Jinwu Financial News | BOC International Development Research Report shows that Sinotruk (03808)'s revenue revenue in 2023 increased 43.9% year on year to 85.498 billion yuan (same in RMB), and net profit to mother surged 217.9% year on year to 5.32 billion yuan, 2% higher than market and bank expectations. Mainly, heavy truck sales recorded a strong recovery in 2023 and improved profit margins due to scale effects.
According to the bank, Sinotruk's heavy gas truck sales increased 259% year-on-year in January-February of this year, in line with the bank's previous report expecting Sinotruk to develop heavy natural gas trucks. The bank believes that as Sinotruk increases sales of heavy natural gas trucks, there is room for further increase in market share.
The bank slightly raised its 2024/2025 profit forecast. As an industry leader, Sinotruk will benefit from the recovery in heavy truck sales, and its market share is expected to increase further. The bank raised the target price from HK$25.06 to HK$26.49, corresponding to a projected price-earnings ratio of 10x in 2024. The current price corresponds to the 2024 forecast dividend rate of 5.3%, maintaining the purchase.