20240430-招银国际-潍柴动力-000338.SZ-1Q24_net_profit_+40__YoY_in_line__solid_growth_outlook_7页_1mb

Weichai Power (000338 CH) reported a 40% year-over-year increase in 1Q24 net profit to RMB2.6 billion, despite a 6% revenue growth below expectations. The company maintained its BUY rating with a target price of RMB20.40, while highlighting solid growth potential driven by margin expansion in core business and KION Group. Key drivers include the widening gas/diesel price gap boosting natural gas engine demand, where Weichai holds over 60% market share. However, risks such as weak engine exports, lower replacement demand, and rising component costs were noted. Financial highlights show improved gross margin at 22.1%, surge in pre-tax profit to RMB4.2 billion, and KION's 46% YoY EBIT growth. Overall, the company's outlook is positive, with recommendation to consider investments based on SOTP valuation and market conditions.