Maintain BUY. Great Wall’s 4Q24 earnings were a mixed bag, in our view, as revenue missed but GPM and SG&A expenses beat our prior estimates. We believe a stronger model cycle in FY25E than FY24 could be a positive catalyst for its share price. In particular, new Wey-brand models could be key to Great Wall’s sales volume and profit growth in FY25E. We still see room for Great Wall’s overseas sales growth, as it expands its footprint in Latin America.

4Q24 revenue miss, GPM and SG&A beat. Although Great Wall’s 4Q24 net profit was in line with the company’s preliminary results announced in Jan 2025, its 4Q24 revenue missed our prior forecast by 9%, as the average selling price (ASP) declined QoQ. 4Q24 GPM without the warranty provision adjustment was 19.1%, or 0.4ppts higher than our projection. 4Q24 SG&A expenses (incl. warranty provision) were about RMB900mn lower than our forecast. Forex loss from ruble depreciation was also lower than most of its peers.

FY25E outlook. We project FY25E sales volume to rise 9% YoY to 1.35mn units (10,000 units lower than our prior forecast), driven by the Haval and Wey brands. A plethora of new models (likely 3 for Haval and 3 for Wey) in FY25E and overseas growth (+28% YoY to 0.58mn units in FY25E) are key to FY25E sales volume, in our view. We also expect vehicle ASP to continue rising 1% YoY in FY25E to about RMB143,000, aided by higher sales contribution from Wey.

We project Great Wall’s FY25E gross profit to rise RMB3.0bn YoY to RMB42.5bn, with 36% of the growth being from Wey, as sales volume growth from Tank slows down. We also expect its net cash position to be further strengthened in FY25E, which could lift net finance income. A possible forex gain in FY25E could also aid Great Wall’s net profit. Taken together, we cut our FY25E net profit estimates by 5% to RMB13.1bn, as we revise down its overseas ASP and GPM slightly.

Valuation/Key risks. We maintain our BUY rating for both A and H shares. Our H-share target price of HK$17.00 is based on 10x (unchanged) our revised FY25E EPS and our A-share target price of RMB32.00 is based on Great Wall’s current A/H premium of about 100% (vs. the average A/H premium of about 120% in the past 12 months). Key risks to our rating and target prices include lower sales volume and margins, slower tech transformation than we expect, as well as a sector de-rating.