\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 633 Great Wall Motor Company Limited(601633) )
1q22 performance announcement: the company’s operating revenue increased by + 8% year-on-year to RMB 33.62 billion (accounting for about 18% of our annual profit forecast), the net profit attributable to the parent increased by – 0.3% year-on-year to RMB 1.63 billion (accounting for about 18% of our annual profit forecast), and the net profit attributable to the parent decreased by – 2.4% year-on-year to RMB 1.3 billion (1q22 net profit attributable to single vehicle decreased by + 17% year-on-year to RMB 4597). 1q22’s performance was stable, mainly due to the improvement of product structure / ASP, hedging the rise of raw material cost and equity incentive.
With the brand switching upward, the improvement trend of ASP is expected to continue: affected by the tight supply chain, 1q22 Great Wall Motor Company Limited(601633) sales volume increased from – 16% to 284000 units year-on-year, ASP increased from + 29% to nearly 120000 yuan year-on-year (the proportion of tank sales of high-profit models increased from + 2.4pcts year-on-year), and the gross profit margin increased from + 2.1pcts to 17.2% year-on-year. We judge that 1) tight chip + rising cost leads to the redistribution of internal vehicle resources. 2) It is expected that the digestion of retained orders + price rise of HaoMao and the improvement of brand / model structure are expected to drive the continuous improvement of ASP; Among them, the demand for medium and high-end off-road SUV tank brands is improving. New models of Euler brand / salon brand and DHT PHEV of wey brand plan to move up the pricing of pure electric and plug-in hybrid markets respectively. 3) We are optimistic about the steady growth prospect of sales driven by the improvement of 2h22e chip supply and the boost of new models. It is expected to recover the pressure impact caused by the epidemic / supply chain shortage in Shanghai from March to April. Optimistic about the opportunity for independent car companies to switch brands upward under this round of intelligent electrification cycle; Among them, whether the upward switching of Euler / wey brand can succeed or not is the key.
The organizational structure of Great Wall’s Noh series is expected to be continuously optimized from multi-dimensional to multi-dimensional, and the product structure is expected to be continuously optimized within the year; In addition, further strengthen the construction of talent echelon and work enthusiasm. We are optimistic about the promotion of Great Wall’s organizational mechanism reform, the transformation of strategic concept with users as the core, the adjustment of business operation modes from B2B to C2B, and the positioning of globalization / full stack self-study of automatic assisted driving. We expect that the precise positioning of user segments + the introduction of intelligent electrification functions and the acceleration of model iteration cycle are expected to drive the steady rise of ASP, and the scale effect will drive the decline of single vehicle production cost (vs. the expansion of R & D investment). We judge that great wall is in the head camp of the transformation of traditional automobile enterprises in terms of power system technology innovation and automatic driving promotion, and is expected to be one of the traditional automobile enterprises most likely to succeed in the transformation of intelligent electrification.
Maintain the “overweight” rating of a / H shares: we maintain the 2022e / 2023e / 2024e net profit attributable to the parent company of RMB 9.26 billion / 12.28 billion / 15.9 billion, and maintain the “overweight” rating of a / H shares.
Risk warning: chip shortage mitigation / replenishment is less than expected; The launch and climbing of new models are less than expected; Increase in R & D expenses; Withdrawal of equity incentive expenses; Rising prices of raw materials; Repeated outbreaks; Market and financial risks, etc.
