Core Viewpoint - The domestic natural gas heavy truck market is experiencing a decline, with sales dropping for four consecutive months, indicating a challenging environment for the industry [1][25]. Sales Performance - In June 2025, domestic natural gas heavy truck sales reached 13,500 units, a year-on-year decrease of 17% [1][13]. - Cumulatively, from January to June 2025, sales totaled 91,500 units, down 16% compared to the same period last year, representing a net decrease of 17,300 units [1][16]. Engine Market Characteristics - The main displacement ranges for natural gas heavy truck engines in the first half of 2025 were 12-13L and 14-15L, accounting for 42.18% and 40.30% of the market, respectively [6]. - The share of engines over 15L has increased, while the shares of 12-13L and 14-15L engines have decreased compared to the previous year [6]. Power Segment Analysis - The primary power ranges for natural gas heavy truck engines in the first half of 2025 were 400-500 horsepower and 500-600 horsepower, comprising 37.12% and 45.67% of the market, respectively [9]. - The share of super high-power (≥600 horsepower) models has increased by over 12 percentage points compared to the same period last year [10]. Market Share and Rankings - In June 2025, five companies sold over 1,000 units of natural gas heavy truck engines, with Weichai leading at 6,611 units and a market share of 49.13% [15]. - Cumulatively, from January to June 2025, Weichai held a market share of 51.85%, followed by Cummins with 19.83% and Jiefang with 13.21% [20]. Top Selling Engine Models - The top-selling natural gas heavy truck engines from January to June 2025 included: - WP13NG480E61 (Weichai) with 23,200 units sold, 25.35% market share, 12.51L displacement, and 480 horsepower [22]. - DG ! 13 T520-60 (Dongfeng Commercial Vehicle) with 5,600 units sold, 6.12% market share, 12.9L displacement, and 520 horsepower [22]. Future Outlook - The natural gas heavy truck engine market has seen a cumulative decline of 16% as of June, raising questions about potential recovery in the remaining months of 2025 [25]. - The market currently has limited participants, with only eight companies actively selling, suggesting potential for new entrants [25].

Summary of Weichai Power Conference Call Company Overview - Weichai Power is a core domestic replacement manufacturer for AIDC diesel engine units, with a projected market growth of approximately 30% year-on-year over the next 3-4 years. The global market capacity is expected to double from $25 billion to $50 billion, with a forecasted demand of 15,000 units in 2025 and a long-term ceiling potentially exceeding 30,000 units. Weichai's expected shipment volume for 2025 is 1,100 units, corresponding to a global market share of about 6% [2][3]. Key Insights and Arguments - **Market Growth**: The AIDC diesel engine market is anticipated to maintain a high growth rate, driven by downstream AI-related investments, with Weichai's large bore segment expected to significantly contribute to the company's performance in 2025 [3]. - **Heavy Truck Sector**: In the context of domestic vehicle replacement, while short-term sales of new energy heavy trucks are high, Weichai's natural gas heavy truck engines and the entire heavy truck chain are expected to see cyclical recovery opportunities in the medium to long term. In the first half of 2025, new energy heavy truck sales surged by 190%, nearing 70,000 units, with a penetration rate close to 20% [2][4]. - **Profitability and Valuation**: Weichai is projected to achieve a profit of 12.5 billion in 2025, with a corresponding P/E ratio of approximately 10.5 times. For 2026, profits are expected to reach 15.4 billion, representing a year-on-year growth of 23% and a P/E ratio of about 8 times. The current dividend yield is attractive, and several business segments show promising growth potential [2][6]. Competitive Landscape - The global AIDC diesel engine market is dominated by major players such as Cummins, Caterpillar, and MTU, each holding about 20% market share. Weichai's market share is projected to be around 6-7% in 2025. The competitive landscape is relatively concentrated due to high entry barriers, with limited capacity for large-bore engine production among many companies [4][7]. Performance in New Energy Sector - Weichai's subsidiaries in battery, motor, and electronic control manufacturing have become profitable, with a significant increase in sales of Shaanxi Automobile's new energy heavy trucks, which rose by 270%, capturing an 11.6% market share. In contrast, China National Heavy Duty Truck's natural gas heavy truck sales increased by 250%, achieving a 13% market share. These competitors have minimal impact on Weichai, and the overall value of the new energy supply chain is higher than that of traditional natural gas heavy trucks [5][8]. Risks and Considerations - Potential risks include slower-than-expected global economic growth and significant increases in raw material prices, which could impact profitability [6]. This summary encapsulates the key points from the Weichai Power conference call, highlighting the company's growth prospects, competitive positioning, and performance in the new energy sector.

Core Viewpoint - The domestic natural gas heavy truck market is experiencing a decline, with sales dropping significantly in May 2025, marking a continuous decrease over three months. The cumulative sales from January to May also show a notable year-on-year decline, indicating potential challenges for the industry moving forward [1][5][30]. Sales Performance - In May 2025, the sales of natural gas heavy trucks reached 14,000 units, a year-on-year decrease of 34%. Cumulatively, from January to May, sales totaled 78,000 units, reflecting a 16% decline compared to the same period last year [1][5][18]. - The sales of natural gas heavy truck engines in May 2025 were 14,000 units, also down 34% year-on-year, with a cumulative total of 78,000 units sold from January to May, marking a 16% decline [5][18]. Engine Market Characteristics - The main displacement ranges for natural gas heavy truck engines from January to May 2025 were 12-13L and 14-15L, accounting for 42.21% and 40.22% of the market, respectively. The share of engines over 15L has increased slightly compared to the previous year [7]. - In terms of horsepower, the dominant ranges were 400-500 horsepower and 500-600 horsepower, comprising 37.65% and 45.72% of the market. The share of super high horsepower models (≥600 horsepower) reached 14.17%, showing a significant increase compared to the previous year [10][11]. Market Share and Competitors - In May 2025, five companies sold over 1,000 units of natural gas heavy truck engines. Weichai led the market with 6,953 units sold, capturing a market share of 49.84%. Cummins ranked second with 2,875 units and a 20.61% share, followed by Jiefang with 1,580 units and an 11.33% share [14][16]. - From January to May 2025, Weichai maintained a market share of over 50%, reaching 52.32%. Cummins' total sales were 15,500 units, with a market share of 19.83%, while Jiefang surpassed 10,000 units, achieving a 13.44% share [21]. Top Engine Models - The top-selling natural gas heavy truck engines from January to May 2025 included: - WP13NG480E61 (Weichai) with 20,100 units sold, 25.69% market share, 12.51L displacement, and 480 horsepower - WP15NG630E61 (Weichai) with 4,562 units sold, 5.85% market share, 14.5L displacement, and 630 horsepower [24]. Future Outlook - The natural gas heavy truck engine market has seen a decline in sales for three consecutive months. The remaining months of 2025 will be critical to determine if the market can recover. Additionally, the limited number of participants in the natural gas heavy truck engine sector raises questions about potential new entrants [30].

Summary of Weichai Power Conference Call Company Overview - **Company**: Weichai Power - **Industry**: Heavy-duty truck and engine manufacturing Key Points and Arguments Revenue Growth Projections - Weichai Power expects a revenue growth of approximately 15% in 2024, with potential for even higher growth rates in 2026 driven by: - Natural gas heavy-duty truck engines - Large-bore engines, particularly IDEC diesel generator applications - Growth in Kaiao logistics equipment business [2][3] Heavy-duty Truck Market Performance - The domestic heavy-duty truck market is projected to perform strongly in 2025, with May wholesale volume increasing by 12% year-on-year and terminal sales up by 18% - The "old-for-new" policy is expected to drive demand, with anticipated year-on-year growth exceeding 30% from April to September [2][4][5] Large-bore Diesel Generator Demand - There is a rapid growth in demand for large-bore diesel generators, with supply constraints leading to a price increase trend - The global IDEC diesel generator unit count is expected to grow from 15,000 units in 2024 to 30,000-40,000 units by 2030, effectively doubling the market space [2][6] Kaiao Subsidiary Impact - Kaiao's release of severance costs in Q1 is expected to lead to reduced expenses and improved operating profit margins - The subsidiary will benefit from reinvestment in European manufacturing, positively impacting Weichai Power's overall performance [2][7] Risks and Challenges - Weichai Power faces risks from slower-than-expected global economic growth and significant increases in raw material prices - These factors could negatively impact the company's operations and profitability, necessitating close monitoring and appropriate measures [4][8] Additional Important Insights - The penetration rate of natural gas heavy-duty trucks remains low, but with the implementation of subsidy policies, a positive outlook for the coming months is anticipated [2][5] - The tight supply in the large-bore engine market, with limited capacity growth from major players like Caterpillar, Cummins, and MTU, is expected to enhance profitability for Weichai Power [4][6]

Core Viewpoint - Weichai Power (000338) anticipates that the domestic sales of natural gas heavy trucks will reach 47,000 units in Q1 2025, with a penetration rate of 31% [1] Group 1: Industry Insights - The future supply-demand balance is expected to support natural gas prices in a stable and reasonable range, enhancing the application scenarios for natural gas heavy trucks due to their low-carbon and economic advantages [1] - The penetration rate of natural gas heavy trucks is projected to continue increasing [1] Group 2: Company Strategy - The company possesses strong R&D capabilities and technical accumulation, which will help it lead in the market share of natural gas heavy truck engines [1] - A recent notice from the Ministry of Transport on March 18 regarding the "old-for-new" policy will provide subsidies for natural gas heavy trucks, further boosting the demand for gas vehicle replacements [1] - The company will continue to drive industry upgrades through product innovation and aims to further enhance its market share [1]

Group 1: Natural Gas Heavy Truck Development - In Q1 2025, domestic sales of natural gas heavy trucks reached 47,000 units, with a penetration rate of 31% [1] - The supply-demand balance is expected to support stable and reasonable natural gas prices, leading to broader applications of gas heavy trucks [1] - The company has over 20 years of experience in this market, with strong R&D capabilities, aiming to lead in market share for natural gas truck engines [1] - The "old-for-new" policy announced by the Ministry of Transport on March 18 will further boost demand for gas vehicle replacements [1] Group 2: New Energy Business Development - The penetration rate of new energy in heavy trucks, light trucks, and engineering machinery is gradually increasing due to policy support and cost reductions [2] - The company is constructing the Weichai (Yantai) New Energy Industrial Park, which includes a 50GWh power battery and energy storage system production base [2] - The first battery product from this industrial park was launched on March 28, 2025, marking the project's official production [2] - The company has made breakthroughs in power battery thermal management, intelligent management, and lifecycle reliability, aiming to enhance the performance contribution of its new energy business [2] Group 3: Dividend Policy - If the 2024 dividend distribution plan is considered, the total dividends distributed since the company's listing will reach nearly 35 billion yuan [2] - The company values shareholder opinions and continuously rewards them through dividends [2] - Future dividend policies will balance company development and shareholder interests, considering market conditions, operational cash flow, and future funding needs [2]

Group 1: Natural Gas Heavy Trucks - In 2024, domestic sales of natural gas heavy trucks are projected to reach 178,000 units, with a penetration rate of 30% [1] - The company expects the penetration rate to continue increasing due to a favorable supply-demand balance and the advantages of low carbon and economic benefits [1] - The company has over 20 years of experience in this market, with an estimated market share of approximately 60% for natural gas heavy truck engines in 2024 [1] Group 2: Large Bore Engine and Data Center Business - The company anticipates selling over 8,100 units of the M series large bore engines in 2024, with a revenue growth of 20% [3] - Data center product sales are expected to grow by 148% year-on-year, reaching nearly 400 units [3] - The company aims to leverage its technological performance and production capacity to capture key high-end markets [3] Group 3: New Energy Business - In 2024, sales of new energy heavy trucks are expected to reach 80,000 units, with a market penetration rate of 14% [4] - The penetration rates for new energy loaders and light trucks are projected to be 25% and 16%, respectively [4] - The company has launched its new energy industrial park, which supports its strategic transition to new energy [4] - The company aims for a year-on-year doubling of new energy revenue in 2025 through product innovation and market expansion [4] Group 4: Dividend Policy - The total dividend payout since the company's listing is expected to reach nearly 35 billion yuan by considering the 2024 dividend plan [5] - The company emphasizes shareholder feedback and aims to maintain a stable dividend policy while balancing development and shareholder interests [6]