Great Wall Motor (601633): Product Power Boosts Growth Restart

Great Wall Motor (601633): Product Power Boosts Growth Restart
We judge that due to the sluggish industry sales in the first half of the year and the intensified market competition, the company increased product discounts to benefit consumers, and continued to expand brand promotion efforts and research and development leading to significant levels of revenue and net profit attributable to mothers.In 2019H1, the company’s operating income was 413.77 ppm, a ten-year average of 15.0%; net profit attributable to mother is 15.17 ‰, 58 years ago.95%; net profit after deducting non-attribution is 12.410,000 yuan, 65 years average.32%. The industry’s profit indicators under pressure in the off-season are under pressure. The company’s single quarter gross margin and net profit levels have fallen to their positions since 2015, and the management and research and development expense ratio has continued to rise.We believe that companies in the industry have increased their discounts during the off-season, allowing consumers to lower their gross profit margins, and the company has continued to expand its research and development to lower and lower net interest rates. The company’s internal production capacity was pushed forward in an orderly manner, and the projects under construction gradually consolidated.The company has formed eight production bases in China. Following Baoding, Xushui, and Tianjin production bases, Chongqing Yongchuan production base projects were completed and put into operation at the end of eight months. Zhangjiagang, Rizhao, Shandong, Pinghu, Zhejiang and Taizhou, Jiangsu are steadily advancingThe Russian Tula plant was officially completed and put into operation on June 5, 2019.In the first half of the year, new additions to the company’s projects under construction were mainly concentrated in the Chongqing plant, the Russian plant and its component expansion and expansion projects. Among them, the Russian plant project was nearing completion, and gradually expanded to solidification. The company lowered its sales target for 2019 to 1.07 million vehicles.We think that lowering the sales target will help ease sales pressure in the second half of the year, and the company will be able to replace the discounts in a timely manner to improve profitability.In 深圳spa会所 addition, continuously updating the product pedigree and releasing new segmented industry models can help the company achieve its sales target.In July and early August, Great Wall successively launched four models of the 2019 Haval H7 National Six Edition, the 2019 Haval M6, the new Haval H6 and the 2020 Haval H9. The product lineage was updated to continue to rejuvenate the brand.In addition, on August 18, a new series of pickup trucks, the Great Wall Cannon series, was officially launched, which opened up the pickup of Chinese pickup trucks and transformed the era. Earnings forecasts and investment advice.We expect the company’s corresponding EPS for 2019-2021 to be 0.54 yuan, 0.77 yuan, 1.11 yuan, comprehensively refer to the relevant subject of the vehicle, considering that the company is the leader in the SUV segment, the addition of F-series insert sales and profit flexibility, and the ability to transform flexibility as a purely independent brand, giving the company PEG 0 in 2019.80-0.92 level, corresponding to 20-23 times PE, with a reasonable value range of 10.80-12.42 yuan, maintain the “preliminary market” rating. risk warning.The prosperity of the automotive industry fluctuates.F-series sales climbed below expectations.The company’s increase in product preferences led to a decline in gross profit margin growth.