20230502-招银国际-潍柴动力-02338.HK-Impressive_1Q23_earnings__Higher_earnings_forecast___TP__More_catalysts_ahead_8页_1mb

Weichai Power Q1 2023 Performance Summary

This report analyzes Weichai Power's (2338 HK) Q1 2023 financial results, highlighting strong performance and future outlook. Key points include a 68% year-over-year increase in net profit on revenue growth of 30% YoY, driven mainly by the HD engine segment's operating leverage. The firm revises up its 2023E/24E earnings forecast by 30%/28% due to factors like the ~40% drop in LNG prices since December, which is expected to boost sales, easing supply chain pressures, and growth in agriculture and HDT engine markets. The target price for the stock has been raised to HK$15.8, and Weichai-A is upgraded to "BUY" from "Hold," with the H/A discount narrowing. Improvements in gross margin and operating cash flow are noted, but risks such as weak engine demand and cost increases are highlighted.Overall, the analysis points to positive catalysts supporting further gains, with a maintained BUY recommendation for both A and H shares.