China / Hong Kong Company Guide Great Wall Motor Version 6 | Bloomberg: 2333 HK EQUITY | 601633 CH Equity | Reuters: 2333.HK | 601633.SS Refer to important disclosures at the end of this report DBS Group Research . Equity 27 Mar 2019 H: HOLD Headwinds remain Last Traded Price ( 26 Mar 2019):HK$5.46(HSI : 28,567) Price Target 12-mth:HK$5.60 (2.6% upside) (Prev HK$4.30) Market remains challenging; HOLD. Great Wall Motor (GWM) is still facing some headwinds, as the overall auto market is expected to A: HOLD remain tough in 1H19. While the government’s stimulus measures Last Traded Price (A) ( 26 Mar 2019):RMB7.67(CSI300 Index : 3,700) may help boost sales, we expect keen market competition to stay, Price Target 12-mth (A):RMB8.00 (4.3% upside) (Prev RMB6.50) especially in the SUV segment where rivals are intensifying their efforts Analyst and rapidly rolling out new models. This could compress gross Rachel MIU+852 36684191,
[email protected] margins. While the company will launch some new energy vehicles What’s New this year, the traditional segment still dominates a large part of its • Market challenges remain in 1H19; competition in business. We cut FY19F earnings by 30% due to the downward SUV segment is fierce revisions in sales volume and margins (especially after the weak 2H18 • Government stimulus policy could support performance), as a decent recovery is not visible as yet. Valuation is sentiment; awaiting release of details unattractive based on its earnings fundamentals. • Launching some new models to boost sales New energy vehicle (NEV) strategy.