UBS maintains Buy on Great Wall Motor, cuts target price to Rmb32

Overview

This is an UBS company research and rating-change report on Great Wall Motor's A shares. Against the backdrop of weaker-than-expected 2025 earnings, overseas scrappage tax collection issues, intensifying domestic competition, and rising raw material costs, UBS cut Great Wall Motor's 2026-28E earnings forecasts by 19-24%, but still maintained a Buy rating, believing the market is underestimating the company's potential to enter the mainstream premium segment through the Wey brand and the Guiyuan platform, as well as the earnings support from its overseas business.

Core views

The core views are threefold. First, Great Wall Motor has already shown a solid premiumization base among China's mainstream automakers, with 2025 ASP reaching Rmb173k. Second, Wey V9X, with powertrain, suspension, steering, long pure-electric range, an 800V PHEV platform, and 6C fast charging, may replicate the premium large-SUV playbook of Li L9, AITO M9, and Zeekr 9X. Third, overseas sales contribute about 40% of volume and profit; the 2026 target is 600k units, and combined with Brazil capacity expansion, this could become a pillar of profit growth.

Analysis framework

The report combines top-down industry competition judgment with bottom-up company-level analysis of models, sales, gross profit, and valuation. UBS focused on key questions such as whether V9X monthly sales can exceed 5k units, whether overseas expansion can continue, and whether the valuation has already reflected concerns; it compared the company's historical valuation, peer P/E multiples, and model configurations, and adjusted sales, gross margin, net profit, and target price accordingly.

Methodology notes

• Valuation methodsPE methodology

  Price-to-earnings valuation

  UBS derived the base-case target price of Rmb32 using a 20x 2027E P/E; the previous target price was based on a 20x 2026E P/E. The upside case of Rmb36 is based on a 20x 2027E P/E, and the downside case of Rmb15 is based on a 15x 2027E P/E.

• scenario_analysisUpside/Base/Downside scenario

  Scenario analysis

  The report sets out upside, base, and downside scenarios, estimating valuation ranges around demand for new EV models, export expansion, total sales, ASP trends, and gross margin changes.

• peer_comparisonComps table and ASP comparison

  Peer comparison

  The report compares Great Wall Motor with peers such as BYD, Geely, Changan, and SAIC in terms of ASP, P/E, and product mix, arguing that Great Wall Motor should deserve some valuation premium due to its more premium product mix and higher per-vehicle net profit.

Asset mapping & comparison

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

• Great Wall Motor A-share 601633.SS

  Research target

  Strengths

  High ASP, a relatively balanced domestic and overseas mix, overseas sales and profit contribution of about 40%, strong competitiveness of the Wey V9X configuration, and cost-sharing advantages from the Guiyuan platform.

  Weaknesses

  Weaker-than-expected 2025 earnings; 2026-28E gross margin forecasts lowered by 0.4-0.7 percentage points; domestic competition and raw-material cost pressure remain.

  Comparison

  2025 ASP was higher than BYD's and Geely's; 2026E P/E is about 15x, below Changan and BYD at about 18x, and roughly in line with SAIC at about 15x.

  Risks

  Slower-than-expected demand for auto sales in China, intensifying industry competition, weakening competitiveness of the Tank brand, slower-than-expected export expansion, and geopolitical factors affecting overseas sales.

• Wey V9X

  Key new model and premiumization vehicle

  Strengths

  Longest CLTC pure-electric range at 363 km, 800V PHEV platform, 6C fast charging, 0-100 km/h acceleration under 5 seconds, rear-wheel steering, and dual-chamber air suspension.

  Weaknesses

  Whether it can stably achieve mainstream sales in the mid-to-high-end large-SUV segment still needs to be proven.

  Comparison

  The report compares it with Li L9, AITO M9, and Zeekr 9X, and believes its configuration is competitive and its price may have an advantage.

  Risks

  Disappointing market response to the new model, intensifying competition in premium large SUVs, and insufficient consumer acceptance of Wey's premium positioning.

• Overseas business

  Pillar of earnings and volume growth

  Strengths

  Overseas sales account for about 40% of volume and profit, with per-vehicle gross profit of about Rmb30k; the product lineup spans ICE, HEV, PHEV, and BEV, fitting demand across different regions.

  Weaknesses

  Scrappage tax collection issues and geopolitical risks exist.

  Comparison

  Compared with automakers that rely on a single domestic market, Great Wall Motor has a more balanced domestic and overseas mix.

  Risks

  Slower-than-expected export expansion, intensifying overseas competition, and policy and geopolitical factors weighing on sales.

Key data

• 12-month ratingBuyThe report maintains a Buy rating.
• Target priceRmb32.00Lowered from the previous Rmb35.00.
• Current priceRmb21.27As of 2026-04-10.
• Implied upsideAbout 50.4%Calculated based on target price Rmb32.00 and current price Rmb21.27.
• 2026-28E earnings forecast changeCut by 19-24%Mainly due to weaker-than-expected 2025 earnings and overseas scrappage tax issues.
• 2026-28E sales forecast1.55-1.72m unitsUBS raised the sales forecast by 3-4% on improved visibility for new models and export expansion.
• 2026-28E net profit forecastRmb12.1-16.0bnNet profit forecasts were cut after gross margin was lowered.
• 2025 ASPRmb173kThe highest among Chinese automakers with annual sales above 1 million units; BYD was Rmb122k and Geely was Rmb103k.
• V9X sales expectationPeak 8-10k units/month, stable 5-6k units/monthThe report sees a relatively high probability of monthly sales above 5k units.
• Overseas sales target600k units in 2026About 500k units in 2025, implying around 20% YoY growth.
• Brazil capacityExisting 50k units, planned additional 200k unitsProvides growth potential for overseas business in 2027.
• Base-case valuation multiple20x 2027E P/EUsed to derive the Rmb32 target price.

Impact & implications

The report is mildly positive for Great Wall Motor's investment case: although near-term earnings forecasts were cut, the share price at roughly 15x 2026E P/E already reflects concerns over sales growth and scrappage tax uncertainty. If V9X and the Guiyuan platform drive premiumization, combined with export expansion and product-mix improvement, the company could see earnings recovery and valuation re-rating.

Risks

• China auto demand slows.
• Intensifying industry competition, especially domestic price and product competition.
• Tank brand competitiveness weakens.
• Export expansion falls short of expectations or is affected by geopolitical factors.
• Weaker-than-expected reception of new EV models, hindering premiumization and ASP upside.
• Rising raw material costs compress gross margins.
• Ongoing uncertainty around overseas scrappage tax continues to affect earnings.

What to watch

• Whether orders, deliveries, and monthly sales of Wey V9X after launch can stabilize above 5k units.
• Whether the cost-sharing and scale effects of Guiyuan platform models can materialize.
• Whether overseas sales can reach the 600k-unit target in 2026.
• The construction progress and utilization rate of the additional 200k capacity in Brazil.
• Whether 2026-28E gross margins can stay at 18.5-18.7% or improve.
• Changes in competition in premium SUVs and NEVs in China.
• Whether the company's dividend payout ratio can remain above 40% and support valuation.