In July 2026, Great Wall Motor delivered a half-year report card marked by stark contradictions. While both sales volume and revenue grew, the net profit attributable to shareholders plummeted by nearly 60%. Management attributed the profit shortfall to “black swan” events like overseas subsidy delays and foreign exchange losses, but beneath this financial veneer, a more intricate structural dilemma has surfaced. Under the spotlight of overseas sales surpassing domestic sales for the first time, the company's main brands are facing a growth slowdown. Meanwhile, despite the Guiyuan platform shouldering high hopes for cost reduction, the expense erosion from direct-sales expansion has made the profit turning point increasingly unpredictable. This automaker, once at the peak of China's independent brands thanks to SUV dividends, now stands at a crossroads where its valuation logic must be reset.
A $40 Billion Profit Bleed: The True Picture Behind Non-Recurring Items
Performance forecasts indicate that in the first half of this year, Great Wall Motor's net profit attributable to shareholders will be between 2.35 billion and 2.6 billion yuan, a year-on-year decline of 58.97% to 62.92%. The net profit excluding non-recurring items is expected to be between 1.5 billion and 1.75 billion yuan, a year-on-year drop of 51.14% to 58.12%. In its report, Great Wall Motor stated that the significant profit bleed primarily stems from two accounts: first, a 2.274 billion yuan overseas tax subsidy benefit recognized in the same period last year was not booked due to policy delays; second, exchange rate fluctuations led to approximately 266 million yuan in forex losses in the first half, reducing forex gains by 1.759 billion yuan year-on-year. The combined impact on profit is about 4 billion yuan, largely covering the scale of the net profit reduction. Excluding these two factors, Essence Securities estimates that Great Wall Motor's operating net profit for the first half was approximately 4.42 billion to 4.67 billion yuan, only down 4% to 9% year-on-year, corresponding to a net profit per vehicle of 7,600 to 8,000 yuan, a slight narrowing from 8,500 yuan in the same period last year.
On the day the performance forecast was released, Great Wall Motor Chairman Wei Jianjun publicly responded on his social media platform, emphasizing, "Surface numbers are important, but we care more about the healthy development of the enterprise. In channel operations, we sell more but ship less. The domestic inventory-to-sales ratio is better than the industry average, ensuring healthy operations for both the company and dealers." According to data from YOUNG Finance, as of the end of June 2026, Great Wall Motor's total domestic inventory coefficient was 1.3, with an average inventory-to-sales ratio stable at 1.5 (meaning dealer inventory equals 1.5 months of sales). For reference, the China Automobile Dealers Association reported a national average dealer inventory coefficient of 1.58 for June 2026. The industry-recognized safety warning line for inventory is 2.0. Great Wall Motor's ratio of 1.5 is indeed lower than the industry average of 1.58 and significantly below the 2.0 warning line, indicating a relatively healthy and controllable range.
However, terminal selling expenses remain persistently high. Financial reports show that for the full year of 2025, Great Wall Motor's selling expenses totaled 11.273 billion yuan, a sharp year-on-year increase of 43.93%, with a selling expense ratio of about 5.0%. In the first quarter of 2026, this figure further climbed to 5.8%, indicating that the expansion of direct-sales channels is still in an accelerated investment phase. With the combined impact of overseas subsidy delays and forex losses, selling expenses are further eroding short-term profits, exacerbating the decline in reported profit. Citigroup directly downgraded its rating to “sell” after the performance announcement, warning that raw material cost inflation would further pressure gross margins. Analyst profit forecasts vary widely. Jefferies lowered its 2026 net profit forecast for Great Wall Motor to 9.4 billion yuan, CLSA cut it by about 19%, and HSBC reduced it by 23%. These figures are significantly more cautious compared to the previous expectation range of 12 billion to 12.6 billion yuan.
Auto industry analyst Mei Songlin believes that the recovery of Great Wall Motor's profits currently faces uncertainties. In the short term, the timing of subsidy receipts remains unresolved. A Citigroup research note stated that management expects approximately 1.9 billion yuan in Russian scrappage tax refunds to be received by the end of 2026, but given previous delays, it believes actual booking is unlikely. If this amount cannot be confirmed within the year, it will continue to drag on full-year profits. In the medium term, the Guiyuan platform will determine the quality of the profit turning point. At the beginning of 2026, Great Wall Motor launched the Guiyuan platform. This platform is compatible with five major powertrain forms, boasting an 80% parts commonality rate, and theoretically has the potential to reduce new model costs by approximately 50%. “If these new products can truly establish differentiation in premiumization and intelligence, rather than just diverting customers within the system, a profit turning point may gradually emerge by 2027,” Mei Songlin commented.
‘Cannibalization’: The Internal Friction of Multi-Brand Development
However, in the view of auto industry analyst Lin Shucheng, profit fluctuations are merely a surface issue; the internal brand competition within Great Wall Motor is a more concerning hidden danger. The most typical case is the Tank brand. According to the company's sales data, Tank's decline widened to 27.16% in June, with sales of its flagship model, the Tank 300, plummeting from a peak of nearly 10,000 units to around 3,000 units per month. “The lower-priced Haval Menglong PLUS shares similar exterior design and off-road features with the Tank 300, and it even incorporates the Tank’s signature ‘tank turn’ function. By cascading technology to expand its coverage, Great Wall Motor has objectively diluted the exclusivity and pricing power of the Tank brand. Consumers are choosing cheaper alternatives within the system rather than being poached by competitors. This internal friction is more problematic than external competition,” Lin Shucheng stated.
Looking at individual brands, development across Great Wall Motor's various segments is uneven. For first-half sales this year, the Haval brand sold a cumulative 327,000 units, a slight year-on-year increase of 1.82%, but June sales fell 3.38% year-on-year. As Great Wall Motor's fuel vehicle base, Haval is facing transition pressure. The Tank brand sold a cumulative 93,000 units, down 10.62% year-on-year, ending its previous period of rapid growth. The premium-focused WEY brand sold 45,000 units cumulatively, a strong year-on-year increase of 29.05%. The ORA brand sold 26,000 units cumulatively, achieving a year-on-year growth rate of 89.74%. Lin Shucheng noted that the root cause of this unbalanced brand development lies in multiple strategic contradictions within Great Wall Motor. First, the dispersion and inconsistency of technology roadmaps. He pointed out that while BYD bet on DM-i and a pure electric matrix, Great Wall Motor chose a “parallel hybrid, pure electric, and hydrogen energy three-track” approach, which spread resources thin, leading to insufficient investment in each track. The Hi4 hybrid technology, due to its high cost and energy efficiency disadvantages, failed to gain traction in volume models, while pure electric efforts were only supported by the niche ORA brand, resulting in a low overall new energy vehicle (NEV) penetration rate. According to the China Passenger Car Association, against the backdrop of a roughly 20.2% year-on-year decline in China's domestic passenger car retail market in the first half of 2026, Great Wall Motor fell out of the top ten domestic retail sales rankings, replaced by Leapmotor. Based on June sales data, Great Wall Motor's domestic sales were approximately 47,900 units (including pickups), while Leapmotor delivered 93,400 units in the same period, HarmonyOS Smart Mobility delivered 50,600 units, and both NIO and XPeng exceeded 40,000 units. This means that in its core domestic market, Great Wall Motor's monthly sales scale is being comprehensively chased or even overtaken by NEV makers.
Secondly, there is a conflict between the “profit protection” strategy and the pursuit of scale expansion. The ORA Black Cat and White Cat models were discontinued due to raw material price increases and losses on each unit sold, causing Great Wall Motor to miss the explosive growth window in the micro EV market. While this decision preserved short-term profits, it cost the company a crucial volume-generating entry point in the main NEV battleground. Thirdly, there is a lack of brand synergy. “The five brands appear to cover all scenarios, but in reality, their positioning overlaps and resources dilute each other. Haval and Tank overlap in rugged design, WEY's premiumization competes with Tank's high-end models, and ORA's transition from a female-oriented positioning to a more general audience creates new overlap with Haval. This internal friction consumes more strategic resources than external competition,” Lin Shucheng concluded.
Overseas, Platform Commercialization, and Brand Focus: Valuation Reset Requires Clearing Three Hurdles
Against the backdrop of a nearly 60% profit drop in the first half of 2026, Great Wall Motor's valuation logic is facing a reset. The core question from the capital market has shifted from “Can it still grow?” to “How will it grow?” For a traditional automaker with a PE valuation hovering in the 9-12x range and widely divergent institutional target prices, shifting its valuation center upward depends on whether it can craft a new narrative. Overseas business is currently the most certain growth driver for Great Wall Motor. Data shows that in the first half of this year, Great Wall Motor's cumulative sales were 584,000 units, a slight year-on-year increase of 2.48%. Of this, overseas deliveries reached 291,400 units, with year-on-year growth close to 50%. Overseas sales as a percentage of total sales approached 50%, and in June, monthly overseas sales exceeded 60,000 units for the first time, marking the first instance of overseas sales officially surpassing domestic sales. Essence Securities predicts that its export wholesale sales for 2026-2028 will reach 660,000, 850,000, and 1 million units respectively, with an annual growth rate exceeding 20%. However, what capital truly focuses on is not sales volume but the profit quality of the overseas business. It is noted that Great Wall Motor's Brazil plant currently has an annual capacity of only 50,000 units and is in a capacity ramp-up phase. After contracting its European market to a light-asset agency model, there are questions about whether operating costs have been effectively reduced. The nearly 1.8 billion yuan forex loss fluctuation reveals that the company has not yet established effective financial hedging for its global operations. BOCOM International pointed out that with the capacity ramp-up at overseas plants like Brazil, coupled with localized operations in the Latin American market, high-margin overseas sales are expected to see continued breakthroughs.
In terms of technology narrative, Great Wall Motor President Mu Feng provided some figures at the 2025 annual general meeting: the total R&D investment for the eight models planned under the Guiyuan model for the ORA 5 is equivalent to the cost of just 2.4 models under the non-Guiyuan model, saving about 70% in R&D costs, about 65% in production asset investment, and about 78% in supply chain tooling and development costs. The launch pace and sales performance of mid-to-high-end new models in the second half of the year, such as the WEY V9X, V8X, and the new Tank 700, will be the litmus test for the commercialization capability of the Guiyuan platform. Furthermore, the implementation of the “ONE GWM” strategy is a crucial step for Great Wall Motor's brand valuation logic to shift from “multi-brand dispersion” to “master brand concentration.” At the aforementioned general meeting, Mu Feng clearly stated that globally, GWM will be used to integrate Haval, ORA, and the Great Wall Pickup, carrying the mainstream product line, while Tank and WEY will continue to move upwards as more premium, independent brands. Mei Songlin believes that whether Great Wall Motor can truly end its internal brand friction, whether its NEV penetration rate (only about 29.4% in the first half) can rapidly catch up with the industry average, and whether its new mid-to-high-end models can hold their ground in fierce competition are all “empirical evidence” the capital market needs to see. The second half of 2026 will be a validation period, determining whether Great Wall Motor is valued at a discount for a “traditional automaker” or a premium for a “global platform enterprise.”
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