Great Wall Motor expects H1 2026 net profit to drop 58.97%-62.92% YoY, mainly due to deferred overseas tax subsidy recognition and foreign exchange volatility. However, H1 sales reached 5.839 million units (+2.48% YoY), with overseas markets at 2.914 million units remaining a bright spot.
Profit Warning: A Nearly 60% Decline
On July 14, 2026, Great Wall Motor released its H1 performance forecast, projecting net profit attributable to shareholders of only 2.35 billion to 2.60 billion yuan, a sharp decline of 58.97% to 62.92% year-on-year. This warning immediately drew capital market attention.
The announcement clearly stated that the profit plunge was driven by two primary factors: deferred recognition of overseas tax subsidies—originally expected to be recognized in H1 but delayed due to policy processes—and exchange rate volatility resulting in foreign exchange losses. As Great Wall's overseas market share continues to grow, its foreign exchange exposure has expanded, and with increased volatility in major settlement currencies, financial expenses have come under pressure.
Sales Overview: Overseas Growth Defies Trend
Contrasting with the sharp profit decline, Great Wall Motor's H1 sales maintained positive growth. Latest production and sales data show:
- H1 Total Sales: 5.839 million units, up 2.48% YoY
- June Sales: 1.081 million units, down 2.36% YoY
- H1 Overseas Sales: 2.914 million units, robust performance
- June Overseas Sales: 602,000 units
- H1 NEV Sales: 347,000 units
The data reveals that Great Wall's overseas business has become the core engine of sales growth. Overseas sales accounted for nearly 50% of total sales in H1, demonstrating significant progress in the globalization strategy.
| Metric | H1 2026 | YoY Change | Note |
|---|---|---|---|
| Total Sales | 5.839M units | +2.48% | Domestic + Overseas |
| Overseas Sales | 2.914M units | Robust | ~50% of total |
| June Sales | 1.081M units | -2.36% | Single-month pressure |
| NEV Sales | 347K units | — | In transition |
Deep Dive into Profit Decline Causes
Chairman Wei Jianjun responded on Weibo the same day, emphasizing that the profit decline was not due to operational deterioration but rather accounting recognition timing and FX fluctuations. He revealed:
- Overall sales and revenue actually grew: Both H1 sales and revenue increased YoY, indicating healthy fundamentals
- High-value model share rose: Domestic sales of high-value models continued to climb, optimizing product mix
- Overseas growth remained strong: International markets continued to expand, contributing stable incremental volume
- Subsidy deferral is a one-time impact: Overseas tax subsidy recognition delay is a temporary factor that does not change long-term value
Wei also noted that Great Wall is executing a "sell more, ship less" inventory strategy, keeping domestic inventory below industry average to relieve pressure on dealers. This approach sacrifices some short-term turnover efficiency but benefits long-term channel health.
Strategic Outlook: H-Share Buyback and Long-Term Confidence
In response to the profit volatility, Great Wall Motor plans to launch an H-share buyback to bolster market confidence. Wei reiterated his belief in the company's long-term value, stating that the current profit fluctuation results from short-term accounting and FX factors that do not alter the company's long-term competitiveness.
From an industry perspective, the challenges Great Wall faces in 2026 are not unique. Under the backdrop of complex global trade environments and normalized exchange rate volatility, export-oriented automakers commonly face similar financial pressures. Balancing global expansion with financial risk management has become an industry-wide challenge.
For more overseas market procurement information and automaker financial analysis, visit EX1000.COM.
