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M Stanley Expects WEICHAI POWER (02338.HK) AIDC Business to Contribute Over 35% of Earnings by 2028; Raises TP to HKD47, Rating Overweight
Morgan Stanley said in a report that it maintains a positive outlook on demand for artificial intelligence data center (AIDC) equipment. It expects WEICHAI POWER (02338.HK)'s AIDC ...
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M Stanley Expects WEICHAI POWER (02338.HK) AIDC Business to Contribute Over 35% of Earnings by 2028; Raises TP to HKD47, Rating Overweight
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Morgan Stanley said in a report that it maintains a positive outlook on demand for artificial intelligence data center (AIDC) equipment. It expects WEICHAI POWER (02338.HK)  +2.020 (+5.166%)    Short selling $128.47M; Ratio 12.379%   's AIDC business to deliver a revenue and earnings CAGR of about 130% from 2026 to 2028. The broker forecasts that by 2028, the AIDC segment will contribute 10% of the company's revenue and more than 35% of earnings, while continuing to gain market share.

M Stanley believes WEICHAI POWER is transforming from a traditional heavy-duty truck engine manufacturer into a broader power and energy equipment platform. It expects heavy-duty truck industry demand to grow 5% YoY to 1.2 million units in 2026 and remain at 1.2 million units in 2027, with the company maintaining a stable market share in the heavy-duty truck engine segment.

Taking into account its 1Q26 results, the broker raised its revenue forecasts for 2026 to 2028 by 4%, 8% and 14%, respectively. However, it lowered its gross margin forecasts for 2026 and 2027 by 0.7 ppts and 1.3 ppts, while lifting its 2028 gross margin forecast by 2 ppts. For earnings, the 2026 forecast was cut by 5%, but the 2027 and 2028 forecasts were raised by 3% and 7%, respectively. Based on an upward revision of the 2026 forecast PE multiple for the AIDC business from 60x to 90x, and for the traditional engine and truck business from 10x to 13x, M Stanley raised its TP for WEICHAI POWER H shares from HKD32 to HKD47 and maintained an Overweight rating.
(fc/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-22 16:25.)

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