JPMorgan has released a research report maintaining an "Overweight" rating on Weichai Power Co.,Ltd. (ASX: 02338).
The bank noted that since the second half of this year, the company has continued to attract attention from long-term investors. Even amid significant share price volatility, investors have shown a willingness to buy on dips, and the current valuation and dividend yield are attractive.
The bank believes that the latest industry developments further highlight the market opportunities and urgency for the solid oxide fuel cell (SOFC) business. U.S.-listed Bloom Energy (NYSE: BE) has raised its full-year 2026 revenue guidance to US$4.4 billion to US$4.6 billion, representing year-on-year growth of more than 120% at the midpoint, and has lifted its non-GAAP gross margin outlook to approximately 34%. The UK's Ceres has announced new partnerships and stated that Weichai is one of the fastest-expanding licensors globally, targeting 200 megawatts of SOFC capacity by the end of 2027 and rapidly advancing toward mass production.
JPMorgan stated that the latest China heavy truck industry data reflects a still-challenging demand environment, with LNG truck sales continuing to come under pressure, while electrification and exports have become the main growth drivers. Against this backdrop, Weichai has raised its AIDC diesel and gas engine shipment targets for this year and next. Currently, the company guides approximately 1,300 units of AIDC diesel engine shipments in the third quarter of this year, 200 to 300 units of gas engine shipments in 2026, and more than 2,000 units of gas engine shipments in 2027. The bank believes that with the shift in product mix, the upside potential for the company's incremental profit in 2027 will expand significantly.
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