According to the research report released by Daiwa, Great Wall Motor's gross margin is expected to remain strong in the second half of 2024, and overseas expansion will be the main growth driver. The bank has raised the company's target price to HKD20 and maintained a "buy" rating.
Daiwa stated that since May's export sales have been accounted for in June, the company's management expects strong sales rebound in June. For the second quarter of 2024, the management expects the gross margin to remain flat or slightly increase on a quarterly basis, as the average selling price remains unchanged and the sales matrix is improved. For the second half of FY2024, the management is bullish on the strong gross margin prospects due to the increase in the proportion of overseas market sales of high-profit off-road vehicle models, further cost reduction due to sufficient upstream parts supply, and limited involvement in the price war in the mainland, which allows it to maintain a higher average selling price and a stable profit margin.