GWM (2333.HK): Initial Success of Cost Reduction & Benefit Growth May 4, 2018

Investment Thesis

  • Result of Q1 in 2018 Rebounded Slightly
  • Initial Success of Cost Reduction & Benefit Growth
  • Improving Sales Structure and Export Performance
  • Implementation of Strategy for New Energy Development is Underway

Result of Q1 in 2018 Rebounded Slightly

In 2017, Great Wall Motor recorded RMB101.17 billion in revenue, up 2.6% yoy, and a slash of 52.35% in net profit attributable to parent company, at RMB5.03 billion, as well as RMB0.55 of EPS. This slump of the result is mainly caused by heavy promotion of the old products in the first half year, below-scaled sales of new products (which led to the reduced gross profit, down 6 ppts), and the above-expectation advertising effect of new arrivals.

According to the result report of Great Wall Motor in Q1 2018 (China Accounting Standards), the revenue grew by 14.0% yoy to RMB26.57 billion; the net profit attributable to parent company increased by 6.5% yoy to RMB2.08 billion; and the EPS stood at RMB0.23. Compared with EPS of the last year, which stood at RMB0.21, the result exceeded market expectancy slightly.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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