[ET Net News Agency, 1 November 2017] Citi Research raised its target price for Weichai
Power (2338) to HK$10.3 from HK$9.6, and maintained its "buy" rating.
The research house said Weichai is trading at 8.3x FY2017 PE excluding KION's impact,
which should have factored in the cautious view of HDT retreat in 2018.
However, Citi thinks Weichai is well-prepared to defend the possible HDT weakness
through (1) KION's SCS ramp-up; (2) continuous margin expansion; and (3) over-conservative
provision accrual in FY2017.
Citi revised up FY2017-19 earnings by 27%/26%/20%, mainly on higher HDT & Engine,
despite a lower contribution from KION. (KL)