Weichai Power(SZ:000338) Soochow Securities·2024-07-15 01:30Investment Rating - Buy (Maintained) [1] Core Views - The company's Q2 2024 performance significantly exceeded expectations, with a notable improvement in profitability [1] - The company's heavy-duty truck (HDT) segment demonstrated strong performance despite industry-wide declines, with its subsidiary Shaanxi Heavy Duty Automobile achieving a 2.2% YoY and 7.0% QoQ increase in sales, outperforming the industry average [3] - The company's HDT engine sales, particularly for natural gas engines, saw a significant increase, with a 65% YoY and 24.2% QoQ growth, accounting for 71% of total engine shipments [3] - The company is expected to benefit from the strong demand for natural gas HDTs, high market share, and high profit margins in the short term [3] - In the medium term, the company is focusing on expanding its high-margin large-bore engine business and optimizing the operational structure of its subsidiary Shaanxi Heavy Duty Automobile [3] - Long-term growth is supported by the company's efforts in product development, including WPDI, methanol engines, hydrogen internal combustion engines, and advancements in electric drive components and fuel cell technology [3] Financial Performance and Projections - The company's 2024H1 net profit attributable to the parent company is expected to be between 5.46 billion and 6.24 billion yuan, representing a YoY increase of 40%-60% [3] - For Q2 2024, the company's net profit attributable to the parent company is projected to be 3.25 billion yuan, a YoY increase of 59% and a QoQ increase of 25% [3] - The company's revenue is forecasted to grow from 213.96 billion yuan in 2023 to 273.15 billion yuan in 2026, with a CAGR of 6.04% [2] - Net profit attributable to the parent company is expected to increase from 9.01 billion yuan in 2023 to 15.70 billion yuan in 2026, with a CAGR of 17.39% [2] - EPS is projected to grow from 1.03 yuan in 2023 to 1.80 yuan in 2026, with a corresponding P/E ratio decreasing from 15.75 to 9.05 [2] Industry and Market Position - The HDT industry experienced a decline in production and sales in Q2 2024, with a 7.1% YoY and 15.6% QoQ decrease in production, and a 6.2% YoY and 14.9% QoQ decrease in sales [3] - Despite the industry downturn, the company's HDT engine sales increased by 10.0% YoY and 15.1% QoQ, driven by structural improvements and cost reductions [3] - The company's natural gas HDT engines, which accounted for 71% of total engine shipments, saw a significant increase in sales, contributing to the overall growth [3] Strategic Focus and Future Outlook - The company is strategically positioned to capitalize on the growing demand for natural gas HDTs, with a focus on maintaining high market share and profitability [3] - The company is actively expanding its product portfolio, including the development of WPDI, methanol engines, and hydrogen internal combustion engines, as well as enhancing its capabilities in electric drive components and fuel cell technology [3] - The company's long-term growth strategy includes accelerating the commercialization of fuel cell technology and improving its testing capabilities for electric drive components and power systems [3]