Investment advisory support|Yu Xiaoming, editor|Gu Jinfeng
Source: Jufeng Investment Advisory, Good Stock Application
Despite the month-on-month decline in sales in the domestic market in April, the export growth rate remained strong, especially the new energy vehicle market continued its rapid growth. According to the analysis, the car trade-in policy through financial subsidies, tax incentives and other measures, reduce consumer pressure to buy cars, thereby stimulating consumer demand, China's new energy vehicle market demand trend is expected to be similar to last year, in the second quarter began to gradually strengthen. Today, let's take a look at its investment highlights with a leading target in the automotive field.
New energy vehicles continue to grow at a high rate
According to data released by the China Association of Automobile Manufacturers and the China Passenger Car Association, China's automobile production and sales in April reached 2.406 million units and 2.359 million units, up 12.8% and 9.3% y/y, respectively, but down 10.5% and 12.5% m/m, respectively. domestic sales were 1.855 million units, up 4.0% year-on-year and down 15.37% month-on-month; Exports totaled 504,000 units, reflecting a 34.0% y/y increase and a 0.4% m/m increase.
The market share of independent brands has increased steadily. In April, the retail sales of self-owned brands were 880,000 units, a year-on-year increase of 11.0% and a month-on-month decrease of 5.0%; Retail sales of luxury cars were 450,000 units, down 26.0% year-on-year and 9.0% month-on-month; Retail sales of mainstream joint venture brands totaled 200,000 units, down 12.0% y/y and 24.0% m/m. Exports of own-brand brands in April reached 343,000 units, reflecting a 41.0% y/y increase. Exports of joint ventures and luxury brands totaled 70,000 units, reflecting a 30.0% y/y increase. Domestic brands continue to grow in the domestic retail and export markets, and their market share has grown steadily.
The output of new energy vehicles in April was 870,000 units, a year-on-year increase of 35.9% and a month-on-month increase of 0.8%; Sales volume was 850,000 units, up 33.5% y/y and down 3.7% m/m. The market share of new energy vehicles reached 36.0%, an increase of 3.2 pct month-on-month. The production and sales of new energy vehicles continued to grow at a high rate, and the penetration rate continued to increase.
Local support policies have been intensively introduced
As an important pillar industry of the national economy, the automobile has a long industrial chain, a high degree of relevance, a wide range of employment, and a large consumption drive, and plays an important role in the national economic and social development. In the promotion of large-scale equipment renewal and consumer goods trade-in actions, relevant policies have been introduced at the national and local levels to solidly promote the trade-in of automobiles, promote the transformation and upgrading of the automobile industry, and stimulate market vitality.
A few days ago, the Ministry of Commerce, the Ministry of Finance and other 7 departments issued the "Implementation Rules for Car Trade-in Subsidy" to make specific provisions on relevant subsidies. All localities have actively followed up and introduced implementation plans. Jilin Province proposes to strictly implement the mandatory scrapping of motor vehicles and vehicle safety and environmental protection inspection standards, and eliminate old cars that meet the mandatory scrapping standards in accordance with laws and regulations; Subsidies will be given to consumers who scrap high-emission passenger vehicles or eligible new energy passenger vehicles and purchase new energy vehicles that meet energy-saving requirements; Actively promote automobile manufacturers and sales enterprises to carry out activities such as new energy vehicle exchange festivals.
Chongqing Municipality pointed out that it will vigorously promote the trade-in of old cars, and give cash subsidies of 10,000 yuan and 7,000 yuan respectively to scrap old passenger cars of relevant standards and replace them with new energy passenger vehicles and energy-saving fuel vehicles; For eligible consumers who sell old passenger cars and exchange them for new new energy passenger cars, they will be given a municipal financial subsidy of 2,000 to 3,000 yuan per vehicle according to the price of the vehicle. In addition, support key automobile dealerships to carry out trade-in consumption activities to benefit the people, and give a maximum of 2 million yuan of municipal financial funds to the implementation of trade-in to benefit the people's consumption of automobile dealerships with obvious results and outstanding contributions.
Shanghai, Zhejiang, Henan, Hubei and other places have also introduced relevant car trade-in plans and put forward target measures.
According to SPDB International's research report, the implementation of the detailed rules of the car trade-in policy is expected to alleviate consumers' wait-and-see sentiment and greatly boost the willingness of potential consumers to buy cars, especially new energy vehicles. This year, China's NEV market demand is expected to be similar to last year, starting to gradually strengthen in the second quarter.
Today, let's take a look at the company's investment highlights:
1. According to the first quarter report of 2024, the total revenue increased by 47.6% year-on-year, and the attributable net profit increased by 1752.55% year-on-year.
2. It is planned to achieve overseas sales of more than one million units by 2030, and the sales of high-end models will account for more than 1/3, and the importance of overseas markets will be further highlighted.
3. With advanced corporate culture and management team, it has created a unique operation and management model, and its management quality is second to none in the domestic automotive industry.
Great Wall Motor Company is a world-renowned SUV manufacturer, adhering to the corporate philosophy of "making a little progress every day", with advanced corporate culture and management team, creating a unique business and management model, and the quality of operation is second to none in the domestic automotive industry.
Introduction and main business of Great Wall Motor
Great Wall Motor Co., Ltd. has been selected as one of the "Top 500 Chinese Enterprises", "Top 500 Chinese Machinery" and "Top 500 Made in China" for many times, and has been listed as "Forbes Asia-Pacific Best Listed Company", "Forbes Top 2000", "Fortune China Top 500", "BrandZ Top 100 Most Valuable Chinese Brands", etc., and has been rated as the "Recommended Export Brand" of the China Chamber of Commerce for Import and Export of Machinery and Machinery, and the "National Automobile Export Base Enterprise" awarded by the Ministry of Commerce and the National Development and Reform Commission. The first Chinese automotive company to become a member of the International Hydrogen Council. In recent years, Great Wall Motor's technical strength has been widely affirmed by the society, and has been jointly recognized as "National Recognized Enterprise Technology Center", "Postdoctoral Research Workstation Unit" and "National Innovative Enterprise" by the National Development and Reform Commission, the Ministry of Science and Technology and other five ministries and commissions.
The concept to which Great Wall Motor stock belongs
Automobiles, Hebei Plate, AH Shares, HS300_, Convertible Bond Targets, Institutional Heavy Positions, Equity Incentives, Margin Trading, SSE 50_, SSE 180_, Fuel Cells, Shanghai-Hong Kong Stock Connect, Securities Holdings, Artificial Intelligence, Unmanned Driving, Xiong'an New Area, MSCI China, Baidu Concept, Huawei Concept, Hydrogen Energy, FTSE Russell, Standard & Poor's, New Energy Vehicles, Internet of Vehicles, Solid-State Batteries
What are the domestic companies of Great Wall Motor?
Changan Automobile, SAIC, GAC Group, Great Wall Motor, Celis, Haima Automobile and so on.
What is the status of Great Wall in the automotive industry?
Industry comparison
In terms of operating income, Great Wall Motors ranks 4th in the industry higher than the industry average.
What is the basic situation of Great Wall Motor's stock issuance?
The total share capital of Great Wall Motor is 8.544 billion shares, of which 6.169 billion A shares are in circulation. As of May 13, the total market value was 223.592 billion yuan, the circulating market value was 161.43 billion yuan, and the price-earnings ratio was 22.19. The number of shareholders is 164,600. The largest shareholder is Baoding Innovation Great Wall Asset Management Co., Ltd., with the top ten shareholders accounting for 92.01% of the shares.
What about Great Wall Motors stock financial data?
According to the first quarter report of 2024, Great Wall Motor's total revenue was 42.86 billion yuan, and the net profit attributable to the parent company was 3.228 billion yuan, with a year-on-year increase of 47.6% in total revenue and a year-on-year increase in attributable net profit of 1752.55%.
Business analysis
As of December 31, 2023, Great Wall had an operating income of 153.279 billion yuan from the sale of automobiles and 12.614 billion yuan from the sale of spare parts.
Who is the chairman of Great Wall Motors?
Great Wall Motor is Mr. Wei Jianjun ("Mr. Wei"), the chairman and executive director of the Company, who graduated from the Party School of the Hebei Provincial Committee of the Communist Party of China in 1999, majoring in enterprise management. Mr. Wei joined Baoding Great Wall Automobile Industry Co., Ltd. (the predecessor of the Company and served as the general manager) in 1990 and has been the chairman of the Board of Directors of the Company since June 2001, responsible for the overall strategic planning and business development of the Group. Mr. Wei is a deputy to the 9th and 10th People's Congress of Hebei Province and a representative of the 18th National Congress of the Communist Party of China. Mr. Wei is currently the director and general manager of Baoding Innovation Great Wall Asset Management Co., Ltd., a substantial shareholder of the Company.
Sales in April increased year-on-year, and tank exports performed well
In April 2024, Great Wall Motor's total production volume will be 103418/94,796 units, +10.84%/+1.81% year-on-year and -3.55%/-5.46% month-on-month, respectively. In April, the production volume of the Haval brand was 51,913/47,054 units, -0.37%/-9.97% year-on-year and -8.19%/-12.95% month-on-month; The production volume of WEY brand was 4933/4458 units, +102.26%/+87.71% year-on-year, and +19.39%/+23.56% month-on-month; The production volume of Great Wall pickup trucks was 19,597/18,069, +5.01%/-3.12% year-on-year, and +1.71%/+2.85% month-on-month; The production volume of the ORA brand was 5630/4686 units, -36.61%/-47.35% year-on-year and -8.96%/-22.19% month-on-month; The production volume of tank brands was 21,335/20,469 units, +90.25%/+87.51% year-on-year and +1.24%/+8.00% month-on-month, respectively.
In April, the proportion of new energy and exports increased year-on-year. Great Wall Motor's wholesale sales in April totaled 94,800 units, a year-on-year increase of +1.81%. In terms of brands, the performance of Haval and Ora is relatively weak, mainly due to the bottleneck of capacity switching on the launch of the new Haval H6. 1) Exports: The company's overseas exports increased year-on-year, with 36,141 vehicles exported in April, +65.68%/+0.91% year-on-year, accounting for 38.13% of the group's sales, and +14.70/+2.41pct year-on-year, respectively, and the pace of globalization accelerated. 2) New energy: In April, the company's wholesale volume of new energy vehicles was 22,436, +50.95%/+2.53% year-on-year, and the penetration rate of new energy products was 23.7%, +7.70/+1.85pct year-on-year, respectively, and the penetration rate of new energy increased rapidly year-on-year.
Systematic advantages continue to develop the global market, and technology increases to empower products
In terms of products, WEY brand Blue Mountain Intelligent Driving Edition, Tank 700Hi4-T, new generation Haval H6, H9, 2024 Ora Good Cat, Great Wall Shanhai Cannon Hi4-T, Great Wall Soul Motorcycle Engine and other products were jointly unveiled at the Beijing Auto Show, further enriching the product matrix. The starting price of the tank 700Hi4-T/2024 Ora Good Cat > Mulan Edition/2.4T passenger gun is 428,000/105,800/148,800 respectively.
In terms of technology, the Great Wall Wei brand Blue Mountain LiDAR version of the Coffee Pilot Ultra intelligent driving system full-scene NOA is about to be fully installed in the car, and NVIDIA chips are empowered; It is also equipped with the Coffee OS3 intelligent cockpit system, and the intelligent level of the product continues to improve, and the intelligent layout is fully accelerated.
In terms of going overseas, the layout of overseas investment has accelerated, and globalization has been steadily promoted. Great Wall Alpine MPV Dubai started delivery, opening a new journey for the development of the Middle East market; Great Wall Motor debuted at the 45th Bangkok Motor Show in Thailand, and Shanhai Run officially opened pre-sale in Thailand; Great Wall Motor officially released the "New Four Modernizations" strategy for global development, announcing that it will increase overseas investment and promote R&D, production, supply, sales and services to go overseas in an all-round way, and plans to achieve overseas sales of more than one million units by 2030, with high-end models accounting for more than 1/3 of sales, further highlighting the importance of overseas markets.
Profit forecast and investment rating: We maintain the company's 2024-2026 profit forecast, with a net profit attributable to the parent company of 89/117/15.1 billion yuan, +27%/+31%/+29% year-on-year, corresponding to EPS of 1.04/1.37/1.76 yuan, and corresponding PE of 25/19/15 times, respectively, maintaining Great Wall Motor's "buy" rating.
Enlightenment Today:
To buy a stock is to buy a company, and a falling market is a good opportunity. - Warren Buffett
Risk warning: the price war in the domestic passenger car market exceeds expectations; Global geopolitical risks.
Source:
Dongguan Securities-Automobile Industry Tracking Comments: Automobile exports increased high in April, and the policy implementation is expected to stimulate consumption-20240513
Soochow Securities' sales increased year-on-year in April, and tanks/exports performed well 20240507
(Investment advisory support: Yu Xiaoming, practicing certificate: A0680622030012)
Disclaimer: The above content is for reference only and does not constitute specific operation advice, and you shall operate at your own risk and profit and loss