20250328-招银国际-潍柴动力-000338.SZ-Strong_engine_margin_expansion_in_2024__55__dividend_payout_ratio_a_record_high_6页_1mb

Weichai Power Summary

Core Content

Weichai Power (2338 HK/000338 CH) reported a strong net profit growth of 27% YoY in 2024, reaching RMB11.4bn, aligning with expectations. The company proposed a final dividend of RMB0.347 per share, leading to a record high payout ratio of 55%, up from 50% in 2023. The firm revised its 2025E and 2026E earnings forecasts upward by 9% and 11%, respectively, due to improved margin assumptions for the engine segment. The stock is maintained with a BUY rating, and the target price (TP) for A/H is revised to RMB18.7/HK$18.0, reflecting a 10% discount to the net asset value (NAV) per share.

Key Highlights

• Engine Segment:

  • Total engine sales remained flat at 734k units in 2024.
  • Exports increased by 5%, contributing 9% to total engine sales.
  • Segment revenue decreased by 2% YoY to RMB59.4bn, primarily due to a slight decline in blended ASP.
  • Segment profit surged by 35% YoY to RMB10.3bn, driven by a 4.8ppt margin expansion to 17.5%.
  • Projected margin expansion to 17.7% in 2025E and 17.8% in 2026E, fueled by HDT engine demand recovery and data center engine growth.

• Forklifts & Supply Chain Solution (KION Group):

  • Segment profit grew by 21% YoY to RMB6bn in 2024.
  • KION's 2025E guidance for adjusted EBIT is conservative, with a projected decline of 5% to 21%, but the medium-term outlook is positive due to Germany's infrastructure investment plan.
  • Segment margin remained stable at 6.0% in 2024, with a slight increase in 2025E guidance.

• Agricultural Machinery:

  • Segment margin continued to expand despite a slowdown in revenue growth to 3% in H224 from 25% in H124.

• Risk Factors:

  • Weakness in engine exports.
  • Lower-than-expected replacement demand in China.
  • Contraction of diesel/gas price ratio.

Financial Summary

Revenue

• FY23A: RMB213,958 mn
• FY24A: RMB215,691 mn (+0.8% YoY)
• FY25E: RMB228,168 mn (+5.8% YoY)
• FY26E: RMB238,946 mn (+4.7% YoY)
• FY27E: RMB243,611 mn (+2.0% YoY)

Adjusted Net Profit

• FY23A: RMB11,403.3 mn
• FY24A: RMB12,763.9 mn
• FY25E: RMB13,669.3 mn
• FY26E: RMB14,344.8 mn

EPS (Reported)

• FY23A: RMB1.31
• FY24A: RMB1.46
• FY25E: RMB1.57
• FY26E: RMB1.65

P/E Ratio

• FY23A: 11.1
• FY24A: 10.0
• FY25E: 9.3
• FY26E: 8.9

P/B Ratio

• FY23A: 1.5
• FY24A: 1.4
• FY25E: 1.3
• FY26E: 1.2

Yield

• FY23A: 4.9%
• FY24A: 5.5%
• FY25E: 5.9%
• FY26E: 6.2%

Net Gearing

• FY23A: -38.8%
• FY24A: -52.1%
• FY25E: -68.1%
• FY26E: -78.1%

Stock Performance

Stock Data

SOTP Valuation

Analyst Certification

• The research analyst certifies that the views expressed accurately reflect personal opinions.
• No part of the analyst's compensation was related to the specific views in the report.
• The analyst and associates did not trade in the stock within 30 days prior to the report and will not do so within 3 business days after the report's release.
• The analyst does not serve as an officer of any covered company and has no financial interests in them.

Notes

• Weichai owns 46.5% in KION, 20% in Ballard Power, and 20% in Ceres Power.
• Share of JV/associates excludes Ballard Power and Ceres Power.
• The calculation of net cash includes financial assets.