CMB International: Raises Weichai Power H-share target price by 39%, Maintains "Buy" rating

MaticHoleFiller · 2026-04-10T01:06:27+00:00

CMB International raises the target prices for Weichai Power's H-shares and A-shares, maintaining a "Buy" rating, believing that the short-term pullback in stock price is a good buying opportunity. Although the net profit forecast for 2025 unexpectedly declines, the company's transition to the power business looks promising, and profits are expected to grow somewhat by 2027.

MaticHoleFiller

2026-04-10 01:06:27

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ZhaoYin International releases a research report stating an upward adjustment of Weichai Power (02338) H-shares target price by 39.3%, from HKD 21.9 to HKD 30.5, while also raising the target price for A-shares (000338.SZ), both maintaining a “Buy” rating. The firm believes that short-term stock price pullbacks are a good buying opportunity.

Weichai’s net profit in 2025 unexpectedly declined by 4% to RMB 10.9 billion, below the consensus expectations of the firm and institutions by 12%. This means that net profit in Q4 2025 will decrease by 32% year-on-year to RMB 2 billion. The decline in Q4 profit is mainly attributed to a 3.9 percentage point decrease in gross profit margin year-on-year, which the firm believes is primarily related to a drop in engine profit margins. Despite the weaker performance, the firm remains optimistic about Weichai’s strategic shift toward the power business (by 2025, power-related engine sales will account for 14%, up from 12% in 2024).

The firm has raised its 2027 profit forecast by 3.5%, mainly due to upward revisions in engine sales and heavy truck profit margin forecasts. The target price increase is primarily due to raising the core business EV/EBITDA multiple to 11 times from 7 times, to reflect strong growth including the planned entry into the U.S. market with AIDC backup power engines.

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