长城汽车(02333.HK)Alert: WEY Jan 18 Sales below Nov/Dec 17 Levels-Maintain Sell

2018-02-12 09:26 港股研报君 阅读 1112

机构:花旗银行

评级:sell

目标价:HK$6.84 

Jan-18 sales declined by 12.4% MoM: GWM’s Jan-18 wholesale volume came in at 110k units, up 20.6% YoY but a 12.4% MoM decline. Overall its SUV Jan sales were up 21% YoY but pulled back by 10.3% MoM mainly due to Havel SUV’s 2% YoY sales decline. We recognize GWM’s Jan sales are rather neutral to negative because (1) WEY SUV sales volume fell by 5% MoM and is also 1% below the Nov 17 level; (2) M6 sales were down 54% MoM; (3) H2 sales were down 43% MoM; (4) H6 sales were up 7% MoM   

Dealership visit feedback: WEY volume likely peaked: We visited 40 dealerships in Shanghai, Wuxi, Beijing, Tianjin, Shenzhen and Shenyang over the past few weeks, including six stores for GWM and WEY. Our channel check suggests that (1) customer traffic has significantly slowed down, leading to a gloomy outlook for Feb18; (2) Most WEY 4S stores have available inventory for vv5/vv7 in mainstream colors, and they acknowledge that volume has fully ramped-up in Nov/Dec – hence it is less likely to increase on a monthly basis in future.  

Negative catalysts ahead: We see two near-term negative catalysts: (1) GWM’s 1Q18 retail sales likely will be weaker than expectation as most of its products are equipped with 1.6T engines, which suffer most from the 2.5ppt purchase tax increase this year, (2) WEY SUV sales run-rate may decline MoM after the low season for car sales kicks in after the Chinese New Year. We maintain a Sell rating with TP at HK$6.84. We recommend investors to switch from GWM into BYD (1211.HK) with  Jan NEV sales up 11x YoY and hidden PV margin recovery ahead. 

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