Damo: Weichai Power (02338)'s third quarter results are in line with the bank's expectations to maintain an “gain” rating

The Zhitong Finance App learned that Morgan Stanley released a research report saying that the results of Weichai Power (02338) for the third quarter of 2026 are in line with the forecast; the bank maintains an “increase in holdings” rating, with a target price of HK$46.

According to the bank, Weichai Power's third-quarter revenue increased 1% year-on-year to 56.08 billion yuan, reflecting weak sales in the heavy truck industry in the third quarter (especially LNG and diesel trucks), but this was partially offset by AIDC's revenue growth.

The bank pointed out that the gross margin of Weichai Power expanded 1.5 percentage points to 22.9% year on year, 1.7 percentage points higher than the bank's expectations, or benefited from an improved revenue mix (the share of AIDC engines increased). Sales of AIDC diesel engines accelerated to around 1,300 units (compared to 800 units in the second quarter and 600 units in the first quarter); if growth continues in the fourth quarter, sales are expected to exceed the target of 4,000 units for the whole year.

Net profit fell year on year, with recorded net profit of 2,957 billion yuan, down 9% year on year, slightly lower than market expectations. Mainly due to one-time factors, but in line with the bank's estimates. In the third quarter, Ballard recorded a fair value loss of about 390 million yuan due to falling stock prices; if this item is excluded, net profit increased by about 3% year-on-year, which is expected to be roughly in line with market expectations.