Weichai Power: Focus on Follow-up Fluctuations in the Heavy Truck Industry Market
According to the 2007 annual report, Weichai Power Company achieved operating revenue of 29.266 billion yuan for the year, an increase of 312.69% year-on-year; net profit attributable to shareholders of listed companies was 2.019 billion yuan, an increase of 172.54% year-on-year (the company retrospectively processed data for 2006). 07 fully diluted earnings per share of 3.88 yuan. The distribution plan for Weichai Power is: RMB 4.40 (taxes included) for every 10 shares. The company also announced a quarterly report for the first quarter of 2008, with EPS 1.37 in the first quarter.
Has the most complete industrial chain in heavy truck industry. On April 30, 2007, the company absorbed the merger of the Hunan Torch and expanded its business scope from a single engine business to heavy-duty vehicles, heavy-duty truck axles, gearboxes and other businesses. It has the best powertrain in the heavy-duty truck industry and formed a domestic The most complete vehicle and parts industry chain lays the foundation for the long-term development of the company.
Heavy-duty sub-sectors saw rapid growth, and the construction machinery industry experienced rapid growth. In 2007, the heavy cargo market (including heavy trucks, heavy cargo chassis, and semi-trailer tractors) achieved sales of 487,500 units, an increase of 58.64% year-on-year. In the first quarter of 2008, sales reached 168,200 units, an increase of 58.70% year-on-year. In 2007, the sales volume of construction machinery industry was about 460,000 units, an increase of 31% year-on-year.
Sales volume growth led to rapid growth in revenue. In 2007, the company’s engine sales were 244,900 units, a year-on-year increase of 67.85%. Among them, heavy-duty vehicle engines sold 151,400 units, an increase of 88.10% year-on-year; construction machinery engines were 85,100 units, an increase of 43.66% year-on-year. The sales volume of gearboxes was 430,200 units, an increase of 86.08% year-on-year. Heavy truck sales of 60,000 vehicles, an increase of 96.46%. Corresponding to this, in 2007, the company’s total vehicle and key assembly (gearbox, axle) achieved a sales income of 14.815 billion yuan, and its revenue accounted for 54.05%; the engine realized a sales revenue of 7.363 billion yuan, and the revenue accounted for 26.86%, an increase of 25.50 percent over the same period of the previous year. %, the total revenue of the above two businesses accounted for 80.91%, which contributed to the company's overall high revenue growth.
The comprehensive gross profit margin is at a relatively high level and the engine's profitability is good. Due to the expansion of the company's consolidated list in 2007, the comprehensive gross profit margin is not of much significance compared to the previous year. In 2007, the company's main business gross margin was 24.87%. The engine business gross profit rate reached 33.06%, an increase of 1.32 percentage points year-on-year. Considering other businesses, the company's consolidated gross profit margin in 2007 was 23.61%. In the first quarter of 2008, the company's comprehensive gross margin was 24.41%, and its profitability steadily increased.
In 2008, the heavy-duty truck industry is expected to interpret the “pre-high-low-low†growth trend. Weichai Power relied mainly on the domestic market to increase the uncertainty of performance growth. In the first quarter, heavy trucks will continue to grow. We expect heavy truck industry growth in the second quarter of 2008 to remain largely unconcerned. However, as the country's three emission standards are formally implemented on July 1, increasing the production cost of heavy trucks, the early consumption effect will make the heavy truck industry. The growth rate in the second half of the year is somewhat restrained. In 2007, the company realized export revenue of 1.73 billion yuan, accounting for 6.31% of the main business income, and its export revenue ratio was at a relatively low level. The cyclical fluctuations in the domestic heavy truck industry will increase the uncertainty of the company's future performance.
Earnings forecasts, investment advice and risks. It is expected that the EPS of the company in 08 and 09 will be RMB 4.56 and RMB 5.17, respectively. On April 29, the company's closing price will be RMB 63.99, which corresponds to 14 times the dynamic PE in 2008. We maintain the company's rating of holdings. The risks of the company are mainly reflected in the risk of growth uncertainty in the heavy truck and construction machinery industries and the impact of rising raw material prices on profitability; the implementation of the National III emission standards increases the company's production costs, and at the same time it may cause market demand to fall.
DHW, Hot Water, All in One
FOSHAN UWOTEC NEW ENERGY CO., LTD. , https://www.uwo-heatpump.com