Great Wall Motor (2333.HK)_ Key Takeaways from Mgmt Meeting; 4Q24E_2025E Outlook

Summary of Great Wall Motor (2333.HK) Management Meeting Company Overview - Great Wall Motor manufactures and sells pickup trucks and SUVs in China, with major brands including Haval and WEY [doc id='22'][doc id='13']. Key Highlights 1. Sales Targets: - Management maintained the FY24 sales target at 1.3 million units, with a 2025 export sales target of 550-600k units and a projected 30% YoY increase in domestic sales [doc id='2'][doc id='3']. 2. Export Growth: - The anticipated growth in export sales for 2025 will primarily come from Latin America and right-hand-drive markets, including Australia and New Zealand [doc id='2'][doc id='3']. 3. Profitability: - Management expects decent overseas profitability to continue, driven by sales growth in high-profitability regions such as Brazil, Australia, and New Zealand [doc id='5']. 4. Brand Performance: - Haval: Targeting 40k monthly domestic sales, with key models including Menglong PHEV and Xiaolong Max [doc id='4']. - Wey: Plans to launch over three models in 2025, including a BEV sedan and two PHEV SUVs, aiming for 10k monthly sales [doc id='4']. - Tank: Aiming for 300k units in 2025, with a monthly domestic sales target of 20k [doc id='4']. - Ora: Introduction of 1-2 new BEV models and a facelifted Good Cat in 2025 [doc id='4']. - Pickup: Targeting 20k monthly sales, split evenly between domestic and overseas markets [doc id='4']. 5. Overseas Sales Outlook: - For 2024, management projects overseas sales of 450k units, with contributions from various regions: ~40% from Russia, ~20% from Latin America, 15-20% from Australia and New Zealand, and 10-15% from South Africa [doc id='4']. 6. Financial Performance: - 2024E net profit is projected at RMB 13,009 million, with a significant increase to RMB 15,013 million in 2025E, reflecting an 84.1% growth from 2023 [doc id='6']. - The diluted EPS is expected to rise from RMB 0.827 in 2023 to RMB 1.523 in 2024E and RMB 1.758 in 2025E [doc id='6']. 7. Valuation and Investment Strategy: - The target price is set at HK$20.20, representing a potential return of 60.3$12.60 [doc id='7']. - The company is rated as a "Buy" due to a positive outlook on the NEV sector and expected growth in exports [doc id='23']. Risks - Potential risks include strong volume growth in low-margin NEV products that may negatively impact overall earnings and policy risks affecting export sales [doc id='25']. Additional Insights - Management indicated that the overseas gross profit margin (GPM) for the Tank brand is around 30%+, comparable to domestic GPM, while Haval's overseas GPM is approximately 20% [doc id='14']. - The company has around 1.3k 4S stores in overseas markets, with significant presence in Russia and Brazil [doc id='14']. - Management plans to pass some tax increases to local customers in Russia, where local production is around 70-80% [doc id='15']. This summary encapsulates the key points from the management meeting, highlighting the company's strategic direction, financial outlook, and potential risks.