Ge Long Hui·2025-11-06 01:41Core Viewpoint - Weichai Power (2338.HK) has seen a strong performance, opening over 5% higher at HKD 18.76, marking the highest stock price since March 2021, driven by a new manufacturing license agreement with Ceres Power for solid oxide fuel cells (SOFC) [1] Company Developments - On November 5, Ceres Power announced a manufacturing license agreement with Weichai Power, reinforcing their existing partnership [1] - Weichai Power plans to establish a new factory to produce batteries and stacks aimed at the data center, commercial, and industrial electricity markets, with expected revenue recognition in the fiscal year 2026 [1] Financial Performance - According to a report from Founder Securities, Weichai Power's acquisition of the SOFC manufacturing license opens up a new growth avenue in the energy sector [1] - The company has shown steady growth in 2023, with a year-on-year revenue increase of 5% and a net profit attributable to shareholders rising by 6% in the first three quarters [1] - The annual profit is projected to exceed RMB 12 billion, further strengthening the positive outlook [1] Valuation Insights - The current price-to-earnings (PE) ratio is below 12 times, which is in the bottom 40% of the past three years, indicating a high margin of safety [1] - As the penetration rate of new energy heavy trucks stabilizes in early next year, the long-term pessimistic outlook for the main business is expected to reverse, suggesting considerable room for valuation recovery [1] - Founder Securities maintains a "recommended" rating for Weichai Power [1]