Weichai Power (000338) Interim Report Comments: Leading Multi-Point Flowering Performance Growth Exceeds Expectations

Weichai Power (000338) Interim Report Comments: Leading Multi-Point Flowering Performance Growth Exceeds Expectations

The company achieved operating income of 90 in the first half of the year.

86 ppm, an increase of 10 in ten years.

45%; net profit attributable to mother 5.

29 ppm, an increase of 20 in ten years.

37%; EPS is 0.

67 ppm, an increase of 21 in ten years.

3%, performance growth exceeded expectations.

The high revenue growth is definitely the company’s core business. (1) The city share of power system engines has increased significantly, and light supporting heavy trucks; (2) the city share of gearboxes has continued to rise to 80%, forming an oligopoly.

In terms of profit, the company actively promoted cost reduction and efficiency improvement, the three expense ratios have been reduced, and profitability has continued to improve.

The sales structure was upgraded to take advantage of the power product portfolio.

In the first half of the year, heavy trucks maintained a high level of sales, with sales of 660,000 vehicles, a decrease of 2% per second, and basically stable operation.

The competitiveness of the company’s powertrain products continues to increase, and sales growth continues to exceed the industry: engine sales of 400,000 units, an annual increase of 11%; gearbox sales of 580,000 units, an annual increase of 11%; axle sales of 460,000 units, an increase of 27%; Construction machinery and its engines, agricultural machinery, etc. all maintained positive growth.

We expect to have the advantages of platform powertrains, and the company’s market share of complete vehicles and power systems will continue to increase in the future.

The leader will continue to benefit from the elimination of National III and the upgrade of National VI emissions.

With regard to the elimination of country three, key regions have continued to advance, and the sales base of heavy trucks has gradually stabilized this year and next.

In terms of the upgrade of National VI, the diesel engine National VI emission upgrade will be launched in the next year. Weichai has completed a full series of development, certification, and started small-volume launch, which has the first-mover advantage in the industry.

It is expected that the proportion of well-prepared industry leaders will continue to increase, and the growth will exceed the industry.

Investment suggestion: We estimate that the company’s net profit attributable to mothers in 2019 and 2020 will be US $ 9 billion and US $ 9.9 billion, respectively, and the current overall corresponding dynamic estimates are 10 and 9 times, respectively. Maintain the “Buy” rating.

Risk warning: Heavy 厦门夜网 truck sales are lower than expected; KION integration progress is slow.

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