长城汽车(02333) 　　On 16 November, Great Wall Motor (GWM) formally launched its new high-end “WEY” brand, along with two new concept SUV models (W01 and W02). In addition, there will be a hybrid model to be shown on Guangzhou Auto Show. As per Sina News and other news, WEY will be positioned as an accessible luxury SUV brand with its mainstream products to be priced around RMB150k-200k (vs. Haval’s RMB80k-150k), similar to Lexus vs. Toyota (7203.T). WEY’s products will share the same production platform with Haval, but will be equipped with more refined powertrain and safety features than Haval. Target customers will be the generation born after the 80s. 　　According to CNFOL news, the new SUV WEY models W01 and W02 are equipped with 2.0T engines, 7-speed dual-clutch transmission, and with body length of 4.8m and 4.4m, respectively. The first WEY model is expected to launch on Shanghai Auto Show in April 2017, and GWM plans to launch a total of 5 SUVs by 2018E with two additional new model launches in 2H17E. 　　Sina News and other news further noted that WEY has a 2017E sales target of 50k-unit, and will form a sales network of 100 and 300 stores by 2017E and 2018E, respectively. GWM has invested over RMB10bn for establishment and product R&D for WEY. 　　In our view, this is GWM’s second attempt to enter a higher SUV price segment, now predominantly occupied by mass market JV brands. In late 2014-2015, the company launched Haval H8 and H9 SUV at suggested retail price of above RMB200k. The market reception remains weak with recent combined monthly sales of about 1,500 units. While GWM now targets a lower RMB150-200k segment with a dedicated high end brand, we remain doubtful if this attempt will be successful. To elaborate, we think that GWM have a well established history of selling popular SUV at around RMB100k price range, and customers may not be willing to pay extra for a better equipped local brand car on similar product platform vs. a lower-priced ones. In comparison, Geely (0175.HK) has also launched a high-end brand named “Lynk & Co”, but Lynk’s future products will have clear differentiation vs. Geely’s existing products since the former models will be based on an advanced platform co-developed with Volvo. 　　All in all, we do not think that GWM’s new brand will alter the company’s outlook much, while we are still concerned on the company’s margin pressure amid competitions, not to mention the additional cost in developing the WEY brand. As such, we maintain Hold on Great Wall-H and Sell on Great Wall-A. Key upside risk is stronger-than-expected new model sales and key downside risk is further market share erosion.