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

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>Weichai Power (Weichai) pre-announced last night (23 Jan) that net profit in 2023E is expected to surge 75-90% YoY to RMB8.58-9.32bn, which is better than expectations as both our and consensus estimates are only close to the low end of the profit range.</li><li>The profit alert implies that Weichai delivered net profit of RMB2.08-2.82bn in 4Q23E (up 31-77% YoY), with a midpoint of RMB2.45bn (+54% YoY).</li><li>As we highlighted in our note on 15 Jan (link), Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY in 4Q23 (surpassing the industry average of 26%), driven by strong HDT engine demand. </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 Power (Weichai) pre-announced last night (23 Jan) that net profit in 2023E is expected to surge 75-90% YoY to RMB8.58-9.32bn, which is better than expectations as both our and consensus estimates are only close to the low end of the profit range.The profit alert implies that Weichai delivered net profit of RMB2.08-2.82bn in 4Q23E (up 31-77% YoY), with a midpoint of RMB2.45bn (+54% YoY).As we highlighted in our note on 15 Jan (link), Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY in 4Q23 (surpassing the industry average of 26%), driven by strong HDT engine demand. 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) – 4Q23E Earnings Surged 31-71% YoY, Above Expectation

<ul><li>Weichai Power (2338 HK/000338 CH, BUY) delivered 27% YoY growth of multi-cylinder diesel engine sales volume in Dec 2023, similar to the industry average of 29%, according to the latest figures from China Internal Combustion Engine Industry Association (CICEIA).</li><li>In 4Q23, Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY to ~193k units, surpassing the industry average of 26%, driven by strong commercial vehicles demand in the previous months.</li><li>Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 18.6% in 4Q23, up 3ppt YoY and 0.1ppt QoQ.</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 Power (2338 HK/000338 CH, BUY) delivered 27% YoY growth of multi-cylinder diesel engine sales volume in Dec 2023, similar to the industry average of 29%, according to the latest figures from China Internal Combustion Engine Industry Association (CICEIA).In 4Q23, Weichai’s multi-cylinder diesel engine sales volume surged 51% YoY to ~193k units, surpassing the industry average of 26%, driven by strong commercial vehicles demand in the previous months.Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 18.6% in 4Q23, up 3ppt YoY and 0.1ppt QoQ.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.

China Heavy Duty Truck – Multi-Cylinder Diesel Engine Sales +29% YoY in Dec

Thematic (Sector/Industry)

<ul><li>Three companies reported their 3Q24 results last night (30 Oct).</li><li>SANY Heavy reported better-than-expected earnings driven by strong revenue growth (+19% YoY), while Zoomlion’s profit is below our expectation as strong overseas sales were more than offset by weak China performance.</li><li>Weichai Power reported profit decrease (-4% YoY), but is largely in-line with expectation given the weak HDT and engine demand. </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.

Three companies reported their 3Q24 results last night (30 Oct).SANY Heavy reported better-than-expected earnings driven by strong revenue growth (+19% YoY), while Zoomlion’s profit is below our expectation as strong overseas sales were more than offset by weak China performance.Weichai Power reported profit decrease (-4% YoY), but is largely in-line with expectation given the weak HDT and engine demand. 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.

Capital Goods - 3Q24 Earnings Review: SANY Heavy Beat; Zoomlion Missed; Weichai In-Line

<ul><li>We revise down our 2024E/25E heavy-duty truck (HDT) sales forecast by 10%/5% to 856k/ 954k units, following our cut in forecast in Aug, due to further deterioration of HDT demand over the last two months.</li><li>We now expect 5% YoY decline in HDT sales (China sales + exports) in 2024E, followed by 10%/9% recovery in 2025E/26E.</li><li>We are cautious on export market as Russia, the major market for Chinese trucks, will likely see further decline due to high base and impact of high tax recycling tax (starting in Oct).</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 revise down our 2024E/25E heavy-duty truck (HDT) sales forecast by 10%/5% to 856k/ 954k units, following our cut in forecast in Aug, due to further deterioration of HDT demand over the last two months.We now expect 5% YoY decline in HDT sales (China sales + exports) in 2024E, followed by 10%/9% recovery in 2025E/26E.We are cautious on export market as Russia, the major market for Chinese trucks, will likely see further decline due to high base and impact of high tax recycling tax (starting in Oct).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.

Capital Goods - Headwinds in 4Q24 in Both China & Export; Eyes on Policy-Driven Recovery in 2025

<ul><li>The HK market had a strong run over the past two weeks following the dramatic policy changes announced by the Chinese government.</li><li>In order to have a closer look at the sources of buying forces, we analysed ~13,000 data points of shareholdings over the past nine settlement days (23 Sep - 4 Oct on T+2 basis) for four HK-listed names under our coverage, namely Weichai PowerH (2338 HK, BUY), Zoomlion-H (1157 HK, BUY), SANYI (631 HK, BUY) and Sinotruk (3808 HK, HOLD). Our analysis is based on CCASS data, which represented brokers’ holdings on behalf of clients.</li><li>We divided ~380 brokers into six categories: (1) Hong Kong, (2) the Chinese mainland, (3) Stock connect, (4) the US, (5) Europe and (6) other foreign brokers (excluding the US and Europe). </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.

The HK market had a strong run over the past two weeks following the dramatic policy changes announced by the Chinese government.In order to have a closer look at the sources of buying forces, we analysed ~13,000 data points of shareholdings over the past nine settlement days (23 Sep - 4 Oct on T+2 basis) for four HK-listed names under our coverage, namely Weichai PowerH (2338 HK, BUY), Zoomlion-H (1157 HK, BUY), SANYI (631 HK, BUY) and Sinotruk (3808 HK, HOLD). Our analysis is based on CCASS data, which represented brokers’ holdings on behalf of clients.We divided ~380 brokers into six categories: (1) Hong Kong, (2) the Chinese mainland, (3) Stock connect, (4) the US, (5) Europe and (6) other foreign brokers (excluding the US and Europe). 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.

Capital Goods - Who Are Buying/Selling the Sector?

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)