Summary of GAC Group: Major Changes and Outlook
Based on the latest market data and analysis as of June 2026, here are the key points regarding GAC Group’s current operations, outlook, and earnings projections:
Major Changes This Quarter
- Rise of Proprietary Brands: Proprietary brands (GAC Aion and GAC Trumpchi) have become the core drivers of growth. Proprietary brand sales in May grew by 32.48% year-over-year. GAC Aion has maintained strong momentum, with sales of New Energy Vehicles (NEV) surging by 71.64% year-over-year in May.
- Explosive Overseas Growth: The internationalization strategy has yielded significant results, with export volume for the first five months increasing by 135% year-over-year. Overseas business has shifted from sporadic breakthroughs to large-scale growth, with a full-year export target of 250,000 to 300,000 units.
- Divergence in Joint Ventures: Joint venture brands continue to face immense pressure. GAC Honda has experienced significant volatility during its transition, while GAC Toyota’s New Energy transition via the “Bozhi” brand has shown initial efficacy, resulting in relatively stable performance.
- Partnerships and Technology: The first model produced in collaboration with Huawei (under the Aion/Hyper brand) was launched in June, which the market views as a key catalyst for the second half of the year. Additionally, the company continues to implement capacity and workforce streamlining to mitigate profit pressures.
Outlook for the Next Quarter (Q2-Q3 2026)
- Earnings Forecast: The market projects a net loss of approximately 261M RMB for Q2 2026, representing a significant narrowing compared to the same period last year (a year-over-year improvement of approximately 85%).
- Key Observations:
- Impact of Huawei Collaboration: Whether the Huawei-collaborated model launched in June can deliver the anticipated boost in sales and brand equity.
- Cost Control: Market focus remains on whether improvements in capacity utilization and declining lithium battery costs will further expand gross margins.
- Progress of Joint Venture Transitions: The stability of market share for GAC Honda and GAC Toyota amidst ongoing price wars.
EPS Forecast for the Next Year
According to a consensus of sell-side analyst views and earnings prediction models, GAC Group remains in an earnings adjustment phase due to intense industry competition and shrinking profit contributions from joint venture brands:
- 2026 Forecast: Most analysts anticipate that the company will remain in a net loss position for 2026, with an estimated loss ranging from 3.5B RMB to 4.8B RMB. Consequently, EPS is expected to remain negative.
- Long-term Trend: Analysts project that the net loss could narrow further to 1.8B RMB in 2027, approaching the break-even point (approximately -80M RMB) by 2028.
Data Sources:
- AASTOCKS – GAC GROUP May Vehicle Sales Up 8.18% YoY
- Gasgoo – GAC’s May sales rise 8.18%, driven by its own brands and overseas markets
- Sina Finance – GAC Group Q2 Net Profit Forecast
- CMB International – GAC Group Equity Research Report 2026
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