UBS: Maintains "Buy" rating on Weichai Power (02338), raises target price to 17.2 Hong Kong dollars.

UBS released a research report stating that it maintains a "buy" rating on Weichai Power (02338), with a target price increased from 15.1 Hong Kong dollars to 17.2 Hong Kong dollars, and an increase of 5% to 12% in profit forecasts for 2025 to 2027. UBS stated that it has raised its forecast for sales of heavy trucks in China from 950,000, 1,000,000, and 1,050,000 vehicles in 2025 to 1,000,000, 1,050,000, and 1,100,000 vehicles respectively; the forecast for sales of liquefied natural gas (LNG) heavy trucks has also been raised from 180,000 vehicles to 200,000 vehicles. At the same time, the bank has raised sales forecasts for Weichai's general engine business from 2025 to 2027 by 7% to 11%, and profit forecasts by 14% to 18%. Since the launch of DeepSeek-R1, market sentiment for artificial intelligence (AI) and data centers in China has improved. In view of Weichai Power's higher business visibility and upgraded product portfolio, the bank has raised its profit forecast for large bore engines by 1% to 19% for 2025 to 2027.