潍柴动力：Still positive, but wait for a better entry point after 3Q24E results

Investment Rating - The report maintains a BUY rating for Weichai Power, indicating that the valuation remains attractive even with revised earnings forecasts [2][4]. Core Views - The earnings forecast for Weichai Power has been adjusted downwards, with HDT engine sales volume forecasts trimmed by 7% for 2024E and 2025E, reflecting a challenging market environment [2]. - Profit growth is expected to decelerate significantly from 51% in 1H24 to 7% in 2H24E and further to 2% in 2025E, primarily due to unfavorable LNG/diesel price spreads impacting the gas engine segment [2]. - The target price has been revised down to RMB17.9/HK$17.7 from RMB18.0/HK$19.5, reflecting a 25.1% upside from the current price of RMB14.31 [4]. Financial Summary - Revenue is projected to grow from RMB213,958 million in FY23A to RMB223,162 million in FY24E, representing a 4.3% year-on-year growth [3]. - Adjusted net profit is expected to increase from RMB9,013.9 million in FY23A to RMB11,390.7 million in FY24E, reflecting a 26.4% growth [3]. - The P/E ratio is forecasted to decrease from 13.9x in FY23A to 11.0x in FY24E, indicating a more favorable valuation [3][14]. Sales Volume and Revenue Breakdown - The total engine sales volume forecast for 2024E has been revised down to 803,223 units, a decrease of 5.6% from previous estimates [7]. - Revenue from diesel engines is expected to decline from RMB69,788 million to RMB66,427 million in 2024E, a drop of 4.8% [7]. - The segment profit for diesel engines is projected to increase slightly from RMB8,863 million to RMB8,968 million in 2024E, indicating a 1.2% growth [7]. Valuation Metrics - The report indicates a target price of RMB17.90, with a current price of RMB14.31, suggesting a significant upside potential [4]. - The net gearing ratio is expected to worsen from (62.0%) in FY23A to (70.2%) in FY24E, indicating increasing leverage [3][14]. - The dividend yield is projected to increase from 3.6% in FY23A to 4.6% in FY24E, reflecting a commitment to returning value to shareholders [3][14].