According to a research report from BofA Securities, Weichai Power Co.,Ltd. (02338) delivered its third-quarter AIDC engines on schedule, with heavy truck sales supported by exports. The bank lowered its earnings per share forecasts for 2026 to 2028 by 6%, 15%, and 11% respectively, cut its H-share price target from HK$47.5 to HK$42, and reiterated its "Buy" rating.
Weichai Power reported its third-quarter results, with sales revenue of RMB 58.1 billion, up 1% year-on-year and down 4% quarter-on-quarter, broadly in line with the bank's expectations. The gross margin was 22.9%, up 1.5 percentage points year-on-year, benefiting from an improved product mix. Operating profit (clean EBIT) was RMB 5.5 billion, up 27% year-on-year and up 7% quarter-on-quarter, in line with the bank's expectations. Net profit was RMB 3.0 billion, down 9% year-on-year; after excluding the investment loss on the Ballard stake and the write-back of credit impairment, adjusted net profit was RMB 3.2 billion, up 14% year-on-year, broadly in line with market expectations.
The bank noted that third-quarter large-bore engine deliveries reached 4,300 units (including 1,300 units for AIDC, up 330% year-on-year), up 55% year-on-year, progressing as planned, and the company is expected to deliver 15,000 large-bore engines and more than 4,000 AIDC engines/generator sets in 2026. Despite weak heavy truck sales in mainland China in the third quarter, especially LNG heavy trucks, the company said the impact on heavy truck engine sales was limited, as indirect export sales accounted for more than 50% in the first nine months of this year; bus and construction machinery engine sales also recorded strong growth.
The bank lowered its earnings per share forecasts for 2026 to 2028 by 6%, 15%, and 11% respectively, to reflect the third-quarter results, new assumptions for AIDC-related products, and KION's third-quarter results. It is bullish on the steady growth prospects of large-bore diesel/gas engines driven by data center demand, as well as the incremental revenue brought by SOFC solutions.
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