股 票 研 [Table_Title] Company Report: Great Wall Motor (02333 HK) Toliver Ma 马守彰 究 (852) 2509 5317 Equity Research 公司报告： 长城汽车 (02333 HK) [email protected] 14 July 2020 [Table_Summary] Pickup Trucks Outperformed; SUVs Expected to Rebound 皮卡跑赢大市，SUV将反弹 Upbeat pickup truck sales. Thanks to policy tailwinds, the pickup truck [Table_Rank] 公 market outperformed the overall auto market. Recently, Shanghai has Rating: Accumulate Maintained loosened up registration requirements for pickup trucks. We expect more 司 Report provinces and cities to partially or fully relax driving restrictions for pickup 评级： 收集 (维持) 报 trucks. Coupled with the launch of the new Great Wall Pao, GWM’s sales of 告 pickup trucks has thrived, representing nearly 50% market share in Jun. 2020. We expect that this will be the Company’s long-term growth driver as 6[Table_Price-18m TP目标价] : HK$7.40 Company pickup truck penetration in China is well below key international markets. Revised from 原目标价: HK$6.00 SUVs to catch up in 2H20. GWM’s SUV sales lagged behind the market in Share price 股价: HK$6.650 1H20 due to a lack of new models and fading growth momentum from the F7. However, we expect GWM to come back in 2H20 with two new SUVs expected to be launched. One has already been unveiled to the market, the Stock performance Da Gou. We are more confident on this model than previous launches due to 股价表现 its more distinctive outlook and marketing approach. We expect less [Table_QuotePic] cannibalization effect for this model. 30.0 % of return The Company’s stock has attracted capital, especially from southbound 20.0 inflow, in which holdings through the HK-Shanghai connect increased to 10.0 证 32.6%. Our investment thesis remains unchanged; we like GWM’s growth 券 告 strategy. Its dominant position in the pickup truck market will be a long-term 0.0 growth engine due to China’s low pickup truck penetration rate. Meanwhile, (10.0) 研 报 the Company’s SUV segment is set for another growth trend upon the new product launch in 2H20. Therefore, we maintain our investment rating as (20.0) 究 究 "Accumulate" and increase our TP to HK$7.40, representing 12.1x 2021 (30.0) 报 研 PER and 8.7x 2022 PER. (40.0) 告 皮卡车销售乐观。由于政策的顺风，皮卡车市场的表现优于整体汽车市场。最近，上海放 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 券 Equity Research Report 宽了皮卡的注册要求。我们预计会有更多的省市部分或完全放宽对皮卡的驾驶限制。加上 HSI Index GREAT WALL MOT-H 证 新的长城炮的发布，长城汽车的皮卡销售蓬勃发展，在 2020 年 6 月获得近 50%的市场份 额。由于皮卡在中国的渗透率低于主要国际市场，我们预计这将是公司的长期增长动力。 [Tab SUV 将在 2020 年下半年反弹。由于缺乏新车型，以及 F7 的增长动力减弱，长城汽车的 Change[Table_PriceChange] in Share Price 1 M 3 M 1 Y SUV 销售在 2020 年上半年落后于市场。但是，我们预计长城汽车将在 2020 年下半年推 le_I 股价变动 1 个月 3 个月 1 年 出两款新 SUV 后反弹。 其中一款，命名为大狗，已经向市场公布。由于它具有更独特的 Abs. % 汽nfo1 22.0 33.0 17.7 外观以及营销方向有别于以前的车型，我们对该车型更有信心。我们预计此车型分流销售 绝对变动 % Rel. % to HS Index 车 的影响较小。 17.2 28.7 28.2 ] 相对恒指变动 % 及 Avg. Share price(HK$) 公司股票受南向资金追捧，其通过沪港通持股比例增加到 32.6%。我们的投资逻辑保持不 5.4 5.1 5.2 平均股价（港元） 零 变；我们认同长城汽车的增长策略。由于中国皮卡普及率低，其在皮卡市场的主导地位将 Source: Bloomberg, Guotai Junan International. 部 成为长期增长引擎。同时，随着 2020 年下半年新产品的发布，公司的 SUV 分部将出现另 件 一个增长趋势。 因此，我们维持投资评级为“收集”，目标价上调至 7.40 港元，相当于 12.1 倍 2021 年市盈率和 8.7 倍 2022 年市盈率。 行 业 Automobiles & Components Sector Automobiles & Components Y[Table_ear End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE [Tab 年结Profit ] 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 le_I 12/31 (RMB m) (RMB m) (RMB) (△ %) (x) (RMB) (x) (RMB) (%) (%) 2018A 99,230 5,207 0.571 3.6 10.2 5.773 1.0 0.290 5.0 10.2 nfo2 2019A 96,211 4,497 0.493 (13.6) 12.1 5.960 1.0 0.250 4.2 8.4 中] 2020F 98,669 4,411 0.483 (1.9) 12.5 6.201 1.0 0.246 4.1 7.9 2021F 长外 120,497 5,065 0.555 14.8 10.9 6.478 0.9 0.282 4.7 8.7 2022F 141,214 6,472 0.709 27.8 8.5 6.832 0.9 0.360 6.0 10.7 城运 总股数 大股东 汽 [Table_BaseData]Shares in issue (m) (m) 9,176.6 Major shareholder Wei Jian Jun 34.9% 输 Market cap. (HK$ m) 市值 (HK$ m) Free float (%) 自由流通比率(%) 车 61,024.2 65.1 个月平均成交股数 净负债 股东资金 3 month average vol. 3 (‘000) 27,621.9 FY20 Net gearing (%) FY20 / (%) Net Cash 52 Weeks high/low (HK$) 52 周高/低 (HK$) 6.95/3.85 FY20 Est. NAV (HK$) FY20 每股估值（港元） 8.2 Source: the Company, Guotai Junan International. Great Wall MotorGreat Wall HK) (02333 See the last page for disclaimer Page 1 of 8 [Table_PageHeader]Great Wall Motor (02333 HK) POLICY FAVOURABLE TOWARDS PICKUP TRUCKS ] 1 r a M t h g i R _ e l b a T [ More provinces to relax driving restrictions for pickup trucks. A recent development has come from Shanghaiwhere license registration requirements for pickup trucks has been relaxed. After these changes, pickup truck drivers can also register its plate as "Shanghai C". The changes will make it easier to register pickup trucks, though the effect remains uncertain as driving 2020 restrictions within the city still applies. Shanghai, as one of the strictest cities with regards to vehicle control, will slowly relax pickup truck restrictions, showing intentions of allowing more vehicles into the city. We believe it’s a meaningful first step. 14 July Chongqing, another municipality, fully opened up in May 2020. We believe the opening up for pickup trucks is trending in China and more will follow in the future. Table-1: Developments in Relaxing Pickup Trucks Restriction Date Province and City Comment The MIIT and NDRC jointly announced a pilot program on relaxing restrictions on Feb-16 Liaoning, Hebei, Henan and Yunnan pickup trucks entering the city in 4 provinces. Dec-16 Xinjiang andHubei 2 provinces to join the pilot program. Lifted restriction measures for pickup trucks as well as NEV light-duty trucks in ] 2 r a M t h g i R _ e l b a T [ Jun-19 Shandong-Jinan entering the city. Sep-19 Hebei-Qinhuangdao Completely lifted restrictions on pickup trucks entering the city. Allowed pickup trucks that weigh over 0.5 tons to enter its cities, with certain Dec-19 Hebei-Zhangjiakou conditions intact. Except for the key polluted areas, Tangshan lifted the restrictions over pickup trucks Jan-20 Hebei-Tangshan from entering the city. Jan-20 Jilin Relaxed restrictions over pickup trucks entering the city. (02333 HK) Relaxed the restrictions in Ningbo for pickup trucks with Zhejiang B plates or NEV Jan-20 Zhejiang-Ningbo 长城汽车 trucks. Apr-20 Jiangsu Optimized the control of pickup trucks entering the city. Great Wall Motor Apr-20 Jiangxi Completely lifted restrictions over pickup trucks from entering the city. On 15th January, Chongqing launched 5 service reform measures to optimize the May-20 Chongqing management of trucks. Further, the city relaxed driving restrictions on pickup trucks in May. May-20 Shaanxi Appropriately relaxed restrictions of pickup trucks from entering the city. Jun-20 Shandong-Zibo Lifted traffic restrictions on pickup trucks. Jul-20 Shanghai Relaxed license registration requirements for pickup trucks. Source: cnpickups.com, Guotai Junan International. Report Company See the last page for disclaimer Page 2 of 8 [Table_PageHeader]Great Wall Motor (02333 HK) Great Wall Motors (GWM, the "Company") to thrive under policy tailwinds. As more cities have relaxed restrictions for pickup trucks, sales performance has been quite strong in 2020. In Jun. 2020, pickup trucks] sales1 r a increasedM t h 74.5%g i R yoy_ e to 57,000l b a T [ units (See Figure-1). Sales continued to speed up since April, and has outperformed overall auto market sales (See Figure-2). In terms of sales proportion within the auto market, we noticed an increasing trend as well, with sales proportion having increased to 2.5% in Jun. 2020, a 0.7 ppt increase as compared to Dec. 2019 (See Figure-3). We believe that there is huge potential for 2020 increase as penetration rate is far behind other developed countries. According to IHS, sales of pickup trucks to overall vehicle sales in the US/ UK/ Canada represented 16.5%/ 17.4%/ 19.4%, respectively. Therefore, with the help of supportive policies, we 14 July believe that the China pickup trucks market will continue to expand. It is the perfect time for GWM to launch its new pickup models, including the Great Wall Pao. Launched in Oct. 2019 and assembled in its Chongqing factory, the Company’s pickup trucks have been very strong, reaching sales of 15,003 units in June. Along with its Wingle series, pickup truck sales reached 26,680 units in June, becoming a very solid growth driver for the Company. Despite a rather small market, GWM has gained significant market share in the pickup trucks market, with sales representing 46.8% of total in the market, according to data from CAAM, and is still growing (See Figure-4). We expect market share to continue to grow as it would seem that demand is still very strong downstream. Figure-1: Industry Pickup Truck Sales and Growth Figure-2: Industry Pickup Truck Sales vs. China Auto Sales Growth ] 2 r a M t h g i R _ e l b a T [ 2018 2019 Units Pickup truck growth China auto growth 2020 2019 yoy 60,000 100% 2020 yoy 100.0% 80% 50,000 80.0% 60% 60.0% 40% 40,000 40.0% 20% 20.0% 30,000 0% 0.0% -20% 20,000 -20.0% -40% Oct-18 Apr-19 Oct-19 Apr-20 Jun-19 Jun-20 -40.0% Jun-18 Feb-19 Feb-20 Dec-18 Dec-19 Aug-19 -60% Aug-18 10,000 -60.0% -80% -80.0% (02333 HK) 0 -100% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -100.0% Source: CAAM, Guotai Junan International.