Situation Takes Abrupt Turn, What's Wrong with Great Wall Motor?

The chill from the heights.

Half-year revenue broke 100 billion for the first time, but net profit was cut in half. Where did Great Wall Motor's profits go?

After market close on August 25, when Great Wall Motor released the 2026 Semi-Annual Report, perhaps the brows of many investors would furrow tighter.

Revenue of 102.101 billion yuan, up 10.58% year-on-year, this number is no problem; but net profit attributable to shareholders was 2.465 billion yuan, down 61.11% year-on-year. These two numbers make one doubt one's own eyes.

[Image source: Great Wall Motor 2026 Semi-Annual Report]

Revenue hit a historic high for the same period, but net profit returned to the level of the same period in 2017.

This sense of tearing makes people worried for this most representative private listed automaker in Northern China. Perhaps, besides appearing in live streams, Wei Jianjun is also time to return behind the scenes to manage this warship that once had over 10,000 net profit per vehicle.

01

Reviewing this Semi-Annual Report, the core issue is, compared to net profit attributable to shareholders of 6.337 billion yuan in the first half of last year, it decreased by nearly 4 billion yuan this year, where did this money disappear?

Great Wall Motor explained in the financial report: delayed recovery of overseas tax policy subsidy benefits, and exchange rate fluctuations. Looking closely, these two items can almost explain the entire profit gap.

Great Wall Motor disclosed in the performance forecast that in the first half of 2025, Great Wall Motor recognized a relatively large amount of overseas tax policy subsidy benefits, amounting to 2.274 billion yuan. But in the first half of this year, this subsidy could not be recognized in time due to the extended payment cycle, just this one item caused a profit gap of over 2 billion yuan.

In addition, financial expenses in the first half of last year were -1.692 billion yuan, meaning exchange gains were nearly 1.7 billion yuan. But in the first half of this year, financial expenses turned positive at 280 million yuan, of which the exchange difference was a loss of 423 million yuan. One in, one out, the profit difference caused by exchange rate fluctuations was about 2 billion yuan.

[Image source: Great Wall Motor 2026 Semi-Annual Report]

The two items combined totaled about 4 billion yuan, and Great Wall Motor's net profit attributable to shareholders decreased by 3.872 billion yuan in the first half of the year, basically matching this number.

In other words, if these two non-recurring factors are excluded, Great Wall Motor's main business profitability did not experience a cliff-like collapse.

Gross margin was 18.37%, almost flat with 18.38% in the same period last year. Net profit attributable to shareholders in the second quarter was 1.519 billion yuan, up more than 60% quarter-on-quarter.

From these data, Great Wall Motor's direct profitability of selling cars did not suffer fundamental deterioration. Zhongtai Securities pointed out in a research report that the year-on-year decline in net profit attributable to shareholders was mainly disturbed by two major non-operating factors.

But in the view of AutoKline, this conclusion can only explain why profits are lower, cannot explain why they are only this low.

02

The Semi-Annual Report shows that in the first half of this year, Great Wall Motor sold 575,800 new cars, up 1.22% year-on-year, but this growth almost all came from overseas. In the first half of this year, Great Wall Motor's overseas new car sales reached 289,000 cars, up 45.46% year-on-year, overseas sales surpassed domestic for the first time.

Overseas revenue brought in 56.288 billion yuan, up 56.83% year-on-year, accounting for 55.13% of total revenue. In the same period last year, the proportion of overseas revenue was less than 39%. August Production and Sales Bulletin shows that cumulative sales in January-August reached 416,000 cars, up 31.75% year-on-year, the overseas market is still continuously expanding.

From the data, Great Wall Motor's growth engine has completed the switch. A Chinese private listed automaker established over 40 years is turning into a global enterprise with overseas markets as the main revenue source.

[Image source: Great Wall Motor 2026 Semi-Annual Report]

But AutoKline believes this switch has a cost. The higher the proportion of overseas revenue, the greater the sensitivity of profit to exchange rates and overseas policy changes.

RMB depreciation helped Great Wall Motor last year, exchange rate fluctuations brought nearly 1.5 billion yuan in book profit. This year exchange rates reversed, Great Wall Motor paid a cost of over 260 million yuan for this. As the scale of overseas business continues to expand, this fluctuation will only be more intense.

More worthy of attention is the scale comparison. In the first half of the year, Chery Automobile's net profit attributable to shareholders was 8.567 billion yuan, down 11.73%; Geely Automobile's net profit attributable to shareholders was 9.091 billion yuan, slightly down 1.79%.

For these two listed automakers, exchange losses just cut the profit growth, the profit base is still solid. But Great Wall Motor's net profit attributable to shareholders in the first half of this year was only 2.465 billion yuan, the thickness cannot withstand such external shocks.

03

Overseas revenue proportion exceeds half, bringing revenue growth, but also brought structural cost pressure.

In the first half of the year, Great Wall Motor's selling expenses were 5.998 billion yuan, up 19.11% year-on-year, the growth rate was about 9 percentage points higher than revenue. Selling expense ratio rose from 5.45% to 5.87%. Among them, commission expenditure rose from 459 million yuan to 824 million yuan, growth nearly double.

Where was this money spent? Besides channel commission, promotion subsidies, ad placement in the domestic market, Great Wall Motor's overseas sales channels grew from about 1,400 last year to over 1,600, adding about 200 in half a year.

[Image source: Great Wall Motor Official Account]

In June, Great Wall Motor's flagship showroom in Dubai's core business district, the largest overseas flagship showroom, officially opened. The full-process vehicle production bases in Brazil and Thailand are still under construction, not yet reached the break-even point.

These investments are necessary costs for overseas expansion, but also expensive costs.

The larger the scale of overseas business, the greater the amortization pressure of these fixed costs. If overseas sales growth slows, or terminal prices fluctuate, the selling expense ratio will definitely continue to climb.

04

If overseas profit pressure is growing pains, then the continued contraction of the domestic market is a bleeding wound.

In the first half of the year, the overall domestic passenger car market declined by 20.2%; Great Wall Motor's domestic sales were 286,700 cars, down 22.53% year-on-year, underperforming the market by about 2.3 percentage points.

Domestic SUV sales dropped sharply from 284,200 cars in the same period last year to 194,200 cars, a drop of more than 31%; domestic pickup sales were down 16.22% year-on-year.

[Image source: Great Wall Motor 2026 Semi-Annual Report]

Looking by brand, Haval's growth almost all came from overseas, the domestic base obviously contracted. In the top 10 sales of SUV models in the first half of the year, there was no sign of Haval products.

In the past, Haval H6 benefited from the dividend of "large space, high cost-performance", later Big Dog and Raptor benefited from the dividend of "light off-road box". But now there are more and more boxes in the market, Jetour, iCAR and other brand competitors are fully benchmarking against them in styling and intelligence, Haval's uniqueness has been diluted.

Looking at the Tank brand again, the Semi-Annual Report disclosed global sales of 90,200 cars in the first half of the year, down more than 10% year-on-year. In the hardcore off-road niche market that is still growing, a decline means market share is being eroded by competitors.

In 2022, Tank's market share in hardcore off-road exceeded 50%, dropped to 32% in 2025. In the same year, BYD's Fang Cheng Bao annual sales surpassed Tank for the first time.

Tank was once the only domestic hardcore off-road available, which allowed it to benefit. But when BYD, Dongfeng, Chery, Geely are all pushing hardcore off-road, Tank is no longer "the only one".

[Image source: Great Wall Motor August Production and Sales Bulletin]

August sales data confirmed this trend, in the month Great Wall Motor's total sales were 113,400 cars, down 1.87% year-on-year; January-August cumulative 805,400 cars, slightly up 1.98% year-on-year. Although the cumulative data barely maintained positive growth, single-month sales turned down again, the domestic fundamentals have not shown obvious improvement.

Among them, the Tank brand's cumulative sales decline has exceeded 11%, the Haval brand's cumulative sales increased only slightly by 0.44%, approaching negative growth.

05

As for the WEY brand shouldering the mission of brand upward, Great Wall Motor's Production and Sales Bulletin shows cumulative sales of 44,500 cars in the first half of the year, up 29.05% year-on-year. But in June single month, WEY sales fell sharply 29.48% year-on-year, July and August fell by 23.1% and 8.23% respectively, for three consecutive months monthly sales only over 7,000 vehicles.

WEY seems never found the brand's anchor. In the minds of many consumers, Li Auto equals Dad car, AITO equals Huawei Intelligent Driving, Nio equals battery swapping, what does WEY equal?

From VV Series' sports luxury, to Coffee Series' intelligent hybrid, to V Series' AI luxury, repeated adjustments of positioning make people feel indefinite.

In design, WEY can no longer produce a work as stunning as VV7 back in the day. Since Pierre Leclerc resigned in 2017, WEY's design language has fallen into long-term swinging and following, never formed a unique family identity.

Haval, Tank, WEY, the structural collapse of three brands in the domestic market, added up is billions of yuan in profit evaporation.

[Image source: Great Wall Motor June Production and Sales Bulletin]

At the same time, Great Wall Motor's new energy transition is also stumbling.

In the first half of the year, Great Wall's new energy vehicle sales were 144,600 cars, down 9.8% year-on-year, sales proportion only about 25%. For every 3 cars Great Wall Motor sells, less than 1 is new energy, while at the same period domestic new energy overall penetration rate has exceeded 50%. In the past two months, it has broken through 65%!

Even though 2026 has passed two-thirds, Great Wall Motor's new energy penetration rate is still less than 30%, far below the overall market.

06

Overall sales decline caused Great Wall Motor's inventory to climb from 26.148 billion yuan at the beginning of the year to 33.802 billion yuan, growth 29.27%.

On the other side, net profit margin dropped from 6.86% to 2.41%. These numbers linked together, together point to a reality, the domestic market is dragging Great Wall Motor's overall profitability.

Based on this reality, many institutions such as SOW Securities, BOCI, BOC International downgraded Great Wall Motor's net profit attributable expectation.

BOC International stated, Great Wall Motor's export business growth elasticity is weaker than peers, and Guiyuan platform models lack core competitiveness that can drive sales, both may limit the stock price upside.

After Great Wall Motor released the Semi-Annual Report, its A-share trend was still stable, as of August 31 close reported 15.18 RMB. But its HK shares continued to be volatile, hit a low point since April 2024 (7.78 HKD) on August 28, as of August 31 reported 7.89 HKD.

But some institutions are optimistic, China Merchants International expects Great Wall Motor's second-half profitability will迎来 a turnaround.

Comprehensively speaking, securities institutions generally believe domestic market competition intensifying and high selling expenses are Great Wall Motor's real pressure, divergence lies in whether second-half performance can be recovered.

Great Wall Motor is not without seeing these problems. In the second half of the year, it has entered a new product intensive launch cycle. But new product launches and hot orders are just preliminary signals, whether subsequent stable delivery and improved per-vehicle profitability can be improved, still needs time to verify.

Whether overseas tax subsidies can be recovered in the second half of the year, whether exchange rates can stabilize, are also important variables determining the full-year profit trend. And the divergence of securities institutions itself explains the complexity of Great Wall Motor's current situation.

Views of AutoKline:

100 billion revenue is a milestone, but the income statement never lies. Overseas surge forward is Great Wall Motor's present, domestic stop falling and rise is the foundation, premium brand breakthrough is the future. Three propositions, Wei Jianjun and Great Wall Motor, must answer well.

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