External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Weichai Power Co Ltd H / Equity Bottom-Up

<ul><li>According to CICEIA, Weichai Power (2338 HK/000338 CH, BUY) delivered 71% YoY growth of multi-cylinder diesel engine sales volume in Oct, the highest growth rate since Apr.</li><li>The growth is also higher than the industry sales volume growth of multi-cylinder engine for commercial vehicles (+52% YoY).</li><li>Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 22.1% in Oct, up from 19.3% in Sep and 16.1% in Oct 2022.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

According to CICEIA, Weichai Power (2338 HK/000338 CH, BUY) delivered 71% YoY growth of multi-cylinder diesel engine sales volume in Oct, the highest growth rate since Apr.The growth is also higher than the industry sales volume growth of multi-cylinder engine for commercial vehicles (+52% YoY).Based on our calculation, Weichai’s market share in multi-cylinder diesel engine reached 22.1% in Oct, up from 19.3% in Sep and 16.1% in Oct 2022.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Heavy Duty Truck – Weichai’s Multi-Cylinder Engine Sales +71% YoY

<ul><li>Over the weekend, Weichai pre-announced that net profit in 3Q23 is expected to surge 120-200% YoY to RMB2.03-2.77bn, which is better than our expectation.</li><li>The impressive 3Q23 earnings boosted the net profit in 9M23 up by 80-100% YoY. We believe the strong growth in 3Q was driven by natural gas trucks and export.</li><li>We maintain our positive stance on Weichai as the decline in LNG price will continue to boost sales of LNG trucks/engines, where Weichai has strong presence. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Over the weekend, Weichai pre-announced that net profit in 3Q23 is expected to surge 120-200% YoY to RMB2.03-2.77bn, which is better than our expectation.The impressive 3Q23 earnings boosted the net profit in 9M23 up by 80-100% YoY. We believe the strong growth in 3Q was driven by natural gas trucks and export.We maintain our positive stance on Weichai as the decline in LNG price will continue to boost sales of LNG trucks/engines, where Weichai has strong presence. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weichai Power (000338 CH) – 3Q23 Earnings Surged 120-200% YoY

Thematic (Sector/Industry)

<ul><li>For Chinese machinery manufacturers, penetration overseas remains a longterm driver.</li><li>That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.</li><li>Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and China. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

For Chinese machinery manufacturers, penetration overseas remains a longterm driver.That said, with growth trend reversing since mid-2023 after 2-3 years of extraordinary growth, the way to overseas expansion will likely be bumpy in 2024E, especially when the overseas competitors are recovering from the supply chain bottleneck.Geographically, we expect strong demand to continue in the US and the Middle East, but weakness in Europe and China. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery / HDT – 2024 Outlook

<ul><li>The large price spread between LNG and diesel continued to boost the sales volume of natural gas heavy-duty trucks (HDT).</li><li>According to the preliminary data from Cvworld, the industry sales volume of gas HDT surged 14.8x YoY to 23k units in Oct, representing 29% of the total HDT sold.</li><li>In 10M23, sales volume of gas HDT surged 3.1x YoY to ~130k units, accounting for ~17% of total HDT sold.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The large price spread between LNG and diesel continued to boost the sales volume of natural gas heavy-duty trucks (HDT).According to the preliminary data from Cvworld, the industry sales volume of gas HDT surged 14.8x YoY to 23k units in Oct, representing 29% of the total HDT sold.In 10M23, sales volume of gas HDT surged 3.1x YoY to ~130k units, accounting for ~17% of total HDT sold.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Heavy Duty Truck – Natural Gas HDT +14.8x YoY in Oct on Low Base

<ul><li>Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and Jiangsu Hengli are below expectations.</li><li>All of them reported gross margin expansion but very different revenue growth trends due to different product mixes and geographic focuses.</li><li>All of them reported declines in net finance income due to the volatility of FX rates. Weichai Power and Zhejiang Dingli (reported over the weekend) remain our sector key picks.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Four companies reported their 3Q23 results last night. Weichai Power and Zoomlion reported better-than-expected results, while SANY Heavy and Jiangsu Hengli are below expectations.All of them reported gross margin expansion but very different revenue growth trends due to different product mixes and geographic focuses.All of them reported declines in net finance income due to the volatility of FX rates. Weichai Power and Zhejiang Dingli (reported over the weekend) remain our sector key picks.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery & HDT – 3Q23 Earnings Review

China

Weichai Power Co., Ltd. specializes in the research and development, manufacturing and sales of vehicles and parts. The Company produces engines, heavy vehicles, light vehicles, construction machinery, hydraulic products, automotive electronics, and related parts. Weichai Power markets its products across worldwide.

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Weichai Power (000338 CH)

China Heavy Duty Truck – Weichai’s Multi-Cylinder Engine Sales +71% YoY

According to CICEIA, Weichai Power (2338 HK/000338 CH, BUY) delivered 71% YoY growth of multi-cylinder diesel engine sales volume in Oct, the...

CMB International