On Friday, UBS maintained its positive stance on Great Wall Motor Co Ltd. (2333:HK) (OTC: GWLLF), raising the share price target to HK$17.00 from HK$14.00 while keeping a Buy rating on the stock. The move comes as a response to the company's robust export volumes and profitability in 2023, which have set a new record for the automaker.
Great Wall Motor's transformation strategy has been highlighted by its increased focus on exports, which are expected to continue their high growth trajectory. According to UBS, exports could account for over 50% of the company's gross profit in the next three years. This forecast is supported by the firm's raised earnings per share (EPS) estimates for 2024-2026, which have been increased by 22-33%.
The automaker has also been recognized for its dominance in the off-roader segment, where it holds a 30-40% market share. Great Wall Motor's long-standing expertise in technology, customer engagement, channel development, and brand management has positioned it to capitalize on the expanding off-roader market in China.
UBS's updated EPS estimates for Great Wall Motor are notably higher than the consensus figures, standing 18-35% above the Visible Alpha consensus and 3-7% above the Wind consensus. The firm suggests that market concerns regarding price competition in China's auto sector may be overshadowed by the potential for continued positive surprises from Great Wall Motor's export performance and the strong growth momentum within China's off-roader market.
InvestingPro Insights
UBS's optimistic outlook for Great Wall Motor Co Ltd. is echoed by several key metrics and insights from InvestingPro. The company currently boasts a perfect Piotroski Score of 9, indicating robust financial health, and it holds more cash than debt on its balance sheet, which is a positive sign for investors concerned about financial stability. Additionally, Great Wall Motor is trading at a low P/E ratio relative to near-term earnings growth, with a current P/E ratio of 10.56, suggesting that the stock may be undervalued given its growth prospects.
InvestingPro's real-time data further supports the company's strong position. With a market cap of 14.75B USD, Great Wall Motor has demonstrated impressive revenue growth of 40.88% over the last twelve months as of Q1 2024. Moreover, the company's gross profit margin stands at 19.19%, reflecting its ability to maintain profitability amid market fluctuations.
For investors looking to delve deeper into Great Wall Motor's potential, InvestingPro offers additional tips, including insights on the company's performance in the Automobiles industry and its long history of dividend payments. To access these insights and more, visit https://www.investing.com/pro/GWLLF and don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes a comprehensive list of over 10 additional InvestingPro Tips for a more informed investment decision.
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