Weichai Power: Sales volume is expected to maintain 15% growth in 2011

In the third quarter of 2010, Weichai Power achieved a sales revenue of 13.7 billion yuan, a year-on-year increase of 42%; and a net profit of 1.57 billion yuan, a year-on-year increase of 35%, corresponding to a gain of 1.88 yuan per share. The quarterly report data was better than the market expectation. The main reason for exceeding the forecast was that the gross profit margin of the engine business of Weichai headquarters in the third quarter increased year-on-year and the administrative expenses decreased.

Weichai Engine

Weichai's power sales in 2011 are expected to maintain a 15% growth. Benefiting from the promotion of affordable housing and the increase of logistics demand in the central and western regions, sales of heavy trucks will continue to increase by 10% in 2011. Weichai Power Engine’s capacity bottleneck has been resolved and sales are expected to increase by 15%, exceeding market expectations.

Downstream customers have limited influence on the introduction of foreign investment engines. Most of the foreign-invested engine products generally introduced by downstream customers are priced at around RMB 150,000. Even if the cost after production is expected to be much higher than the current level of RMB 50,000, only the high-end and export markets can be positioned, making it difficult for Weichai Power to The main market constitutes an impact.

At present, Weichai Power still occupies 38% of the heavy truck market. It is the largest supplier of heavy-duty engines in the country, and has near-monopolistic advantages in the 10-12L market, enjoying a 20% sales margin. In addition, Weichai Power's product line spreads, and diversified development opens up space for growth.

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