Weichai Power is principally engaged in the design, development, production, sales, and maintenance of diesel engines and related parts, as well as diesel engines and ancillary products. Among them, the vehicle and the assembly accounted for 53.86% of the main business income, the engine accounted for 28.42%, and other auto parts accounted for 11.68%. The company's consolidated earnings per share forecast for 2009-2011 was 4.00, 4.69 and 5.36, respectively, corresponding to a dynamic P/E ratio of 16, 13 and 11; currently there are 12 analysts tracking, and 6 analysts recommend “Strong Buy”. Six analysts recommended "buy" with an overall rating factor of 1.50.

The company's product development capability ranks in the forefront of the domestic industry, and the overall level of technology and equipment ranks the leading position in China. The company’s WD615 and WD618 diesel engines have an average occupancy rate of over 75% in the heavy-duty automotive and construction machinery markets. In recent years, the company has achieved 10L/12L high power. Diesel engines have always maintained market leadership.

In the next decade, the heavy truck industry will enter the stage of connotative growth. Driven by the rapid growth of heavy-duty truck sales in the past ten years, such as national infrastructure investment, highly prosperous manufacturing industries, and insufficient railway freight capacity, the driving effect on the prosperity of the heavy-duty truck industry will be significantly weakened in the next decade, and the heavy-duty truck industry will rapidly expand. The phase will end, and the phase of intrinsic growth is about to begin. Factors driving the connotative growth of heavy-duty truck industry include: 1) Downstream customers: Driven by policies such as toll-by-weight, over-control, and fuel tax reform, heavy-duty, high-speed, heavy-duty, lightweight, and fuel-efficient heavy-duty trucks are increasingly being User's favor; Downstream users already have the ability to pay for heavy-duty products with higher purchase price but better performance and quality; 2) Heavy-duty truck manufacturers: They can already manufacture heavy-duty trucks that meet the needs of customers and are affordable, and the heavy truck industry is brand-new A round of technology upgrade competition has begun. 3) The increase in railway freight capacity has forced the road freight industry to upgrade its transportation equipment to improve the economics of road transport. The above factors will drive the growth of the heavy truck industry from an extension to an intrinsic growth.

Orient Securities expects that the heavy-duty truck industry in 2010 will continue its boom since the second half of 2009. The year-on-year sales growth will exceed 15% year-on-year; annual sales of heavy-duty truck products will increase by 1.5% to 2.5% year-on-year; and engines carrying 10L and above will be available. The proportion of sales of heavy-duty trucks for more gear transmissions will exceed 30%; the annual earnings growth of the heavy-duty truck industry will exceed 30%.

The company will fully benefit from the continued strong demand for heavy trucks for road freight. The macro economy continues to improve, driving the continuous growth of road freight; the elimination of road maintenance fees, the fixed costs of the road freight industry have dropped significantly, the cash flow pressure of practitioners has been greatly reduced, the freight rates have stabilized, the industry has become more attractive, the road freight industry The customer's enthusiasm for car purchase has increased significantly. The company's engine downstream supporting vehicle companies such as Shaanxi Heavy Duty Truck, Foton Auman, and North Mercedes-Benz, the company's heavy truck products are on the road

The freight industry market has strong market competitiveness. The heavy truck market for road freight continues to be booming. These companies will benefit the most, which will drive the company’s sales of heavy-duty truck engines and transmission products to continue to grow.

The company will continue to maintain its leading position in the congestive growth phase of the heavy truck industry. The company's 12L engine and 12-speed/16-speed dual countershaft heavy-duty gearbox better meet the requirements of the downstream vehicle for power, speed and fuel economy. It has an absolute leading position in the heavy truck industry and has a good market prospect. Excellent profitability. The sales volume of the company’s 12L engine and 12-speed/16-speed transmission will be further increased in 2010. The sales volume of 12L engines is expected to reach 20%, and the sales volume of 12-speed/16-speed transmissions will exceed 30%. High-end products The significant increase in the sales ratio will help improve the overall gross profit of the company's products.

According to BOC International, the heavy-duty truck industry will maintain strong demand in the first quarter of this year in the context of relatively rapid growth in fixed asset investment and a full recovery of the domestic economy. Although there is still uncertainty in the demand for the macro economy and heavy trucks in the second half of the year, Weifang Diesel engine sales are expected to increase by 12% this year. The current valuation of the company is still low, and the target prices of A shares and H shares are raised by 96.50 yuan and 78.80 Hong Kong dollars, both of which maintain the “buy” rating.

Risk factors: In the second half of 2010, the economic prosperity of the country has declined, and the demand for heavy-duty truck products has slowed down significantly; sales of downstream supporting companies have been lower than expected.

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