matter:
Weichai released the 2021 interim report. In 2021h1, it realized an operating revenue of 126.4 billion yuan (+ 34%), a net profit attributable to the parent company of 6.4 billion yuan (+ 37%), and a net profit attributable to the parent company of 6 billion yuan (+ 39%) after deduction. The dividend plan is to distribute a cash dividend of RMB 1.85 (including tax) to all shareholders for every 10 shares, and the accumulation fund will not be converted into share capital.
Weichai production workshop
Weichai production workshop
Viewpoint:
The downstream industry of Weichai's main business has a high prosperity. In 2021h1, 1045000 heavy trucks (+ 28%) and 617000 construction machinery (+ 33%) were sold. In 2021, 1.5 million heavy trucks are expected, higher than the general expectation at the beginning of the year. With the increase of the proportion of logistics and the scale of ownership, the annual production and sales scale of heavy trucks is expected to be on a high platform and weaken periodically.
The market share of core powertrain has increased and the product structure has improved significantly. In 2021h1, the company's core powertrain + vehicle business realized a revenue of 71.4 billion (+ 29%). The parent company reported revenue (mainly Weichai engine business) of 34.1 billion (+ 20%), 1h21 Weichai sold 671000 engines (+ 42.8%), including 339000 heavy truck engines, with a year-on-year increase of 3.2 percentage points to 32.4%. The sales volume of "national six" engines in 2021h1 doubled year-on-year, and the 400000 "national six" engines in Weichai were delivered offline on August 17, 2021, marking that Weichai's "national six" engine production and sales volume is far ahead and ranks first in the industry. The leading advantage of Weichai engine was further highlighted in the "national sixth" stage. Shaanxi heavy truck has a revenue of 42.2 billion (+ 30%) and a net profit of 520 million (- 43%), and its profitability is affected by the rise in the price of raw materials. 1h21 sells 117000 heavy trucks (+ 32.4%). The adjustment of product structure was effective, with logistics heavy trucks accounting for 61% and exports accounting for 8%. Fast's revenue was 11.9 billion (+ 29%), net profit was 1 billion (+ 14%), and 1h21 sold 802000 transmissions (+ 32.4%), including 782000 heavy truck transmissions, with a year-on-year increase in market share of 2.8 percentage points to 74.9%. Strategic high-end products continued to develop, and the revenue of large bore engine was 520 million yuan (+ 24.2%); High end hydraulic realized domestic revenue of 290 million yuan (+ 27.3%).
The road "national six" engines fully meet the regulatory requirements, and the non road "national four" engines are continuously upgraded iteratively. The products have achieved remarkable results in cost reduction, fuel consumption reduction and lightweight. Taking the power system as the core and giving full play to the system matching advantages, the core technologies of the three new power assemblies of "hydraulic power assembly, CVT power assembly and new energy power assembly" continue to break through, and the key core technologies are self controllable.
The intelligent logistics business has recovered strongly. Kion in Germany achieved a revenue of 38.8 billion yuan (+ 26.5%), a net profit of 2.111 billion yuan (160 million for 1h20), a significant year-on-year increase of 52.8% in the sales of supply chain solutions represented by dematec, and a net profit of 290 million euros, a year-on-year increase of 4.8 times. The company gives the annual revenue guidance of Kaiao in 2021 to be 9.7-10.3 billion euros.
Looking forward to the future, Weichai will increase its supporting share in the field of light and heavy trucks. It is estimated that the market share of supporting heavy truck engines will increase from 30% to more than 40% of exports, and the supporting share of light truck engines is expected to increase to more than 40%. With the full implementation of the "national six year plan" stage, Weichai has more obvious advantages in the field of commercial vehicle core powertrain than before. By the end of 2022, the company will usher in greater growth space after the non road upgrading of "National IV". Significant multi business synergy: 1) significantly improve the supporting facilities for heavy and light trucks of Heavy Truck Group of Heavy Truck Group, and strengthen cooperation with Lovol heavy industry; 2) Large bore engine and hydraulic power assembly will gradually play a higher value. Weichai has broken through the core technology of three power assemblies of commercial vehicles, engineering machinery and agricultural equipment, and has strong system matching advantages.
Increase the layout of hydrogen fuel cells. As the largest shareholder, the company has successively participated in two world leading hydrogen fuel cell and solid oxide fuel cell technology companies, Ballard in Canada and Siris power in the UK, so as to promote the layout of new energy industry. Hydrogen fuel cells will accelerate industrialization and scale. Weichai has built a fuel cell industrial park integrating R & D, testing, inspection and trial production, forming a complete industrial chain and inspection and testing capability. Led by Weichai, the only national fuel cell technology innovation center in China has settled in Shandong. We believe that hydrogen fuel cells will have broad application prospects in commercial vehicles. Suihe fuel cell demonstration operation will be carried out in an orderly manner, and Weichai, as an industry leader, will benefit significantly.
Profit forecast and investment suggestions: the whole vehicle business in 2021 will be greatly affected by the rise of raw materials. In addition, due to the implementation of the comprehensive "national six year plan" for heavy trucks, the scale effect in the second half of 2021 may be lower than that in the first half of 2021. In addition, due to a number of new business expansion, the company's R & D expense rate has an upward trend. We adjust the company's performance forecast according to the latest situation of the company, It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be 10 / 113 / 12.4 billion respectively (the original performance forecast was 11.7/12.8 billion / 13.8 billion). The company has a solid leading position in the field of heavy truck engine business. The "national six" upgrading of diesel vehicles and the non road "national four" upgrading will highlight the company's competitive advantage. The company takes heavy truck engine as the core and carries out multi business expansion. In the future, there is room for improvement in the subdivided fields such as large bore engine, agricultural machinery CVT and high-end hydraulic pressure. We maintain the "recommended" rating of the company.
Risk tips:
1) The sales volume of heavy truck industry is lower than expected: as the investment and infrastructure demand is lower than expected, the downstream demand for heavy trucks is lower than expected, and the company's engine sales may be affected; 2) Price increase of upstream raw materials: if the price of upstream raw materials increases, it will have a certain impact on the company's cost and profitability; 3) The popularization of new energy technology is less than expected. The company has invested a lot of resources in the field of new energy, but limited to that the technology and products are not mature enough. If the promotion of fuel cell engine is less than expected, it may have a negative impact on future performance.
