Se Source: the Company,the Source: Guotai International. Junan

52 Weeks hi 52 Weeks vol. average 3 month m) (HK$ cap. Market (m) issue in Shares 201 201 201 201 201 12/31 年结 Year End       e 公司报告： Company Report:

th 好于预期的 Surprises Margin Gross 8 7 6 5 4 e A A F F F las

launches of Haval SUV Haval of launches i offer and through share market its defend to able We figure sales main solid The segment. its in welcoming the Aug expected up revise We andbenefit from better the as 23.9% compared to to 1.1ppts decreased margin Gross growth. SUV strong by driven yoy, 8.8% expectations. our than better but consensus, 1 2016 多哈弗 更多折扣优惠或其他推广 我们 慢 可 月销量同比增长 因预期更好 占比及得益于较好的产能利用率 个百分点 的预期 2016 2017PER,1. attractive, mproving H 毛利率 和哈弗 t 16

pag 上调 . 2016 sales up sales 2016 . upgrade aa H6 Haval gh/low (HK$) 52 (HK$) gh/low 上半年 年市盈率和 tain tain its market shareand slowdown decreasethe grossin profit margin.

。 长城汽车 SUV e poi u 44 yy o M 496 mn, 4,926 RMB to yoy 4.4% up profit net e C 总体汽车销量同比增长 至 的 投资评级为 RB m) (RMB H7 fo Turnover ompany sold more Haval H6 Haval more sold ompany ing

下降 的毛利率 113,218 23.9% and r

净利润同比增长 etr rs mri perc margin gross better 99,922 99,922 88,703 76,033 62,599 rdc mx and mix product 车型推出

总股数

在其细分市场 disclaimer

3 市值

收入 毛利率， 6 our investment rating investmentour , 速度 oe ae discount sales more 个月平均成交股数

2 x2016 PBR and 1. we

8.0 is P (ai) y 57 t 17 to 15.7% by (basic) EPS 5 ; ( 但是下降的幅度低于我们的预期 .4

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。 ， “ (HK$ m)

ihy eadd y h mre ad h Hvl H7 Haval the and market the by regarded highly

revise up ％ 倍 (m) 买入 。目前 周高

我们 1H15; ，增长势 2 2017

及 5

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4.4

我们预计长城汽车能够通过：

年市盈率， ）提高 受欢迎

2016 上调 The current valuation of the C the of valuation current The however ) 9,061 8,973 8,653 8,059 8,042

。

8.8 TP ％至 头

相对有吸引力， utilization. pcfctos sc ta w wud e more see would we that such specifications,

持续。我们认为

％， -

(‘000) . to 2018

产品结构和规格 。稳 4,926 We believe We 至

4 HK$ 受 x2017 PBR. , s 1. 建 强劲的 “ 年

the decrease is less than our expectation

买入 6 每股净利 的销售数字 to 百万元 r te frs f promotion of forms other or 9.29

基本每股收益

entage 倍 (RMB) vehicles

0.993 0.983 0.948 0.883 0.881

“ EPS 1) 2016 Buy SUV , , representing 目标价上调至 人民币 ”

哈弗系列，尤其是哈弗 l ，因高 imiting growth of its selling price selling its of growth imiting that

来捍卫自己的市场份额， .0 ”. ”. .

年

增长 每股净利变动

% 可令

rwh oetm nat as intact momentum Growth 市净率和

We expect We which ha which th 1

, ， 利润率 上 1 Overall vehicle sales grew sales vehicle Overall uig 2016 during 1 所带动

e Haval Series, especiallySeries, Haval e . 长城汽车维持其市场份额和 与市场预期一致，但 ( ）限制了其售价的增长 s 22

调 Upgrade to Upgrade 02333 HK (

△ 0 EPS 34,346.4 72, (2.2) hud all should 15.7 9.29

9,127.3 1.0 3.7 7.4 0.2 %) / n ie ih market with line in 的

1. 。毛利率 8.3 4.94 6 ompany is relatively is ompany ve 5 哈弗

4 ％ 3

港元，相当于 倍 x 2016 PER, that

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2017 H6 .0 higher -

较同期 2 H6 ow GWM willGWM ％。 市盈率 有较高的销售 018 PER

年市净率。 并 深受市场 FY1 FY1 (%) Free float Major shareholder

and , ) 6.8 6.9 7.0 7.1 7. W to GWM (x) 2016

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(RMB) 6. 5. 4.908 4.206 3.672 ‘ B 资产 自由流通比率 Buy 4 6 PS 05 59

Source (40.0) (30.0) (20.0) (10.0) 大股东 股价表现 Stock performance 10.0 20.0 30.0 40.0 50.0

平均股价（港元） Avg. price(HK$) share 相对恒指变动 % HS to Rel. index 绝对变动 Abs.% 股价变动 Share Price Change in Shareprice from Revised 6 评级： Rating: 0.0 - Sep-15 18m TP

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g Dec-15

目标价

原 股价： / , 股东资金 Guota

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i (RMB) Juna : 0.246 0.233 0.245 0.190 0.267

DPS :

n (%) 1

Mar-16

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e Cash Net 马守彰 HK$ $ $ Sep-16

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Company Report Great Wall Motor 长城汽车 (02333 HK) GTJA Research 国泰君安研究

Se International Junan Guotai Company, Source: the Mar Operating Keyfinancials RMB(in mn, except per share item Table ex and than higher respectively Cost depreciation revenue why expected de The than slower However, 1H15. to compared 1.1ppts of decrease a 1H16, in 25.9% was margin Com the units 454,813 to 4,926 million, in line with market consensus 1 Company”) “the or (“GWM” Motor’s Wall Great 1H16 Effectivetax rate A Selling costs revenue to Netprofit margin(%) OP Grossprofit margin(%) ASP(RMB) Export DomesticSales Salesvolume(unit) Basic EPS(RMB) Minorityinterest Netprofit attributable parent to Incometax expenses Profitbefore taxation Operatingprofit Financeexpenses (income) / Administrative expensesSelling Businesstax and surcharges Grossprofit of Cost sales Total e pense rise more thanrevenue more rise due to the pense expansion Xushui on plant.

dmin costs revenue to ginsand ratios (%) Operatingincome th returned s are a are s m e - 1 r las argin(%)

evenue : Summary 1 of

Results Review pany to grow to pany t

d pag ata

the overall increase in revenue. This is This revenue. in increase overall the

. and amortization are expense shared

slight e customer

On selling expense, we noticed after noticed we expense, selling On nrae more increase

expenses fo

, while revenue up 12.2% yoy to RMB 41,672 million. S million. 41,672 RMB to yoy 12.2% revenueup while , r

disclaimer

concern as we saw selling costs / admin costs to revenue ratio increase 0.2 ppts and 0.1 ppts 0.1 and ppts 0.2 increase ratio revenue to costs admin / costs selling saw we as concern

but dragged by sedan and pick and sedan by dragged but

s

H

hc is which 1

6

FinancialResult crease is due to due to higher 1) crease salesis

hn volume than s ) buddle

.

with the vehicle sales vehicle the with

growth s

448,063 454,813 but better than our expectations

of GWM 91,624 10,774 30,898 41,601 41,672 20.1% 11.8% 14.0% 25.9% 6,750 4,926 5,920 5,814 1,907 1,402 1,537 1H16 4.6% 3.4%

0.54 992 with more products as rate utilization in 1H16 ) probably yoy, 3.5% by increased ASP blended that see we that such , - 35 sales services expenses incre expenses services sales H16 net profit attributable to parent to attributable profit net H16 0 -

up trucks which decreased 20.4% and 3.9% respectively.3.9% and 20.4% decreased which trucks up

due to GMW has GMW to due proportion 405,733 417 37,145 88,890 12,142 10,016 27,129 37,115 21.2% 12.7% 15.1% 27.0% 4,717 1,00 5,718 5,615 1,657 1,193 1,323 1H15 4.5% 3.2% ,875 0.52 . In administrative expenses, d expenses, administrative In . 219 0 0

trong SUV segment SUV trong

of

Haval H6 which has a a margin which higher H6 Haval has - - 12.2% 44.4% 10.4% 84.0% 15.1% 17.6% 16.2% 13.9% 12.1% - 3.1% 8.8% 4.4 4.4% 0.8% 3.5% 3.6% 7.6% (1.1) (0.9) (1.2) (1.1) offered yoy n.a. ppt 0.1 0.2 % .

the In 1H16, overall sales volume up 8.8% yoy

ased 27.2% to RMB 542 million which is which million 542 RMB to 27.2% ased

decrease is less than our expectation. our than less is decrease more 217,804 221,387 20,792 15,310 20,757 93,919 16.8% 12.2% 13.9% 26.4%

3,583 2,529 2,957 2,891 5,483 2Q16

(up 13.2% yoy) 13.2% (up 4.7% 3.7% company after sales services for their new their for services sales after 0.28 426 974 775 769 (1) (3) epreciation wa

s better.s

up 230,259 233,426 20,880 89,449 15,588 20,8 23.6% 11.5% 14.0% 25.3% 3,167 2,396 2,963 2,923 5,292 1Q16 4.5% 3.0% 4.4 0.26

566 932 628 769 continue and

37 44 % yoy % 1

(also

amortization amortization Gross profit Gross Page Page d explains to RMB to

-

106.8% and 2) 2) and to lead to - 2 13.1% 24.7% 23.4% ------of of 5.0% 5.4% 5.2% 5.7% 5.6% 0.2% 1.1% 4.5% 0.1% 3.6% 1.8% 0.4% 0.4% (6.8) (0.1) qoq n.a. ppt 0.2 0.7 0.7 1.0 9

,

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 1,000,000 1,000,000 1,500,000 2,000,000 2,500,000 Se Source: Figure JunanInternational Guotai Source: theCompany, Total Pick Sedan SUV Table though share, market margi its defend able are GWM that confident are we Therefore, months. the over shuffle to Haval H6 is still able the to due 54.4%, to 71.4% from down shrinking, are brands brand SUV 10 top the excessive risk to the Company Company) the to sales in share market sales, GMW to Ma support provide to continue policy tax purchase the C30, and H6 Haval beneficiary. clear a certainly whole The 950,000 units,of 12.2% implying a growth. earlier cities relax government to due probably is picture encouraging The 2016. shows waitingfour also for are customer optimi are 170,000 RMB to 150,000 RMB around moment the at long is time waiting The 2016. in recorded significant growth of represents of growth yoy with the on Riding Sales Analysis 500,000 500,000 e

Aug Haval HavalH6 kt hr hik u t oe rdcs r itoue i ti ya, oh rm ef we ad oeg bad. GMW brands. foreign and owned self from both year, this in introduced are products more to due shrinks share rket

th

-

uptruck e n. - 0

. 2016. . the Company the 2 - upturning las 1 : GWM

- : SalesSales and PV Growth t others

Aug-10 model this at stic pag 62 industry

Dec-10 this yea . e Although this model model this Although 3 SUV yoy (RHS) SUV yoy vol. PV sales solid fo

Apr-11 Aug

% % of management target. Strong sales continued to be driven by Haval H6, Aug r International Guotai Junan , tr Aug-11 disclaimer end May.end since by recording 2016, . 20 .

Dec-11 was 10. 2016 . r, positive iswhich a

25 to maintain its position and first half first is is

, which repre which , Apr-12

.4%. 16 Sales16 Summary which ha which Aug-12 gaining

Dec-12

YTD sales accumulated to to accumulated sales YTD seily hn h lne wel ae aa HL s xetd o i te akt n 4Q16 in market the hit to expected is H7L Haval base wheel longer the when especially 36 Apr-13 ’

performance s sales due to its popularity in China Since the Since Aug

23,354 40,629 73,079 63,983 .2% .2% in from from

Aug-13 ve 7,674 1,422 - wheel drive version for better for version wheel off drive road experience received 1

Dec-13 - sents roughly 30% of the market the of 30% roughly sents . been the top SUV product in China for over 30 months 30 over for China in product SUV top the been 16 % (Jan. 2015: 14.4%).2015: (Jan. %

Apr-14 (RHS) yoy GWM (RHS) PV yoy the

.

Aug

which has which

Aug-14 in China

to the pick the to displacement

Dec-14 year prior from effect base low . 2016. New model Haval H7 was launched in Apr. 2016 and recorded

lukewarm demand at the at demand lukewarm , the momentum continued in in continued momentumthe ,

Apr-15 as the Company takes time on the quality control quality the on time takes Company the as Aug-15 without shrinking of its top10 SUV share, while other Aug

Dec-15 58,270 22,047 27,202 49,249 limited 6,407 2,614 -

Apr-16 truckup market. - 15 positive

Aug-16

of 50% 0% - 100% 150% 50%

direct no or 592 most of its products are below 1.6L, such as Haval H1, Haval H2, Haval H1, Haval as such 1.6L, below are products its of most Although Although

, growth in the last last the growth in more aggressive more 30 Note: inner ring: YTD Jul. 2016; outer ring: 2015 ring: outer 2016; ring: Jul. inner YTD Note: Source: Figure 6

-

nt in units 25.4% 19.8% 45.6% 49.4% 29.9% and the upgrade of Haval H6 Coupe version 5.9% GWM es YoY W the Company the beginning (see figure 2), we see that see we 2), figure (see competition from competition - 2 e believe GWM could achieve the management target management e couldthe achieve believe GWM

12.5% : the driving restriction of pick of restriction driving the

Top SUV 10 composition

s heavily rely 22.7% Aug

8.0% A and the purchase tax policy purchase cutthe and ug

SUV investment from other brands. other from investment SUV , g , four . 2016, achieved yoy growth of of growth yoy achieved 2016, . , Guotai Junan International Guotai Junan , . 2016. . 8.9% 14.0% rowth of this model model this of rowth 592,306 182,742 319,961 502,703 8.1% . On the other hand, sales of pick salesOn theof . hand, other YTD16 months and hit months hit and 67,812 21,791 other o

n T otal vehicle sales was vehicle sales otal

Haval H6 Haval up

despite , we believe this should not pose not should this believe we ,

Chinese 49 . 54.4% 4 market . The . 71.4% % % yoy, whi

19 facing fierce competition. fierce facing

521,050 201,774 222,296 424,070 sale

position YTD15 -

. 64,758 32,222 up truck in certain pilot pilot certain in truck up started to pick up up pick to started

self owned brand owned self . 8 Haval Haval % yoy % growth in s share of self owned self of share

(contributed 56.7%(contributed

s

le le Haval H9 also

ha Japanese American German Self owned H7 is priced at priced is H7 , and GWM is GWM and , . By a

sacrificing its sacrificing 73 ve 16 Page Page 13 ,

continued 079 , However, 620 - . nalysing 7 up truckup and % - 3 13.7% 32.4% 43.9% 18.5% s -

units, in Jul in of of 4.7% 9.4% units Aug We . YoY

and 9

’ s .

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 100,000 100,000 Se to respectively. 2018 2016 improve utilization which as such mix product and we should see introduced believe (25. margin profit gross Although competition. stiff anticipated despite pace slower margin Gross pick expect we therefore half trucks second in low is base year prior As 2016. Jul. in positive turned already has growth YTD Pick foreign other H9. b / We we with optimistic the sales are 39,000 units pe SUV: 2 increase to expected is volume sales Vehicle Earning Source: Figure Source: 25,000 25,000 50,000 75,000 100% Figure 2.3 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% e

- th % - up trucks: e We We , the Company the the Company the should - las respectively 5 that - 3 Aug 10 : Sales t

have : Dec 14 Dec pag 11.4% 20.0% 51.2% eliev by both self s 3.9% 0.0% 4.7% Dec 10 Haval this margin is not sustainable due to due sustainable not is margin this

premium Forecast e continue this trend this continue Apr 11

: fo e the price range of H7 ofrange price thee r month (2015: average of 31,000 units), translating to a mainly upgraded sales for Haval for sales upgraded mainly

With its leading position and strategy to defend its mar its defend to strategy and position leading its With We upgradedWe sales to positive growth due to the relaxation of driving restriction in certain pilo r International Guotai Junan , International Guotai Junan , Aug 11 Growth

Series Series disclaimer Growth of Haval Series, yoy Series, of Haval Growth % sales, GWM of total Series Haval Series of Haval Sales volume lowering lowering Dec 11 ,

Haval H6 Haval during 2016 during

Apr 12 - brands. owned brand and foreign brands Dec 15 Dec Aug 12 13.1% 22.3% 47.5% 13.1% should 0.0% 1.2% 2.9% of Havalof SUV Series product composition

Dec 12

GPM

Apr 13

Coupe and H7 which has a higher ASP higher a has which H7 and Coupe for H7for wouldadd a total of 32,000

h Aug 13

in 2016.

elp in in the future

- Dec 13 2018.

maintain margin

Apr 14 2016 YTD . . 18.6% 63.5%

6.1% 2.4% 7.0% 1.0% 1.4% position themselves with less competition, while the price forprice thewhile competition, less with themselves position Aug 14

O

Dec 14 ur ur isforecast Apr 15 .

Nonetheless Aug 15

H

14.5 Dec 15 expected 6 as we believe average car sales for this year could reach an average of average an reach could year this for sales car average believe we as 6 Apr 16 H1 H2 H5 H6 H7 H8 H9 . As a result, w %, Aug 16 0% - 100% 150% 50% , we, believe thatit will be hard for toGWM sustain such high margin 50% based on based on the assumption following key

10.6

, we believe price reduction plans reduction price

10% 15% 20% % and and % 5% Figure Source: Figure Source: Source: 100% 20% 40% 60% 80% 0% for for year current

e e revise up gross profit margin to 24. Aug 10 the Company the the Company the 10.2 - - Dec 10 6 Aug 10 4 full full year

: Share GWM SUVMarket of :Salesof Segmented GWM Contribution the the de than the usual H6 usual the than ket share, GWM’s sales will continue to grow at a at grow to continue will sales GWM’s share, ket Apr 11 Dec 10 % yoy, with gross ma gross yoy, with %

Aug 11 (RHS) sales total to model seller best GWM's (LHS) Share SUV market GWM's (LHS) share market model SUV seller best GWM's Apr 11 crease crease of GPM

Dec 11 SUV , Guotai Junan International Guotai Junan , , Guotai Junan International Guotai Junan , Aug 11 yoy growth of 27.1% for Haval H6. Moreover,

in the future the in Apr 12 and offsetand should the Dec 11 9 Aug 12 %) Apr 12 Dec 12 truck Pickup

in 1H16 in Aug 12 Apr 13

, and , Dec 12 Aug 13

will be Apr 13 . As more SUV model SUV more As . Dec 13 s:

expected volume pick up to to up pick volume expected Aug 13 is

rgin of 2 of rgin Apr 14 Sedan

better than expected, we we expected, than better Dec 13 H8 an H8 Aug 14 benign . .

Dec 14 Apr 14 loss 2

%, 23. Apr 15 Aug 14 d 4 MPV

H9 due to improving . of salesfromH8 Aug 15 Dec 14 2 t cities in China. %, 2 %, Dec 15 Apr 15 5 overlap

%, 22.

Page Page Apr 16 Aug 15 3.

s Aug 16 5 Dec 15 0.0% 100.0% 50.0%

% and and % will be be will 4 s 3

Apr 16 of of

% % in with - 9 up Aug 16

s

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 1,000,000 1,000,000 1,500,000 Se So Figure Source: EPS Net Profitfrom operation Gross Revenue Financials Total Sedan SUV Pick Vehiclesales Table 500,000 500,000

urce: urce: e

i - ,basic th

ncome(Loss)

upTruck - e -

p the Company the 3 the Company the - rofit las 7 :

: Sales Forecast Revision Forecast t 27.3% ,RMB mn

2011 (RMB) pag m

, units , argin e fo 34.3% 2012

Total GWM sales volume (unit) volume sales GWM Total r International Guotai Junan , International Guotai Junan , GrowthGWMof andSales Forecast

disclaimer

24.0% 2013

969,197 828,556 105,262 10,098 88,703 35,379 2016F 24.2% 0.948 8,653

- 2014 4.9%

s

15.5%

1,071,948 2015 941,659 110, New 10,404 99,922 20,059 2017F 23.5% 0.983 8,973 14.5% 2016F 229 . .

10.6% 2017F 1,181,21 1,057,348 113,218 111,545 10,523 12,317 22.3% 2018F 0.993 9,061 yoy 10.2% 2018F 0

0% - 10% 20% 30% 40%

10%

901,283 764,146 82,487 40,559 96,293

23.2% 2016F 0.819 8,558 7,478 Figure Source: Source: 100,000 100,000 50,000 50,000 60,000 70,000 80,000 90,000

the Company the - 944,794 834,372 8 Old 88,069 24,348 85,943 : ASP GWM of Margin Profit Gross and 23.0% 2017F 24.9% 0.840 7,667 8,718 2011

26.9% 2012

ASP (RMB/unit)

, Guotai Junan International Guotai Junan ,

996,178 903,384 95,483 16,033 76,685 22.3% 2018F 28.6% 0.849 7,745 8,847 2013

27.7% 2014

25.2% 2015 - 1.0 ppt1.0 15.7% 15.7% 18.0% 12.8% 2016F 7.5% 7.5% 8.4% 9.3% Gross profit (%) profit Gross 24.2% 2016F .

Changes

23.5% 2017F - 0.5 ppt0.5 17.0% 17.0% 19.3% 13.5% 13.5% 17.6% 12.9% 28.3% 2017F 22.3% 2018F

Page Page

- 5 0.0 pp0.0 15% 20% 25% 30% 17.0% 17.0% 18.9% 18.6% 18.6% 23.2% 17.0% 45.5% 2018F of of 9

t

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 11 15 Se Source: Figure 1. PBR and our launches more see would we that offer and price is We Valuation 3 7 e supported by its Haval se Haval its by supported

upgrade th Sep-11 rating investment the (X) e Bloomberg - las Dec-11 9 : GWM of PERBand t Mar-12 pag PE (historical high) PE (historical PE (2016F) PE band Jun-12 4 x

our investmentour rating e 201 ing

, Guotai Junan International. , Guotai Junan Sep-12 fo r

Dec-12 disclaimer 7 more sales discount sales more

Mar-13 PBR. Jun-13

Sep-13 to

ries, especially its Haval H6. We believe GWM will deliver through deliver will GWM believe H6. We Haval its especially ries, Dec-13

“ Buy Mar-14

Jun-14 ”, of Haval SUV Haval of

Sep-14 and

to PE (historical low) PE (historical PE (2017F) mean) PE (historical Dec-14 s

“ revise up revise or other forms of promotion of forms other or Mar-15 Buy Jun-15 ”. ”. Sep-15 We expect We s

Dec-15 . TP Mar-16 w attractive; relatively is Company the of valuation current The

Jun-16 to

Sep-16 HK$

that 9.29 GWM willGWM Figure Source: Source: 0 1 2 3 4 5 , representing ,

Sep-11 and , (X) Bloomberg -

Dec-11 10

be able to be to able

:GWMof PBRBand

Mar-12 2) PB (historical high) PB (historical PB (2016F) PB band Jun-12 i mproving mproving

, Guotai Junan International. , Guotai Junan Sep-12 8.3 Dec-12 x 201 x Mar-13 defend Jun-13 product product

Sep-13 6

PER, Dec-13 its share market

Mar-14 1)

mix and and mix 8.0 l

Jun-14 imiting

Sep-14 201 x

PB (historical low) PB (historical PB (2017F) mean) PB (historical Dec-14 specifications, such specifications, Mar-15 selling its of growth 7

as as Jun-15 PER,

Sep-15 the Company

Page Page Dec-15 e 1. upgrade Mar-16 6 x 6 Jun-16

201 of of Sep-16 9

6

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 Se Table Guangzhou Auto Guangzhou Ltd Byd Co Motor Qingling Mot Great Wall China Brilliance Geely Automobile Motor Dongfeng Company Global Weighted Average Weighted Global Average Simple Global Weighted Average Average Simple Ltd Tata Steel C Motors General Volvo Ab Renault Sa Man Se Daimler Ag Wk Bayer Motoren Ag Volkswagen Paccar Inc Intl Navistar Co Ford Motor Motor Hyundai Weighted Average Average Simple Isuzu Motors Ltd Hino Motors Suzuki Motor Indus Heavy Fuji Heavy Mitsubishi Ma Co Honda Motor Motor Toyota Co Motor Nissan Weighted Average Average Simple Bus Zhongtong Yax Yangzhou Jiangling Moto Lo Xiamen King Yut Zhengzhou T Cnhtc Jinan Anhui Jianghua Beiqi Foton Power Weichai Chan Chongqing Motor Saic CoLtd Faw Car Mo Great Wall Auto Dongfeng Weighted Average Average Simple Sin Power Weichai Motor Baic Source: the Company,the Source: International. Guotai Junan e zda zda Motor otruk Hk Ltd otruk Hk th e - - 4 B las

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e fo r disclaimer 7203 7203 JP 7201 JP 000957 CH 600213 CH 000550 CH 600686 CH 600066 CH 000951 CH 600418 CH 600166 CH 000338 CH 000625 CH 600104 CH 000800 CH 601633 CH 600006 CH 3808 HK 2338 HK 1958 HK 2238 HK 1211 HK 1122 HK 2333 HK 1114 HK HK175 HK489 Stock Code INTATA USGM VOLVB SS RNO FP MAN GR DAI GR GR BMW GR VOW US PCAR NAV US F US 00 7202 JP 7205 JP 7269 JP 7270 JP 7011 JT 7261 JP 7267 JP 5380 5380 KS

HKD Currency INR USD SEK EUR EUR EUR EUR EUR USD USD USD KRW JPY JPY JPY JPY JPY JPY JPY JPY JPY CNY CNY CNY CNY CNY CNY CNY CNY CNY CNY CNY CNY CNY CNY HKD HKD HKD HKD HKD HKD HKD HKD HKD

137,000.00 137,000.00

Last price 1,226.50 1,095.00 3,461.00 3,812.00 1,601.50 2,983.50 5,866.00 1,003.00 359.75 128.52 440.00 22.19 30.97 98.65 70.49 92.79 61.28 74.19 56.57 19.44 19.06 16.15 29.42 12.88 13.41 15.59 21.37 10.79 10.19 10.28 10.78 53.30 12.11 11.95

2.72 8.90 7.90 4.14 8.26 2.43 7.96 9.12 6.97 8.11

15A 166.4 503.7 14.3 29.0 16.9 17.1 10.7 90.9 10.1 10.5 12.9 13.8 13.2 20.9 20.1 13.8 12.2 42.2 69.9 15.5 19.8 14.1 27.4 24.7 48.7 20.5 51.5 15.7 15.6 36.7 20.5 14.8 31.9 10.6 11.6 11.5 11.9 11.2 11.7 n.a. 6.6 8.9 9.9 7.2 7.4 6.2 9.2 8.8 6.7 7.9 8.6 8.9 7.4 7.5 6.5

317.4 16F 25.9 18.2 5 18.6 10 27.2 13.2 12.9 24.5 18.8 10.9 25.7 10.4 10.6 23.3 13.3 15.1 57.1 14.2 13.2 14.7 29.9 43.7 17.2 10.8 14.9 12.3 11.3 n.a. n.a. n.a. 4.4 6.4 7.5 8.5 7.0 7.2 4.9 9.5 5.3 5.9 7.7 7.6 7.5 6.7 5.5 8.5 9.3 8.6 8.4 7.2 6.0 9.8 7.9 7.5 .3

PE

469.1 17F 20.4 14.9 38.9 15.6 22.6 19.2 15.8 21.8 10.4 25.7 12.9 15.9 13.8 36.5 15.5 29.4 10.5 10.7 14.0 13.2 10.8 10.8 35.2 52.9 13.0 10.7 11.5 11.2 11.2 11.8 11.5 n.a. 6.0 7.1 9.5 9.0 7.6 6.8 9.3 6.9 4.7 8.7 5.4 5.4 7.3 7.6 6.1 6.7 5.4 8.9 9.8 8.9 7.6 8.6

431.6 15.9 13.0 38.9 13.9 22.6 10.2 10.0 17.1 13.7 18.5 22.4 12.4 14.1 10.3 13.8 32.7 49.0 10.4 10.9 10.4 11.8 18F n.a. n.a. 6.0 6.7 9.6 8.5 6.9 9.9 6.7 7.7 6.8 4.5 9.8 6.9 8.3 9.3 5.6 5.3 7.3 7.7 5.5 6.7 5.1 9.5 9.3 8.0 8.7 9.6 7.2 9.7 9.9 6.8 8.2

50.0 15A n.a. 1.7 2.5 1.1 0.9 1.9 1.3 3.1 1.8 2.8 1.6 1.3 0.4 0.9 1.4 1.0 2.7 0.7 1.5 2.1 1.6 0.9 1.6 2.9 1.4 1.5 1.0 1.3 1.9 1.0 2.5 1.5 1.5 0.8 2.4 2.0 0.5 1.5 1.7 1.8 2.3 1.4 3.0 1.2 1.7 1.0 1.6 1.1 2.6 5.8 3.4 1.6 3.0 3.9

16F n.a. n.a. n.a. 1.8 1.9 1.0 1.1 1.7 1.2 2.0 2.1 2.3 1.6 1.3 0.5 1.1 1.4 1.3 2.6 0.7 1.4 1.7 1.4 0.6 1.2 1.5 1.2 1.4 1.2 1.0 2.3 0.6 2.6 1.2 1.0 0.7 2.7 1.5 0.6 1.1 1.2 1.2 1.4 1.4 2.2 0.8 1.0 0.7 1.0 0.8 2.0 1.9 1.9 1.8 3 .5 .5 PB

17F n.a. n.a. n.a. 1.7 1.8 0.9 1.0 1 1.1 1.9 1.8 2.1 1.4 1.1 0.5 1.0 1.3 1.2 2.3 0.7 1.2 1.5 1.2 0.6 1.2 1.4 1.1 1.3 1.3 0.9 2.1 0.6 2.4 1.1 1.0 0.7 2.3 1.3 0.5 1.1 1.2 1.2 1.4 1.5 2.0 0. 0.9 0.8 1.0 0.8 1.8 1.7 1.7 2.1 3.1 .5 .5 8

18F n.a. n.a. n.a. n.a. 1.6 1.6 0.9 1.0 1.3 1.0 1.8 1.6 1.9 1.3 1.0 0.5 1.0 1.1 1.1 2.1 0.7 1.0 1.3 1.1 0.5 1.0 1.2 0.9 1.0 1.2 0.7 1.9 0.5 1.0 0.9 0.6 1.9 1.1 0.5 1.0 1.1 1.1 1.3 1.4 1.7 0.8 0.8 0.7 1.0 0.8 1.6 1.6 1.5 1.8 2.7

ROE(%)

16F (2.0) 12.7 25.8 16.7 19.9 14.7 12.9 14.2 16.5 20.8 17.0 20.8 12.5 12.9 13.2 14.2 12.9 18.4 16.0 15.2 13.3 20.9 19.8 10.3 13.7 12.1 10.5 21.4 10.7 10.9 17.6 13.9 24.7 19.7 14.5 28.5 11.1 11 11.2 11.4 n.a. n.a. 8.6 2.4 6.7 3.6 7.9 2.7 6.6 6.5 8.1 9.2 6.6 7.3 9.6

.9 .9

D/Y(%)

16F

n.a. n.a. 2.4 2.0 0.7 2.6 5.1 7.1 0.0 3.1 2.3 2.8 1.7 2.2 4.0 4.1 1.0 7.7 1.4 1.3 1.3 3.4 3.7 3.2 4.2 3.6 2.2 5.1 3.4 4.6 3.3 5.6 4.7 2.4 3.2 0.0 5.4 3.5 3.4 3.0 2.7 3.1 1.0 3.8 2.8 2.2 3.0 3.5 4.8 3.3 3.2 0.5 4.3 1.8 5.8

Page Page

EV/EBITDA

7 16F of of

13.0 10.4 12.1 15.6 22.3 10.8 11.7 9 n.a. n.a. n.a. n.a. n.a. n.a. 6.8 6.5 3.9 5.7 8.3 2.4 5.9 2.7 3.6 2.1 1.3 8.8 2.8 7.7 9.4 6.3 4.7 6.2 4.7 4.2 5.1 4.1 7.4 8.5 5.8 6.5 2.9 2.4 7.5 6.1 3.7 8.5 5.9 5.5 9.9 7.4 3.0 3.6 4.5 0.6 4.8 4.9

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 Se atbalance sheet Cash Restrict year the of end the at Free Cash adjustment exchange Foreign of cash Net change of the year beginning the at Free Cash f generated Net cash Others paid Dividends borrowings in Net change Share Issuance activities investing used in Net cash Others entities business other and subsidiaries from Net received/(Paid) on available Net change of PPE from sale Proceeds PPE of Acquisition activities operating from generated Net cash adjustment Other p costs Finance liabilities and assets tax deferred inChange working capital in Changes Investment losses/(gains) Adjustments & Amortization Depreciation Net profits mn) 31 (RMB Dec endYear (RMB) share per Dividend (RMB) EPS Basic to attributable Net profit Net profits before taxation Profit Non Non profit Operating Investment income value fair in changes from Gains/(losses) onassets loss Impairment expenses/incomes Financial exp Administrative expenses Selling surcharges and tax Business profit Gross Operating costs Turnover mn) 31 (RMB Dec endYear Statements Financial Ratios and Source: the Company,the Source: International. Guotai Junan Interest Minority Expenses Taxes e - - operating expenses operating income operating th

ed cash and bank balance bank and ed cash e

las

from other G/L other from t

aid pag

enses

rom financing activities financing rom e

fo equity equity -

for

r

-

sale financia sale disclaimer

shareholders shareholders

Cash Flow Statement Cash Flow l assets l

Income Statement Income

(45,252) (2,423) (1,309) (2,50 (7,210) (7,229) (3,45 (1,599) (3,822) (2,085) (2,282) 62,599 17,347 2014A 2014A

6,096 1,606 8,041 0.267 0.881 8,042 8,041 9,640 9,244 3,394 3,082 5,523 1,210 (18) (14) (48) (41) (32) (44) (72) 313 441 129 (0) (4) 13 26 32 6) 5)

0 0 0 6 0

(56,864)

(3,199) (6,517) (5,857) (1,628) (4,031) (2,842) (2,886) (4,112) 10,034 19,169 76,033 2015A 2015A

1,908 8,060 0.190 0.883 8,059 8,060 9,689 9,280 3,642 1,183 2,458 3,082 (595) (882) (938) (272) (146)

(28) (31) (98) (59) (82) 150 109 163 145 467 (0) (0) 18 45 98 0 1

(67,234)

(2,306) (2,240) (1,898) (4,805) (3,077) (3,367) (7,119) (7,112) 88,703 10,552 10,098 21,469 11,587

2016F 2016F

5,803 1,183 4,619 2,161 2,458 2,172 8,654 0.245 0.948 8,653 8,654 (108) (112) (116) (116) (56) (69)

196 186 527 523 108 116 (2) (2) 50 18 33 26 0 0 1

(76,463) (2,244) (2,127) (8,192) (7,907) (2,388) (1,987) (5,627) (3,509) (3,793) 10,961 10,404 23,459 99,922 2017F 2017F

0.233 0.983 8,973 8,974 4,848 1,183 3,665 4,619 9,481 2,521 8,974

(127) (954) (357) (117) (117) (119) (78) 635 197 149 119 117 (1) (0) (4)

56 19 31 1 0 0

(87,967) 113,218

(2,026) (6,232) (4,045) (4,298) (2,393) (2,247) (5,509) (5,213) 10,523 25,251 12,470 11,088 2018F 2018F

0.246 0.993 9,061 9,063 9,417 1,183 8,233 4,568 3,665 2,769 9,063 (137) (146) (146) ( (131) 389)

(88) 654 131 197 146 194 199 (2) (0) (5) 75 24 34

1 0 0

Deferred income Current Liabilities liabilities Other current Borrowing Short Term payables Salaries payables Tax from customers Advances payables Trade Non Other Investments Deferred Assets Intangible Construction PPE Current Assets Others Prepayments Receivables other andTrade Inventories Cash mn) 31 (RMB Dec endYear days Payable turnover days turnover Receivable days Inventory turnover Analysis Efficiency ratio Quick Cash ratio (x) Interest cover ratio(%) Gearing solvency and Liquidity BPS(%) EPS(%) growth (%) Net profit OP growth(%) growth(%) Rev Analysis Growth ROA(%) ROE(%) Net profit margin(%) OP margin(%) EBITDAR(%) profit margin(%) Gross Analysis Profitability (RMB) BPS Total Equity Equity Shareholders' Interest Minority Net Assets Total Non

-

current Assets current

tax assets tax -

current Liabilities current

in progress in

Net Cash

Financial Ratio Financial

Balance sheet Balance 26,145 20,010 26,032 17,273 35,314 26,979 33,518 33,452 33,518 2014A 2014A (2.21) (2.21) (4.39) 1,682 1,327 3,180 2,813 5,274 3,470 3,394 19.67 10.24 26.14 12.85 14.77 17.23 27.71 3.672 1,682 14.11 1.22 0.13 (74) 748 880 158 441 746 723 135 139 72 25 67 0

Net Cash

31,786 22,749 31,521 19,156 40,390 28,945 38,387 38,331 38,387 20 2015A 1,686 1,286 1,535 4,938 2,239 3,136 6,241 2,803 4,120 3,642 14.52 21.46 12.10 22.42 10.60 12.21 14.98 25.21 4.206 1,737 1.14 0.22 0.22 0.40 0.11 15A 300 979 710 881 126 134 s

39 24 71 56

Net Cash

36,349 26,580 36,887 22,451 46,280 31,808 44,800 44,743 44,800 2016F 2016F 1,967 1,500 1,790 5,145 2,429 3,279 7,882 3,082 1,038 4,548 5,803 16.71 16.66 20.80 13.94 24.20 4.908 2,018 11.16 11.38 1.15 0.16 7.36 7.36 8.81 9.75 350 984 805 122 131 113 42 25 57

Net Cash

29,488 42,817 26,013 51,509 36,894 51,647 51,589 51,647 40,411 2017F 2017F Page Page 2,216 1,689 2,017 1,072 5,795 2,633 3,515 9,706 3,390 1,195 5,181 4,848 15.28 12.65 18.61 10.41 13.03 23.48 5.659 2,267 10.11 1.15 0.12 3.70 3.70 3.02 8.98 350 904 122 135 116 46 25 58

8

Net Cash

of of

58,463 58,403 58,463 46,579 34,351 45,833 10,910 27,261 61,771 41,347 2018F 2018F 13.20 16.46 22.30 6.405 2,562 2,511 1,914 2,285 6,567 2,880 1,005 3,726 3,728 1,353 5,928 9,417 11.85 1,113 1.20 0.20 0.99 0.99 1.15 8.00 8.97 8.00 9.29 9 121 133 349 25 90 59 50

Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016 Se Website:www.gtja.com.hk Tel.:(852) 2509 27/F.,Low Block, GrandMillennium Plaza, 181 Queens’ Road C 201 © regulati or subjectGuotai law Junan and groupits applicablecompanies any to registration or to licensingrequirement within such contraryjurisdiction. be would use or availability publication, distribution, such where jurisdiction any in Research This Report isnot d unpredic andwhere necessary consult their own inherently financial advisers prior to any investment decision. with conditions economic and political future the muta of assumptions the from derived forecasts and estimates the guarantee not Thoughbest effort has been ensuremade to the accuracy of the information and data containedin this ResearchReport, Guotai becontrary to opinions reportthis professionalopinionsexpressedcompanies.in otherdealersAnyandexecutivesGuotai Junan of persons,group of Any opinions expressed in this report may differ or s manager, lead agent, placing the example, (for etc. r that and underwriter businessorproprietarily).invest services do investment may banking, companies investment group including its reports, and research Junan Guotai Junan"). ("Guotai Limited Kong) (Hong Ju Guotai by securities for subscribe or purchase acquire, to offer or invitation an constitute not does Report Research This DISCLAIMER (4) (3) (2) (1) DISCLOSURE OF INTERESTS Horizon: Time to6 18 months TheBenchmark: Hong KongHang Seng Index SectorRating Definition Horizon: Time to6 18 months TheBenchmark: Hong KongHang Seng Index CompanyRatingDefinition e Underperform Neutral Outperform Rating Sell Reduce Neutral Accumulate Buy Rating

th ble situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its relat its andobjectivesinvestment comprehend the understandand shouldInvestors contain. uncertainty may so situation, ble corporation mentionedin thisResearch Repo companies group its and Junan Guotai Report. th more or to equal hold not do companies group its and HoldingsLimited (01788 (00198 Limited Group Holdings SMI for Except The Analystsand their associates The Analystsand their associates 6 e

Guotai Junan Securities(Hong Kong) Limited. AllRights Reserved. las

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accuracy and completeness of the information and data herein. This Research Report may contain some forwardsome contain may ReportResearch This herein. dataand information the ofcompleteness and accuracy r disclaimer

orinvestment decisions madeby assetthe managementand investment banking groups of Guotai Junan.

irectedat,or intended distributionfor to orby,use any person orentity who isa orcitizenresident or of located HK

Definition orfundamentalthe outlook of the companyor sectoris RelativePerformance < orfundamentalthe outlook of the companyor sectorisunfavorable. RelativePerformance is orfu the RelativePerformance is orfundamentalthe outlook of the companyor sectoris favorable. RelativePerformance is5% to 15%; orfundamentalthe outlook of the companyor sectoris favorable. Rel orfundamentalthe outlook of the sectorisunfavorable RelativePerformance orth RelativePerformance orfundamentalthe outlook of the sectoris favorable RelativePerformance Definition

)and Binhai InvestmentCompany Limited (02886 ativePerformance e fundamentale outlook of the sectorisneutral

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Company Report Great Wall Motor 长城汽车 (02333 HK) 19 September 2016