Sinotruk (3808 HK) Keep Moving up and Carry on June 12, 2023 102

PSR Recommendation: BUY Status: Upgraded
Target Price: HKD16.10

Company Profile
As one of the leading heavy truck manufacturers in China, Sinotruk specializes in the heavy
trucks, light trucks, buses and related major powertrains and parts. With heavy trucks as the
main products, the Company serves a wide range of customers in the infrastructure,
construction, container service, logistics, mining, steel and chemical industries.
Investment Thesis
Despite a Trough in China’s Heavy Truck Industry, the Company Outperforms the Industry
Average in 2022
According to the data of, China’s heavy truck industry sold a total of 672
thousand units in 2022, down 720 thousand units or 52% yoy, of which the cumulative sales
volume of new energy heavy trucks was 25.1 thousand units, up 140% yoy. In 2022, affected
by multiple adverse factors such as the Covid-19 pandemic, economic slowdown, low
investment and consumption, sluggish freight, lack of confidence, and demand overdraft,
China’s heavy truck industry has seen a yoy decline in the sales volume for 12 consecutive
Sinotruk sold 158 thousand heavy trucks in 2022, down 44% yoy, a decrease significantly less
than the industry average of 52%. The Company occupied a share of 23.5% in China’s heavy
truck market, up 3.0 ppts over the same period last year, surpassing FAW Jiefang and
ranking first. We think that the reasons for Sinotruk’s increased market share despite
headwinds are mainly as follows: 1) In the domestic market, the Company has made certain
breakthroughs in the development of key segments and key customers. Dump trucks and
mixer trucks continued to maintain their competitive edge. The market share of highhorsepower tractors, trucks and special vehicles has grown significantly. 2) With the help of
Sinotruk International’s network layout and strategic breakthroughs, the Company’s export
sales volume of heavy trucks reached a new high during the reporting period, increasing by
65% yoy to 89 thousand units, accounting for 56% of the Company’s total sales volume of
heavy trucks, and maintaining the first place in China for 18 consecutive years.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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