Behind the repeated record highs in its stock price, Weichai produced and sold over 150,000 engines in January

Against the backdrop of the continued high prosperity of the heavy truck industry, Weichai engines achieved new historical highs in production and sales in January. After the announcement of the 13 billion yuan private placement plan, the development logic and market prospects of Weichai Power's structural transformation and focus on new energy have gradually been recognized by the capital market, and its A-share price has repeatedly reached new highs.

It is understood that on the basis of achieving a production and sales volume of over 1 million engines in 2020, Weichai continued to maintain a strong momentum in both production and sales in January 2021, with engine sales exceeding 150,000 units in a single month, setting a new historical record. According to industry data, in January 2021, the Chinese heavy truck market is expected to sell 189,000 units of various models (based on the number of invoices), a significant year-on-year increase of 62%, and has set a new monthly historical record for ten consecutive months. The two major customers of Weichai Power, Shaanxi Heavy Duty Truck and Sinotruk, sold a total of 50,500 units, accounting for 27% of the total sales.

In the 13 billion yuan non-public offering of stocks plan announced on December 24, 2020, the investment direction of the raised funds, apart from the sectors related to Weichai Power's existing business such as high-end engines, high-end hydraulic powertrains, and large CVT powertrains, the fuel cell industry chain base project is clearly the focus quietly defined by Weichai Power.

A relevant person in charge of Weichai Power stated that the additional share issuance plan has revealed Weichai's key development directions for the next 5 to 10 years, conveying to investors the intention that Weichai's new business will be fully developed. The company aims to achieve an income of 20 billion yuan in its new energy business by 2025.

It is understood that Weichai Power began to promote structural adjustment as early as after the 2008 financial crisis. Through a series of mergers and acquisitions and R&D investments at home and abroad, Weichai Power has successively laid out a large number of key core technologies in the equipment manufacturing industry, such as large-bore engines, high-end high-pressure hydraulics, automated logistics, fuel cells, and large continuously variable CVT. It has taken up the banner of independent control in China's commercial vehicle, construction machinery, agricultural equipment, industrial power, new energy and other industries.

With clear development expectations, coupled with years of strategic transformation and structural adjustment, Weichai Power has completed a diversified business layout, and multiple high-tech sectors have successively entered the period of performance release. In the eyes of the market, Weichai Power, which possesses core manufacturing technologies, has the ability to transcend cycles and is about to embark on a growth channel of the "second growth curve". It is not surprising that Weichai Power is favored in the capital market when value investment becomes mainstream.

Capital market data shows that as of the close of trading on February 2nd, among the over 140 listed companies covered in the automotive manufacturing industry (excluding new share factors), Weichai Power's increase over 20 trading days reached 52.44%, leading the industry. Since the beginning of 2021, the share price of Weichai Power on the A-share market has risen by more than 50%, with A total market value reaching 183.2 billion yuan, approaching the 200 billion yuan mark.