Core Viewpoint - ESG has transitioned from an optional agenda to a core driver in global capital markets, with investors focusing on ESG for risk management and long-term value creation [1] Group 1: ESG Performance and Recognition - Weichai Power has been awarded the "ESG Social Responsibility Excellence Enterprise" by Gelonghui, recognizing its achievements in environmental protection, social responsibility, and corporate governance [1] - The award reflects Weichai Power's future development potential and demonstrates its efforts in ESG, serving as a model for traditional manufacturing leaders in the sustainable development wave [1] Group 2: Green Dynamics and Industry Transformation - The heavy-duty truck industry faces significant pressure from traditional diesel products due to high emissions, but Weichai Power is driving a green transition through technological innovation and energy structure upgrades [2] - In 2024, Weichai Power achieved a world record with a diesel engine featuring a thermal efficiency of 53.09%, showcasing its commitment to energy-saving potential [2] - The company is expanding its presence in the new energy sector with a comprehensive range of commercial vehicle power batteries, including pure electric, hydrogen fuel, and methanol technologies, forming a "zero-carbon power matrix" [2] - Weichai Power's dual strategy of "traditional optimization + new energy substitution" aligns with ESG's environmental demands and sets a benchmark for the heavy-duty truck industry [2] Group 3: Policy and Market Opportunities - Weichai Power is actively engaging in energy-saving technology projects and promoting renewable energy utilization, positioning itself favorably in the global competition [3] - The demand for low-carbon products is surging, with Weichai Power's hydrogen fuel trucks being utilized in significant projects, demonstrating the commercial viability of green technologies [3] - The company is integrating ESG standards into cross-border mergers and acquisitions, creating a positive cycle of "technology synergy - carbon footprint optimization - market access" [3] - Weichai Power has maintained an A rating in Wind ESG ratings for four consecutive years, reflecting its sustainable practices and financial performance, with revenues exceeding 210 billion and net profits of 11.4 billion [3] Group 4: Governance and Social Responsibility - Weichai Power has established a three-tier ESG management structure, embedding ESG governance into its core operations, ensuring that it is a key decision-making factor [6] - The company emphasizes high governance standards to enhance operational efficiency and market competitiveness, gaining trust from investors and society [6] - In terms of social responsibility, Weichai Power focuses on employee welfare, achieving a 97% overall employee satisfaction rate in 2024 [7] - The company integrates sustainable development into its supply chain management and actively participates in community service and public welfare activities, with social contributions amounting to 21.99 million in 2024 [7] Group 5: Conclusion - Weichai Power exemplifies the synergy between heavy industry and sustainable development, showcasing a transformation from efficiency-first to responsibility-first in Chinese manufacturing [8] - The company is leading the way in sustainable practices through technological innovation and responsible governance, steering the Chinese power equipment industry towards a sustainable future [8]

Core Viewpoint - The legal opinion letter from Beijing Tongshang Law Firm confirms that Weichai Power Co., Ltd. has obtained the necessary approvals for the adjustment of the repurchase price and the repurchase and cancellation of part of the A-share restricted stock under its 2023 A-share incentive plan, in compliance with relevant laws and regulations [1][7][9]. Summary by Sections Approval and Authorization of Repurchase Price Adjustment and Cancellation - The company has completed the necessary approval and decision-making procedures for the repurchase price adjustment and cancellation of restricted stock, including resolutions from the board of directors and the supervisory board [3][4][6]. Details of the Repurchase Price Adjustment - The repurchase price for the restricted stock will be adjusted based on the company's profit distribution, specifically from RMB 5.599 per share to RMB 5.252 per share, if the profit distribution occurs before the completion of the repurchase [8][9]. Reasons for Repurchase and Cancellation - The repurchase and cancellation of 820,000 shares of restricted stock are due to changes in employment status of eight original incentive targets, such as retirement and resignation [9]. Repurchase Price and Funding - The repurchase price is set at RMB 5.252 per share, plus applicable bank deposit interest, with a total funding requirement of approximately RMB 4.3066 million sourced from the company's own funds [9]. Conclusion - The legal opinion concludes that the repurchase price adjustment and cancellation of shares have met the necessary approvals and comply with relevant regulations, although final approval from the shareholders' meeting is still required [9].

全球算力投入预计持续增长，短期增速约 40%，随后趋缓至 20%以内， 但每年新增算力体量巨大。2025 年新建算力预计 500 亿 Flops，2028 年或达 1,000 亿 Flops，驱动柴油发动机需求。 市场规模测算显示，2025 年全球柴油发电机组需求约 1.5 万台，2028 年增至 2.7-3 万台。科研机构测算每年新增功率约 38GW，对应 2.44 万台机组，市场规模约 366 亿元人民币。综合来看，远期市场规模可达 500 亿元人民币。 全球主要柴油发动机企业包括康明斯、卡特彼勒、MTU、潍柴、玉柴和 上海铃重，占据较大市场份额。但这些企业产能扩张速度未达 40%的需 求增速，导致供需持续紧张。 潍柴动力在 AIDC 柴油发动机领域增长显著，预计 2025 年出货量超 1,000 台，较 2024 年大幅提升。受益于博杜安技术和 PSI 公司支持， 以及重卡领域的规模效应，业绩弹性较高。 玉柴国际与 MTU 合资，在高端数据中心应用表现突出，盈利能力强。同 时，玉柴本部公司也取得了国内头部互联网企业 AI DC 柴油发电配套资 格，国产替代趋势良好。 Q&A AIDC 柴发产业链近况更新 ...

Core Viewpoint - Weichai Power has experienced a decline in stock price over three consecutive trading days, with a cumulative drop of -2.53% as of June 30. The company is notable for being the first in China's internal combustion engine industry to be listed on the Hong Kong H-share market and for achieving a dual listing through a share swap merger [1]. Group 1: Company Overview - Weichai Power Co., Ltd. was established in 2002, initiated by the original Weifang Diesel Engine Factory along with domestic and foreign investors [1]. - The company is recognized as the first in its industry to achieve a dual listing in both Hong Kong and A-share markets [1]. Group 2: Shareholder Activity - E Fund Management's E Fund CSI 300 Initiated ETF is among the top ten shareholders of Weichai Power, having reduced its holdings in the first quarter of this year [1]. - The year-to-date return for Weichai Power is reported at 1.31%, ranking 2269 out of 3428 in its category [1][2]. Group 3: Performance Metrics - The performance metrics for Weichai Power show a year-to-date increase of 1.31%, with a quarterly increase of 2.34% and a monthly increase of 3.30% [2]. - Comparatively, the average performance of similar funds shows a year-to-date increase of 5.179% [2].

Core Viewpoint - Weichai Power plans to spin off its subsidiary Weichai Lovol Smart Agriculture Technology Co., Ltd. for an IPO on the Hong Kong Stock Exchange, following a previous unsuccessful attempt to list on the Shenzhen Stock Exchange [1][10]. Company Overview - Weichai Lovol, headquartered in Weifang, Shandong Province, was established in 2004 and rebranded in 2022 to focus on agricultural machinery and smart agriculture services [4]. - The company is primarily owned by Weichai Power and Weichai Holdings, controlling approximately 88.36% of the voting rights [4]. Financial Performance - Weichai Lovol reported revenues of approximately CNY 159.5 billion, CNY 146.76 billion, and CNY 173.93 billion for the years 2022, 2023, and 2024, respectively, with net profits of CNY 7.72 billion, CNY 8.71 billion, and CNY 9.57 billion during the same period [5][6]. - The company has a high debt-to-asset ratio exceeding 80%, with figures of 83.4%, 80.44%, and 80.24% over the reporting period [14]. Market Position - Weichai Lovol leads the Chinese agricultural machinery market with a sales revenue of CNY 174 billion in 2024, capturing a market share of approximately 21.2% [5]. - The company ranks first in various segments, including tractors (22.6% market share), harvesting machinery (53.5% market share), and intelligent harvesting machinery (66% market share) for 2024 [6]. Dividend Policy - The company has a history of significant cash dividends, totaling over CNY 20 billion in the past five years, with recent dividends of CNY 2.29 billion announced in June 2025 [13][14]. - The cash dividends in 2021 and 2022 were CNY 7.8 billion and CNY 9.61 billion, respectively, exceeding the net profits for those years [13]. IPO Plans - Weichai Lovol's IPO application was submitted to the Hong Kong Stock Exchange after a previous attempt to list on the Shenzhen Stock Exchange was withdrawn in April 2024 [9][10]. - The funds raised from the IPO are intended for the construction of a new high-end agricultural machinery production base, smart upgrades of existing production lines, and international logistics for high-end agricultural equipment [14].

Group 1 - The diesel generator sector is undergoing adjustments primarily due to the impact of chip bans, leading to lower-than-expected capex intensity and pace from domestic manufacturers [1] - Nvidia is developing a new chip, B30, specifically for the Chinese market, with plans to produce over 1 million units this year [1] - Despite slow progress in data center construction in Q2, overall demand remains strong, extending the industry's prosperity until at least the end of next year [2] Group 2 - Major manufacturers plan to initiate bidding for diesel generators for 2026 in advance, with both the bidding volume and prices expected to exceed previous expectations from April to May [3] - Weichai Power (02338) anticipates selling over 8,100 units of its M series large-bore engines in 2024, with overseas sales accounting for 62% and a 20% year-on-year revenue increase, driven by a 148% surge in data center product sales [4] - Chongqing Machinery and Electric (02722) projects a net profit of approximately 431 million yuan for 2024, reflecting a 42% increase, benefiting from the sustained high demand for high-end diesel generators due to ongoing AIDC and data center construction [4]

Core Viewpoint - The heavy truck industry showed slight growth in production, wholesale, and export in May, exceeding initial expectations [2][15][28] Volume Tracking - In May, heavy truck production reached 84,000 units, with year-on-year and month-on-month growth of 18.8% and 6.8% respectively [2][15] - Wholesale sales for May were 89,000 units, reflecting a year-on-year increase of 13.6% and a month-on-month increase of 1.3% [2][15] - Terminal sales totaled 63,000 units, with a year-on-year increase of 17.6% but a month-on-month decrease of 8.2% [2][15] - Export sales were 26,500 units, showing a year-on-year decline of 6.4% but a month-on-month increase of 3.5% [2][15] - The total industry inventory is currently at 144,000 units, which is considered a reasonable level [2][15] Structural Tracking - New energy heavy trucks saw significant growth, with sales of 15,000 units in May, representing a year-on-year increase of 192% [2][15] - The penetration rate for new energy trucks reached 23.8%, up 14.2% year-on-year [2][15] - Natural gas heavy truck sales were 14,000 units, down 33.6% year-on-year, with a penetration rate of 22.1% [2][15] Market Share Tracking - In May, the market share for major manufacturers in terminal sales was as follows: Jiefang 19.8%, Dongfeng 21.9%, Heavy Truck 16.5%, Shaanxi Heavy Truck 11.2%, and Foton 12.9% [3][14] - For exports, the market shares were: Jiefang 15.1%, Dongfeng 7.6%, Heavy Truck 47.9%, Shaanxi Heavy Truck 16.1%, and Foton 9.0% [3][14] Engine Market Tracking - Weichai maintained the highest market share at 18.4%, despite a decline from previous months [4][18] - In May, Weichai's terminal matching volume was 12,000 units, down 33.4% year-on-year [4][18] - The market share for Weichai's diesel and natural gas engines was 13.7% and 49.8% respectively [4][18] Investment Recommendations - The company is optimistic about the heavy truck sector's recovery driven by the National IV policy, projecting domestic sales to reach 700,000 units, a year-on-year increase of 16% [5][18] - Recommended stocks include leading heavy truck manufacturers with high market share and good profit realization, specifically China National Heavy Duty Truck Group and Weichai Power [5][18]

Core Viewpoint - The spin-off of Weichai Power's subsidiary Weichai Lovol for listing in Hong Kong raises questions about whether it enhances independence or serves as a capital infusion. The significant debt ratio of Weichai Lovol compared to peers and the necessity of fundraising amid declining capacity utilization are also under scrutiny [1][2][5]. Group 1: Spin-off Details - Weichai Power announced plans to spin off its subsidiary Weichai Lovol for an initial public offering (IPO) on the Hong Kong Stock Exchange, maintaining its controlling stake post-listing [1][2]. - The spin-off aims to enhance the company's focus on its core business and independence, allowing Weichai Power to concentrate on its strengths in powertrains, complete vehicles, and smart logistics [2][4]. Group 2: Financial Performance and Valuation - Weichai Lovol's valuation increased significantly from approximately 2.5 billion RMB in July 2021 to around 8.5 billion RMB by June 2022, marking a 240% rise within a year [3]. - The company plans to raise 5 billion RMB through the spin-off, with a projected valuation of around 20 billion RMB [3][11]. Group 3: Debt Levels and Financial Health - Weichai Lovol's debt levels are notably high, with total liabilities projected at 10.438 billion RMB, 12.122 billion RMB, and 15.39 billion RMB for 2022, 2023, and 2024, respectively, resulting in debt ratios of 83.4%, 80.44%, and 80.24% [5][9]. - In comparison, peers like Yituo Co. show a declining debt ratio trend, with a projected 2024 debt ratio of 47.06% [7]. Group 4: Revenue Contribution and Market Position - Weichai Lovol's tractor and harvesting machinery products contribute approximately 50% and 40% to its revenue, respectively, with projected revenues from these segments showing slight fluctuations from 2022 to 2024 [9][10]. - The company aims to expand its production capacity to meet growing market demand, particularly for high-horsepower tractors and large-volume harvesting machinery, supported by favorable government subsidy policies [11]. Group 5: Capacity Utilization Trends - The capacity utilization rates for Weichai Lovol's production facilities are declining, with the utilization rate for wheeled grain harvesting machinery dropping from 97.2% in 2022 to 81.6% in 2024 [13][15]. - The tractor factory's utilization rate is projected to decrease from 121.1% in 2023 to 102.9% in 2024 due to insufficient market demand for mid-horsepower tractors [14][15].

Core Viewpoint - The article highlights the efforts of Weichai Power Co., Ltd. to promote its second-generation multi-fuel mining power products in Xinjiang, aiming to support the region's green mining development under the "dual carbon" initiative [2][3]. Group 1: Product Launch and Features - Weichai Power has introduced the first methanol-powered excavator engine, WP17T, in Xinjiang, showcasing its economic and environmental advantages by replacing traditional diesel with methanol [3]. - The company has achieved a 40% cost savings in operational economics compared to diesel engines of the same displacement after two years of reliability testing in mining conditions [3][5]. - Weichai Power's product lineup includes methanol engines, WP14T range extension engines, WP16NG natural gas engines, and power batteries, forming a diversified low-carbon solution for local mining operations [4]. Group 2: Industry Impact and Technological Advancements - The introduction of Weichai Power's multi-fuel platform breaks the foreign monopoly on core mining equipment, enhancing the competitiveness of China's mining industry [4][5]. - The company has successfully adapted its M-series large-bore engines for mining excavators and rigid dump trucks, increasing the localization rate of mining equipment in Xinjiang [5]. - Weichai Power's market share in the wide-body dump truck power sector exceeds 80%, and it continues to develop products tailored to the specific working conditions of Xinjiang [6]. Group 3: Future Developments and Services - Weichai Power is committed to continuous innovation in mining power solutions, focusing on multi-fuel technology routes and providing competitive mining power solutions [6]. - The company has launched the "Mining Service 2.0" program to enhance after-sales service and support for mining operations in Xinjiang [6].

Meeting Overview - The annual general meeting of Weichai Power Co., Ltd. was held on June 13, 2025, with no resolutions being rejected [1] - A total of 1,766 shareholders and representatives attended the meeting, representing 21.7855% of the voting shares for A shares and 14.1647% for H shares [1] Voting Results - The meeting utilized a combination of on-site and online voting, with all proposed resolutions being approved [1][2] - The profit distribution plan for the fiscal year 2024 was approved, proposing a cash dividend of RMB 3.47 per 10 shares, based on a total of 8,715,671,296 shares entitled to profit distribution [1] Proposals Approved - The board was authorized to pay interim dividends for the fiscal year 2025 without prior approval from the shareholders' meeting [1] - The appointment of KPMG Huazhen LLP as the auditing firm for the fiscal year 2025 was approved [1] - The appointment of Hexin Certified Public Accountants as the internal control auditing firm for the fiscal year 2025 was also approved [1] Independent Director Report - The independent directors presented their annual report for 2024, which was published on March 28, 2025 [2] Legal Compliance - The meeting was confirmed to comply with relevant laws and regulations, ensuring the legitimacy of the attendees and the resolutions passed [2]