26 Aug 2026 CMB International Global Markets | Equity Research | Company Update

Great Wall Motor (2333 HK/601633 CH)

2H26 earnings inflection with attractive valuation

Maintain BUY. Great Wall's 2Q26 results were in line with its profit alert, with ASP beating our forecast on a record export mix. We see an earnings inflection in 2H26E, driven by the expected receipt of RMB3-4bn in Russian recyclingfee reimbursement by Dec 2026, new model ramp-ups (such as the H10), and stabilizing selling expenses following the completion of its direct-sales network expansion. Exports—now accounting for more than half of total sales volume with structurally higher margins—underpin earnings quality, while the Guiyuan platform should revive domestic sales, in our view.

 2Q26 core profit in line, revenue beat. Great Wall's 2Q26 net profit of RMB1,519mn (-67% YoY, +61% QoQ) fell within its profit-alert range of

• RMB1.4-1.7bn. The YoY decline was mainly due to the delayed recognition of about RMB2.0bn of recycling-fee reimbursement in Russia (vs.
• RMB2.3bn recognized in 2Q25); excluding this drag and adverse forex, core net profit was largely flat YoY. Revenue rose 9% YoY to RMB57.0bn, 4% above our forecast, driven by a record quarterly ASP of RMB181,000 (+8% YoY). GPM remained resilient at 18.3% (vs 18.8% in 2Q25).

 Prioritizing profit over volume. We cut our FY26E sales volume forecast by 30,000 units to 1.35mn units (0.7mn units for exports and 0.65mn units for domestic market), as it appears to us that Great Wall continues to prioritize profitability over volume. This implies 2H26 sales volume of about 0.77mn units, up 31% HoH and 2% YoY. Factoring in a higher export contribution offset by year-end bonus accruals, we expect 2H26 GPM to narrow 0.5ppts HoH to 17.9%. We conservatively assume RMB3.0bn of recycling-fee reimbursement to be received in 2H26. Accordingly, we trim our FY26E net profit by 1.3% to RMB9.2bn. For FY27E, we lower sales volume forecast from 1.6mn to 1.53mn units but expect rising exports and the Guiyuan platform to support margins, bringing our FY27E net profit forecast to RMB10.9bn (-7.5%).

 Valuation/Key risks. We maintain BUY and cut our H-share target price from HK$19.00 to HK$14.00, now based on 10x FY27E P/E (prior 12x), to reflect compressed sector-wide valuation multiples. Our A-share target price is adjusted to RMB25.00, based on the current A/H premium of about 110%. Key risks to our rating and target price include lower sales volume and margins than we expect, as well as a further sector de-rating.

Earnings Summary - 2333 HK

(YE 31 Dec) FY24A FY25A FY26E FY27E FY28E Revenue (RMB mn) 202,195 222,824 233,775 266,440 287,715

YoY growth (%) 16.7 10.2 4.9 14.0 8.0 Net profit (RMB mn) 12,692.2 9,865.3 9,231.7 10,897.8 12,077.2

YoY growth (%) 80.8 (22.3) (6.4) 18.0 10.8 EPS (Reported) (RMB) 1.49 1.16 1.07 1.26 1.39 P/E (x) 4.8 6.2 6.7 5.7 5.2 P/B (x) 0.8 0.7 0.6 0.6 0.5 Yield (%) 6.3 4.9 4.5 5.3 5.8 ROE (%) 17.2 11.8 10.1 10.9 10.9 Source: Company data, Bloomberg, CMBIGM estimates

China Auto

12-mth Price Performance

Source: FactSet

PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk

1

Figure 1: Quarterly results

Source: Company data, CMBIGM

Figure 2: Earnings revision

Source: CMBIGM estimates

Figure 3: CMBI estimates vs consensus

Source: Bloomberg, CMBIGM estimates

Financial Summary

INCOME STATEMENT 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Revenue 173,212 202,195 222,824 233,775 266,440 287,715 Cost of goods sold (141,772) (162,747) (182,622) (191,442) (217,976) (235,263) Gross profit 31,440 39,449 40,202 42,333 48,464 52,452 Operating expenses (26,062) (29,281) (34,936) (36,462) (40,867) (42,819) Selling expense (7,286) (7,830) (11,273) (12,338) (13,669) (14,206) Admin expense (4,735) (4,756) (4,747) (4,886) (5,351) (5,451) R&D expense (8,054) (9,284) (10,432) (10,822) (11,989) (12,517) Others (5,986) (7,409) (8,483) (8,416) (9,858) (10,645) Operating profit 5,378 10,168 5,267 5,871 7,597 9,634 Other income 744 435 337 500 550 550 Other expense (121) (72) (113) (100) (120) (120) Gain/loss on financial assets at FVTPL (26) 42 167 0 0 0 Investment gain/loss 761 877 574 1,053 1,109 1,118 Other gains/(losses) 962 2,924 3,557 3,375 3,301 2,433 EBITDA 16,599 25,318 23,785 23,938 27,124 28,953 Depreciation 4,081 4,722 4,598 4,884 5,159 5,441 Depreciation of ROU assets 463 740 1,515 1,616 1,901 2,171 Other amortisation 3,284 4,691 5,179 5,839 6,477 6,515 EBIT 8,771 15,165 12,493 11,599 13,586 14,826 Interest income 249 299 358 531 655 976 Interest expense (947) (882) (736) (609) (535) (275) Net Interest income/(expense) 126 (91) 1,970 291 615 936 Foreign exchange gain/loss (127) (343) 1,640 (200) 0 0

Pre-tax profit 7,824 14,283 11,758 10,990 13,051 14,551 Income tax (801) (1,591) (1,893) (1,758) (2,153) (2,474) After tax profit 7,023 12,692 9,865 9,232 10,898 12,077 Minority interest (1) (0) 0 0 0 0

Net profit 7,022 12,692 9,865 9,232 10,898 12,077 Gross dividends 2,563 3,853 2,995 2,770 3,269 3,623

BALANCE SHEET 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Current assets 118,584 133,435 137,647 153,259 163,573 179,705 Cash & equivalents 38,337 30,741 28,846 36,262 35,840 44,895 Account receivables 41,235 54,149 39,591 44,834 51,098 55,178 Inventories 26,628 25,408 26,148 28,847 32,846 35,451 Prepayment 3,873 1,942 2,112 1,836 2,090 2,256 Financial assets at FVTPL 0 0 0 0 0 0 Other current assets 8,511 21,195 40,949 41,480 41,699 41,925 Non-current assets 82,686 83,831 87,641 89,669 90,558 91,376 PP&E 30,235 30,014 29,282 28,387 27,397 26,126 Right-of-use assets 736 1,831 3,133 2,516 1,515 243 Deferred income tax 4,660 5,450 6,913 6,913 6,913 6,913 Investment in JVs & assos 10,751 11,551 12,222 12,822 13,471 14,131 Intangibles 11,310 12,345 12,235 12,354 12,118 12,189 Goodwill 28 28 28 28 28 28 Financial assets at FVTPL 2,128 1,771 1,703 1,703 1,703 1,703 Other non-current assets 22,838 20,841 22,125 24,946 27,412 30,043 Total assets 201,270 217,266 225,288 242,928 254,131 271,081

Current liabilities 110,835 122,229 126,216 136,708 138,836 145,559 Short-term borrowings 12,221 9,597 8,234 18,949 7,195 5,500 Account payables 81,488 93,844 95,025 97,032 109,287 116,020 Other current liabilities 16,771 18,048 21,465 19,510 21,139 22,823 Lease liabilities 354 739 1,491 1,216 1,216 1,216 Non-current liabilities 21,926 16,041 11,180 10,645 10,119 10,079 Long-term borrowings 13,331 6,639 1,147 647 647 1,147 Convertible bonds 3,418 3,517 3,611 2,891 2,171 1,451 Deferred income 3,198 3,455 3,322 3,632 3,826 4,005 Other non-current liabilities 1,979 2,431 3,100 3,475 3,475 3,475 Total liabilities 132,762 138,270 137,396 147,353 148,955 155,638

Share capital 8,498 8,556 8,558 8,613 8,680 8,747 Capital surplus 7,731 10,915 12,822 13,857 14,937 16,004

Retained earnings 52,729 61,431 66,249 72,486 80,614 89,422 Other reserves (456) (1,914) 263 619 945 1,270 Total shareholders equity 68,501 78,988 87,892 95,575 105,176 115,444 Minority interest 8 8 0 0 0 0

Total equity and liabilities 201,270 217,266 225,288 242,928 254,131 271,081

CASH FLOW 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Operating Profit before taxation 7,824 14,283 11,758 10,990 13,051 14,551 Depreciation & amortization 7,828 10,153 11,291 12,339 13,538 14,127 Tax paid (801) (1,591) (1,893) (1,758) (2,153) (2,474) Change in working capital 3,521 4,382 20,543 (6,498) 1,415 (574) Others (618) 555 (1,344) (3,862) (246) (415) Net cash from operations 17,754 27,783 40,355 11,211 25,605 25,216

Investing Capital expenditure (16,713) (11,737) (11,509) (13,321) (13,936) (14,452) Acquisition of subsidiaries/ investments (14,139) (75,457) (127,763) 0 0 0 Net proceeds from disposal of short-term investments

18,362 63,169 109,502 200 200 200

• Others 2,039 730 616 2,054 1,780 1,779 Net cash from investing (10,451) (23,296) (29,154) (11,068) (11,957) (12,472)

Financing

Dividend paid (2,534) (2,563) (3,853) (2,995) (2,770) (3,269) Net borrowings 526 (8,686) (6,867) 9,315 (12,655) (2,095)

• Others 3,060 (929) (2,725) 953 1,355 1,676 Net cash from financing 1,052 (12,178) (13,445) 7,273 (14,070) (3,688)

Net change in cash Cash at the beginning of the year 26,899 35,272 27,210 25,257 32,673 32,251 Exchange difference 18 (371) 292 0 0 0 Cash at the end of the year 35,272 27,210 25,257 32,673 32,251 41,306

GROWTH 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Revenue 26.1% 16.7% 10.2% 4.9% 14.0% 8.0% Gross profit 18.2% 25.5% 1.9% 5.3% 14.5% 8.2% Operating profit 26.1% 89.1% (48.2%) 11.5% 29.4% 26.8% EBITDA 2.9% 52.5% (6.1%) 0.6% 13.3% 6.7% EBIT (7.9%) 72.9% (17.6%) (7.2%) 17.1% 9.1% Net profit (15.1%) 80.8% (22.3%) (6.4%) 18.0% 10.8%

PROFITABILITY 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Gross profit margin 18.2% 19.5% 18.0% 18.1% 18.2% 18.2% Operating margin 3.1% 5.0% 2.4% 2.5% 2.9% 3.3% EBITDA margin 9.6% 12.5% 10.7% 10.2% 10.2% 10.1% Return on equity (ROE) 10.5% 17.2% 11.8% 10.1% 10.9% 10.9%

GEARING/LIQUIDITY/ACTIVITIES 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec Current ratio (x) 1.1 1.1 1.1 1.1 1.2 1.2

VALUATION 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

P/E 8.8 4.8 6.2 6.7 5.7 5.2 P/B 0.9 0.8 0.7 0.6 0.6 0.5 P/CFPS 3.5 2.2 1.5 5.5 2.4 2.5 Div yield (%) 4.1 6.3 4.9 4.5 5.3 5.8

Source: Company data, CMBIGM estimates. Note: The calculation of net cash includes financial assets.

Disclosures & Disclaimers

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CMBIGM Ratings

BUY : Stock with potential return of over 15% over next 12 months HOLD : Stock with potential return of +15% to -10% over next 12 months SELL : Stock with potential loss of over 10% over next 12 months NOT RATED : Stock is not rated by CMBIGM

OUTPERFORM : Industry expected to outperform the relevant broad market benchmark over next 12 months MARKET-PERFORM : Industry expected to perform in-line with the relevant broad market benchmark over next 12 months UNDERPERFORM : Industry expected to underperform the relevant broad market benchmark over next 12 months

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