Goldman Sachs: Weichai Power's (02338) AIDC power generation business is expected to become the core growth engine and maintain a “buy” rating with a target price of HK$55.5

The Zhitong Finance App learned that Goldman Sachs released a research report saying that Weichai Power (02338) is transforming and developing the AIDC power generation business. It is expected that this business will become the company's core net profit growth engine and contribute about 50% of net profit in 2027. The bank maintains a “buy” rating, and the target price for H shares is HK$55.5.

The bank pointed out that the gas generator (RICE) business in AIDC's power generation business will drive short-term growth, and its contribution to profit growth will continue to increase; solid oxide fuel cells (SOFC) are expected to scale up from 2028. The bank believes that steady on-hand order visibility will support the company's strong net profit growth until 2028.

Goldman Sachs believes that Weichai Power's A share and H share prices have yet to reflect the upward space of the RICE business and the potential of the SOFC business.