Group 1 - The core point of the article is that Weichai Power Co., Ltd. and Weifang Weichai Power Technology Co., Ltd. have obtained a patent for a method, device, storage medium, and electronic equipment for gas engine emission control, with the patent announcement number CN116753079B and application date of June 2023 [1] Group 2 - Weichai Power Co., Ltd. was established in 2002, located in Weifang City, and primarily engages in the automotive manufacturing industry, with a registered capital of 87,156.71296 million RMB [1] - The company has invested in 64 enterprises, participated in 5,000 bidding projects, has 740 trademark records, and holds 5,000 patent records, along with 778 administrative licenses [1] Group 3 - Weifang Weichai Power Technology Co., Ltd. was established in 2017, also located in Weifang City, focusing on research and experimental development, with a registered capital of 17,600 million RMB [1] - The company has participated in 6 bidding projects, holds 879 patent records, and has 3 administrative licenses [1]

Investment Highlights - The passenger car sector is expected to see a recovery in Q1 2026 due to the implementation of subsidy policies, with a focus on high-end electric vehicles that are less sensitive to policy changes, such as Jianghuai Automobile, Geely, Great Wall Motors, BAIC Blue Valley, Seres, and Li Auto [2][7] - For exports, priority should be given to leading companies with established overseas systems and proven execution capabilities, including BYD, Great Wall Motors, Chery, Leap Motor, Xpeng, SAIC Motor, and Changan Automobile [2][7] Heavy Truck Sector - In 2025, wholesale heavy truck sales reached 1.144 million units, up 26.8% year-on-year, with domestic sales of 799,000 units, up 32.8%, and exports of 341,000 units, up 17.2% [3][37] - The expected domestic sales for heavy trucks in 2026 is optimistic, projected at 800,000 to 850,000 units, a 3% increase year-on-year [3][37] - Recommended leading heavy truck companies include China National Heavy Duty Truck Group, Weichai Power, Foton Motor, FAW Jiefang, and CIMC Vehicles [3][37] Bus Sector - The implementation of the vehicle replacement policy in 2026 is slightly better than expected, with bus sales in 2025 projected at 38,000 units, a 25% increase year-on-year [3][37] - For 2026, bus sales are expected to grow to 40,000 units, a 5% increase year-on-year, supported by the number of buses over eight years old that need replacement [3][37] - Recommended leading bus companies include Yutong Bus, King Long Motor, and Zhongtong Bus [3][37] Motorcycle Sector - The motorcycle industry is projected to achieve total sales of 19.38 million units in 2026, a 14% increase year-on-year, with large-displacement motorcycles expected to reach 1.26 million units, a 31% increase [4][34] - Domestic sales of large-displacement motorcycles are expected to grow slightly to 430,000 units in 2026, a 5% increase year-on-year, while exports are projected to reach 830,000 units, a 50% increase [4][34] - Recommended leading motorcycle companies include Chunfeng Power and Longxin General [4][34]

Core Insights - Xiamen Xiang'an International Airport is a significant project under China's 14th Five-Year Plan, expected to commence operations by the end of 2026 [1][12] - Weichai has successfully implemented a customized emergency power supply system for the airport, which includes 25 units of Weichai M33/M55 series generators [3][8] Group 1: Project Overview - The airport is nearing completion and is classified as a 4F-level modern air transport hub [1][3] - The emergency power system is crucial for ensuring stable electricity supply to key areas such as the baggage handling system, terminal operation control center, hotels, and cargo stations [3][8] Group 2: Company and Product Insights - Weichai's M33/M55 series generators are recognized for their reliability and have been selected as the emergency power solution for the airport [6][11] - This deployment highlights Weichai's commitment to supporting major national infrastructure projects and showcases its role in the transportation sector [6][11] - Weichai aims to leverage its core technological advantages and integrate resources across its entire industrial chain to provide high-end product solutions for global transportation hubs and major infrastructure [6][11]

Investment Rating - The report maintains a "Recommended" rating for the automotive industry [1] Core Insights - The implementation of the China-Europe electric vehicle price commitment mechanism is expected to stabilize sales expectations for Chinese electric vehicles in Europe and promote the high-end and localized transformation of automakers [5][13] - Multiple provinces have opened applications for the 2026 automotive replacement subsidy, indicating a clear path for local governments to implement the policy [14] - Great Wall Motors has launched the "Guiyuan" platform, which is the world's first native AI all-power platform, designed to support various power forms and enhance development efficiency [6][14] - The report expresses a positive outlook for 2026, highlighting opportunities in the high-end upgrade of domestic brands and the acceleration of smart technology penetration [15][16] Summary by Sections Recent Performance - The automotive sector outperformed the Shanghai Composite Index with a 1-week increase of 0.5% from January 12 to January 16, 2026, while the Shanghai Composite Index decreased by 0.4% [17] - The performance of individual stocks varied, with notable increases in companies like Ideal Auto (+2.4%) and declines in others like Li Auto (-3.5%) [17][23] Key Companies and Earnings Forecast - Key companies recommended include: - Jianghuai Automobile - Leap Motor - Great Wall Motors - BYD - SAIC Motor - China National Heavy Duty Truck [7][8] - Earnings per share (EPS) forecasts for selected companies show growth, with Great Wall Motors expected to reach an EPS of 2.03 in 2026 [8] Industry Indicators - In December 2025, automotive production and sales reached 3.296 million and 3.272 million units, respectively, with a year-on-year decrease of 2.1% and 6.2% [42] - New energy vehicles accounted for approximately 52% of total new vehicle sales, indicating a significant market shift towards electrification [42]

Core Viewpoint - Daiwa has reassessed its A+H share valuation premium strategy, which involves selecting A+H shares with a minimum premium of 10% to construct a monthly A-share investment portfolio, indicating that this strategy typically yields strong returns when the overall A+H premium narrows rapidly [1] Group 1: Investment Strategy Performance - The latest results show that even when the valuation gap widens or the A-share market outperforms the H-share market, the investment strategy has performed well, with cumulative relative returns increasing from approximately 90% to 107.5% over the past two months [1] - The primary drivers of this performance are attributed to the rise in global metal prices and the recent renewal cycle in China's construction machinery sector, benefiting companies such as Luoyang Molybdenum (603993), Zijin Mining (601899), Sany Heavy Industry (600031), and Weichai Power (000338) [1] Group 2: Foreign Investment Trends - There is a sustained interest from overseas investors in Chinese technology companies; however, due to geopolitical concerns, investors generally prefer holding H-shares [1] - It is anticipated that the repatriation of foreign capital will drive the market capitalization of H-shares, which are significantly lower than their A-share counterparts, including Contemporary Amperex Technology (300750), leading to a potential rapid increase in stock prices post dual listing, which may create re-rating opportunities for their A-shares [1]

Group 1 - The core point of the article is that Weichai Power Co., Ltd. has obtained a patent for a method and device for fault storage, with the patent announcement number CN114610570B and an application date of March 2022 [1] - Weichai Power Co., Ltd. was established in 2002 and is located in Weifang City, primarily engaged in the automotive manufacturing industry, with a registered capital of 87,156.71296 million RMB [1] - The company has invested in 64 enterprises, participated in 5,000 bidding projects, and has 740 trademark records and 5,000 patent records, along with 778 administrative licenses [1] Group 2 - Weifang Weichai Power Technology Co., Ltd. was established in 2017, also located in Weifang City, focusing on research and experimental development, with a registered capital of 17,600 million RMB [1] - This subsidiary has participated in 6 bidding projects, holds 879 patent records, and has 3 administrative licenses [1]

Group 1 - The core point of the article is that Weichai Power Co., Ltd. has obtained a patent for an "abnormal handling method, device, storage medium, and electronic equipment for electronic control units," with the patent announcement number CN116300823B and an application date of March 2023 [1] Group 2 - Weichai Power Co., Ltd. was established in 2002 and is located in Weifang City, primarily engaged in the automotive manufacturing industry, with a registered capital of 87,156.71296 million RMB [1] - The company has invested in 64 enterprises, participated in 5,000 bidding projects, and has 740 trademark records and 5,000 patent records, along with 778 administrative licenses [1] Group 3 - Weifang Weichai Power Technology Co., Ltd. was established in 2017, also located in Weifang City, focusing on research and experimental development, with a registered capital of 17,600 million RMB [1] - This subsidiary has participated in 6 bidding projects, holds 879 patent records, and has 3 administrative licenses [1]

Core Viewpoint - Shandong Heavy Industry Group has officially launched its seventh business segment, Power Energy, aiming to enter the global data center power generation equipment and solid oxide fuel cell markets, indicating a strategic focus on cultivating new growth areas [1] Group 1: Business Development - The Power Energy business is primarily concentrated in Weichai Power, which has established a multi-faceted new energy landscape through its technological accumulation and market presence in data center power generation equipment and solid oxide fuel cells [3] - The rapid growth of the artificial intelligence industry has led to an explosive increase in AI data centers, with energy demand expected to double by 2030, reaching approximately 945 TWh, creating a significant market opportunity for efficient and reliable power solutions [3] Group 2: Product and Market Position - Weichai Power is a leading domestic natural gas engine manufacturer, integrating cutting-edge global technologies into its gas power products, which cover various scenarios including commercial vehicles and power generation equipment [3] - Solid oxide fuel cells (SOFC) are emerging as a leading technology for data center energy supply due to their high energy conversion efficiency and low carbon footprint, with commercial demand expected to accelerate [4] - Weichai Power has positioned itself as one of the earliest companies to integrate SOFC systems, achieving a maximum power generation efficiency exceeding 65% and forming a differentiated competitive advantage [6] Group 3: Market Demand and Product Launch - The demand for backup power in data centers is robust, with diesel generators being the most common backup power source, and Weichai Power has successfully completed product deliveries in various data center projects, enhancing its market recognition [6] - In 2025, Weichai Power is set to launch the world's first 5-megawatt high-speed diesel generator set, marking a significant breakthrough in the global high-end market for data center backup power [6]

Summary of Conference Call Records Industry Overview - The records pertain to the automotive industry, specifically focusing on heavy trucks, motorcycles, and automotive components. Key Companies and Insights 1. **博俊科技 (BoJun Technology)** - Location: Suzhou Kunshan - Date: January 20 - Core Insight: Focus on stamping parts, with strong performance and low valuation, leading to steady market capitalization growth [1] 2. **伯特利 (Bertley)** - Location: Wuhu - Date: January 20 - Core Insight: Domestic leader in line control braking, with EMB set to lead in production this year and extensive layout in robotics [1] 3. **春风动力 (Chunfeng Power)** - Format: Online meeting via Tencent - Date: January 20 - Core Insight: Anticipation of a significant year for all-terrain vehicles with new product launches; recovery in motorcycle exports and domestic business; continuous growth in extreme core products [1] 4. **瑞鹄模具 (Ruihu Mould)** - Location: Wuhu - Date: January 21 - Core Insight: Domestic equipment business leader, high-quality supplier, successful shipment of collaborative robots [1] 5. **海安集团 (Hai'an Group)** - Location: Fujian Putian - Date: January 22 - Core Insight: Deep ties with major clients like Zijin and Jiangxi Copper, with a gross margin exceeding 45% and a return on equity (ROE) of over 22% [1] 6. **中国重汽A (China National Heavy Duty Truck Group A)** - Format: Online available - Date: January 28 - Core Insight: Focus on international expansion, elimination of National IV standards, and progress in new energy initiatives [1] 7. **中国重汽H (China National Heavy Duty Truck Group H)** - Format: Online available - Date: January 28 - Core Insight: Emphasis on international expansion and high dividends, alongside the elimination of National IV standards and advancements in new energy [2] 8. **潍柴动力 (Weichai Power)** - Location: Weifang - Date: January 29 - Core Insight: Core player in the heavy truck supply chain, benefiting from domestic demand and international expansion; steady revenue and gross margin growth in forklift and supply chain sectors; large displacement engines and SOFC expected to benefit from AI data center demand [2] Additional Important Insights - The records highlight a trend of companies in the automotive sector focusing on international markets and new energy solutions, indicating a shift towards sustainability and global competitiveness. - The emphasis on strong financial metrics such as gross margins and ROE suggests a focus on profitability and operational efficiency within the industry.

Company and Industry Summary Company: Weichai Power Key Points - **Emerging Business Growth**: Weichai Power has established a seventh business segment focused on AIDC (Automated Identification and Data Capture) power, indicating a strategic shift in business drivers [1] - **Large Cylinder Production Forecast**: The company anticipates a production volume of over 13,000 units for large cylinders in 2026, representing a year-on-year growth of nearly 30% [1] - **Data Center Large Cylinder Growth**: For data center large cylinders, the expected production in 2026 is 2,600 units, which marks a 100% increase from approximately 1,300 units in 2025. This includes 800 units for domestic clients and 400 units for overseas clients, primarily large firms like Oracle in the US [1] - **Profit Margins**: The profit per unit for standard large cylinders is projected at 100,000 yuan, while for data center large cylinders, it is significantly higher at 500,000 yuan. This indicates a strong profit elasticity driven by price increases in AIDC large cylinders [1] - **Revenue Contribution from Large Cylinder Business**: The large cylinder segment is expected to contribute over 2.5 billion yuan in revenue in 2026 [1] Industry: Gas Power Generation and SOFC (Solid Oxide Fuel Cell) Key Points - **Certification Status**: The gas generator currently awaits UL certification in the US. Until certification is obtained, customers can use the product, with invoicing to occur post-certification. A small number of units are expected to be delivered this year [2] - **SOFC Business Projections**: For 2026, the SOFC business is expected to deliver 40-50 MW, with planned production capacity of 60 MW. By 2030, the capacity is projected to reach 1 GW, and by 2032, 2 GW, with an estimated price of around 20,000 yuan per kW. This translates to an expected mid-term contribution of 8 billion yuan by 2032, assuming a 20% profit margin [2] - **Main Business Outlook**: In 2026, the company anticipates a total revenue of approximately 14 billion yuan, with the main business contributing around 11.5 billion yuan. The valuation is projected at 1.15 trillion yuan based on a 10x multiple [2] - **Large Cylinder Business Valuation**: The large cylinder business is expected to generate 2.5 billion yuan, with a 20x valuation leading to a potential market cap of 500 billion yuan [2] - **SOFC Option Valuation**: The SOFC business, with a mid-term contribution of 8 billion yuan, is estimated to have an option value of 80 billion yuan, discounted at a 50% rate [2]