Weichai (2338 HK) Continue to Lead in Market Share, Profitability Rallies Significantly December 26, 2023 113

PSR Recommendation: ACCUMULATE Status: Downgraded
Target Price: HKD15.30

Company Profile
Weichai is one of the automobile and equipment manufacturing groups with the strongest
comprehensive strength in China’s heavy truck industry. Based on the powertrain system
including engine, axle and gearbox, the Company extends upstream components and
downstream heavy trucks, and takes the lead in forklifts and intelligent warehousing. After
years of development, the Company has built a synergetic development pattern of four
major industrial segments including powertrain (engine, transmission, axle/hydraulics),
vehicle and machinery, intelligent logistics and other segments.
Investment Summary
Remarkable Performance Driven by Strong Demand for Natural Gas-fueled Heavy Trucks
and Robust Exports
The domestic economy has entered a plateau phase, after an impulse-type increase at the
beginning of the year. The heavy truck industry has been driven by multiple favorable
factors, such as economic recovery, the constant release of policy effects, and a low base in
the same period last year. Nevertheless, as affected by the complex international
environment and insufficient domestic demand, the industry still faces certain pressure.
Specifically, 701 thousand heavy trucks were cumulatively sold from January to September
2023, with an increase of 34%yoy. The cumulative sales this year so far have already
surpassed the total sales of 670 thousand last year.

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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