The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it raised the profit forecast for Weichai Power (02338,000388.SZ) by about 12%, raised the target price for H shares from HK$55 to HK$57, and raised the target price for A-shares from RMB 52 to RMB 54, all maintaining an “increase in holdings” rating. The adjustments reflect the company's stronger shipping prospects, profit margin resilience, and accelerated commercialization of artificial intelligence data centers (AIDC) and solid oxide fuel cells (SOFC).

Although the company's operating and financial progress is clear, H share and A share prices have fallen by about 9% since the last results, outperforming the MSCI China Index by about 5 percentage points. The bank believes that this is due to negative market sentiment and macroeconomic headwinds about China's AIDC power supply chain, rather than a decline in the company's execution or fundamentals.

The bank maintains confidence in the company. Sector insights from Bloom Energy, Ceres, and leading marine engine/gas engine companies all reflect that Weichai Power is on a multi-year growth track, and that the upward space brought about by China and global SOFC and AIDC power demand has not been fully reflected in market expectations or valuations.

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