Investment Rating - The report maintains a "BUY" rating for Weichai Power, indicating a potential return of over 15% over the next 12 months [1][16]. Core Insights - Weichai Power's net profit for 2024 is projected to grow by 27% year-on-year to RMB 11.4 billion, aligning with expectations. The fourth quarter of 2024 saw a 19% year-on-year increase in net profit to RMB 3 billion, driven by reductions in selling and distribution (S&D) and research and development (R&D) expenses [1]. - The company proposed a final dividend of RMB 0.347 per share, resulting in a record high payout ratio of 55%, up from 50% in 2023 [1]. - The target price for Weichai Power's A/H shares has been revised up to RMB 18.7/HK$18.0, reflecting improved margin assumptions for the engine segment [1]. Financial Performance Summary - Revenue for FY24 is reported at RMB 215.7 billion, with a slight year-on-year growth of 0.8%. The adjusted net profit for FY24 is RMB 11.4 billion, showing a year-on-year growth of 26.5% [3][13]. - The earnings per share (EPS) for FY24 is reported at RMB 1.31, with a year-on-year growth of 25.4% [3]. - The price-to-earnings (P/E) ratio is projected to decrease from 14.0 in FY23 to 11.1 in FY24, indicating a more attractive valuation [3]. Segment Performance - The engine segment reported a total sales volume of 734,000 units, remaining flat year-on-year. However, the segment profit surged by 35% year-on-year to RMB 10.3 billion, with a margin expansion to 17.5% [6]. - The heavy-duty truck (HDT) segment saw exports grow by 13% year-on-year, accounting for 50% of total HDT sales, although the overall segment profit was modest at RMB 563 million [6]. - The forklift and supply chain solution segment's profit increased by 21% year-on-year to RMB 6 billion, supported by margin improvements [6]. Future Outlook - The report identifies several catalysts for growth, including a recovery in HDT demand driven by new subsidies, strong growth in engines for data centers, and a potential re-rating of KION Group [1]. - Earnings forecasts for 2025 and 2026 have been revised upwards by 9% and 11%, respectively, primarily due to higher margin expectations for the engine segment [1].