Southwest Securities·2024-07-15 10:00Investment Rating - The report maintains a "Buy" rating for Weichai Power (000338) with a current price of 14.27 CNY [1]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 5.46-6.24 billion CNY for the first half of 2024, representing a year-on-year increase of 40.0%-60.0% [2]. - The demand for gas engines is strong, significantly enhancing the company's profitability, with a projected net profit of 8.08 billion CNY for 2023, up 146.1% year-on-year [2]. - The company is actively developing new market demands and optimizing its product structure, which is expected to contribute to further performance improvements [2]. Summary by Sections Financial Performance - For Q2 2024, the company anticipates a net profit of 2.86-3.64 billion CNY, a year-on-year increase of 40.0%-78.2% and a quarter-on-quarter increase of 10.0%-40.0% [2]. - The net profit attributable to shareholders for Q2 2024 is projected to be 3.25 billion CNY, reflecting a year-on-year increase of 59.1% and a quarter-on-quarter increase of 25.0% [2]. - The company expects to achieve net profits of 11.85 billion CNY, 13.65 billion CNY, and 15.67 billion CNY for 2024, 2025, and 2026 respectively, with a compound annual growth rate of 20.2% [2][3]. Market Demand and Product Development - The sales of natural gas heavy trucks reached 152,000 units in 2023, a year-on-year increase of 307%, with 109,000 units sold in the first half of 2024, up 104% year-on-year [2]. - The company showcased its M33/M55 series large-bore power generation products at the 2024 China (Shanghai) International Power Equipment and Generator Set Exhibition, targeting high-end markets [2]. Subsidiary Performance - The subsidiary Kion achieved a revenue of 87.52 billion CNY in 2023, up 10.8% year-on-year, with a net profit of 2.09 billion CNY, up 336.9% year-on-year [2]. - Other subsidiaries like Shaanxi Heavy Truck and Lovol are also expected to improve profitability, benefiting the overall profit growth of the company [2].