Xiaomo: Weichai Power's (02338) valuation and dividend yield attracted an increase in AIDC engine shipment targets to maintain an “gain” rating

The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it maintains the “gain” rating of Weichai Power (02338). The bank pointed out that since the second half of this year, the company has continued to receive attention from long-term investors. Even if the stock price fluctuates greatly, investors have shown a willingness to absorb the dips, and the current valuation and dividend yield are attractive.

The bank believes that the latest industry developments further highlight the market opportunities and development urgency of the solid oxide fuel cell (SOFC) business. US listed company Bloom Energy (BE.US) has raised its 2026 full-year revenue guidance to US$4.4 billion to US$4.6 billion, an increase of more than 120% year-on-year in median terms, and raised its non-GAAP gross margin outlook to approximately 34%. British Ceres, on the other hand, announced a new partnership and stated that Weichai is one of the fastest-expanding licensors in the world. The goal is to achieve 200 megawatts of SOFC production capacity by the end of 2027, and is rapidly moving towards mass production.

J.P. Morgan said that the latest data on China's heavy truck industry shows that the demand environment is still challenging. LNG truck sales continue to be under pressure, and electrification and exports have become the main growth drivers. In this context, Weichai has raised its AIDC diesel and gas engine shipment targets for this year and next two years. Currently, the company is directing AIDC to ship about 1,300 diesel engines in the third quarter of this year, 200 to 300 gas engines in 2026, and more than 2,000 gas engines in 2027. The bank believes that with the transformation of the product portfolio, the upward space for the company's incremental profit in 2027 will expand significantly.