2 Nov 2026 CMB International Global Markets | Equity Research | Company Update

Great Wall Motor (2333 HK/601633 CH)

Overseas localization as key after 3Q26 miss

Maintain BUY. Great Wall's 3Q26 net profit missed our estimate by 36% as gross margin fell 1.0ppts QoQ. Great Wall has higher international exposure than some of its peers, as its YTD overseas sales volume exceeded half of total deliveries. It has been expanding global footprint outside Russia in both sales and production in a bid to mitigate trade risks.

 3Q26 miss on GPM. Great Wall’s 3Q26 revenue fell 5.7% YoY to RMB57.8bn, trailing our forecast by 3.0%. GPM fell 1.1ppts YoY and 1.0ppts QoQ to 17.3%, coming in 1.1ppts lower than our prior forecast. Management attributed it to launch-stage incentives and ramp-up costs for newly introduced models in China, while reiterating a healthy overseas GPM. Combined SG&A and R&D ratio fell 1.0ppt QoQ to 10.9%, 0.2ppts better than our forecast. Net profit fell 40.7% YoY and 10.4% QoQ to RMB1,362mn, missing our estimate by 36%.

 Overseas localization expansion to mitigate tariffs and supports longterm upside. Overseas markets accounted for about 52% of Great Wall’s total wholesale volume in the first nine months this year, with locally produced vehicles comprising 35%-45% of total overseas deliveries. Management projects overseas capacity to reach 250,000-300,000 units in FY26E (including 220,000 units in full-process manufacturing facilities across Russia, Brazil and Thailand), with further expansion targeted for FY27E. Its KD plant in Bulgaria provides strategic positioning to mitigate upcoming EU tariffs on Chinese hybrid vehicles. Management still sees substantial overseas growth potential and expects locally produced vehicles to achieve superior profitability over CBUs (Complete Built Units) over time, potentially exceeding consensus expectations.

 Earnings forecasts. We expect 4Q26E sales volume to rise 9.3% QoQ to about 0.37mn units, supported by new models (the H10, new Lanshan and Ora models). We expect year-end bonus accruals to drive down GPM by 1.1ppts QoQ and increase the combined SG&A and R&D ratio by 2.7ppts QoQ in 4Q26E. We forecast 4Q26E net profit to rise 7.8% YoY to RMB1.3bn, assuming the receipt of RMB2.0bn in Russia’s recycling-fee reimbursements. We cut both FY26-27E net profit forecasts by 30% to RMB5.3bn and RMB6.4bn, respectively, reflecting structural policy headwinds (export VAT rebate reduction and battery consumption tax increase) and uncertainties surrounding Russia’s recycling-fee refunds.

 Valuation/Risks. We maintain our BUY rating and cut our H-share target price from HK$14.00 to HK$8.50, still based on 10x FY27E P/E. Our Ashare target price is adjusted to RMB18.20, based on a 150% A/H premium. Key risks to our rating and target prices include lower sales volume and margins than we expect, as well as a sector de-rating.

Earnings Summary - 2333 HK

(YE 31 Dec) FY24A FY25A FY26E FY27E FY28E Revenue (RMB mn) 202,195 222,824 223,423 241,125 263,895

YoY growth (%) 16.7 10.2 0.3 7.9 9.4 Net profit (RMB mn) 12,692.2 9,865.3 5,309.0 6,354.9 8,071.2

YoY growth (%) 80.8 (22.3) (46.2) 19.7 27.0 EPS (Reported) (RMB) 1.49 1.16 0.62 0.74 0.93 P/E (x) 3.7 4.8 8.9 7.5 5.9 P/B (x) 0.6 0.5 0.5 0.5 0.5 Yield (%) 8.2 6.4 3.4 4.0 5.0 ROE (%) 17.2 11.8 5.9 6.7 7.9 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

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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 173,212 202,195 222,824 223,423 241,125 263,895 Cost of goods sold (141,772) (162,747) (182,622) (184,359) (198,522) (216,328) Gross profit 31,440 39,449 40,202 39,064 42,603 47,567 Operating expenses (26,062) (29,281) (34,936) (35,666) (38,373) (40,660) Selling expense (7,286) (7,830) (11,273) (12,109) (13,048) (13,807) Admin expense (4,735) (4,756) (4,747) (4,847) (5,190) (5,399) R&D expense (8,054) (9,284) (10,432) (10,576) (11,334) (11,822) Others (5,986) (7,409) (8,483) (8,133) (8,801) (9,632) Operating profit 5,378 10,168 5,267 3,398 4,230 6,907 Other income 744 435 337 200 300 350 Other expense (121) (72) (113) (60) (90) (120) Gain/loss on financial assets at FVTPL (26) 42 167 200 0 0 Investment gain/loss 761 877 574 1,053 1,109 1,118 Other gains/(losses) 962 2,924 3,557 2,691 2,549 1,845 EBITDA 16,599 25,318 23,785 20,038 22,681 25,150 Depreciation 4,081 4,722 4,598 4,884 5,162 5,446 Depreciation of ROU assets 463 740 1,515 1,616 1,901 2,171 Other amortisation 3,284 4,691 5,179 5,821 6,406 6,368 EBIT 8,771 15,165 12,493 7,716 9,212 11,164 Interest income 249 299 358 344 303 559 Interest expense (947) (882) (736) (731) (850) (544) Net Interest income/(expense) 126 (91) 1,970 (496) 263 519 Foreign exchange gain/loss (127) (343) 1,640 (800) 0 0

Pre-tax profit 7,824 14,283 11,758 6,986 8,362 10,620 Income tax (801) (1,591) (1,893) (1,677) (2,007) (2,549) After tax profit 7,023 12,692 9,865 5,309 6,355 8,071 Minority interest (1) (0) 0 0 0 0

Net profit 7,022 12,692 9,865 5,309 6,355 8,071 Gross dividends 2,563 3,853 2,995 1,593 1,906 2,421

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

YE 31 Dec (RMB mn) Current assets 118,584 133,435 137,647 150,121 155,294 162,270 Cash & equivalents 38,337 30,741 28,846 36,262 35,840 35,340 Account receivables 41,235 54,149 39,591 42,848 46,243 50,610 Inventories 26,628 25,408 26,148 27,780 29,914 32,597 Prepayment 3,873 1,942 2,112 1,768 1,904 2,074 Financial assets at FVTPL 0 0 0 200 200 200 Other current assets 8,511 21,195 40,949 41,262 41,193 41,448 Non-current assets 82,686 83,831 87,641 89,426 89,817 90,245 PP&E 30,235 30,014 29,282 28,407 27,454 26,217 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 12,288 11,883 11,760 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 24,750 26,850 29,250 Total assets 201,270 217,266 225,288 239,547 245,111 252,516

Current liabilities 110,835 122,229 126,216 137,307 137,175 136,995 Short-term borrowings 12,221 9,597 8,234 23,954 17,258 8,147 Account payables 81,488 93,844 95,025 93,442 99,533 106,682 Other current liabilities 16,771 18,048 21,465 18,695 19,168 20,950 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 132,762 138,270 137,396 147,953 147,294 147,074

Share capital 8,498 8,556 8,558 8,613 8,680 8,747 Capital surplus 7,731 10,915 12,822 13,800 14,867 15,934

Retained earnings 52,729 61,431 66,249 68,563 73,325 79,490 Other reserves (456) (1,914) 263 619 945 1,270 Total shareholders equity 68,501 78,988 87,892 91,594 97,817 105,441 Minority interest 8 8 0 0 0 0

Total equity and liabilities 201,270 217,266 225,288 239,547 245,111 252,516

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

YE 31 Dec (RMB mn) Operating Profit before taxation 7,824 14,283 11,758 6,986 8,362 10,620 Depreciation & amortization 7,828 10,153 11,291 12,321 13,469 13,986 Tax paid (801) (1,591) (1,893) (1,677) (2,007) (2,549) Change in working capital 3,521 4,382 20,543 (6,901) 37 (440) Others (618) 555 (1,344) (4,184) (732) (48) Net cash from operations 17,754 27,783 40,355 6,546 19,128 21,569

Investing Capital expenditure (16,713) (11,737) (11,509) (13,064) (13,335) (13,881) 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 2,244 1,770 1,769 Net cash from investing (10,451) (23,296) (29,154) (10,620) (11,365) (11,911)

Financing

Dividend paid (2,534) (2,563) (3,853) (2,995) (1,593) (1,906) Net borrowings 526 (8,686) (6,867) 14,320 (7,596) (9,511)

• Others 3,060 (929) (2,725) 166 1,003 1,259 Net cash from financing 1,052 (12,178) (13,445) 11,490 (8,185) (10,158)

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 31,751

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

YE 31 Dec

Revenue 26.1% 16.7% 10.2% 0.3% 7.9% 9.4% Gross profit 18.2% 25.5% 1.9% (2.8%) 9.1% 11.7% Operating profit 26.1% 89.1% (48.2%) (35.5%) 24.5% 63.3% EBITDA 2.9% 52.5% (6.1%) (15.8%) 13.2% 10.9% EBIT (7.9%) 72.9% (17.6%) (38.2%) 19.4% 21.2% Net profit (15.1%) 80.8% (22.3%) (46.2%) 19.7% 27.0%

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

YE 31 Dec

Gross profit margin 18.2% 19.5% 18.0% 17.5% 17.7% 18.0% Operating margin 3.1% 5.0% 2.4% 1.5% 1.8% 2.6% EBITDA margin 9.6% 12.5% 10.7% 9.0% 9.4% 9.5% Return on equity (ROE) 10.5% 17.2% 11.8% 5.9% 6.7% 7.9%

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

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

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

YE 31 Dec

P/E 6.8 3.7 4.8 8.9 7.5 5.9 P/B 0.7 0.6 0.5 0.5 0.5 0.5 P/CFPS 2.7 1.7 1.2 7.2 2.5 2.2 Div yield (%) 5.4 8.2 6.4 3.4 4.0 5.0

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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