China

Great Wall Motor Reports a 6% Increase YOY in 1Q14 Net Profits to RMB 2 Bln; Misses Estimates

This article was originally published on April 17, 2014 at 11:39 am EST

Summary:

  • Great Wall Motor (HK: 2333/ CH: 601633) reports that its net profits for first-quarter of 2014 were up 6% from same period in 2013 to RMB 2 billion, missing the consensus of RMB 2.12 billion.
  • The firm reports net revenues of RMB 14.7 billion on the same basis of comparison, up 16% from the same quarter last year.
  • EPS increased 6% from the first-quarter of 2013 to RMB 0.66, missing a RMB 0.7 estimate.

Why It Matters:

  • Ahead of the Beijing Auto Show on April 20, Great Wall Motor expects to launch three new SUV models the H2, H9, and the H8. The H8 is expected draw attention as it represents the company’s initial foray into the high-end SUV market. The unveiling will also be highly scrutinized after a series of manufacturing setbacks pushed the launch back by three months.
  • According to a recent brokerage report from CITIC Securities, although Great Wall Motor is launching several new car models in April, it will still take time for the company to expand its production lines. Therefore, CITIC Securities expects Great Wall Motor to boost its net profits only during the second half of the year. The brokerage firm also predicts that Great Wall Motor will maintain a relatively slow growth rate during the same time frame.