Huachuang Securities·2024-07-15 09:01Investment Rating - The report maintains a "Strong Buy" rating for Weichai Power, with a target price of 20.6 CNY, representing a potential upside of 45% from the current price of 14.27 CNY [2]. Core Views - The company's Q2 performance exceeded expectations, driven by growth in the natural gas segment and improvements in internal operations. The forecast for net profit attributable to shareholders for the first half of 2024 is between 5.46 billion to 6.24 billion CNY, reflecting a year-on-year increase of 40% to 60% [2]. - The report highlights that Weichai Power is a leader in the heavy truck segment, with a market share consistently above 30%. The company is expected to benefit significantly from the recovery in the heavy truck industry and the sustained high demand for natural gas heavy trucks [2][3]. Financial Summary - The total revenue for 2023 is projected at 213.96 billion CNY, with a year-on-year growth rate of 22.2%. For 2024, the revenue is expected to reach 238.54 billion CNY, reflecting an 11.5% growth [3]. - The net profit attributable to shareholders for 2023 is estimated at 9.01 billion CNY, with a remarkable year-on-year growth of 83.8%. The projections for 2024, 2025, and 2026 are 11.92 billion CNY, 13.69 billion CNY, and 15.25 billion CNY, respectively, indicating growth rates of 32.2%, 14.9%, and 11.4% [3][9]. - Earnings per share (EPS) for 2024 is forecasted at 1.37 CNY, with a price-to-earnings (P/E) ratio of 10 [3]. Business Segments - The report emphasizes Weichai's diversified business model, which includes heavy trucks, large-bore engines, intelligent logistics, and agricultural equipment. Each segment is positioned to contribute to the company's growth beyond the heavy truck industry's cyclical nature [2]. - The natural gas segment is highlighted as a key growth driver, with significant increases in market penetration and sales volume. The report notes that the penetration rate for natural gas vehicles has reached approximately 38%, with a year-on-year increase of 16 percentage points [2].