UBS: Upgrades Weichai Power (02338) rating to "Buy" with target price raised to 15.1 Hong Kong dollars.

UBS releases research report, stating that it has upgraded its rating on Weichai Power (02338) from "neutral" to "buy", with an H-share target price raised from 12.3 Hong Kong dollars to 15.1 Hong Kong dollars. The report mentioned that Weichai Power's stock performance in the second half of last year lagged behind the Hang Seng Index, as electric trucks quickly gained market share due to higher subsidies and lower operating costs. However, on a quarterly basis, with the cost of liquefied natural gas (LNG) falling since the fourth quarter of last year, the bank expects demand for LNG trucks to rebound in the first quarter of this year. Furthermore, the bank believes that Weichai Power is transforming into an electric vehicle supplier through its joint venture with BYD COMPANY (01211), with the first phase of battery production capacity completed at the end of last year and expected to start operating this year. Therefore, the bank has raised its earnings forecast for Weichai Power for the next two years by 12% to 15%, believing that the risks of electric trucks are already reflected in the stock price, and investors may overlook the potential rebound in LNG truck demand in the first quarter of this year and Weichai's expansion into electric vehicles.