Weichai Power(000338) 华泰证券·2025-04-02 01:43Investment Rating - The report maintains a "Buy" rating for both A and H shares of the company [8][9]. Core Views - The company is entering a performance release phase, with earnings and dividends exceeding expectations. The revenue for 2024 is projected at 215.7 billion RMB, a year-on-year increase of 1%, and the net profit attributable to shareholders is expected to reach 11.4 billion RMB, up 27% year-on-year [1][2]. - The company's profitability has improved significantly, with a gross margin of 22.4% for 2024, an increase of 1.3 percentage points year-on-year, and a net profit margin of 5.3%, up 1 percentage point year-on-year. The fourth quarter of 2024 is expected to see a gross margin of 24.2% and a net profit margin of 5.6% [2][3]. - The company benefits from improved engine profitability, enhanced performance from its subsidiary Kion, and increased exports from Shaanxi Heavy Truck, alongside ongoing cost reduction and efficiency improvement initiatives [2][3][4]. Summary by Sections Financial Performance - For 2024, the company anticipates a total revenue of 215.7 billion RMB, with a slight increase in net profit to 11.4 billion RMB. The fourth quarter is expected to generate 53.7 billion RMB in revenue and 3 billion RMB in net profit [1][2]. - The gross margin for 2024 is projected at 22.4%, with a net profit margin of 5.3%. The fourth quarter is expected to show a gross margin of 24.2% and a net profit margin of 5.6% [2][3]. Business Segments - Engine sales are expected to see a slight decline in domestic sales but an increase in exports, with a projected 6.7 million units sold domestically and 6.9 million units exported, reflecting a 5% year-on-year increase [3]. - The Kion Group is expected to achieve a 30% increase in revenue and a 17.5% increase in net profit for 2024, indicating recovery from inflation and supply chain issues [3]. - Shaanxi Heavy Truck's exports are projected to grow by 15% year-on-year, with a net profit margin increase to 1.6% [3]. Future Outlook - The upward cycle in the heavy truck industry and the company's diversified business layout are expected to enhance earnings elasticity. The company is well-positioned to benefit from increased demand for large-bore engines and other diversified business segments [4]. - The company is projected to have a strong cash position of 55 billion RMB by the end of 2024, supporting further dividend increases, with a total dividend payout of 6.3 billion RMB and a payout ratio of 55% [2][4]. Valuation - The report maintains profit forecasts for 2025-2026, estimating net profits of 12.4 billion RMB and 14 billion RMB, respectively. The target price for A shares is set at 19.88 RMB, while the target price for H shares is 18.01 HKD [5][9].