[ET Net News Agency, 2 November 2018] Credit Suisse lowered its target price for
Weichai Power (02338) to HK$7 from HK$7.7, and maintained its "underperform" rating.
The research house said Weichai's 3Q profit of Rmb1,609mn was in line with market
expectation.
Credit Suisse expects Weichai's earnings to continue its downtrend in 2019, as HDT
demand is expected to drop by 15% YoY to 900k units. This will likely be driven by (1)
weak logistic truck demand, as currently low freight fee is unattractive for drivers, (2)
construction truck sales decline as the leading indicator - infrastructure investment
growth - has dropped to negative YoY growth since July 2018 from the double digits in
2015-17, as a result of local governments' tight fiscal condition. (KL)