Bank of America Securities: Lower Great Wall Motor (02333) target price to 14.3 Hong Kong dollars, cut profit forecast.

Bank of America Securities released a research report stating that they have lowered the profit forecast for Great Wall Motor (02333) for the years 2026 to 2028 by 4%, 4%, and 3% respectively. They have also lowered the target price for the H shares from 14.6 Hong Kong dollars to 14.3 Hong Kong dollars, maintaining a "neutral" rating. They believe that the strong product line and steady growth of the company have already been reflected in the valuation. The A-share target price of Great Wall Motor (601633.SH) has been lowered from 18.4 yuan to 18.1 yuan, maintaining an "underperform" rating due to its high valuation. In the first quarter, Great Wall Motor's revenue was 45.1 billion yuan, a year-on-year increase of 13%, but a quarterly decrease of 35%. Sales volume increased by 5% year-on-year but decreased by 33% quarter-on-quarter. The gross profit margin increased by 0.6 and 1.2 percentage points year-on-year and quarter-on-quarter to 18.5%, mainly due to increased contributions from overseas markets and sales of high-end models. In terms of profitability, Great Wall Motor's net profit in the first quarter decreased by 46% year-on-year and 23% quarter-on-quarter to 945 million yuan, mainly due to a 100 million yuan exchange gain in the same period last year, while a 50 million yuan exchange loss was recorded this quarter. Excluding the impact of exchange rates, net profit actually increased by 42% year-on-year. In addition, net profit after deducting non-recurring gains and losses was 482 million yuan, a year-on-year and quarter-on-quarter decrease of 67% and 17% respectively.