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潍柴动力(000338):大缸径+降本贡献增量 Q3 扣非逆势增长

Weichai Power (000338): Large bore+cost reduction contribution incremental Q3 deduction is not against the trend

guolian ·  Nov 9

occurrences

On October 30, 2024, the company released its report for the third quarter of 2024. In the first three quarters of 2024, the company achieved revenue of 161.95 billion yuan, a year-on-year increase of 1.0%, and net profit to mother of 8.4 billion yuan, an increase of 29.2% over the previous year. 2024Q3 achieved revenue of 49.46 billion yuan, a year-on-year decrease of 8.8%, a month-on-month decline of 11.8%, and realized net profit of 2.5 billion yuan, a year-on-year decrease of 4%, a year-on-month decrease of 24.4%, after deducting non-return net profit of 2.23 billion yuan, an increase of 10% year-on-year and a decrease of 28.8% month-on-month.

Sales in the heavy truck industry are under pressure. The company relied on diversified products to perform better than the industry's 2024Q3 heavy truck industry's sales volume of 0.178 million vehicles, down 18.2% year on year and 23.0% month-on-month. On the one hand, economic demand was weak, and the oil and gas price spread weakened. The industry sold 0.037 million heavy natural gas trucks, down 28.4% year on year.

In terms of revenue, Q3 achieved revenue of 49.46 billion yuan, a year-on-year decline of 8.8% and a month-on-month decline of 11.8%. The performance was better than that of the industry, mainly benefiting from off-road engines in particular.

Benefiting from product restructuring and cost reduction, the 2024Q3 company achieved net profit of 2.5 billion yuan after deducting non-net profit, of which net profit after deducting non-return net profit was 2.23 billion yuan, up 10.0% year on year, sales margin 7.4%, up 0.2 pct year on year, and down 1.1 pct month on month, mainly due to the decline in sales of highly profitable natural gas engines. Although there is still a gap with the equity incentive target of 8%, the company achieved profit growth in the context of declining sales, and product structure optimization and cost reduction contributed a lot. The gross margin of 2024Q3 was 22.1%, up 0.3 pct year on year and 0.7 pct month on month. The cost rate for the period was 15.5%, an increase of 0.4 pct over the previous year. The subsidiary Kaiao's net profit for Q3 2024 was 0.074 billion euros, -9.9% YoY.

With policy support, the industry is expected to recover. Equity incentive targets may continue to drive the fourth quarter's month-on-month improvement outlook, and stimulus policies such as trade-in are expected to support the industry's recovery. Looking at the equity incentive targets, the 2024-2026 revenue targets were 210.2/231.2/258.9 billion yuan, the sales margin targets were 8%/9%/9%, respectively. 2024Q1-Q3 achieved revenue of 161.95 billion yuan, and the sales margin was 7.8%, which is a small gap with the equity incentive target. The equity incentive target is expected to drive the company to reduce costs and increase efficiency in the fourth quarter and make further improvements in business development.

Investment advice

With policy support, the industry is expected to pick up, and equity incentive targets are expected to support the company's further strength in the fourth quarter. We expect the company's revenue for 2024-2026 to be 216.51/242.76/258.5 billion yuan, with year-on-year growth rates of 1.2%/12.1%/6.5% respectively, net profit to mother of 11.23/13.91/15.61 billion yuan, year-on-year growth rates of 24.6%/23.9%/12.2%, EPS 1.29/1.59/1.79 yuan/share, respectively, and a 3-year CAGR of 20.1%.

Given the company's leading position in the industry, its products are highly competitive and maintain a “buy” rating.

Risk warning: natural gas prices are rising; the recovery of the heavy truck industry falls short of expectations; the pace of exports is slowing down.

The translation is provided by third-party software.


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