Weichai Power Co.Ltd(000338) cycle curse: in 2021, the production and sales of complete vehicles will fall back to the mother, and the net profit of 10 billion will not move forward

10 billion seems to be a difficult hurdle for Weichai Power Co.Ltd(000338) ( Weichai Power Co.Ltd(000338) . SZ) net profit attributable to parent company.

In the past three years, Weichai Power Co.Ltd(000338) the net profit attributable to the parent company has always been maintained at about 9 billion, failing to further break through the 10 billion mark.

At the performance presentation meeting on April 1, Weichai Power Co.Ltd(000338) chairman Tan Xuguang said that with the power system as the main axis, the company has realized diversified business structure adjustment, rapid expansion of strategic business, rapid growth of export business and increased contribution to intelligent logistics performance.

Weichai Power Co.Ltd(000338) 2021 annual report shows that in the past year, the company achieved operating revenue of 203548 billion yuan, a year-on-year increase of 3.17%; The net profit attributable to the parent company was 9.254 billion yuan, a year-on-year increase of 0.28%.

Yue Qinghui, chief analyst of shouchuang securities automobile, believes that Weichai Power Co.Ltd(000338) will perform better than the industry in 2021, and the growth logic is gradually being realized. “We expect the company’s operating revenue to reach 205.01 billion yuan, 221.88 billion yuan and 244.15 billion yuan in 2022, 2023 and 2024, corresponding to the net profit attributable to the parent company of 9.97 billion yuan, 10.99 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.”

However, China Merchants Bank International lowered the rating of Weichai Power Co.Ltd(000338) and lowered the rating of Weichai Power Co.Ltd(000338) A-Shares from “buy” to “hold”.

sales volume of complete vehicles decreased year on year

Statistics show that Weichai Power Co.Ltd(000338) is a leading enterprise in China’s heavy truck industry. Based on the powertrain system including engine, axle and gearbox, the company extends upstream parts and downstream heavy trucks, and takes the lead in forklift and intelligent storage.

After years of development, Weichai Power Co.Ltd(000338) has formed a pattern of coordinated development of power system business, commercial vehicle business, intelligent logistics business, new energy and other industrial sectors.

However, in 2021, affected by many factors, the sales of construction machinery industry and heavy trucks showed a situation of “developing first and restraining later”, and the overall sales in the second half of the year was lower than that in the first half of the year.

Taking Weichai Power Co.Ltd(000338) as an example, analyzing the financial data of each quarter of the stock in 2021, it can be found that the operating revenue of Weichai Power Co.Ltd(000338) in the first and second quarters of last year was 65.471 billion yuan and 60.917 billion yuan respectively, but the operating revenue in the third and fourth quarters decreased to 40.041 billion yuan and 37.119 billion yuan; Similarly, Weichai Power Co.Ltd(000338) the net profit attributable to the parent company in the first and second quarters was 3.344 billion yuan and 3.088 billion yuan, while the net profit attributable to the parent company in the third and fourth quarters decreased to 1.469 billion yuan and 1.354 billion yuan.

It can be seen that the performance of Weichai Power Co.Ltd(000338) 2021 in the four quarters showed a downward trend.

At the performance Conference on April 1, Tan Xuguang said, “the economic downturn and sudden geographical conflicts have both advantages and disadvantages. For a prepared company, especially Weichai Power Co.Ltd(000338) after structural adjustment, this round will play a significant role”.

However, in terms of complete vehicles, Weichai Power Co.Ltd(000338) last year’s sales volume was 150000, a year-on-year decrease of 17.13%; The production volume was 144000, a year-on-year decrease of 25%; The sales volume of gearbox was 1153000 units, a year-on-year decrease of 2.78%; The production volume was 1049000 units, a year-on-year decrease of 18.11%.

“However, Weichai Power Co.Ltd(000338) ‘s engine and forklift sales increased year-on-year last year.” A researcher in the machinery industry of a securities firm told the 21st Century Business Herald reporter, Weichai Power Co.Ltd(000338) now the biggest problem is how to continue to improve profits. “In the past three years, the company’s net profit has basically hovered around 9 billion. When it can exceed 10 billion, the institution will revalue it.”

growth prospects are difficult to be optimistic for the moment

In 2021, the cumulative sales volume of the heavy truck industry reached 1.391 million, a year-on-year decrease of 14.1%, the first decline in nearly six years.

“In the second half of last year, China’s heavy truck market was mainly affected by the switching of national six emission standards, high industrial inventory and other factors, and the sales volume decreased significantly year-on-year.” The above-mentioned researcher in the machinery industry of a securities firm told the 21st Century Business Herald that with the passage of time, the negative impact of the emission upgrading of the Sixth National Day has been gradually eliminated. “The worst time of the heavy truck industry may have passed, which may be good news for Weichai Power Co.Ltd(000338) but it is not so easy.”

Weichai Power Co.Ltd(000338) 2021 annual report shows that the company sold 1.02 million engines, with a year-on-year increase of 3.1%, including 429000 heavy truck engines, with a year-on-year increase of 2.8 percentage points to 30.7%; 1153000 gearboxes were sold, including 1.01 million heavy truck gearboxes, with a year-on-year increase in market share of 5.3 percentage points to 72.4%; 938000 axles were sold, including 697000 medium and heavy truck bridges.

Hydrogen heavy truck new energy vehicles are regarded by the market as the driving force of Weichai Power Co.Ltd(000338) future growth.

At the performance Conference on April 1, Tan Xuguang shelled the current hot new energy vehicle market.

He said that fossil energy can not be replaced in commercial vehicles, especially in heavy commercial vehicles, non Road (engineering machinery), ship power and agricultural equipment in a short time. At the same time, the arrival of new energy has brought the driving force of scientific and technological progress to traditional energy. Reducing fuel consumption and improving efficiency are important means to realize the power of traditional fossil energy and prolong life. “In recent years, the new energy industry has been quite lively. My definition of excitement is’ a swarm of bees’, and then disorderly competition. There will be a disastrous overcapacity in the whole vehicle of new energy, especially passenger cars. My words have been carefully considered, not nonsense.”

As for performance growth, some institutional investors are not optimistic about Weichai Power Co.Ltd(000338) .

As the recovery of logistics and engineering vehicles was weaker than expected, the Research Report of China Merchants Bank International reduced the sales forecast of heavy truck industry in 2022 / 2023 by 21% / 20% to 1.02 million / 1.06 million, with a year-on-year change of – 27% / + 4% respectively. “We believe that the high base effect will continue in the first half of 22 years, which will bring profit pressure to heavy truck and engine enterprises.”

On March 25, China Merchants Bank International lowered its profit forecast for Weichai Power Co.Ltd(000338) 2022-23, 20-30% lower than the market consensus, and downgraded Weichai Power Co.Ltd(000338) A-Shares from “buy” to “hold”. However, maintaining the buying rating of Weichai Power Co.Ltd(000338) H shares (02338. HK), “mainly due to the recent market sell-off, the current discount of Weichai H shares to A-Shares has reached 25%, the highest since 2015, and the downside risk is relatively limited.”

“In the future, we should take ‘technology leading + Solutions’ as the core to promote the transformation from an equipment manufacturing group to a technology led equipment solutions group. We should not only be the world’s first in sales, but also the world’s first in high-quality development! Report back to the society with more brilliant performance and continue to create value for investors!” Tan Xuguang said at the performance briefing on April 1.

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