\u3000\u3000 Weichai Power Co.Ltd(000338) Weichai Power Co.Ltd(000338) )
The company released the annual report of 2021: the company’s revenue / net profit attributable to the parent company in 2021 was 203.55 billion / 9.25 billion, with a year-on-year increase of + 3.1% / + 0.5% respectively. Among them, the revenue of 4q21 was 37.12 billion, with a month on month ratio of – 25.9% / – 7.3%, the net profit attributable to the parent company was 1.35 billion, with a month on month ratio of – 35.6% / – 7.8%, and the sales volume of 4q21 heavy trucks in China was – 57.6% / – 13.2% respectively. The company’s performance was under pressure at the same time. Split to see each
Annual operation of business section:
1. Engine business. In 2021, the company’s engine business revenue was 52.33 billion yuan (year-on-year + 9.7%), of which the revenue of large bore engine was 1.41 billion yuan (year-on-year + 49.3%). The company sold 1.02 million engines (year-on-year + 3.1%), including 429000 heavy truck engines (market share + 2.8pct to 30.7%) and the average price of engines + 2000 year-on-year. In terms of profit margin, the industry is generally affected by the decline in demand and the rise in raw material costs in 2021. It is expected that the profit margin of the company’s engine business will decline slightly by 1-2pct, supported by share growth and product structure upgrading.
2. Automobile and auto parts. 1) Complete vehicle: in 2021, Shaanxi Automobile’s revenue was 54.09 billion (year-on-year – 17.8%), and 150000 heavy trucks were sold (year-on-year – 17.1%). Affected by the decline of sales volume, Shaanxi Automobile lost 53.61 million in 2021; 2) Gearbox: in 2021, faxter’s revenue was 16.86 billion (year-on-year – 6.3%), the sales volume was 1.153 million (year-on-year – 2.8%), and the net interest rate in 2021 was 6.9%, year-on-year – 1.7 PCT; 3) High end parts: in 2021, high-end hydraulic realized a revenue of 560 million yuan in China, a year-on-year increase of + 11.8%.
3. Intelligent logistics business. In 2021, Kaiao group achieved a revenue of 78.62 billion (year-on-year + 20.8%), and the net interest rate recovered rapidly from the damaged state of the epidemic in 2020, with a year-on-year increase of 3.7pct to 5.1%. Among them, the supply chain solutions business represented by dematek achieved a sales revenue of 3.8 billion euros (year-on-year + 44.5%), and a total profit of 290 million euros (+ 97.4%).
The steady growth policy is expected to support the bottom demand, and the company’s growth logic continues. 1) The steady growth policy is expected to underpin demand. In the first two months of 2022, China’s heavy truck sales were – 49% year-on-year, and the company will still be under pressure in the short term. In the medium term, with the accelerated implementation of China’s steady growth policy, the demand of truck market is expected to rebound at the bottom; 2) The company’s growth logic continues. Traditional engines continue to lead, and the thermal efficiency of 51.09% diesel engine released by the company in January 2022 set a new global record; The high-end products have been steadily promoted. In 2021, the company’s high-end hydraulic products and large bore engine business have achieved significant growth; With a comprehensive layout in the field of new energy, the company has established three powertrain platforms covering fuel cell, hybrid and pure electric, and realized multi scenario applications.
Investment suggestion: we expect the company to achieve operating revenue of 205.01 billion yuan, 221.88 billion yuan and 244.15 billion yuan in 2022, 2023 and 2024, with corresponding net profit attributable to parent company of 9.97 billion yuan and 10.99 billion yuan Billion yuan and 12.22 billion yuan. Calculated at today’s closing price, PE is 12.0 times, 10.9 times and 9.8 times. It is covered for the first time and given a “buy” rating.
Risk warning: the recovery of commercial vehicle demand is less than expected, the rise of raw material cost is more than expected, and the development progress of the company’s new products is less than expected
