Great Wall Motor Shares Drop After Flagging Lower 2023 Profit

By Jiahui Huang

Great Wall Motor's shares dropped sharply after the Chinese automaker said it expected profit to fall 15% in 2023, with fourth-quarter profit also declining sequentially.

Hong Kong-listed shares fell 9.2% at midday Wednesday, taking losses this month to 20%. The company's China-listed shares were down 3.0% on the Shanghai Stock Exchange.

Great Wall Motor said in a release of preliminary 2023 results Tuesday that it expects full-year net profit to fall 15% to 7.01 billion yuan (US$980.9 million), even as its topline likely rose 26% on higher selling prices and demand. It blamed the lower profit on foreign currency movements, without elaborating.

The Hebei, China-based company said it also expects fourth-quarter profit to have fallen on a sequential basis, which it attributed to expenditure on annual staff bonuses.

Citi Research analyst Jeff Chung said in a note that the full-year revenue beat his estimates, and that fourth-quarter profit was "decent," even as it came in lower than forecast due to "very high" year-end bonuses and one-off items.

Chung kept his buy rating and HK$12.50 target price for the stock, noting that the company remains one of the bank's sector picks in 2024.

He also maintained his forecast for 2024 profit of CNY10.8 billion, up more than 54% from the preliminary 2023 figure.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

January 23, 2024 23:43 ET (04:43 GMT)

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