Bank of America Securities: Reaffirms a "neutral" rating on Great Wall Motor (02333), expecting valuation to trend towards reasonable levels.

Bank of America Securities released a research report stating that taking into account the third-quarter performance and the latest car model launch schedule, they have lowered their sales forecasts for Great Wall Motor (02333) for 2025, 2026, and 2027 by 4%, 2%, and 3% respectively. They have raised their gross profit margin forecasts for 2026 and 2027 by 0.2 percentage points. Profit forecasts for 2025 to 2027 have been adjusted by -0.6%, +3.8%, and -0.1% respectively. The target price has been lowered from 19.5 Hong Kong dollars to 18 Hong Kong dollars, maintaining a "neutral" rating, as the valuation is considered to be reasonable. The report stated that Great Wall Motor recorded revenue of 61 billion yuan in the third quarter, a year-on-year and quarterly increase of 21% and 17% respectively, mainly driven by increased sales volume and product prices during the period. Profit for the third quarter at Chang'an Motors was slightly below expectations, with a year-on-year decline of 31%, 50% lower than the second quarter of this year, attributed to the delay in recognizing a tax refund of 800 million yuan from scrappage tax in Russia and approximately 130 million yuan in exchange losses recorded during the period. Excluding one-off items, net profit for the third quarter fell by 30% compared to the same period last year. The gross profit margin was 18.4%, a 1.6 percentage point decrease year-on-year, believed to be due to a decrease in sales contribution from the tank brand and increased rebates to dealers for the Haval and pickup brands.