GF Securities: Maintaining Chery Auto (09973)'s “buy” rating at a reasonable value of HK$32.06, net profit returning to mother increased 15.79% year-on-year in the third quarter

The Zhitong Finance App learned that GF Securities released a research report stating that it maintains the “buy” rating of Chery Auto (09973), considers comparable company valuations, and gives the company an 8 times price-earnings ratio (PE) valuation in 2026, corresponding to a reasonable value of HK$32.06 per share. The bank estimates that the company's net profit from 2026 to 2028 will be RMB 19.026 billion, RMB 21.815 billion and RMB 25.315 billion, respectively. The company achieved operating income of 97.954 billion yuan in the third quarter of 2026, up 33.76% year on year and 26.54% month on month; net profit to mother was 5.396 billion yuan, up 15.79% year on year and 22.72% month on month, with excellent revenue and performance.

The main views of GF Securities are as follows:

Excellent revenue and performance for the third quarter of 2026

The company released its report for the third quarter of 2026. The first three quarters achieved operating income of 241,234 billion yuan, an increase of 12.29% over the previous year; net profit to mother was 13.963 billion yuan. Looking at a single quarter, the third quarter of 2026 achieved operating income of 97.954 billion yuan, up 33.76% year on year and 26.54% month on month; net profit to mother was 5.396 billion yuan, up 15.79% year on year and 22.72% month on month.

Gross profit margin continues to improve

In the third quarter of 2026, the company's gross margin was 16.29%, up 1.21 percentage points year-on-year and 0.17 percentage points month-on-month; net profit margin was 5.51%. Sales, management and R&D expenses were 3.71%, 1.83% and 4.47%, respectively, down 0.24, 0.69 and 0.47 percentage points from month to month, respectively.

In the first three quarters of 2026, the company's gross margin was 16.17%, an increase of 2.45 percentage points over the previous year. Foreign exchange during the same period changed from a profit of 2,974 billion yuan to a loss of 3.171 billion yuan for the same period last year, which dragged down profit growth.

Domestic and foreign sales both increased month-on-month, and exports maintained a high share

According to the company's monthly sales announcement, the total sales volume for the third quarter of 2026 was 801,800 units, up 14.97% year on year and 13.10% month on month; domestic sales (total sales minus exports) were 217,400 units, and 584,400 units were exported, up 24.92% and 9.25%, respectively. Exports accounted for 72.88% in the third quarter, with domestic and foreign sales contributing 43,400 units and 49,500 units, respectively, month-on-month increases.

In the first three quarters of 2026, the company's total sales volume was 2,077,900 units, up 10.48% year on year; domestic sales and exports were 577,800 units and 1.491 million units, respectively.

Risk Alerts

Competition in the industry intensified; fluctuations in overseas demand, trade policies and exchange rates; progress in the transformation and high-end of new energy sources fell short of expectations; sales of new models fell short of expectations.