20240326-招银国际-潍柴动力-02338.HK-4Q23_net_profit_+58__YoY__Payout_increased_to_50__Higher_earnings_forecast_on_margin_7页_1mb

Weichai Power (2338 HK) reported a 84% year-on-year increase in 2023 net profit to RMB9bn, aligning with the previously announced profit range. In the fourth quarter of 2023, net profit grew 58% YoY to RMB2.5bn, supported by 20% revenue growth and margin expansions. The dividend payout increased, raising the payout ratio to 50% from 45%, reflecting strong cash flow. The analyst maintains a positive stance with a revised earnings forecast for 2024E and 2025E, up 19% and 20% respectively, due to higher segment margins across industries. Key growth drivers include the replacement cycle, higher gas truck sales, and export-supported HD industry sales in 2024. The target price increased to HK$22 from HK$19.4, sustaining a "BUY" recommendation based on factors like engine and HDT sales. However, risks include potential weakness in engine exports, lower replacement demand, and rising costs. Other highlights include strong engine segment performance, auto and component profit recovery in H2FY23, and overall financial metrics showing improved profitability and valuation ratios.