Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

Investors can't make up their minds about China's largest seller of sport-utility vehicles.

Great Wall Motor Co. shares surged in the last several days, climbing more than 20 percent Monday and upending the narrative of an automaker that before this week was the most-shorted stock in Hong Kong. So is it a lemon or not? The answer will depend on the Chinese consumer. 

Investors betting against Great Wall Motor were squeezed as shares of China's largest SUV seller rose; it had been the most heavily shorted Hong Kong stock
Source: Markit

Last week I wrote about a long call on Great Wall at the Sohn Conference by Yuet Wei Wan, founder and CIO of Hong Kong-based Wei Capital Management Ltd. Wan argued that Great Wall is undervalued and that a new brand of souped-up SUVs, called WEY, would surprise investors accustomed to weak model upgrades by Great Wall. 

Credit Suisse Group AG came out with a similar point of view Monday, upgrading the stock to the equivalent of a "buy" from "hold." It pointed to a two-month waiting list for WEY's first product, the VV7 large SUV, and said the company also stood to gain from new versions of its older Haval brand. By 2020, Credit Suisse analysts expect the carmaker to introduce more than 40 new products, which could help Great Wall win back some of the market share it's lost to competitors like Geely Automobile Holdings Ltd. 

Climbing Wall
Great Wall Motor's shares rose more than 20% Monday, their largest one-day jump in two years
Source: Bloomberg
Intraday times are displayed in ET.

The bears over at Alliance Bernstein growled back with their own "highest conviction" short call Tuesday, saying Great Wall had "no WEY out" (ouch) of its structural challenges. Domestic and international competitors are fighting back in China with their own SUVs, making it tougher for Great Wall to claw back its leading market share. As a result, pricing  power will also slip away. 

Great Wall's share of China SUV sales has slipped from a peak of 15 percent in July 2013
Source: CAIN

The truth is, no one analyzing Great Wall's financials and past performance has much of a handle on where the stock is going. That's because the shares aren't trading on fundamental metrics that make sense to investors, such as sales, profits, or valuations.

Many carmakers (and the analysts who cover them) missed the mass migration by Chinese consumers over to SUVs, so relying on them to read those buyers' minds is fraught.

The key to the dissonance between bulls and bears is that this is one big bet on a single product cycle. The only people able to decide Great Wall's fate will be drivers who stop for the WEY SUV, or accelerate right past it.

But consider this: Consumers like shiny new cars with extra bells and whistles, something Great Wall is promising. And brokerage sales forecasts have sunk so low that the stock could benefit even if the company sputters along with only a slightly better performance.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in Hong Kong at

To contact the editor responsible for this story:
Paul Sillitoe at