Weichai Power's Gross Margin Likely Facing Significant Pressure in 2H -- Market Talk

Dow Jones10-14

0319 GMT - Weichai Power's gross margin is likely facing significant pressure in 2H, due to China's weak macroeconomic conditions and soft liquefied-natural-gas demand, Daiwa Capital Markets analyst Kelvin Lau says in a research report. LNG demand outlook seems weak for rest of 2H owing to factors such as LNG heavy-duty trucks not being eligible for the nationwide trade-in policy and a shrinking diesel-LNG spread that has curbed LNG HDT demand, the analyst adds. The brokerage cuts its 2024-2026 gross-margin estimates for the diesel-engine manufacturer by 0.4-0.5 percentage points. It downgrades the stock's rating to hold from buy and lowers its target price to HK$13.50 from HK$16.00. Shares are 3.4% lower at HK$12.58. (ronnie.harui@wsj.com)

(END) Dow Jones Newswires

October 13, 2024 23:19 ET (03:19 GMT)

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The brokerage cuts its 2024-2026 gross-margin estimates for the diesel-engine manufacturer by 0.4-0.5 percentage points. It downgrades the stock's rating to hold from buy and lowers its target price to HK$13.50 from HK$16.00. Shares are 3.4% lower at HK$12.58. 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LNG demand outlook seems weak for rest of 2H owing to factors such as LNG heavy-duty trucks not being eligible for the nationwide trade-in policy and a shrinking diesel-LNG spread that has curbed LNG HDT demand, the analyst adds. The brokerage cuts its 2024-2026 gross-margin estimates for the diesel-engine manufacturer by 0.4-0.5 percentage points. It downgrades the stock's rating to hold from buy and lowers its target price to HK$13.50 from HK$16.00. Shares are 3.4% lower at HK$12.58. 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LNG demand outlook seems weak for rest of 2H owing to factors such as LNG heavy-duty trucks not being eligible for the nationwide trade-in policy and a shrinking diesel-LNG spread that has curbed LNG HDT demand, the analyst adds. The brokerage cuts its 2024-2026 gross-margin estimates for the diesel-engine manufacturer by 0.4-0.5 percentage points. It downgrades the stock's rating to hold from buy and lowers its target price to HK$13.50 from HK$16.00. Shares are 3.4% lower at HK$12.58. 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