HK Stock Market Move | Weichai Power (02338) fell more than 4% in the closing session, as major institutions lowered their full-year heavy truck sales forecasts. The company's transformation is showing results but still needs time.

Weichai Power (02338) fell more than 4% at the close, dropping 4.38% to HK$11.34 as of the time of writing, with a turnover of HK$170 million. HSBC released a research report indicating that heavy-duty truck (HDT) sales in China continued to decline in October. The impact of the subsidy policy for replacing old trucks with new ones seems limited, possibly due to macro weakness and low freight rates. This has constrained domestic HDT demand growth. As a result, they have lowered their full-year industry HDT sales forecast from 905,000 units to 875,000 units, with an expected 3% increase to 900,000 units next year. HSBC also noted that Weichai Power's management's goals appear too ambitious, as third-quarter performance showed revenue and profits slightly below expectations. Daiwa released a report stating that they anticipate further decline in demand for liquefied natural gas (LNG) trucks and reiterated a cautious view on Weichai Power. While they see potential in Weichai Power's expansion into non-HDT engine business and the development of the electric truck supply chain, they believe it will take time to see results. Daiwa has lowered its revenue forecast for Weichai Power for 2024 to 2026 by 3% to reflect the weaker-than-expected outlook for local HDT demand.