Morgan Stanley: Slightly lowered Weichai Power (02338) target price to HKD 46, rating Overweight

Morgan Stanley has released a research report stating that it has raised the revenue forecasts for Weichai Power (02338) by 4% for 2027 to 2028 and raised the net profit forecasts by 15%, mainly reflecting the stronger growth prospects for AIDC products. The forecast for 2026 has remained largely unchanged. The bank has slightly lowered the target price from HKD 47 to HKD 46, maintaining a rating of "Overweight." Morgan Stanley pointed out that Weichai Power is undergoing a transformation from being a traditional truck engine company to a broader platform for power and energy equipment. The bank believes this is sufficient to support the company's ongoing valuation reassessment and potential upward adjustments in earnings. The bank anticipates that the profitability of the AIDC business will be realized in 2027, with net profits expected to leap to over RMB 10 billion, accounting for about 50% of the group's total. The traditional business is expected to remain relatively stable, while growth in the heavy truck industry is projected to slow down starting in the second half of 2026.