Tianfeng Securities has published a research report stating that based on WULING MOTORS' (00305) research capabilities in the new energy sector and its continuous investment and innovation in building a comprehensive autonomous industrial chain, future performance is expected to continue growing. The firm projects the company's total operating revenue for 2025-2027 to be RMB 8.866 billion/9.724 billion/10.672 billion, representing year-over-year growth of +12%/10%/10%. Net profit attributable to shareholders is projected at RMB 80 million/110 million/144 million for 2025-2027, with year-over-year growth of 58%/38%/31%. The firm has set a target price of HK$0.77 for the company and assigned a "Buy" rating.
**Industrial Chain Layout Enhances Industrial Synergy**
WULING MOTORS Holdings Limited is a Hong Kong-listed company focused on automotive industrial chain businesses. Building on nearly a century of manufacturing experience from its controlling shareholder Guangxi Automobile Group, the company specializes in automotive components, automotive power systems, and commercial vehicle design and development including new energy vehicles. With automotive components as its core business (contributing 69% of main operating revenue in 2024, with axles and chassis as key products), the company simultaneously develops power systems (22%) and commercial vehicles (9%). The company provides high-value component products to dozens of domestic and international OEMs, offers power systems to over 10 million end customers, and provides quality commercial vehicles and mobility services to more than 1 million users.
**Transformation Adjustments Show Results, Revenue Growth Expected in 2025**
Following business model changes in WULING MOTORS' commercial vehicle segment, the company achieved total revenue of RMB 7.949 billion in 2024, with operating costs of RMB 7.089 billion, down 24.96% year-over-year. The company's profit performance grew against market trends with significant gross margin improvement. The company realized net profit of RMB 111 million in 2024, up 60.19% year-over-year, and net profit attributable to shareholders of RMB 51 million, up 115.59% year-over-year. The sustained net profit growth was primarily driven by commercial vehicle business adjustments and increased proportion of high-margin products in the components segment. The company's gross margin reached 9.89% in 2023 and 10.82% in 2024.
**Focus on Components Business, Layout in New Energy Track**
Controlling shareholder Guangxi Automobile Group has proposed the "Ling Momentum Project" strategy, planning to implement the "131" strategy from 2025-2027. The company will cultivate three national-level manufacturing champions, including national-level small and medium displacement energy-saving hybrid power system champion, national-level light micro drive axle champion, and national-level automotive chassis champion. The focus will be on automotive components business development, using technological breakthroughs to drive product competitiveness improvement, while simultaneously building an automotive industry ecosystem, developing automotive services and trade industries, and cultivating strategic emerging industries such as automotive digitalization and high-end intelligent equipment.
The company's components business shows marginal improvement: product structure upgrading toward mid-to-high-end segments, successful development of hot gas expansion forming and micro integrated electric axles and other high value-added products, supporting the company's entry into BYD, Great Wall and other mid-to-high-end vehicle supply chains. Customer structure optimization with SAIC-GM-Wuling's production and sales growth driving core business development, while achieving breakthroughs in expanding new customers like BYD. In overseas expansion, the company continues operations at overseas production bases in Indonesia and India, advancing international layout of components business.
The company actively develops new energy industries, forming a product layout of "traditional power technology upgrade + new energy power integration development." It continues developing high-efficiency low-emission engines and promoting new energy products, including electric vehicle engines, electric vehicle control systems and related components, and different types of hybrid vehicle models. The company established Liuzhou Wuling New Energy Automobile Co., Ltd. as an associated company integrating new energy vehicle business, which will be a major customer for the company's components and other products in the future. Going forward, the company will leverage its new strategy to continue developing in the new energy track, achieving strategic transformation to adapt to market demands.