By Jiahui Huang
Weichai Power, a Chinese diesel-engine maker, has projected a significant rise in its net profit for 2023, driven by increased sales and industry growth. As a result, the company's shares saw a 3.35% increase, reaching HK$12.94 (US$1.65) on Wednesday, marking the largest one-day percentage gain since November.
According to the Shandong-based company, it anticipates a full-year net profit ranging between 8.58 billion yuan (US$1.20 billion) and CNY9.32 billion, representing a growth of 75% to 90% compared to 2022. Weichai Power attributes this expected earnings jump to the sustained growth in the heavy-duty trucking sector and an uptick in product sales.
While Weichai Power's guidance slightly surpasses Citi's expectations, it aligns with the consensus, says analyst Beatrice Lam. Lam suggests that the company's net profit for the fourth quarter likely increased by 31% to 77% compared to the previous year.
However, Citi maintains its neutral rating and target price of HK$13.20 for Weichai Power's stock. The bank points out that although China's heavy-duty truck industry is experiencing a recovery from a downturn, there remains a lack of visibility regarding policy support.
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