Morgan Stanley has issued a research report stating that Weichai Power Co.,Ltd. (02338) reported third-quarter 2026 results that were in line with the firm's expectations. The investment bank maintained its "Overweight" rating on the stock with a target price of HK$46.
The report noted that Weichai Power Co.,Ltd. (02338) recorded third-quarter revenue growth of 1% year-on-year to RMB 56.008 billion, reflecting weak heavy truck industry sales in the third quarter, particularly for LNG and diesel trucks, though this was partially offset by growth in AIDC revenue.
The bank pointed out that Weichai Power Co.,Ltd. (02338) saw its gross margin expand 1.5 percentage points year-on-year to 22.9%, which was 1.7 percentage points above the firm's estimate, likely benefiting from an improved revenue mix with a higher proportion of AIDC engines. AIDC diesel engine sales accelerated to approximately 1,300 units, compared with 800 units in the second quarter and 600 units in the first quarter. If growth continues in the fourth quarter, full-year sales could exceed the 4,000-unit target.
Net profit declined year-on-year, with reported net profit of RMB 2.957 billion, down 9% year-on-year, slightly below market expectations primarily due to one-off factors, but in line with the firm's estimate. The third quarter recorded approximately RMB 390 million in fair value losses due to a decline in Ballard's share price. Excluding this item, net profit would have risen approximately 3% year-on-year, broadly in line with market expectations.
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