- GWM forecasts H1 net profit plunging 59%–63% to RMB 2.35–2.60 billion.
- Foreign-exchange volatility wiped out roughly RMB 1.759 billion in FX gains and caused ~RMB 266 million FX loss.
- Vehicle sales and overseas revenue rose strongly, but delayed subsidies and FX swings sank profits.
On the evening of July 14, Great Wall Motor (GWM) released its earnings guidance for the first half of 2026.
The company expects net profit attributable to shareholders to range between RMB 2.35 billion ($347 million) and RMB 2.60 billion ($384 million), down 58.97% to 62.92% year-on-year.
Net profit excluding non-recurring items is projected at RMB 1.50 billion ($221.5 million) to RMB 1.75 billion ($258.4 million), representing a decline of 51.14% to 58.12% from a year earlier.
The results point to a divergence between GWM’s top-line and bottom-line performance, with revenue and vehicle sales continuing to grow while profits fell sharply.
The company said both revenue and vehicle sales increased year-on-year during the first half, driven primarily by overseas expansion and stronger sales of higher-value models in the domestic market.
However, earnings were significantly affected by non-operating factors.
GWM attributed the profit decline to two main reasons. First, the recognition of overseas tax policy-related subsidies was delayed.
The company had recognized RMB 2.274 billion ($335.8 million) in related income during the same period last year, creating a high comparison base.
Second, significant fluctuations in global exchange rates resulted in a comprehensive foreign exchange loss of approximately RMB 266 million ($39.3 million), even after gains from hedging instruments.
As a result, foreign exchange gains declined by about RMB 1.759 billion ($259.7 million) year-on-year, compared with a foreign exchange gain of RMB 1.493 billion ($220.5 million) in the first half of 2025.
GWM Chairman Jack Wey also commented on the earnings outlook, saying the profit decline was primarily caused by delayed subsidy recognition and exchange rate volatility rather than deterioration in the company’s core business.
He added that GWM remains committed to maintaining disciplined inventory management by keeping wholesale shipments below retail sales, allowing domestic inventory-to-sales ratios to remain among the lowest in the industry.
Wey said the company aims to preserve healthy dealer operations and will continue executing its previously announced H-share share repurchase plan.
Foreign exchange fluctuations have weighed on GWM’s earnings throughout the year.
In the first quarter, the company reported revenue of RMB 45.109 billion ($6.65 billion), up 12.72% year-on-year.
The net profit attributable to shareholders fell 46.01% to RMB 945 million ($139.4 million), with currency movements cited as a major factor behind the earnings decline.
Operationally, GWM continued to post sales growth in the first half.
According to the company’s production and sales report, vehicle sales reached 582,900 units between January and June, up 2.48% from a year earlier.
Overseas markets remained the company’s primary growth driver. First-half overseas sales rose 47.4% year-on-year to 291,400 vehicles, accounting for nearly half of GWM’s total sales.
GWM’s performance also reflects the broader surge in China’s auto exports. In June, China’s vehicle exports exceeded 1 million units for the first time, rising 75.1% year-on-year.
However, as overseas revenue continues to account for a larger share of earnings, fluctuations in the renminbi exchange rate are having an increasingly pronounced impact on the profitability of listed automakers.
For companies with substantial overseas exposure, even continued growth in sales and revenue may not translate into higher net profit if foreign exchange gains decline.
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