Great Wall Motor Expects 59%-63% Drop in Net Profit for H1 2026
Claire Weston
Great Wall Motor (02333) guided H1 net profit to RMB 2.35–2.60 billion, down roughly 59%–63% year-on-year — yet sales volume and revenue both grew. The profit slide traces to two non-operating items, not a weakening core business.
How big is the profit drop?
Attributable net profit is guided at RMB 2.35–2.60 billion, a year-on-year decline of RMB 3.7–4.0 billion, or roughly 59%–63%.
Stripping out non-recurring items, net profit is RMB 1.50–1.75 billion, down 51%–58%.
This means → on either measure, profit is nearly halved; the smaller drop on a non-recurring-adjusted basis signals that one-off items — not the core business — drove most of the decline.
Where did the money go? Two items explain nearly all of it
Item one: delayed overseas tax subsidy. The year-earlier period booked about RMB 2.274 billion in overseas tax-policy subsidies; this period, the same payment has not yet arrived.
In plain terms = last year's H1 profit included a government subsidy that was recognised early; this year that line is simply missing, creating an instant gap.
Item two: FX swung from gain to loss. H1 2025 recorded RMB 1.493 billion in FX gains; H1 2026, after hedging offsets, shows a net FX loss of about RMB 266 million (unaudited) — a year-on-year swing of roughly RMB 1.759 billion.
This means → these two items alone account for about RMB 4.0 billion of the profit shortfall — virtually the entire year-on-year decline.
Are cars actually selling? Yes — and growing
The filing states that sales volume and revenue both grew year-on-year, driven by overseas expansion and higher-value models in China.
This reflects an improving operating picture: the brand-upgrade and globalisation strategy is delivering on the top line.
In plain terms = the core business is not shrinking — it is expanding. The ugly profit number is entirely a function of two non-operating line items.
What to watch in H2?
Watch one: subsidy arrival. If the RMB 2.274 billion overseas subsidy is confirmed in H2, full-year profit will recover materially.
Watch two: FX trend. H1's FX swing cost nearly RMB 1.76 billion; a more stable renminbi in H2 would ease this drag.
This means → whether full-year earnings can "catch up" depends on these two non-operating variables, not on how many cars the company sells.
Content is for reference only, not financial advice.