HK Stock Market Move | Weichai Power (02338) rises nearly 3% again, domestic self-owned diesel engine manufacturers accelerate going global, with room for improvement in product delivery prices and profit.

Weichai Power (02338) rises by nearly 3%, as of the time of writing, it has risen by 2.14% to 32.38 Hong Kong dollars, with a trading volume of 252 million Hong Kong dollars. A research report released by Zhongjin indicates that large-bore diesel engines are the core components of diesel generating units for backup power supply in global data centers, with foreign brands such as Cummins, Caterpillar, and MTU leading the market. Currently, there is a shortage of production capacity and tight delivery schedules. According to the bank's calculations, in the past two years, domestic brands such as Weichai, Yuchai, and Shangchai have steadily increased their market share in the domestic data center market, verifying their product technology strength and accumulating application experience, which is expected to accelerate their overseas expansion with the advantages of production capacity and cost-effectiveness. Weichai and its subsidiary brands, Bode En, have gradually accumulated overseas customers and channel resources such as PSI and Generac, successfully delivering products to data center scenarios in the US, Asia-Pacific, and other regions. Regarding pricing, Huayuan Securities points out that the global data center diesel engine market is dominated by foreign brands such as Cummins, MTU, and Caterpillar. Foreign companies have long and cautious production expansion cycles, and the current tightness in the overseas supply chain has become evident. Domestic suppliers are expected to gradually increase their global market share with advantages in price and delivery time. In addition, the average price of a single unit in the domestic market is close to 3 million yuan, and from 2024 onwards, diesel engine prices are expected to continue to rise. The price of units using foreign engines has already increased by about 20%, and the price of pure foreign original units has exceeded 3 million yuan per unit. Therefore, in the context of supply shortages, domestic diesel engine suppliers have room to increase their delivery prices and profits.