BOCOM INTL: Great Wall Motor's profit elasticity this year depends on efficiency improvement, maintaining a "buy" rating.

BOCOM INTL released a research report stating that Great Wall Motor (02333) had a revenue of 222.79 billion RMB last year, a year-on-year increase of 10.2%, with a net profit of 9.912 billion RMB, a decrease of 21.7%, mainly due to the drag from direct sales channel construction and new product/brand investment. The company's revenue in the fourth quarter of last year reached a record high of 69.21 billion RMB, but the net profit was only 1.277 billion RMB, a decrease of 44% on a quarterly basis, mainly due to the one-time provision for year-end bonuses (provision of 4.6 billion RMB) combined with direct sales and advertising investment, and new store ramp-up. Looking ahead to 2026, the bank expects the profitability of the company to depend on efficiency improvement, overseas challenges of 600,000 vehicles and direct sales efficiency driving profit recovery. The bank maintains a "buy" rating on the company with a target price of 22.5 Hong Kong dollars.