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<Research>HSBC Research Downgrades WEICHAI POWER (02338.HK) to Hold, Trims TP to $13.5
Recommend 2 Positive 8 Negative 4 |
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China's HDT sales continued to fall in October, and the positive impact from the truck renewal subsidy policy seems to be limited, HSBC Global Research issued a research report saying. The broker believed that this is mainly due to the weak macroeconomic environment, as well as freight rates hovering at a low level, limiting the upside for domestic HDT demand. Therefore, HSBC Global Research lowered its 2024 sector HDT sales from 905,000 to 875,000, and expected the annual sales volume to increase by 3% to 900,000 in 2025. WEICHAI POWER (02338.HK)'s management seems to be too aggressive in its targets, with 3Q24 results showing slightly weaker-than-expected revenue and earnings, HSBC Global Research added. The broker saw some difficulty in reaching its targets of 8%/ 8%/ 9% pre-tax profit margin in 2024-2026. In response to the decline in expectations for HDT-related business, HSBC Global Research lowered its 2024-2026 earnings forecasts for WEICHAI POWER by 3%/ 6%/ 6% each, and downgraded the stock to Hold. The broker also trimmed its target price from $17.5 to $13.5. AAStocks Financial News |
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