Financial and Economic News App learned that Soochow Securities released a research report stating that the terminal sales of heavy trucks in September fell short of expectations, while exports slightly exceeded expectations, and new energy continued to perform well. Specifically, in September, the sales volume of new energy heavy trucks was 7,858 vehicles, with month-on-month and year-on-year changes of +159.2% and +25.3% respectively, and a penetration rate of new energy of 18.1%, with month-on-month and year-on-year changes of +12.9 and +2.5 percentage points, respectively. In addition, the policy of replacing old vehicles with new ones began to be gradually implemented locally in September, and the effects are expected to take some time to become evident. It is estimated that in October, the terminal sales of heavy trucks will be 0.052 million vehicles, exports will be 0.021 million vehicles, and wholesale will be 0.07 million vehicles, with month-on-month changes of -13.7% and +21.3% respectively. In the third quarter of 24Q3, heavy truck sales are slow due to the off-season and the continuous narrowing price difference of oil and gas. Domestic sales performance was below expectations, but domestic sales of heavy trucks in the fourth quarter of 24Q4 are expected to rebound.

The main viewpoints of Soochow Securities are as follows:

September sales volume: The total volume meets expectations, and the performance of new energy remains impressive.

Industry total volume: In September, terminal sales fell short of expectations while exports slightly exceeded expectations. Production: In September, the production of heavy trucks was 0.06 million vehicles, with month-on-month and year-on-year changes of -29.5% and -2.3% respectively; wholesale: In September, the wholesale sales volume of heavy trucks was 0.058 million vehicles, with month-on-month and year-on-year changes of -32.7% and -7.6% respectively; insurance: In September, terminal sales of heavy trucks were 0.043 million vehicles, with month-on-month and year-on-year changes of -25.9% and +8.1% respectively, showing weak performance due to seasonality and falling short of expectations. Exports: In September, the heavy truck industry's exports were 0.025 million vehicles, with month-on-month and year-on-year changes of +3.5% and +3.6% respectively, slightly exceeding expectations due to rush delivery effects. Inventory: In September, heavy truck enterprise inventory increased by 0.0022 million vehicles, while channel inventory decreased by -0.0103 million vehicles.

Industry structure: Natural gas heavy trucks are entering a period of observation, while new energy continues to perform well. In September, the sales volume of new energy heavy trucks was 7,858 vehicles, with month-on-month and year-on-year changes of +159.2% and +25.3% respectively, and a penetration rate of new energy of 18.1%, with month-on-month and year-on-year changes of +12.9 and +2.5 percentage points, respectively. In September, the sales volume of natural gas heavy trucks was 0.009 million vehicles, with month-on-month and year-on-year changes of -61.7% and -23.2% respectively, and a penetration rate of natural gas heavy trucks of 21.7%, with month-on-month and year-on-year changes of -20.2 and -8.8 percentage points, respectively. The average price difference between oil and gas in September was 1.4 yuan, down 0.5 yuan from August.

September situation: Foton's terminal market share has rebounded month-on-month, Jiefang Dongfeng's exports continue to strengthen, while Weichai's terminal market share has declined month-on-month.

Vehicle layout: Foton's terminal market share increased month-on-month, while Jiefang Dongfeng continued to exert strong exports. Terminal: In September 2024, the domestic Foton/Dongfeng/Sinotruk/ Shanxi Heavy Duty Truck/Foton terminal sales market share were 21.6%, 21.7%, 16.3%, 9.9%, and 11.0% respectively, with year-on-year changes of -1.5/-1.7/-0.7/-0.1/+0.6pct compared to the full year of 23, and month-on-month changes of +0.1/+0.0/-1.6/-0.2/-0.5pct compared to August.

Engine layout: Weichai's terminal market share declined month-on-month. Overall: In September, Weichai/Cummins/XiChai/Yuchai/Sinotruk market share were 20.6%, 20.9%, 15.7%, 12.1%, and 8.3% respectively, with year-on-year changes of -10.9/+0.6/+2.3/-1.3/+0.4pct compared to 23, and month-on-month changes of -4.8/+0.3/+1.7/-0.1/+0.5pct; Weichai: In September, Weichai's terminal matching volume was 0.009 million, with year-on-year and month-on-month changes of -57.4%/-12.4%.

Looking at individual companies, in September, Weichai's matching rates in Shanxi Heavy Duty Truck/Sinotruk/Jiefang were 62.0%/47.3%/20.8%, with month-on-month changes of -4.8/-7.3/-8.2pct compared to August, and year-on-year changes of -17.6/-4.1/-19.4pct compared to the full year of 23. In terms of fuel types, in September, Weichai's diesel/natural gas engine market share were 15.8%/52.2%, with year-on-year changes of -6.1/-13.3pct compared to the full year of 23, and month-on-month changes of -1.4/-0.9pct compared to August.

Demand tracking in September and October: High-frequency indicators began to improve, with the effect of the replacement policy for old vehicles being released slowly.

September Tracking: Freight market: In October, the long-distance coal transport price in Ordos was 0.24 yuan/ton-km, with month-on-month changes of -0.02/+0.01 yuan/ton-km. Macro indicators: Engineering logistics: As of October, real estate development investment completion accumulated a year-on-year decrease of -10.1%, slightly lower than August by 0.1pct. Production logistics: The manufacturing PMI in September was 49.8 (August value 49.1), still below the boom-bust line. Consumer logistics: Total social retail sales in September showed a year-on-year growth of +3.2%, with a month-on-month increase in growth rate.

October high-frequency tracking: Engineering logistics: The average cement shipment rate in the first two weeks of October was 37.2%, with month-on-month changes of -10.3/+1.75pct, showing a smaller year-on-year decline. The average national petroleum asphalt operating rate in the first 15 days of October was 28.4%, up from September. Freight volume: The average full-load freight volume in the first 16 days of October was 106.7, a 2.4% increase compared to the same period last year (September -2.0%). The old-for-new policy began to be gradually implemented locally in September, but the effects are expected to take some time to show. It is estimated that in October, terminal sales for heavy trucks will be 0.052 million units, exports 0.021 million units, wholesale 0.07 million units, with month-on-month changes of -13.7%/+21.3% for wholesale sales.

Investment recommendation: Weak season for heavy trucks in Q3 24 + continued narrowing of oil and gas price differentials, weaker than expected domestic performance, expected rebound in domestic sales of heavy trucks in Q4 24. Looking ahead to Q4, with the implementation of the Russian scrappage tax in October, there will be greater month-on-month pressure on exports to Russia, but with limited year-on-year drag due to a low base, continuing high growth trends in non-Russian regions. Maintaining a slightly increased year-on-year judgment on total annual sales of heavy trucks. Preferred investment targets for Q4 include strong export alpha symbols such as Sinotruk (03808), undervalued assets+old-for-new elastic symbols: Sinotruk (000951.SZ)+Weichai Power (000338.SZ)+FAW Jiefang Group (000800.SZ)+Beiqi Foton Motor (600166.SH).

Risk warning: Domestic heavy truck industry recovery falls short of expectations, natural gas price increases exceed expectations.