UBS has issued a research report announcing a reduction in the target price for GWMOTOR (02333) from HK$18 to HK$12, attributing the adjustment primarily to uncertainties surrounding Russia's vehicle scrappage tax rebate policy. Despite this downward revision, the firm maintains its "Buy" rating on the stock.

The broker highlights that the company's dividend yield of approximately 5.5% remains attractive at current price levels, offering a compelling income proposition for investors amid lingering market concerns.

UBS acknowledges that as the market transitions further toward battery electric vehicles, GWMOTOR's underinvestment in the pure electric segment suggests it may have missed out on a significant growth opportunity. However, the firm believes that investor worries on this front have been overly discounted in the current share price.

According to the report, based on consensus estimates, the company is trading at 6.2 times forward 12-month price-to-earnings ratio, which is more than one standard deviation below its historical average. For a company with demonstrated profitability and robust cash flow, the report argues this valuation appears excessively low.

UBS has also slashed its net profit forecasts for GWMOTOR for the 2026-2028 period by 35.3%, 31.3%, and 24.8%, respectively. For 2026 specifically, the firm now expects net profit to reach RMB 7.845 billion, reflecting the impact of tax-related uncertainties and weaker-than-anticipated vehicle sales.