x Country 12 February 2020 Great Wall Motor (2333 HK) Share price (12 Feb): HKD5.67 12-mth rating: Outperform (2) Consumer Discretionary: China Softness in January sales MEMO Kelvin Lau Summary: Great Wall Motor (GWM) registered a volume decline of 28% YoY to 80k (852) 2848 4467 units in January, after declines of 21% in December and 13% in November. This was
[email protected] especially due to weakness in the SUV segment (-32% YoY) and sedan segment (-56%) despite strong growth for pick-ups (+17%). We think the sales weakness was due to the earlier Lunar New Year holiday in 2020 (25 January vs. 5 February in 2019). We are cautious on GWM’s February sales number amid the current coronavirus outbreak. Analysis Haval brand sales fell significantly– In January, the total sales volume for the Haval brand fell significantly by 32% YoY, to 59k units, after declines of 27% in December and 22% in November. While sales for the key model M6 remained solid at 14,291 units (+18% YoY), F7 and H6 showed softness at 10,193 units (-32% YoY) and 26,414 units (-41% YoY) respectively. Further, sales for H2, H4, and F5 declined by 60%, 19% and 68% YoY, respectively to 2011, 1294 and 1630 units, respectively. However, H9 showed robust growth of 50% YoY to 1237 units. WEY brand sales fell further– The total sales volume for the WEY brand fell by 37% YoY in January to 6,395 units, vs. declines of 20% for December and 8% for November. Sales for WEY VV5, VV6 and VV7 dropped by 18%, 46% and 24% YoY, respectively, to 1,724, 3,120 and 1,551 units.