CICC: Maintaining Chery's (09973) “Outperform the Industry” Rating Target Price of HK$35

The Zhitong Finance App learned that CICC released a research report saying that maintaining Chery Auto (09973)'s 2026/2027 profit forecast of 20.2 billion yuan/25.1 billion yuan, maintaining the “outperforming industry” rating and a target price of HK$35, corresponds to 9 times/7 times the 2026/2027 projected price-earnings ratio, with 44% upside compared to the current stock price. The bank is optimistic about the company's overseas expansion trend, and believes that with the launch of the Intelligent World V9, RX and the new R7, Intellect's sales volume is expected to improve significantly in the second half of the year, leading to an improvement in profits.

CICC's main views are as follows:

Intelligent world RX was officially released, focusing on the two major highlights of driving control and intelligence

On September 28, the Zhijie RX was officially launched, and the R7 was refreshed and upgraded. Zhijie RX is positioned as a medium to large pure electric coupe SUV. A total of 6 configurations have been launched. The price range is 259,800 to 389,800 yuan, down 10,000 yuan from the pre-sale price. The intelligent RX focuses on two major highlights of driving control and intelligence: the body design and supporting hardware are performance-oriented. The chassis uses a double front wishbone and rear five-link architecture. The first model is equipped with a new generation of high-performance electric drives from Huawei, led by former AMG board chairman and former Aston Martin CEO Tobias Moers; in terms of smart driving, the premium version is equipped with 4 lidar matrices and 38 fusion sensing sensors, and has a redundant architecture design for L3 level autonomous driving. The intelligent R7 revolves around intelligent and comfortable configuration upgrades, and the starting price dropped by 10,000 yuan to 239,800 yuan, forming a gap with the RX.

Zhijie Brand Strategy 2.0 continues to be deepened, and Hongmeng Zhixing's resource allocation is expected to be optimized

Chery and Huawei have entered the 2.0 phase of the Intelligent World brand strategy, established independent operators to achieve integrated operation of production, sales and services, and increased investment in R&D. Models such as the Intelligent World V9 and RX are all products of Phase 2.0. Yu Chengdong's latest statement said, “... so that every sector can get more resources, the team can also have more energy to make detailed products and improve the experience, so that the four sectors can rapidly improve, and benefit the common development of Hongmeng Zhixing.” The bank believes that along with Quanjie's promotion of exclusive franchises, Huawei's product development, marketing and channel resources are expected to be more rationally allocated within Hongmeng Zhixing and further enhancing resource support for brands such as Smart World.

Optimistic about the company's overseas sales trend and pay attention to the sales performance of new smart cars

The company lays out overseas production capacity through KD (bulk component) plants, joint ventures, acquisitions, etc. The bank believes that it is relatively efficient and has light assets, and is expected to respond flexibly to the risks of trade policy adjustments; at the same time, the company's overseas products are rich in power types, and HEVs, PHEVs, and BEVs are working together, which is expected to better meet differentiated market needs. The bank expects the company's overseas sales volume to reach 2 million vehicles in 2026. On the domestic side, along with the launch of the Zhijie V9, RX, and the new R7, the bank believes that the sales volume of Zhijie is expected to improve significantly in the second half of the year, leading to an improvement in profits.

Profit forecasting and valuation

The bank maintains the company's 2026/2027 profit forecast of 20.2 billion yuan/25.1 billion yuan. The current stock price corresponds to 6.0 times/4.7 times the 2026/2027 projected price-earnings ratio, maintains a “outperforming industry” rating and a target price of HK$35, and corresponds to 9x/7 times the 2026/2027 projected price-earnings ratio. There is 44% upside compared to the current stock price.

risk

Domestic demand continues to be pressured; trade policies in overseas markets have changed.