Weichai Power(SZ:000338) Southwest Securities·2024-11-05 10:33Investment Rating - The report maintains a "Buy" rating for Weichai Power (000338) with a current price of 13.49 CNY [1]. Core Views - The company's profitability continues to strengthen, with a gross margin of 21.9% for the first three quarters of 2024, up 1.6 percentage points year-on-year [2]. - Despite a decline in industry sales, Weichai Power's revenue for the first three quarters of 2024 reached 161.95 billion CNY, a year-on-year increase of 1.0% [2]. - The company is expected to achieve a net profit of 110.2 billion CNY in 2024, corresponding to a PE ratio of 11 times [4]. Summary by Sections Financial Performance - In Q3 2024, Weichai Power reported revenue of 49.46 billion CNY, down 8.8% year-on-year and 11.8% quarter-on-quarter, with a net profit of 2.50 billion CNY, down 4.0% year-on-year and 24.4% quarter-on-quarter [1]. - The gross margin for Q3 2024 was 22.1%, an increase of 0.3 percentage points year-on-year and 0.7 percentage points quarter-on-quarter [2]. Market Position - The heavy truck industry saw a sales decline of 5% year-on-year, with Weichai Power selling 221,000 heavy truck engines, including 89,000 natural gas engines, which is an 8.8% increase year-on-year [2]. - The company’s market share in heavy trucks is supported by strong performance from subsidiaries like Shaanxi Automobile and Kion [3]. Strategic Initiatives - Weichai Power is accelerating its strategic layout in the new energy sector, focusing on high-power fuel cells and hydrogen fuel electric heavy trucks, which are leading the industry in sales [4]. - Collaborations with companies like Changhang Group and Yutong Bus are expected to enhance the company's product and market advantages [4]. Profit Forecast - The company is projected to achieve net profits of 90.14 billion CNY in 2024, 110.15 billion CNY in 2025, and 129.73 billion CNY in 2026, with corresponding PE ratios decreasing from 11 to 8 over the same period [5].