Great Wall Motor's export target is progressing smoothly, with cost optimization supporting expectations for gross margin improvement

Overview

This report is a management meeting note on Great Wall Motor released by Goldman Sachs after the Asia Communacopia + Technology conference. The core information centers on new model launches, the 2026 sales target, gross margin trends, cost optimization, and overseas expansion. Management maintained its 2026 total sales target of 1.8 million units, with export progress relatively strong, but domestic demand clearly weak.

Core views

The report's core view is that export business remains one of the more supportive growth themes for Great Wall Motor at present. Exports from January to April were about 180,000 units, making the full-year export target of 600,000 units appear still achievable. At the same time, the company is lowering costs through the Gaoyuan platform, centralized production, supply-chain localization, and a higher parts-sharing ratio, and management expects gross margin to improve sequentially in 2Q26 and 3Q26. However, domestic sales are down about 10% year over year, showing that pressure on domestic demand has not yet eased.

Analysis framework

The report uses a conference-note style analytical framework, drawing on management's remarks at the Goldman Sachs conference to organize the sales target, new model plan, cost structure, gross margin cadence, and regional overseas progress, supplemented by company regulatory disclosures, rating definitions, and Goldman Sachs' internal factor framework descriptions.

Methodology notes

• equity_factor_profileGS Factor Profile

  Growth, financial returns, valuation multiples, and composite factors

  Goldman Sachs' factor profile provides an investment context by comparing a stock's growth, financial returns, and valuation multiples against the market and industry peers at the percentile level; the composite factor usually combines growth, financial returns, and inverse valuation percentiles.

• corporate_action_frameworkM&A Rank

  Probability score of being acquired

  Goldman Sachs uses an M&A score from 1 to 3 to measure the likelihood that a covered company becomes an acquisition target, where 1 indicates a relatively high probability, 2 a medium probability, and 3 a low probability; this report only discloses the framework definition and does not assign an explicit M&A score to Great Wall Motor.

• data_platformQuantum

  Goldman Sachs proprietary financial database

  Quantum is used to access financial statement history, forecasts, and ratios, supporting both deep single-company analysis and cross-industry, cross-market comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Great Wall Motor Co.(601633.SS)

  The A-share listed entity and one of the core coverage subjects of the meeting notes

  Strengths

  Export targets are progressing smoothly, while the Gaoyuan platform and centralized production are driving cost optimization, and gross margin may improve sequentially in 2Q26 and 3Q26.

  Weaknesses

  Domestic demand is weak, company sales are down about 10% year over year, and the report provides no formal investment rating or target price.

  Comparison

  The regulatory disclosure lists other companies in the same coverage universe, including BYD, GAC Group, Li Auto, NIO, XPeng, and SAIC Motor, among other auto industry names.

  Risks

  Raw material prices, exchange rates, product mix, slower domestic demand, and a sequential gross margin decline in 4Q26.

• Great Wall Motor Co.(2333.HK)

  The H-share listed entity and one of the core coverage subjects of the meeting notes

  Strengths

  Also benefits from export growth, overseas market expansion, and cost optimization strategies.

  Weaknesses

  The report is labeled Not Covered, with no formal rating, target price, or earnings forecast support.

  Comparison

  It sits alongside the A-share entity in Goldman Sachs' auto coverage-universe disclosures.

  Risks

  Overseas profit is affected by exchange-rate and product-mix volatility, and the realization of growth in Russia, Europe, and right-hand-drive markets still needs to be monitored.

Key data

• 2026 total sales target1.8mn unitsManagement kept the full-year target unchanged.
• 2026 domestic sales target1.2mn unitsDomestic demand is weak, and company sales are down about 10% year over year.
• 2026 export target0.6mn unitsExports from January to April were about 0.18mn units, and management believes the full-year target is still on track.
• 2030 total sales target3mn unitsOf which about 1mn units are expected to come from overseas markets.
• New model launches planned for the year11 modelsMost are new vehicles developed based on the Gaoyuan platform.
• Wey V9X monthly sales expectationabout 5k unitsThe Wey brand V9X was launched on May 18.
• Potential cost reduction from the Gaoyuan platformabout 50%Compared with non-Gaoyuan models, management says the Gaoyuan platform can significantly reduce costs and improve consistency.
• Potential cost reduction from centralized production and supply-chain localizationabout 30%Achieved through single-base centralized production and supply-chain localization.
• Parts sharing ratioincreased from 50%-60% to 80%A higher parts-sharing ratio is one of the cost optimization measures.
• Overseas unit profitRmb10k-Rmb20kIt fluctuates due to exchange rates and product mix.
• Overseas inventoryabout 2 monthsIncluding vehicles in transit.
• Year-to-date export powertrain mixICE 60%-70%; HEV 20%-30%; NEV 10%-20%Exports are still dominated by internal combustion vehicles, with hybrids and new energy vehicles accounting for smaller shares.
• Right-hand-drive market share of exports25%Including Southeast Asia, Australia, and New Zealand.

Impact & implications

If export targets continue to be met and cost optimization progresses as planned, Great Wall Motor may receive support from external-demand expansion and gross margin improvement, especially in Russia, Europe, right-hand-drive markets, South America, and the Middle East. However, slower domestic demand, weaker sales, rising raw material prices, exchange-rate fluctuations, and product-mix changes may offset some of the improvement. Since Goldman Sachs labels the stock as Not Covered, this report is better suited as a monitoring piece for operating trends rather than a direct basis for a rating or target price.

Risks

• Domestic demand is clearly weak, and management says company sales are down about 10% year over year.
• Rising raw material prices may erode the effect of cost optimization.
• Overseas unit profit is affected by exchange-rate and product-mix volatility.
• Management expects gross margin to possibly decline sequentially in 4Q26.
• Overseas expansion is growing from a low base, and the tenfold growth in Europe sales and double-digit growth in Russia still need to be validated.
• Goldman Sachs labels Great Wall Motor as Not Covered, with no formal rating, target price, or earnings forecast.

What to watch

• Whether the monthly export pace after January-April continues to support the full-year export target of 600,000 units.
• Whether domestic sales can recover from the year-over-year decline, especially if the effects of weaker industry demand and the high base ease.
• Whether the sales, cost reduction, and gross margin contribution of models on the Gaoyuan platform are realized after launch.
• Whether monthly sales of the Wey V9X can reach the expected level of about 5,000 units.
• Orders, inventory, and profitability in Russia, Europe, right-hand-drive markets, South America, and the Middle East.
• Whether gross margin in 2Q26 and 3Q26 improves sequentially as management expects, and the extent of any decline in 4Q26.
• Changes in the mix of ICE, HEV, and NEV within the export powertrain structure.