Abstract
Chery Auto will announce its quarterly results on August 20, 2026 post-Market, and investors are watching for signs that recent double‑digit unit growth and export momentum can translate into higher revenue and sustained margins.Market Forecast
Market watchers expect Chery Auto to post higher year‑over‑year revenue this quarter, supported by robust July volumes and steady export traction; there is no formal company forecast disclosed, but recent operating data points to a low‑teens revenue increase and gross margin holding near the mid‑teens, with net margin around the mid‑single digits and adjusted EPS not provided. From the previous report’s composition, automobile manufacturing is the core revenue driver and is expected to remain the main earnings contributor this quarter, with volume uplift and mix improvement in electrified models offsetting cost pressure; the company’s most promising near‑term growth pocket is export‑led new energy vehicle offerings, where July volumes rose sharply year over year, indicating continued momentum into the current quarter.Last Quarter Review
In the last reported quarter, Chery Auto generated RMB 65.87 billion in revenue, delivered a gross profit margin of 16.04%, achieved GAAP net profit attributable to the parent company of RMB 4.17 billion, and posted a net profit margin of 6.33%, while adjusted EPS was not disclosed. A notable highlight was revenue concentration in automobile manufacturing, with margins remaining resilient despite intense pricing competition and higher launch expenses, and July’s subsequent operational data suggested sequential strength in volumes. In terms of the main business, automobile manufacturing accounted for 100% of reported revenue at RMB 65.87 billion, with year‑over‑year revenue growth not disclosed in the prior report but with July volumes up 24.10% year over year providing a constructive setup.Current Quarter Outlook
Automobile manufacturing: core revenue engine this quarter
Chery Auto’s core automobile manufacturing business is positioned to benefit from healthy sell‑through and a fuller model lineup, including the recent launch of the Zungheng brand’s F700 pickup that broadens product reach and ticket size. July’s five‑brand sales of 261,876 units, up 24.10% year over year, indicate a favorable start to the quarter and suggest scaling benefits that can support mid‑teens gross margins if promotional intensity is contained. Within passenger EVs, third‑place monthly volumes in July, at 122,082 units according to sector data, signal demand resilience for the company’s electrified portfolio and can help offset price pressure in legacy gasoline models. Given last quarter’s 16.04% gross margin and 6.33% net margin, management focus on operating leverage, manufacturing efficiency, and disciplined incentives will be critical to keep margins near recent levels as volumes rise. Operating expenses will likely be front‑loaded due to product launches and international marketing, but volume uplift and mix of higher‑spec trims can cushion the impact, keeping profitability directionally aligned with last quarter’s baselines.Export‑led electrified lineup: strongest growth momentum
The most promising driver for incremental revenue and profit this quarter is the export‑oriented new energy vehicle lineup, which continues to scale rapidly. In July, the company reported 119,441 new energy vehicles sold and 196,311 vehicles exported, underscoring the strength of overseas channels and the appeal of electrified models in multiple regions. This exposure is strategically reinforced by capacity and partnership moves disclosed this year: taking over a former Nissan plant in South Africa to anchor African capacity, exploring local assembly options in Brazil for Jetour with a proposed investment plan through 2027, and establishing technology and development cooperation with Korea’s KG Mobility alongside a planned US dollars 75 million stake to speed mid‑to‑large SUV programs. While revenue by sub‑segment is not separately disclosed for the quarter, the July volume run‑rate indicates that export and NEV contributions are rising within the sales mix; this shift typically supports average selling prices and feature‑rich configurations, enabling better contribution margins compared with entry models. If the July trend persists, NEV and exports should account for a larger share of quarterly revenue versus last year, providing the clearest path to above‑company‑average growth in both top line and contribution profitability.Key stock‑price swing factors this quarter
Price discipline and incentive cadence across core models remain a primary swing factor for gross margin trajectory; maintaining a balance between volume and margin will be crucial as the company pushes newer models and clears legacy inventory. The cost of global expansion—start‑up expenses for South Africa and potential Brazil localization, upfront tooling for new platforms, and marketing to build brand equity—could weigh on operating margin quarter to quarter; however, the long‑term payback should be constructive if utilization ramps smoothly. Currency and logistics dynamics also matter: a weaker local currency in export markets can affect realized revenue, while freight and component costs may fluctuate with global supply conditions; this creates variability around net margin and cash conversion even if unit volumes are tracking well. On the demand side, domestic retail softness in July across the broader market highlights a challenging backdrop at home; sustained export strength and mix upgrades will need to more than offset domestic ebb‑and‑flow to keep quarterly revenue on a rising path. Finally, execution of newly launched models such as the F700 pickup, alongside the pipeline that includes the near‑production multi‑form SUV concept evolving toward a Tiggo‑series variant, will influence both order intake and near‑term marketing spend, affecting quarter‑specific profitability.Analyst Opinions
The balance of institutional commentary during the period leans decisively bullish. Among disclosed ratings since January, CITIC Securities maintained a Buy with a RMB 46.00 target price, CICC kept an Add with a RMB 35.00 target, and multiple brokers including Soochow Securities, Zhongtai Securities, and Guosheng Securities carried Buy‑equivalent stances. Based on collated views, bullish opinions outweigh bearish commentary by a wide margin (five recent Buy/Add calls versus no identifiable bearish ratings during the window), reflecting confidence that export scale‑up and an expanding electrified lineup can support both revenue growth and stable margins through near‑term volatility.The bullish case centers on three pillars. First, the company’s monthly operating prints show a strong start to the reporting quarter, with July five‑brand volumes up 24.10% year over year and a solid showing in passenger EV rankings; analysts view this as evidence that the product portfolio refresh is gaining traction across key price bands. Second, the export roadmap is translating into tangible milestones—capacity moves in South Africa, exploration of localized production in Brazil for Jetour, and partnerships such as the US dollars 75 million investment into KG Mobility to accelerate SUV programs—all of which support volume growth outside China and diversify earnings. Brokers argue that this geographic and product mix can help sustain mid‑teens gross margins by bolstering average selling prices and smoothing domestic cyclicality. Third, cost control and scale benefits are expected to stabilize net margin near the prior quarter’s 6.33% reference point; while launch and overseas expansion costs will likely stay elevated, brokers suggest the revenue base is now large enough to absorb these in the near term, maintaining a mid‑single‑digit net margin profile.
CITIC Securities’ Buy stance with a RMB 46.00 target underscores conviction that export momentum and new model launches will continue to compound revenue and support earnings resilience, even with promotional activity in China. CICC’s Add rating and RMB 35.00 target price conveys a similar outlook, highlighting operating leverage as unit volume rises and the potential for margin preservation if pricing is managed prudently. Across these bullish views, institutions acknowledge risks around domestic retail softness and the upfront costs of global expansion, but they consider these manageable against the upside from sustained overseas demand for electrified models and a pipeline that broadens price coverage. In aggregate, the majority opinion expects Chery Auto to deliver a year‑over‑year revenue increase this quarter, supported by export‑led NEV growth and steady margins, with the share price likely to be most sensitive to any surprise in gross margin and the pace of overseas ramp through late‑quarter data.
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