External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>We trim our HDT engine sales volume forecast by 7%/7%2% in 2024E/25E/26E, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”). In the near term, we believe the narrowed LNG/diesel price spread will be unfavourable to Weichai’s gas engine segment.</li><li>While our earnings forecast in 2024E-26E is only revised down by 1-3% due to a relatively solid margin outlook, our new forecasts suggest profit growth to decelerate from 51% in 1H24 to 7%/2% in 2H24E/2025E.</li><li>Our SOTP-based TP for A/H (rolled over to 2025E) is revised down to RMB17.9/HK$17.7 (from RMB18.0/HK$19.5). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We trim our HDT engine sales volume forecast by 7%/7%2% in 2024E/25E/26E, after incorporating our new industry HDT sales forecast (for details, please refer to our sector report “China Heavy-duty Truck – Headwinds in 4Q24 in both China &amp; export; Eyes on policy-driven recovery in 2025”). In the near term, we believe the narrowed LNG/diesel price spread will be unfavourable to Weichai’s gas engine segment.While our earnings forecast in 2024E-26E is only revised down by 1-3% due to a relatively solid margin outlook, our new forecasts suggest profit growth to decelerate from 51% in 1H24 to 7%/2% in 2H24E/2025E.Our SOTP-based TP for A/H (rolled over to 2025E) is revised down to RMB17.9/HK$17.7 (from RMB18.0/HK$19.5). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai Power (000338 CH) - Still Positive, but Wait for a Better Entry Point After 3Q24E Results

<ul><li>While Weichai Power (Weichai)’s revenue growth of 6% YoY in 1Q24 is below our expectation, net profit of RMB2.6bn (+40% YoY) accounted for 21.4% of our full-year estimates (run rate in 1Q23: 20.5%), which is still in line with our expectation.</li><li>The earnings growth was driven by margin expansion on both core business and KION Group (KGX GR, NR).</li><li>We maintain Weichai as our sector top pick, given (1) the large gas/diesel price gap will continue to drive natural gas engine demand, where Weichai has &gt;60% market share in; (2) high-speed large-bore engines will serve as a structural growth driver on the back of construction of more data centres. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

While Weichai Power (Weichai)’s revenue growth of 6% YoY in 1Q24 is below our expectation, net profit of RMB2.6bn (+40% YoY) accounted for 21.4% of our full-year estimates (run rate in 1Q23: 20.5%), which is still in line with our expectation.The earnings growth was driven by margin expansion on both core business and KION Group (KGX GR, NR).We maintain Weichai as our sector top pick, given (1) the large gas/diesel price gap will continue to drive natural gas engine demand, where Weichai has &gt;60% market share in; (2) high-speed large-bore engines will serve as a structural growth driver on the back of construction of more data centres. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai Power (000338 CH) - 1Q24 Net Profit +40% YoY in Line; Solid Growth Outlook

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>During the post-results call yesterday, Weichai expected the industry HDT demand in 2024E will be ~900k units (-2% YoY).</li><li>Of this, China demand is expected to fall by 10% YoY to 600k units while exports are expected to grow 20% YoY to 300k units.</li><li>Weichai expects the LNG price to stay low due to oversupply, which may help boost the demand for gas HDTs. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

During the post-results call yesterday, Weichai expected the industry HDT demand in 2024E will be ~900k units (-2% YoY).Of this, China demand is expected to fall by 10% YoY to 600k units while exports are expected to grow 20% YoY to 300k units.Weichai expects the LNG price to stay low due to oversupply, which may help boost the demand for gas HDTs. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai Power (2338 HK) - Key Takeaways from Post-Results Call

<ul><li>Weichai’s net profit in 2023 surged 84% YoY to RMB9bn, which is in line with the profit range of RMB8.58-9.32bn announced in Jan.</li><li>In 4Q23, net profit grew 58% YoY to RMB2.5bn. It’s worth noting that Weichai has declared a final dividend of RMB0.293/shr.</li><li>This, together with the interim dividend, implies that the payout ratio has reached 50% (up from 45% in 2022). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai’s net profit in 2023 surged 84% YoY to RMB9bn, which is in line with the profit range of RMB8.58-9.32bn announced in Jan.In 4Q23, net profit grew 58% YoY to RMB2.5bn. It’s worth noting that Weichai has declared a final dividend of RMB0.293/shr.This, together with the interim dividend, implies that the payout ratio has reached 50% (up from 45% in 2022). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai Power (2338 HK) - 4Q23 Net Profit +58% YoY

Weichai Power (000338 CH) - 4Q23 Net Profit +58% YoY; Payout Increased to 50%

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of vehicles and parts. The Company produces engines, heavy vehicles, light vehicles, construction machinery, hydraulic products, automotive electronics, and related parts. Weichai Power markets its products across worldwide.

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Weichai Power (000338 CH)