Haitong Securities·2024-10-31 09:12Investment Rating - The investment rating for Weichai Power is "Outperform the Market" and is maintained [2] Core Views - Weichai Power reported a revenue of 161.95 billion yuan for the first three quarters of 2024, a year-on-year increase of 1%, and a net profit attributable to shareholders of 8.4 billion yuan, a year-on-year increase of 29% [5] - In Q3 2024, the company achieved a revenue of 49.46 billion yuan, a year-on-year decrease of 9% and a quarter-on-quarter decrease of 12%, with a net profit of 2.5 billion yuan, a year-on-year decrease of 4% and a quarter-on-quarter decrease of 24% [5] - The decline in performance in Q3 2024 is closely related to the market conditions of domestic heavy trucks and natural gas traction vehicles, with domestic heavy truck sales dropping by 18% year-on-year and 23% quarter-on-quarter [5] - The company expects revenue to reach 222.9 billion yuan, 238.9 billion yuan, and 256.3 billion yuan in 2024, 2025, and 2026 respectively, with net profits of 11.2 billion yuan, 12.5 billion yuan, and 14.3 billion yuan for the same years [6][10] Summary by Sections Financial Performance - For Q3 2024, Weichai Power's gross margin was 22.1%, a year-on-year increase of 0.4 percentage points and a quarter-on-quarter increase of 0.7 percentage points, while the net profit margin was 6.0%, a year-on-year increase of 0.1 percentage points but a quarter-on-quarter decrease of 1.2 percentage points [5] - The financial expenses for Q3 2024 reached 357 million yuan, the second highest in nearly a decade, impacting profits [5] Future Projections - The company forecasts a revenue growth rate of 4.2% in 2024, followed by 7.2% in 2025 and 7.3% in 2026, with net profit growth rates of 24.5%, 11.6%, and 14.3% respectively [10] - The expected earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 1.29 yuan, 1.43 yuan, and 1.64 yuan respectively [6][10] Valuation - The closing stock price on October 30, 2024, corresponds to a price-to-earnings (P/E) ratio of 10x for 2024, 9x for 2025, and 8x for 2026 [6] - Considering the company's competitive advantages, a P/E range of 13-15x is suggested, leading to a reasonable value range of 16.71 to 19.28 yuan [6]