Weichai Power: Maintaining Leading Position by Connotative Growth

Weichai Power is principally engaged in the design, development, production, sales, and maintenance of diesel engines and related parts, as well as diesel engines and ancillary products. Among them, the vehicle and the assembly accounted for 53.86% of the main business income, the engine accounted for 28.42%, and other auto parts accounted for 11.68%. The company's product development capability ranks in the forefront of the domestic industry, and the overall level of technology and equipment ranks the leading position in China. The company’s WD615 and WD618 diesel engines have an average occupancy rate of over 75% in the heavy-duty automotive and construction machinery markets. In recent years, the company has achieved 10L/12L high power. Diesel engines have always maintained market leadership. Today's investment "Online analyst" shows: the company's consolidated earnings per share forecast for 2009-2011 were 3.99, 4.73 and 5.46 yuan, corresponding to a dynamic price-earnings ratio of 17 times, 14 times and 12 times; currently a total of 12 analysts tracking, Among them, six, six, and zero strong buy, buy, and wait-and-see were recommended, and the overall rating coefficient was 1.50.

The company's business structure is basically stable, and the engine product line has been extended. The sales revenue structure of the company's consolidated statements is roughly 1/3 of the total for the engine business, heavy truck sales, and transmission business. The sales profit structure accounts for approximately 70% of engine profits, and the transmission business accounts for approximately 20% of total vehicle sales. 5%. In the future, the parent company will expand its product organization from its original displacement of 10L and 12L to a full range of engines covering 2L, 3L, 5L, 7L, 10L, and 12L through strategic adjustment.

The company will continue to maintain its leading position in the congestive growth phase of the heavy truck industry. The company's 12L engine and 12-speed/16-speed dual countershaft heavy-duty gearbox better meet the requirements of the downstream vehicle for power, speed and fuel economy. It has an absolute leading position in the heavy truck industry and has a good market prospect. Excellent profitability. The sales volume of the company’s 12L engine and 12-speed/16-speed transmission will be further increased in 2010. The sales volume of 12L engines is expected to reach 20%, and the sales volume of 12-speed/16-speed transmissions will exceed 30%. High-end products The significant increase in the sales ratio will help improve the overall gross profit of the company's products.

The macro economy continues to improve, driving the continuous growth of road freight; the elimination of road maintenance fees, the fixed costs of the road freight industry have dropped significantly, the cash flow pressure of practitioners has been greatly reduced, the freight rates have stabilized, the industry has become more attractive, the road freight industry The customer's enthusiasm for car purchase has increased significantly. The company's engine downstream supporting vehicle companies Shaanxi Heavy Duty Truck, Foton Auman, North Benz and other companies, these companies heavy truck products in the road freight industry market has a strong market competitiveness. The heavy truck market for road freight continues to be booming. These companies will benefit the most, which will drive the company’s sales of heavy-duty truck engines and transmission products to continue to grow.

The company is a heavy-duty diesel engine industry leader, benefiting from the continuous recovery of the domestic economy and the added value of the heavy-duty truck industry's power and emission upgrades. Under the influence of the Xiaochai project for the time being, it is expected that the company's EPS for the 10 years in 2009 will be 4.15 yuan. , 5.40 yuan, the current stock price of 63.90 yuan, corresponding to PE were 15.4 times and 11.8 times, for the first time to give "carefully recommended" investment rating.

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