HSBC research reports indicate that in October, the sales of heavy-duty trucks (HDT) in China continued to decline. The positive impact of the policy to replace old trucks with new ones seems limited. It is believed that the main reasons are the sluggish macroeconomic environment and the low freight rates, which have limited the growth space of domestic HDT demand. Therefore, the annual industry HDT sales for this year are expected to decrease from 0.905 million vehicles to 0.875 million vehicles, with an estimated 3% growth in sales volume to 0.9 million vehicles next year.

HSBC research points out that the management's target at Weichai Power (02338.HK) seems too aggressive. The third-quarter performance showed slightly lower revenue and profits than expected. Achieving the target pre-tax profit margins of 8%, 8%, and 9% from 2024 to 2026 appears to be challenging. In anticipation of a decline in HDT-related business, the bank has lowered Weichai's profit forecasts for 2024 to 2026 by 3%, 6%, and 6% respectively. The investment rating has been downgraded to 'hold,' and the target price has been reduced from 17.5 yuan to 13.5 yuan.