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Weichai Power's Margins Likely Weighed by Higher Raw Material Costs -- Market Talk

Dow Jones Newswires ·  2021/11/04 03:30

0722 GMT - Weichai Power's gross margins are likely to remain weighed by high raw material costs, UOB Kay Hian says, trimming estimates for the company's gross margin over 2022-2023 to 19.0% from 19.3%. It also cuts the engine maker's net profit forecasts for both 2022 and 2023 by 4% to CNY12.18 billion and CNY14.06 billion, respectively. However, the broker keeps its buy rating on the stock as it believes a pickup in sales volumes is likely from 1Q 2022, driven by restocking demand and a pick-up in infrastructure investment. UOB Kay Hian cuts Weichai Power's target price to HK$19.00 from HK$20.00. Shares are 0.4% lower at HK$13.48. (yongchang.chin@wsj.com)

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