Weichai Power(02338) 交银国际·2025-03-28 10:14Investment Rating - The report maintains a "Buy" rating for Weichai Power (2338 HK) with a target price raised to HKD 20.50, indicating a potential upside of 31.4% from the current price of HKD 15.60 [1][6][8]. Core Insights - Weichai Power's engine profits have shown strong growth, with a record high dividend payout ratio of 55%. The company is expected to achieve a revenue growth of 0.8% in 2024, reaching RMB 215.7 billion, driven by improved gross margins and a net profit increase of 26.5% to RMB 11.4 billion [2][6]. - The report highlights several catalysts for growth, including new subsidies to boost heavy truck demand, strong growth in data center engines, and robust demand for natural gas heavy trucks [6][10]. Financial Overview - Revenue projections for Weichai Power are as follows: - 2023: RMB 213.96 billion - 2024: RMB 215.69 billion (0.8% YoY growth) - 2025E: RMB 237.92 billion (10.3% YoY growth) - 2026E: RMB 254.83 billion (7.1% YoY growth) - 2027E: RMB 269.35 billion (5.7% YoY growth) [3][10]. - Net profit forecasts are: - 2023: RMB 9.01 billion - 2024: RMB 11.40 billion (26.5% YoY growth) - 2025E: RMB 14.64 billion (28.4% YoY growth) - 2026E: RMB 16.19 billion (10.6% YoY growth) - 2027E: RMB 17.77 billion (9.8% YoY growth) [3][10]. - The report notes a significant improvement in gross margin, which is expected to reach 22.4% in 2024, up from 21.1% in 2023 [11]. Market Position - Weichai Power's heavy truck engine sales are projected to remain stable, with a market share of 38.7% in the domestic market. The company has also seen a 148% increase in sales of data center products [6][10]. - The company has a market capitalization of approximately HKD 250.4 billion and has shown a year-to-date price change of 31.31% [5][10].