Equity Research January 2, 2018

Great Wall Motor GM to reach 20% as Haval recovers and WEY beats

Investment Focus Upgrade to BUY

Ticker 601633.SH 02333.HK Action CICC investment rating  BUY  BUY We stated that Great Wall Motor’s GM will likely recover in our report Last close Rmb11.49 HK$8.95 published on November 27, 2017, after we surveyed GWM’s dealers. CICC target Rmb13.50 HK$11.40 Recently, we notice further improvement in GWM’s operation. The destocking of old models, better-than-expected sales volume of WEY 52wk price range Rmb14.74~10.50 HK$12.08~6.78 models in November and strong MoM growth in Haval sales volume Market cap (bn) Rmb92 HK$111 prompt us to expect a 20% GM in 4Q17. We upgrade GWM-A/H to Daily value (mn) Rmb83.61 HK$324.47 BUY, and lift TP to Rmb13.5/HK$11.4. Shares outstanding (mn) 9,127 9,127 Free float (%) 66 34 What’s changed? Daily volume (mn sh) 7.16 36.66 Business sector Auto & Parts

► WEY models: Sales volume will likely top 300,000 units in 2018 02333.HK HSCEI and boost GWM’s GM. The two WEY models both recorded over 168 10,000 units of sales volume in November, driven by oppotunity in medium SUV market, WEY’s high product competiveness and 151 new design. 4S stores for WEY models reached 100 as of 134

end-2017, and the figure will likely reach 300 in 2018. 117 Relative Value (%) Value Relative ► Haval models: GWM is streamlining Haval’s production and will 100 83 differentiate red and blue label models; the new powertrain Jan-2017 Apr-2017 Jun-2017 Sep-2017 Dec-2017 enhances products’ price premium and lowers production cost. ► GWM increases marketing expense, spurring dealers to open (Rmb mn) 2016A 2017E 2018E 2019E more stores. GWM’s advertising expense ratio is lower than its Revenue 98,616 98,119 121,853 137,949 competitors. GWM sponsors the 2018 new year concerts of (+/-) 29.7% -0.5% 24.2% 13.2% Hunan TV and Jiangsu TV, implying its great determination of Net profit 10,551 4,801 8,235 9,707 putting effort in marketing. (+/-) 30.9% -54.5% 71.5% 17.9%

EPS 1.16 0.53 0.90 1.06 How do we differ from the market? We believe that the growth of BPS 5.18 5.36 6.10 6.89 GWM’s 4Q17/2018e GM will be stronger than expected, and sales DPS 0.35 0.16 0.27 0.32 volume of WEY in 2018 will also beat market expectation. CPS 0.97 1.10 0.98 1.28 Potential catalysts: Strong GM growth, stellar WEY sales volume and P/E 6.9 14.6 8.2 7.0 P/B 1.5 1.4 1.2 1.1 new powertrain product well accepted by the market. EV/EBITDA 4.8 7.6 4.8 3.9

Dividend yield 4.4% 2.1% 3.7% 4.3% Financials and valuation ROAA 12.9% 5.1% 8.0% 8.2% We lift 2017/18e earnings forecast by 5.0%/13.6% to ROAE 24.6% 10.0% 15.7% 16.4% Rmb4.8bn/8.2bn, and introduce 2019e net profit of Rmb9.7bn.

Risks Source: Wind, Bloomberg, company data, CICC Research Sales volume of new products and GM disappoint.

Wei FENG Jing CHANG Analyst Associate [email protected] [email protected] SAC Reg. No.: S0080513110002 SAC Reg. No.: S0080116080077 SFC CE Ref: BCK590

Please read carefully the important disclosures at the end of this report CICC Research: January 2, 2018

Financial summary

Financial statement (Rmb mn) 2016A 2017E 2018E 2019E Financial ratios 2016A 2017E 2018E 2019E Income statement Growth ability Revenue 98,616 98,119 121,853 137,949 Revenue 29.7% -0.5% 24.2% 13.2% COGS -74,377 -79,035 -95,512 -107,685 Operating profit 34.2% -45.0% 54.6% 16.4% Selling expenses 3,175 4,612 5,605 6,346 EBITDA 27.4% -41.6% 48.6% 14.0% Administrative expenses 4,575 5,397 6,702 7,587 Net profit 30.9% -54.5% 71.5% 17.9% Other ops income (expense) 0 0 0 0 Profitability Operating profit 16,488 9,076 14,034 16,331 Gross margin 24.6% 19.5% 21.6% 21.9% Finance costs 4 43 42 93 Operating margin 16.7% 9.3% 11.5% 11.8% Other income (expense) -4,091 -3,334 -4,155 -4,728 EBITDA margin 15.3% 8.9% 10.7% 10.8% Profit before income tax 12,483 5,784 9,921 11,695 Net margin 10.7% 4.9% 6.8% 7.0% Income tax -1,929 -983 -1,687 -1,988 Liquidity Minority interest -3 0 0 0 Current ratio 1.25 1.23 1.27 1.32 Net profit 10,551 4,801 8,235 9,707 Quick ratio 1.11 1.09 1.13 1.18 EBITDA 15,041 8,778 13,041 14,867 Cash ratio 0.05 0.09 0.12 0.17 Recurrent net income 0 0 0 0 Liabilities / assets 48.7% 48.7% 50.0% 49.9% Balance sheet Net debt / equity net cash net cash net cash net cash Cash and bank balances 2,154 3,956 6,252 10,098 Return Trade and bill receivables 41,625 41,487 51,485 58,279 RoA 12.9% 5.1% 8.0% 8.2% Inventories 6,061 6,441 7,783 8,775 RoE 24.6% 10.0% 15.7% 16.4% Other current assets 4,088 3,202 3,202 3,202 Per-share data Total current assets 53,928 55,085 68,722 80,354 EPS (Rmb) 1.16 0.53 0.90 1.06 Fixed assets and CIP 29,574 31,471 33,310 35,175 BPS (Rmb) 5.18 5.36 6.10 6.89 Intangible assets and others 8,807 8,900 9,549 10,095 DPS (Rmb) 0.35 0.16 0.27 0.32 Total non-current assets 38,381 40,372 42,859 45,271 Cash flow per share (Rmb) 0.97 1.10 0.98 1.28 Total assets 92,309 95,457 111,581 125,625 Valuation Short-term borrowings 250 250 250 250 P/E 6.9 14.6 8.2 7.0 Trade and bill payables 25,007 26,573 32,113 36,206 P/B 1.5 1.4 1.2 1.1 Other current liabilities 17,995 17,945 21,713 24,406 EV/EBITDA 4.8 7.6 4.8 3.9 Total current liabilities 43,252 44,768 54,077 60,863 Dividend yield 4.4% 2.1% 3.7% 4.3% Long-term borrowings 50 75 110 154 Total non-current liabilities 1,703 1,728 1,763 1,807 Total liabilities 44,956 46,496 55,840 62,670 Share capital 9,127 9,127 9,127 9,127 Retained profit 38,168 39,774 46,555 53,769 Equity 47,295 48,901 55,682 62,896 Total liabilities & equity 92,309 95,457 111,581 125,625 Cash flow statement Pretax profit 12,483 5,784 9,921 11,695 Depreciation & amortization 2,562 3,036 3,162 3,264 Change in working capital -1,994 1,301 -2,360 -1,223 Others -4,215 -68 -1,739 -2,081 Cash flow from operations 8,835 10,054 8,985 11,655 Capital expenditure -6,684 -5,499 -5,559 -5,699 Others -1,683 496 247 246 Cash flow from investing -8,367 -5,003 -5,312 -5,453 Equity financing 0 0 0 0 Bank borrowings -28 5 35 45 Others -1,088 -3,152 -1,412 -2,400 Cash flow from financing -1,116 -3,147 -1,377 -2,355 Foreign exchange gain (loss) 82 0 0 0 Net changes in cash -567 1,904 2,296 3,847 Source: Company data, CICC Research

Company description

Great Wall Motors is China’s largest non-SOE Auto OEM. Its product portfolio includes SUVs, sedans, and pick-ups under the respective brands Haval, Voleex, and Feng Jun. In 2016, total sales volume of GWM ranked 8th, reaching 1mn units for the first time, and has maintained the 1st place of SUV sales volume for 14 years. In 2017, new brand WEY targeting on mid-to-high end market will be launched.

Please read carefully the important disclosures at the end of this report 2 CICC Research: January 2, 2018

Contents

WEY: Sales volume to beat expectation and boost GM ...... 4 Haval: Product line improved; red/blue label models to be differentiated ...... 6 Increasing effort in marketing to stimulate dealers ...... 9 Sales volume and earnings forecasts ...... 11

Figures

Figure 1: Sales volumes of WEY models ...... 4 Figure 2: SUV discount rate by different submarkets ...... 5 Figure 3: SUV sales volume growth by different submarkets ...... 5 Figure 4: Sales volume of Haval surged MoM in November 2017...... 6 Figure 5: Prices of 2017-/2018 vision H6 and H2 (1.5T/2.0T) ...... 7 Figure 6: Details of new 1.5T direct injection engine ...... 8 Figure 7: Advertising expense ratios at major Chinese automobile makers ...... 9 Figure 8: Advertising and sponsorship expenses for 2017 new year concerts ...... 9 Figure 9: Haval sponsors Hunan TV 2018 new year’s concert ...... 10 Figure 10: Net profit estimation ...... 11 Figure 11: Revision to earnings forecasts ...... 12 Figure 12: P/E and P/B ...... 12 Figure 13: Valuation of comparable companies ...... 13

Please read carefully the important disclosures at the end of this report 3 CICC Research: January 2, 2018

WEY: Sales volume to beat expectation and boost GM

WEY models’ sales volume in November beat expectation; dealer network is expanding. Sales volumes of WEY VV7 and WEY VV5 topped 10,183 units and 10,277 units in November 2017. We believe that sales volume of WEY series (VV7, VV5, VV6 and P8) in 2018 will likely exceed the previous expectation of 250,000 units and reach 300,000 units, equal to ~25% of the total expected sales volume of GWM. We believe that the strong WEY sales will boost GWM’s GM.

4S stores for WEY models topped 100 as of end-2017. WEY models sell well and have higher gross margins, according to our survey of dealers. Haval dealers are willing to distribute WEY models. Meanwhile, new dealers outside the original GWM network are encouraged to join WEY’s network in 2018. We believe that 4S stores for WEY will increase to 300 in 2018.

Figure 1: Sales volumes of WEY models

12,000 (unit) 10,183 10,000 10,277 8,153 8,000 7,197 7,444 8,014

6,075 6,000

4,569 4,000 3,166

2,000

- Jun Jul Aug Sep Oct Nov

VV7 VV5

Source: Company data, CICC Research

Medium SUVs with a price tag of Rmb150,000-200,000 represent a promising market; WEY series’ stylish designs help to garner customers. We analyze prices, discounts and sales volume growth in the SUV segment. We find that owners of medium SUVs are offered higher discounts, which we believe indicates that medium SUV suppliers have greater GM, and the customers are still very sensitive to prices. We believe that medium SUV market will maintain decent growth. Particularly, WEY models will likely gain additional market share on the strength of high value for money. The stylish designs of WEY models appeal to male customers as well as female customers; male and female customers account for about 50%/50% of WEY’s client base, according to our survey of dealers, which is quite different from Haval.

Please read carefully the important disclosures at the end of this report 4 CICC Research: January 2, 2018

Figure 2: SUV discount rate by different submarkets Figure 3: SUV sales volume growth by different submarkets

12% 90% 450%

80% 400% 10% 70% 350%

8% 60% 300% 50% 250% 6% 40% 200%

4% 30% 150% 20% 100% 2% 10% 50%

0% 0% 0% All models Best-selling models Small Compact Medium Large and medium-sized Small SUV (left) Compact SUV (left) All models Best-selling models Medium SUV (left) Mid-to-large SUV (right)

Source: CPCA, CICC Research Source: CPCA, CICC Research

Please read carefully the important disclosures at the end of this report 5 CICC Research: January 2, 2018

Haval: Product line improved; red/blue label models to be differentiated

Sales volume of Haval models recovered in November; destocking of old models has been completed; no discounts on new models. Sales volume of Havel models soared 19.1% MoM to 97,209 units in November 2017. GMW offered no discount on new models supplied in 4Q17. The destocking of old models (2017 version H6 and H2) has been completed.

Figure 4: Sales volume of Haval surged MoM in November 2017

160,000 (unit)

140,000

120,000

97,209 100,000 81,533 73,242 66,882 81,653 80,000 62,120 58,390 77,755 52,373 53,853 60,000 58,052

40,000

20,000

- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2015 2014 2017

Source: Company data, CICC Research

GWM streamlined the production of Haval, and will further differentiate red label/blue label models. GWM stops supplying some MT Haval models and retains premium Haval models (such as H6 Sport) for 2018. The company unifies prices of red label/blue label models, and will provide differentiated models for target customers. Improved product line and wider price gaps between different models help to avoid competition between GWM’s cars. The new model H4 – launched at the Guangzhou Interntional Automobile Exhibition in November 2017 – has not yet arrived in shops. We believe that GWM will further cut Haval products going forward.

Please read carefully the important disclosures at the end of this report 6 CICC Research: January 2, 2018

Figure 5: Prices of 2017-/2018 vision H6 and H2 (1.5T/2.0T)

2017 Version (Rmb thd) 2018 Version (Rmb thd)

Classic MT 2WD Economical 88.8 Classic MT 2WD Urban 94.8 Classic MT 2WD Elite 101.8 Classic AT 2WD Urban 104.8 Classic AT 2WD Elite 111.8 Red Label Sport MT 2WD Elite 107.8

Blue Label Sport MT 2WD Elite 109.8 H6 (1.5T) Red Label Sport MT 2WD Premier 113.8 Red Label/Blue Label Sport MT 2WD Elite 103 Blue Label Sport MT 2WD Premier 115.8

Red Label Sport MT 2WD Luxury 119.8

Blue Label Sport MT 2WD Luxury 121.8

Modified Red Label Sport AT 2WD Luxury 120.8 Red Label/Blue Label Sport AT 2WD Elite 113 Modified Blue Label Sport AT 2WD Luxury 122.8

Modified Red Label Sport AT 2WD Honor 126.8 Red Label/Blue Label Sport AT 2WD Premier 119 Modified Blue Label Sport AT 2WD Honor 128.8

Red Label MT 2WD Comfort 86.8

Red Label MT 2WD Elite 93.8 Red Label/Blue Label MT 2WD Elite 90 Blue Label MT 2WD Elite 95.8

Red Label MT 2WD Luxury 99.8 Red Label/Blue Label MT 2WD Luxury 96 H2 (1.5T) Blue Label MT 2WD Luxury 101.8

Red Label AT 2WD Elite 105.8 Red Label/Blue Label AT 2WD Elite 102 Blue Label AT 2WD Elite 107.8

Red Label AT 2WD Luxury 111.8 Red Label/Blue Label AT 2WD Luxury 108 Blue Label AT 2WD Luxury 113.8

Blue Label AT 2WD Premier 118.8 Blue Label AT 2WD Premier 113

Blue Label MT Comfort 83.8

Red Label MT Comfort 84.8

H2s (1.5T) Red Label MT Elite 88.8 Red Label MT Elite 89

Blue Label AT Elite 97.8 Blue Label AT Elite 98

Blue Label AT Luxury 101.8 Blue Label AT Luxury 102

Red Label AT Luxury 102.8 Red Label AT Luxury 103

Red Label/Blue Label MT 2WD Urban 125.8

H6 Coupe Red Label/Blue Label MT 2WD Elite 133.8 (2.0T) Red Label/Blue Label AT 2WD Urban 135.8

Red Label/Blue Label AT 2WD Elite 143.8

Red Label/Blue Label AT 2WD Premier 149.8

Red Label/Blue Label AT 2WD Fashion 126 New H6 (1.5T) Red Label/Blue Label AT 2WD Wisdom 133

Red Label/Blue Label AT 2WD Leading 140

Source: auto.sina.com.cn, CICC Research

Please read carefully the important disclosures at the end of this report 7 CICC Research: January 2, 2018

New powertrain system helps to enhance products’ price premium and cut production cost. The new H6 model – equipmed with GMW’s new powertrain system – delivered a great boost for Haval’s sales in November (up 16,000 units MoM), indicating that the market has well accepted GWM’s new powertrain product. The new H6 is priced at Rmb126,000-140,000, at the upper bound of H6 models’ price range; while, prices of other Haval models for 2018 have declined, indicating that the new powertrain system has added premium to the new H6. We believe that GWM’s 7DCT gearbox production capacity – likely to top 500,000 units in 2018 – will be sufficient for its WEY models and the new H6 model. We estimate that self-produced 7DCT gearboxes will help GWM cut production cost by around Rmb1.5bn (Rmb3,000/unit).

Figure 6: Details of new 1.5T direct injection engine

Engine type GW4B15 GW4G15B

Displacement (L) 1.5T (direct injection) 1.5T

Maximum power (kW)/corresponding speed (r/min) 124/5,000–5,600 110/5,600

Maximum torque (Nm)/corresponding speed (r/min) 285/1,400–3,000 210/2,000–4,500

Emission Standard National Standard V National Standard V

Source: auto.sina.com.cn, CICC Research

Please read carefully the important disclosures at the end of this report 8 CICC Research: January 2, 2018

Increasing effort in marketing to stimulate dealers

GWM’s advertising expense ratio is lower than that of its competitors. It spends around Rmb200mn on advertising p.a., equivalent to less than 0.5% of its revenue. Besides, GWM is reliant on TV and print media advertising, which is not an efficient marketing method to reach young customers. Thus, GMW’s new products always have a slow start only by consumers’ word of mouth recommendation, despite Haval’s strong product competiveness.

Figure 7: Advertising expense ratios at major Chinese automobile makers

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.4% 0.5% 0.3% 0.2% 0.2%

0.0% 2013 2014 2015 2016

Changan SAIC GAC JAC GWM

Source: Company data, CICC Research

Recently, GWM starts to use internet media to promote its products. It is developing a young and stylish brand image to garner customers. The company sponsors the 2018 new year concerts of Hunan TV and Jiangsu TV. We estimate that GWM’s sponsorship expense for the two concerts is around Rmb100mn, due to the price tags for 2017, implying its great determination of putting effort in marketing. We believe that GWM’s marketing efforts will increase its brand exposure and stimulate dealers to open additional stores.

Figure 8: Advertising and sponsorship expenses for 2017 new year concerts Exclusive Hard advertising Special Midnight Official Official Specified naming (Rmb thd/15 sponsorship Interaction golden moment partnership/Red partnership partnership (Rmb mn) seconds) (Rmb mn) (Rmb mn) (Rmb mn) envelope (Rmb mn) (Rmb mn) (Rmb mn)

Zhejiang TV 40 250 20 15 Hunan TV 80 800 20.17 12 10 Jiangsu TV 38 450 15 15 10 Dongfang TV 35.8 420

Source: PEdaily.cn, CICC Research

Please read carefully the important disclosures at the end of this report 9 CICC Research: January 2, 2018

Figure 9: Haval sponsors Hunan TV 2018 new year’s concert

Source: www.haval.com.cn, CICC Research

Please read carefully the important disclosures at the end of this report 10 CICC Research: January 2, 2018

Sales volume and earnings forecasts

We expect WEY models, the new H6 and 2018 version H6 to account for a larger share in GWM’s total sales volume. We estimate that GWM’s GM will recover from the low point of 16% in 3Q17 to 20% in 4Q17; its full-year net profit – factoring in increased marketing expense – will be around Rmb4.8bn in 2017.

We expect GWM’s sales volume to top around 1.25mn units in 2018; of which sales of WEY models, new H6, M6, 2018 version H6 and H2 will reach 300,000, 250,000, 250,000 and 200,000 units. We expect GWM’s GM to exceed 20% and its earnings to exceed Rmb8bn in 2018.

Figure 10: Net profit estimation

4Q17 Net Profit

Sales volume (thd units)

(Rmb mn) 300 330 350 380 400

18% 1,080 1,170 1,260 1,350 1,440

19% 1,350 1,463 1,575 1,688 1,800

Gross margin 20% 1,620 1,755 1,890 2,025 2,160

21% 1,890 2,048 2,205 2,363 2,520

22% 2,160 2,340 2,520 2,700 2,880

2017 Net Profit

Sales volume (thd units)

(Rmb mn) 300 330 350 380 400

18% 3,959 4,049 4,139 4,229 4,319

19% 4,229 4,342 4,454 4,567 4,679

Gross margin 20% 4,499 4,634 4,769 4,904 5,039

21% 4,769 4,927 5,084 5,242 5,399

22% 5,039 5,219 5,399 5,579 5,759

2018 Net Profit

Sales volume (mn units)

(Rmb mn) 1.22 1.24 1.25 1.27 1.28

19% 5,795 5,866 5,938 6,009 6,080

20% 6,954 7,040 7,125 7,211 7,296

Gross margin 21% 8,113 8,213 8,313 8,412 8,512

22% 9,272 9,386 9,500 9,614 9,728

23% 10,431 10,559 10,688 10,816 10,944

Source: Company data, CICC Research

Please read carefully the important disclosures at the end of this report 11 CICC Research: January 2, 2018

Figure 11: Revision to earnings forecasts

2017E 2018E 2019 (Rmb mn) Before After Change Before After Change Before After Change

Revenue 98,119 98,119 0.0% 120,466 121,853 1.2% 137,949 137,949 0.0% COGS 79,507 79,035 -0.6% 95,613 95,512 -0.1% 107,685 107,685 0.0% Gross profit 18,613 19,084 2.5% 24,853 26,341 6.0% 30,264 30,264 0.0% Selling expenses 4,415 4,612 4.4% 5,421 5,605 3.4% 6,346 6,346 0.0% G&A 5,397 5,397 0.0% 6,626 6,702 1.2% 7,587 7,587 0.0% Interest expenses 49 49 0.0% 52 52 0.0% 57 57 0.0% PBT 5,509 5,784 5.0% 8,736 9,921 13.6% 11,695 11,695 0.0% Income tax 936 983 5.0% 1,485 1,687 13.6% 1,988 1,988 0.0% Net income 4,572 4,801 5.0% 7,251 8,235 13.6% 9,707 9,707 0.0% EPS (Rmb) 0.50 0.53 5.0% 0.79 0.90 13.6% 1.06 1.06 0.0%

Source: Company data, CICC Research

Figure 12: P/E and P/B

PE Band PB Band

Great Wall Motor 3x 8x 13x 18x Great Wall Motor 0.6x 1.4x 2.2x 3x

(HK$) 30 25 (HK$)

25 20

20 15 15 10 10

5 5

0 0 2005 2007 2009 2011 2013 2015 2017 2005 2007 2009 2011 2013 2015 2017

Source: Wind Info, CICC Research

Please read carefully the important disclosures at the end of this report 12 CICC Research: January 2, 2018

Figure 13: Valuation of comparable companies

Company Category Price Market Cap P/E P/B EV/EBITDA

2018/1/1 US$ mn 16A 17E 18E 16A 17E 18E 16A 17E 18E

China A-Share Listcos CICC Coverage Chang'an Auto A PV 12.60 9,288 5.9 7.6 7.9 1.8 1.2 1.1 38.3 41.2 38.8 Great Wall Motor PV 11.49 16,096 9.9 21.8 12.7 2.2 2.1 1.9 6.9 11.6 7.6 SAIC Motor PV 32.04 57,453 11.7 10.6 9.8 2.0 1.8 1.7 11.6 10.5 9.4 Jianghuai Auto PV/CV 9.46 2,749 15.4 15.3 12.3 1.3 1.2 1.1 14.1 11.8 11.1 Weichai Power A Parts/CV 8.34 10,237 23.8 9.2 8.5 1.1 1.8 1.6 12.4 9.2 8.9 CNHTC Jinan Truck CV 17.43 1,795 26.4 11.1 10.8 1.6 2.0 1.8 31.4 12.8 12.6 Yutong Bus CV 24.07 8,179 15.0 13.7 12.4 4.1 3.8 3.5 12.6 10.8 10.1 King Long Motor CV 13.03 1,213 14.8 33.4 18.4 1.8 2.1 1.9 20.5 33.9 22.8 BAIC Foton Motor CV/PV 2.81 2,877 46.8 20.1 18.7 1.0 1.0 0.9 17.6 14.5 14.4 Jiangling Motor CV/PV 16.12 2,136 6.3 10.8 8.4 1.2 1.1 1.0 4.2 5.5 4.6 Huayu Automotive Parts 29.69 14,366 16.3 12.2 11.2 2.5 2.3 2.1 14.8 9.6 8.9 Fuyao Glass Parts 29.00 11,166 16.5 21.6 17.0 3.8 3.7 3.4 22.1 14.3 12.1 Zhejiang Yinlun Parts 9.80 1,205 7.7 24.0 17.3 3.1 2.9 2.5 19.1 16.8 13.0 Weifu Hi-tech Parts 24.00 3,716 16.0 11.2 10.1 1.9 1.7 1.5 12.7 9.1 8.3 GAC PV 24.66 27,563 28.7 16.0 12.5 4.1 3.4 2.8 18.2 10.7 8.5 Joyson Electronics Parts 32.87 4,789 56.7 25.1 22.4 1.8 2.3 2.1 19.5 11.3 10.4 Wanfeng Auto Wheel Parts 17.90 6,008 33.8 26.7 24.5 8.0 5.1 4.2 36.9 20.4 19.1 Locin Motor Parts 7.02 2,277 7.6 14.6 13.2 1.1 2.1 1.9 12.2 11.4 10.3 Shuanglin Parts 15.66 963 18.9 14.8 11.4 2.5 2.1 1.8 12.8 10.5 9.1 Asia-Pacific Mechanical & Electronic Parts 8.98 1,017 47.3 52.8 35.9 2.6 2.5 2.3 26.9 25.1 19.8 Dayang Motor Parts 6.97 2,535 31.7 27.9 23.2 1.9 1.8 1.6 23.9 19.7 17.0 Pacific Precision Forging Parts 14.99 932 31.9 23.9 18.9 4.7 3.6 3.1 24.0 14.5 11.8 ZYNP Parts 9.00 838 25.0 18.0 15.8 2.6 2.2 2.0 18.1 13.9 12.4 Xinzhi Motor Parts 27.20 1,670 47.1 38.9 32.0 6.4 5.8 5.1 36.3 30.2 24.7 Ningbo Huaxiang Electronic Parts 23.80 2,287 17.6 14.9 13.3 2.4 2.1 1.8 11.6 9.4 8.9 DF Electronic Technology Parts 11.99 577 32.2 25.0 22.6 3.3 3.0 2.7 12.8 10.9 10.2 Tianrun Crankshaft Parts 5.72 988 33.1 23.8 10.8 1.4 1.7 0.8 19.4 13.4 12.1 Fulin P.M. Parts 17.67 1,383 39.3 17.5 13.8 2.6 2.3 2.1 30.1 13.7 10.8 Xingyu Automotive Lighting Parts 49.50 2,098 39.0 30.5 24.2 3.6 3.4 3.2 28.8 23.5 19.5 Aotecar New Energy Technology Parts 4.04 1,942 10.1 25.3 23.8 0.9 2.4 2.2 19.8 14.4 12.5 WLY Parts 10.50 2,176 45.4 17.9 15.0 2.5 2.2 2.0 22.0 11.0 9.4 Tuopu Parts 24.74 2,763 29.2 21.9 17.7 5.3 4.2 3.6 23.0 17.5 14.4 Wind Consensus Dongfeng Automobile CV 5.85 1,796 53.5 27.2 14.9 1.8 1.6 1.4 33.4 n.a. n.a. FAWAY Parts 16.51 1,072 16.3 11.4 9.5 1.6 1.5 1.4 9.6 8.5 7.1 Wuhu Yaxia Automobile Dealer 3.98 501 49.6 n.a. n.a. 1.8 n.a. n.a. 24.8 n.a. n.a. Median Median 24.9 20.8 15.0 1.9 2.1 1.9 18.6 13.1 11.2

China B-Share Listcos CICC Coverage HK$ Chang'an B PV 8.60 4,417 3.3 4.3 4.5 0.8 0.7 0.6 28.1 30.2 28.5 Weifu Hi-tech B Parts 16.71 1,803 10.2 7.6 6.9 1.3 1.1 1.0 6.8 5.2 4.9

HK Listcos CICC Coverage HK$ Brilliance Auto PV 20.15 13,014 24.0 18.1 11.7 3.8 3.1 2.5 28.8 15.7 11.3 Geely Auto PV 26.60 30,545 39.4 18.4 13.2 8.2 5.6 4.0 24.7 11.6 8.1 GAC PV 18.00 16,780 17.5 9.9 7.6 2.5 2.1 1.7 16.7 9.8 7.8 Dongfeng Motor Group PV/CV 9.34 10,301 5.0 4.8 4.4 0.6 0.6 0.5 4.6 3.6 3.4 Great Wall Motor PV/CV 8.80 10,282 6.3 14.6 8.2 1.4 1.4 1.2 7.3 7.6 4.8 Weichai Power H Parts/CV 8.62 8,824 20.5 10.4 9.5 0.9 1.6 1.4 8.0 5.0 4.8 Sinotruk CV 8.80 3,110 38.1 8.8 8.8 1.0 0.9 0.8 11.4 3.9 3.9 Minth Group Parts 47.05 6,869 25.8 21.2 16.6 4.2 3.7 3.1 21.2 14.1 11.0 Fuyao Glass Parts 32.35 10,388 21.5 20.2 15.4 3.7 3.5 3.1 6.0 12.7 10.7 Zhongsheng Holdings Dealer 17.30 5,021 17.6 10.4 8.1 2.3 2.1 1.7 21.1 4.8 4.0 Zhengtong Auto Dealer 7.71 2,236 29.5 12.6 8.8 1.6 1.4 1.3 16.7 7.5 5.4 Harmony Auto Dealer 5.60 1,103 n.a. 13.0 11.7 1.4 1.2 1.1 28.4 6.5 5.9 Yonda Auto Dealer 8.94 2,099 16.1 8.9 7.5 2.1 2.0 1.6 8.8 4.9 4.2 Grand Baoxin Auto Dealer 3.90 1,416 20.3 10.2 8.3 1.7 1.5 1.3 6.4 4.0 3.4 Wind Consensus DCH Holdings Dealer 3.61 854 12.2 6.0 n.a. 0.7 0.5 n.a. 2.6 2.4 n.a. Median Median 20.3 10.3 8.3 1.7 1.6 1.3 10.1 5.7 4.8 Source: Wind Info, CICC Research

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