Minsheng Securities·2024-10-31 13:17Investment Rating - The report maintains a "Recommended" rating for Weichai Power (000338.SZ) with a target price of 13.49 CNY, corresponding to a PE ratio of 10/9/8 for the years 2024-2026 [2][4]. Core Views - The company's Q3 2024 performance met expectations, with revenue of 161.95 billion CNY for the first three quarters, a year-on-year increase of 0.98%, and a net profit attributable to shareholders of 8.40 billion CNY, up 29.23% year-on-year [2]. - The diversification of the business is progressing smoothly, with a notable performance in agricultural equipment and overseas subsidiaries [2]. - The implementation of policies for replacing old trucks is expected to boost demand in Q4, positively impacting engine demand [2]. Financial Performance Summary - For Q3 2024, the company reported revenue of 49.46 billion CNY, down 8.82% year-on-year, and a net profit of 2.50 billion CNY, down 4.00% year-on-year [2]. - The gross margin for Q3 2024 was 22.12%, an increase of 0.35 percentage points year-on-year, while the net profit margin was 6.00%, up 0.08 percentage points year-on-year [2]. - The company expects revenues of 219.53 billion CNY, 231.01 billion CNY, and 243.15 billion CNY for 2024, 2025, and 2026 respectively, with net profits of 11.36 billion CNY, 12.95 billion CNY, and 14.69 billion CNY for the same years [3][5]. Business Development - The company is optimizing its product structure, with steady growth in its engine, vehicle, smart logistics, and agricultural equipment segments [2]. - The agricultural equipment segment has seen a successful high-end transformation, with sales revenue from Weichai Lovol increasing by 28% year-on-year in H1 2024 [2]. - The overseas subsidiary KION reported Q3 2024 revenue of 2.699 billion EUR, a decrease of 1.12% year-on-year, but significantly better than the industry average [2].