In "Big Banks," CCB International downgraded Great Wall Motor's rating to "Sell" and reduced the target price to HKD 9.5

Bank of China International published a research report indicating that based on preliminary performance, Great Wall Motor (02333.HK) is expected to see a quarterly revenue growth of 13% to RMB 69.2 billion in the fourth quarter of 2025, but net profit is projected to plummet by 44% to RMB 1.3 billion, significantly below expectations. The reasons include seasonal bonus provisions, an aggressive direct sales model leading to low sales efficiency, and a decrease in tax refunds for scrapped vehicles in Russia.

For 2026, the company's sales target of 1.8 million vehicles implies that domestic sales need to achieve an annual increase of over 45%, primarily relying on the intensive model launches under the EC/DE platform. However, considering insufficient product competitiveness, weak industry demand, and intensified competition, the firm believes this target is highly challenging.

Additionally, the firm anticipates that the extensive direct sales network of the WEY brand, combined with an unclear sales outlook, may put pressure on operational efficiency, with significant downside risks to profitability. Although the company is actively promoting sales of new energy vehicles, Great Wall continues to lag behind peers such as Geely (00175.HK) and Chery (09973.HK) in terms of new energy transformation and market share. In contrast, its current valuation appears high, with a forecasted price-to-earnings ratio of 12.5 times for 2026, significantly higher than Geely and Chery (8 to 9 times). Given the headwinds in fundamentals and excessive valuation premium, the firm has downgraded its rating from "Hold" to "Sell" and significantly reduced the target price from RMB 16 to RMB 9.5