Hong Kong-listed shares of Great Wall Motor dropped 9.2% on Wednesday after the Chinese automaker announced its projected 15% decline in profit for 2023. The company’s China-listed shares also fell 3% on the Shanghai Stock Exchange.
Great Wall Motor released preliminary results for 2023 on Tuesday, revealing that it anticipates a net profit decrease of 15% to 7.01 billion yuan (US$980.9 million) for the full year. Despite an expected 26% increase in revenue due to higher selling prices and demand, the company attributed the decline in profit to foreign currency fluctuations without providing further details.
Additionally, Great Wall Motor expects a sequential decrease in fourth-quarter profit, which it attributes to expenditure on annual staff bonuses.
Citi Research analyst Jeff Chung commented on the results, noting that while fourth-quarter profit was lower than anticipated due to year-end bonuses and one-off items, the revenue for the full year exceeded his expectations. Chung maintained his buy rating and a target price of HK$12.50 for the stock, emphasizing that Great Wall Motor remains one of the bank’s sector picks for 2024.
Looking ahead, Chung forecasts a profit of CNY10.8 billion for 2024, representing a growth of over 54% compared to the preliminary figure for 2023.