Summary of Conference Call Records Industry Overview - The heavy-duty truck (HDT) industry in China experienced a peak sales volume of 1.6 million units in 2020, driven by policy incentives, with significant stock price increases observed. [2] - The domestic HDT market is influenced by the real estate cycle, with an oversupply of construction vehicles. It is expected that by 2027, real estate investment will stabilize, leading to an annual replacement demand of approximately 110,000 to 120,000 units for construction vehicles and 600,000 to 700,000 units for logistics vehicles. [2][4] - The total replacement demand for HDTs is projected to be at least 700,000 to 800,000 units. [4] Sales and Market Dynamics - The heavy-duty truck market in China has a current ownership of about 8.8 million units, with National V models accounting for 62.5% of this total. [5] - The upcoming National V replacement cycle in 2026 is expected to drive an upward trend in the industry. [5] - The sales cycle for HDTs is anticipated to enter a major replacement cycle in 2025-2026, potentially reaching sales levels of 1.6 million units, which would be two to three times the current levels. [3][7] Export Market Insights - In 2021, China's HDT exports surged, particularly to Africa, as a replacement for used vehicles from Europe and the U.S. However, exports to Russia are expected to decline significantly due to scrappage taxes and other factors, with a projected drop of over 90% in 2025. [8] - Future growth in exports is expected to come from regions such as the Middle East, Southeast Asia, and Africa, where infrastructure development is ongoing. [8] Company Performance and Recommendations - Key recommended stocks include China National Heavy Duty Truck Group (CNHTC) and Weichai Power, both subsidiaries of Shandong Heavy Industry Group. CNHTC's Hong Kong shares are noted for their strong export business, while its A-shares are more reliant on domestic demand. [12] - Weichai Power is expected to achieve a performance of around 12.5 billion yuan in 2025, with a high dividend rate and strong growth potential in large-bore generator sets. [18] Future Outlook - The domestic sales growth for 2025 is projected to be close to 18%, driven by pure electric and diesel models, with an upward adjustment of the annual sales forecast to 750,000 units. [10] - The export market is also expected to perform well, with a projected total of 300,000 to 310,000 units for the year, despite the decline in Russian exports. [11] - The overall outlook for the heavy-duty truck market remains positive, with expectations of a recovery driven by replacement demand and policy support. [9][10]