Investment Thesis

Though the profit of Great Wall Motor (GWM) has decreased by half in the first half of 2017, we believe that the lower-than-expected Q2 results are only the dark before dawn. GWM still maintains strong momentum in the domestic SUV market. We never change our focusing strategy of working on making breakthroughs on medium- and high-end products and increasing the low-end products chains in the meantime. The profitability is expected to be increasing again in the second half of the year.

In terms of valuation, we adjust our target price to HK$11.5, equivalent to 12/8.5 P/E ratio in 2017/2018. We maintain the rating of “Accumulate”. (Closing price as at 8 Aug 2017)