Source of this article: Time Weekly Author: Li Zhuoling
In 2021, under the influence of factors such as the overseas epidemic superimposed chip shortage and supply chain challenges, the domestic auto market has undergone deep adjustments, and the trend of joint ventures and independent car companies has "changed greatly".
According to the latest data from the Association, the retail share of Japanese brands in December was 22.2%, down 1 percentage point year-on-year; the retail share of the US market reached 9%, down 0.6 percentage points year-on-year. In contrast, in terms of independent brands, the domestic retail share of independent brands in December was 46.3%, an increase of 6.9 percentage points year-on-year; the annual share was 41%, an increase of 5.6 percentage points.
Under the reform of the automobile market, the independent brands represented by Great Wall Motors have risen like a rainbow, achieving the transcendence of a number of joint ventures. According to its 2021 report card, in 2021, Great Wall Motor sold 1280993 new cars, an increase of 15.2% year-on-year, achieving the achievement of breaking through million sales for six consecutive years.
In the secondary capital market, Great Wall Motors is also sought after, and its market value has soared. As of the end of 2021, Great Wall Motor's market value increased by 193.58 billion yuan from the annual low point on March 24, and its stock price rose by about 75.7%.
According to another review, in the past 3 months, 24 securities institutions have bought and overrated Great Wall Motors. This year alone, 10 institutions, including Guotai Junan, Changjiang Securities, Huaxi Securities, Shenwan Hongyuan and CITIC Securities, have been optimistic about Great Wall Motors.
So, what is the logic behind Great Wall Motors, which is now standing at a market value of 400 billion yuan, optimistic about the secondary capital market and securities institutions, and is it still worth buying by investors?
Behind the bullishness: the fundamentals of Great Wall Motors are going against the trend
Buffett, who is known as the "stock god" in the outside world, once said that the stock price is a voting machine in the short term and a weighing machine in the long term, in other words, there are many factors that affect the stock price in the short term, but in the long run, the core elements driving the stock price are still performance and fundamentals.
Judging from the rising stock price of Great Wall Motor, it is closely related to the strong performance of its main construction vehicle business. In 2021, Great Wall Motors will focus on user needs and form cognitive advantages that affect consumer purchase decisions, making terminal consumer demand strong and stimulating sales growth.
Behind the annual sales performance in 2021 to a record high, the performance of the five major brands of Great Wall Motors is remarkable. Among them, Haval sold 770008 vehicles last year, an increase of 2.6% year-on-year; Euler last year's sales increased by 140% year-on-year to 135028 units; in terms of tank brands, the delivery volume of tank 300 continued to rise, delivering 84,588 vehicles throughout the year, and delivering 11,958 vehicles in December 2021, an increase of 18.3% month-on-month; Weipai sold 10,065 vehicles in December last year, and sold 58,363 vehicles in 2021, with a cumulative user exceeding 450,000; Great Wall pickup trucks. It will sell 233006 units in 2021, up 3.6% year-on-year.
It is reported that in 2021, Great Wall Motor will continue to exert its efforts to innovate in categories, and the above five major brands and salon cars have launched more than 50 new products to shine in the car market, including nearly 30 new products and more than 20 new versions of models listed or unveiled, covering the tank 500, salon mecha dragon and so on, which have attracted much market attention.
In a horizontal comparison of the industry, behind the many "black swans" encountered in the automobile market, Great Wall Motors performed better than the market, and its sales performance was extremely gold-rich, outperforming many mainstream joint venture car companies. Driven by leading independent car companies such as Great Wall Motors, Chinese auto brands truly have the confidence and strength to compete with joint venture brands.
Looking at the global market, Great Wall Motor's overseas sales reached 142793 units, an increase of 103.7% year-on-year, and sales accounted for 11.1%. Behind the continuous implementation of the globalization strategy, Great Wall Motors continues to move forward at a high speed in its global journey in 2021, with the third-generation Haval H6, Haval JOLION, Euler Good Cat, Great Wall Cannon and other models galloping overseas, successively opening up a number of new overseas markets.
By the end of 2021, Great Wall Motor has accumulated overseas sales of more than 900,000 vehicles, and the complete vehicles have been exported to more than 170 countries, forming seven large-scale key markets overseas, including Australia and New Zealand markets, the Middle East and North Africa markets, and the European regional market.
In fact, the excellent sales performance has been reflected in the performance of Great Wall Motors, and its profitability is constantly rising. According to the third quarter report of 2021 previously released by Great Wall Motors, in the first three quarters of last year, Great Wall Motor's total operating income was 90.797 billion yuan, an increase of 46.11% year-on-year; the net profit attributable to the mother was 4.945 billion yuan, an increase of 91.13% year-on-year. Vertically, this performance hit a new high in the past 5 years, as a reference, Great Wall Motor's net profit from Q3 of 2017 to 2020 was 2.879 billion, 3.927 billion, 2.917 billion and 2.587 billion yuan, respectively.
Volume and price rise together, and the technical breakthrough supports high growth
In the stock market, investors mostly prefer high-growth stocks, because these stocks are very likely to rise in the future development, which will bring investors a lot of returns. Therefore, when investors select stocks, high-growth stocks are the first choice. Great Wall Motors, which is popular in the secondary capital market, is extremely growing under the blessing of technology.
In July 2020, after Wei Jianjun, the helmsman, threw out the reflection on the sentence "Will Great Wall Motors survive next year", Great Wall Motors continued to give a positive answer to this sentence with practical actions. On the 20th of the same month, the Lemon Platform, Tank Platform and Coffee Platform of Great Wall Motors were officially released, and these three major technology platforms were built by the technology of Great Wall Motors Group and became the development foundation for Great Wall Motors' comprehensive breakthrough last year and even in the future.
Among them, the lemon platform has multiple advantages of higher performance and better structure; in terms of power, the platform can not only provide traditional high-efficiency fuel power, hybrid power, pure electric power, but also launch hydrogen energy power system to fully meet the needs of different levels of the market.
Last year, lemon hybrid DHT technology was mass-produced and installed on Weipai Machiduo DHT, Weipai Latte DHT, Haval Chitu Hybrid DHT Edition and other models, setting off a wave of hybridization in the car market. Sales data show that as of the end of last year, the delivery volume of Macchiato DHT has steadily climbed, with cumulative sales of 5145 vehicles; since the latte DHT was launched on December 17 last year, it has been favored by the market, with sales of 2707 vehicles in that month.
According to the open source securities research report, the domestic HEV market is dominated by Japanese models, and the market share of Japanese joint venture vehicles exceeds 99%. Honda and Toyota's hybrid systems focus on fuel economy, compared with Great Wall Motors' comprehensive performance. Toyota THS route advantage is the flexible switching of the working mode, the disadvantage is that the mechanical device is complex and leads to the waste of kinetic energy, the Honda iMMD route structure is simple, but the engine direct drive condition is only single gear, lack of power. Great Wall Motor has created a new two-speed hybrid architecture based on the Honda route, the gearbox has power gear, economic gear 2 gears, engine direct drive conditions can meet higher power demand, representing the advanced direction of the next generation of hybrid system upgrades.
In terms of tank platform, the model created from the platform is equipped with three locks, active suspension, tank turning, active stabilizer bar, electronically controlled shock absorber and a rich configuration of professional four-wheel drive. In the off-road intelligent configuration, it will provide automatic terrain recognition, intelligent off-road assistance and off-road creep function, further enhancing the driving experience.
Last year, tank 300, tank 500 and other models were quite popular, and the tank 300 that had been listed even appeared in the terminal market. Under the competition with joint ventures and foreign luxury brands, tank brands aim at the niche market of hardcore off-road, so as to cut into the high-end car market and continuously break through the price ceiling.
"Independent brands seize the opportunity to launch their own luxury brands, with more and more mature design, technology, three major pieces and traditional luxury brands can not match the cost advantages, exceed expectations to meet consumer demand, cut to the pain points of market segments, enter the luxury market, and achieve a breakthrough in brand and value." According to the "2021 China Luxury Car Market Research Report" released by the third-party consumer trend insight platform Judiansu, users' rational consumption and personalized consumption of luxury brands have further expanded.
According to the Galaxy Securities Research Report, the average price of Great Wall bicycles in the first three quarters was estimated to be 102,700 yuan, an increase of 12.50% year-on-year. Mainly under the blessing of the three major technology platforms, the strength and value of Great Wall Motors products have increased, and the superimposed channel marketing innovation has driven the volume and price of Great Wall Motors' products to rise together.
In the industry's view, the price of bicycles is an important dimension to measure the brand power and product strength of automobile manufacturing enterprises. The continuous rise of this indicator means that Great Wall Motors has been greatly recognized in terms of sales, pricing, market acceptance, reputation and so on, and truly realizes the upward road from product price to the entire brand. In just one year, more than a year of highly competitive products equipped with new platform technology have been sheathed, which has also allowed the capital market and investors to see the high growth of the Great Wall. According to public data, the development cycle of a new product of Great Wall Motors can be controlled at the earliest in 11 months, which is only one-half of most brands.
Betting on the Zhidian track, the Great Wall of Science and Technology is still underestimated
CITIC Securities Research Report said that considering the high certainty growth of Great Wall Motors in 2022 and the expected recovery brought about by the launch of new models, Great Wall Motors has an excellent investment cost performance, and the target price of A shares is adjusted to 67 yuan. In other words, according to its latest stock price of 45.62 yuan / share, the Great Wall can rise by more than 40% in the short term.
From the perspective of scientific and technological attributes, under the major changes that the automobile industry is facing in a century, Great Wall Motors, which constantly bets on intelligent and electric tracks, is still undervalued.
Last year, with the courage and determination to embrace the changing situation, Great Wall Motors continued to consolidate the label and attributes of the "Great Wall of Science and Technology" and seek the future. In terms of intelligent ecological layout, Great Wall Motors has continuously strengthened breakthroughs in system, intelligent ecological construction and technological innovation. In terms of system, Great Wall Motors set up The Wisdom Walk to accelerate the development of intelligent assisted driving, and set up a software team of the Product Digitalization Center to focus on full-stack solutions for intelligent cockpit products.
In the field of intelligent driving, which focuses on Millima Zhixing, in 2021, Millima Zhixing achieved hundreds of millions of yuan in operating income. According to Zhang Kai, chairman of Miller Wisdom Bank, it is expected that in 2022, the passenger car auxiliary driving project of Miller End Zhixing is expected to expand by 7 times, and the unmanned logistics vehicle project is expected to expand by 3 times. In its view, 2022 will be the most critical year for the development of the intelligent assisted driving industry, the competition in the field of passenger car assisted driving will officially enter the second half, and the intelligent assisted driving of other scenarios will also officially enter the first year of commercialization.
In terms of intelligent ecological construction, Great Wall Motors established the Coffee Intelligent Ecological Alliance last year to build a new ecosystem for future smart travel, and also officially entered the chip industry and the third-generation semiconductor core industry through strategic investment in Horizon and Tongguang Shares, etc., to accelerate the research and development and mass production of intelligent vehicles.
In terms of technological innovation, the release of new electronic and electrical architecture, intelligent wire control chassis, intelligent cockpit platform, IDC3.0 high-computing power intelligent auxiliary driving calculation platform, etc., has continuously built a moat of Great Wall Motor technology.
"We expect that by 2022, the competition for new energy vehicles will further expand, and new energy vehicles will begin to compete with traditional energy vehicles for market share." Wei Jianjun pointed out in an interview with the media a few days ago that with the full arrival of the era of automotive intelligence, how to stand out in the increasingly fierce intelligent competition has become the key to the brand's victory in the future. "Only by seizing market opportunities, quickly amplifying advantages, and achieving breakthroughs in brand value and market share can we lead the new track of new energy and intelligence."
It is worth mentioning that based on the current domestic and international environment and challenges facing China's automotive industry, at the end of June last year, Wei Jianjun officially released the Great Wall Motor 2025 strategy. According to the plan, Great Wall Motor's cumulative R&D investment will reach 100 billion yuan by 2025, which will focus on pure electric, hydrogen energy, hybrid and other new energy fields, and will impact the global annual sales of 4 million new vehicles by 2025, of which new energy vehicle sales account for more than 80% and operating income exceeds 600 billion yuan.
At the same time, under the national "double carbon" goal, Great Wall Motors has also officially made a commitment to achieve carbon neutrality by 2045, and plans to build the first zero-carbon plant in 2023. So far, Great Wall Motors has also become the first autonomous car company to propose a clear carbon neutrality goal and a path to achieve it.
In Wei Jianjun's view, Chinese car companies, including Great Wall Motors, are ushering in a new round of growth window period, which is also the biggest premise for Great Wall Motors' future development goals. "Chinese car companies have certain advantages in the two fields of new energy and intelligence, but the window period is very short and fleeting. If Chinese brand cars want to achieve real transcendence, only in this 3-5 years time point. Great Wall Motors must seize the opportunity of a new round of change and continue to build competitiveness in order to seek a future change. ”
The development of the future travel ecology is destined to be a marathon with no end. Behind the rising sales volume, Great Wall Motors, which has always played a long-termist, is constantly deepening the intelligent electrification transformation of the industry, and based on the accumulation of technology, the undervalued value of the "Great Wall of Science and Technology" will continue to be released.