fuel version has an average daily order of 100 [1] Group 2 - New models include the 2025 Ora Good Cat and the Tank 500 Hi4-Z Intelligent Driving version in June, with Tank 400, 500, 700, and Haval Big Dog/Second Generation Big Dog facelifts expected in the third quarter [1] - Exports turned positive year-on-year in May, with expectations for year-on-year growth in Q3; the Australian market saw around 5,000 units in May, and the Russian market is expected to improve marginally in June [1] Group 3 - The increase in costs due to the construction of direct sales stores is expected to decline, and sales assessments will be strengthened in the future [1] - The company aims to promote the integration of Ora and Haval's new energy vehicles [1]

Market Overview - The market rebounded with the Hang Seng Index closing up 0.37% following a stabilizing meeting [1] - The Federal Reserve maintained the benchmark interest rate at 4.25%-4.50%, marking the third consecutive meeting without a change [1] - President Trump announced a significant trade agreement with a respected country, likely the UK, which may positively impact the US stock market [1][2] Trade Agreements - The trade agreement with the UK is not a traditional free trade agreement but rather a specific agreement to lower tariffs on certain goods [2] - The agreement is expected to stimulate the US stock market, despite uncertainties regarding Trump's adherence to future agreements [2] Technology Sector - The Trump administration plans to revoke AI chip restrictions from the Biden era, which faced opposition from tech companies and foreign governments [3] - This policy change is anticipated to benefit companies like NVIDIA, which saw a stock increase of over 3% [3] Geopolitical Tensions - Ongoing India-Pakistan conflict has led to significant market reactions, with the KSE-30 index in Pakistan dropping 7.2% due to economic instability [4] - India's recent trade agreement with the UK may provide some economic buffer, but ongoing military tensions could lead to capital flight [5] Pharmaceutical Sector - Following Trump's executive order to promote domestic drug production, the pharmaceutical sector experienced a significant drop but rebounded as the market adjusted to potential limitations on import tariffs [6] - The US relies heavily on imported raw materials for pharmaceuticals, with over 80% dependence, primarily from China [6] Automotive Sector - Great Wall Motors reported a 7% decline in total revenue for Q1, but April sales showed a recovery with a 5.55% year-on-year increase [9] - The company is focusing on new energy vehicles, with a notable 28.42% increase in sales for April [9][10] - The launch of new models and promotional activities are expected to drive future sales growth [10] Emerging Markets - The Chinese autonomous taxi market is projected to grow significantly, with Goldman Sachs predicting 500,000 Robotaxis by 2030 and a market size of $47 billion by 2035 [8] - Early entrants in this market, such as Pony.ai and WeRide, are expected to benefit from favorable regulatory conditions and consumer acceptance [8]

Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of 32.79 CNY per share, compared to the current price of 22.58 CNY per share [4]. Core Views - The report indicates that the company has shown a recovery in sales, with April wholesale sales reaching 100,000 units, a year-on-year increase of 6% and a month-on-month increase of 2% [2]. - The introduction of new models, such as the Tank 300 and the second-generation Haval Max, is expected to contribute positively to sales growth [2][3]. - The company is entering a new growth phase, with expectations of increased sales in the mainstream market and significant potential in the off-road vehicle segment [3]. Sales Performance - April sales included 29,000 units of new energy vehicles, a year-on-year increase of 28% and a month-on-month increase of 14%, while fuel vehicle sales were 71,000 units, showing a year-on-year decrease of 2% [2]. - The Tank brand sold 19,000 units in April, with the Tank 300 contributing significantly to this figure, achieving sales of 11,000 units, a year-on-year increase of 13% [2]. - Haval brand sales reached 57,000 units in April, a year-on-year increase of 21%, attributed to the launch of the second-generation Haval Max [2]. Financial Forecast - The company is projected to achieve net profits of 140.3 billion CNY, 174.0 billion CNY, and 209.6 billion CNY for the years 2025, 2026, and 2027 respectively, with corresponding price-to-earnings ratios of 13.8, 11.1, and 9.2 [8][9]. - Revenue is expected to grow from 1,732.1 billion CNY in 2023 to 3,364.9 billion CNY by 2027, indicating a strong growth trajectory [9][10]. Market Outlook - The report suggests that the mainstream market for new vehicles is entering a growth phase, with the company’s refined product offerings and marketing strategies likely to drive sales upward [3]. - The Hi4Z technology is expected to enhance the company's competitive edge in the off-road vehicle market, potentially leading to significant profit margins [3]. - The company has a diverse product lineup and strong technological capabilities, which are anticipated to boost export potential as new models are introduced [3].

Investment Rating - The report maintains a "Buy" rating for the company [8][5]. Core Views - The company reported Q1 revenue of 40 billion RMB, down 7% quarter-on-quarter and 33% year-on-year, with a net profit of 1.8 billion RMB, down 46% quarter-on-quarter and 23% year-on-year, which was below expectations due to product inventory adjustments and increased direct sales costs [1][2]. - The launch of the second-generation Xiaolong MAX in April is expected to boost revenue and profit as the company transitions to new energy vehicles, alongside the new pricing and features of the Weipai Gaoshan model [1][3][4]. Summary by Sections Q1 Performance - The company sold 260,000 new vehicles in Q1, a decrease of 7% year-on-year. The gross margin was 18%, a decrease of 2% quarter-on-quarter but an increase of 1% year-on-year. The average selling price (ASP) and gross profit per vehicle were 160,000 RMB and 30,000 RMB, respectively [2]. - Sales, management, R&D, and financial expense ratios were 5.7%, 2.3%, 4.8%, and -2.6%, respectively, with sales expenses increasing due to new vehicle marketing and direct sales investments [2]. Product Launches - The second-generation Xiaolong MAX was launched at a starting price of 116,800 RMB, featuring advanced four-wheel drive technology and a low fuel consumption rate of 0.97L/100km, which is expected to achieve monthly sales of over 8,000 units [3]. - The Weipai Gaoshan model has been revamped with a price drop and enhanced features, with expected monthly sales of over 6,000 units as it targets the mainstream MPV market [4]. Profit Forecast and Valuation - The company’s net profit forecast for 2025-2027 is 15.3 billion, 18.6 billion, and 20.1 billion RMB, respectively. The report assigns a PE ratio of 22x for A-shares and 11x for H-shares, with target prices set at 39.69 RMB and 20.95 HKD, respectively [5][13].