AIDC电力驱动的重新评级将继续；盈利预测和TP上调

AIDC powerdriven re-rating to continue;Earningsforecastand TP raised The strong growth of powerrelatedengines(in particular AIDCbackup powerengine: +2.4x YoY) in1Q26provedthat Weichai is on-track to ride on the AIDCgrowth. Meanwhile,Caterpillar’s (CAT US, NR)better-than-expected resultsin 1Q26, followed bytheupward revision of power generation equipment salestarget in 2030 (from>2x to >3x,compared with 2024), suggestedthat AIDC’smedium-term demand will remain robust with good visibility.Werevise upWeichai’s2026E/27E/28Eearnings forecastsby2%/11%/15%, due to higherassumptionson AIDC engine volume and margin.We now expect thecontribution ofpower related engine EBITDA(on attributable basis)to increasesubstantially from 17% in 2026E to 38% in 2028E.We revise up our SOTP-based TP for Weichai H/A toHK$45.1/RMB40.2 (fromHK$30.5/RMB28.7), aswe nowvalue Weichai’s power engine business separately with a 35x targetEV/EBITDAfor 2026Ein order to reflectthe re-rating of power business.ReiterateBUY.We see Weichai a key pick in the Capital Goods sector. China Capital Goods Strong growth ofAIDC backup power engine in 1Q26.Weichai’spowerrelated engine sales volume grew 21% YoY to 30k units in 1Q26. Large-bore engine sales volume also grew +21% YoY to 3k units but carriedmuch higher ASP (our estimate: >RMB500k/unit). Of the large-bore enginesales,AIDC engine sales surged 2.4x YoY to~500 units(ASP:>RMB2mn/unit). Higher assumptions for power related engines.For AIDC engine, weexpect the full-year sales in 2026E to surge 1.7x YoY to 4kt. In particular,we expect the breakthrough in the US market to continue to gain traction. Potentialforfurther re-rating. Caterpillar is trading at 36x 2026E P/E and28x EV/EBITDA. For Weichai, we now assign35x target EBITDA for thepower business, which we believe is justified given Weichai’s much highergrowth potential as a challenger (we expect 45%powersegment EBITDACAGR between 2026-28E). For traditional business (i.e.engine for HDT &machinery + HDT+ agricultural machinery), we assign 10x target EBIDTA(peak cycle valuation) to reflect the continuous up-cycle fortheHDT sector. Related reports: Weichai Power–2025 earnings belowexpectations; structural transition story stillintact–27 Mar 2026 (link) Capital Goods-HDT sales+39% YoY inJan on low base–3 Feb 2026 (link) Capital Goods–Key themes in 2026;Focus on Mining equipment + Power fordata centres + Replacement cycle–1 Dec2025 (link) Source:Bloomberg,company data, CMBIGM estimates Source:Bloomberg,company data,CMBIGM estimates Source:Bloomberg,company data, CMBIGM estimates Source:Bloomberg,company data, CMBIGM estimates Source:Bloomberg,company data, CMBIGM estimates Source:Bloomberg, company data, CMBIGMestimates Source:Bloomberg, CMBIGMNote: Data asof 30 Apr 2026. Source:Bloomberg, CMBIGMNote: Data asof 30 Apr 2026. Key risks:1)unexpectedslowdownindiesel and gas engine demand due to high oilandgas prices;2) increase in raw material costs;3)lower-than-expectedAIDCbackup powerengine sales. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) all of the viewsexpressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International CapitalCorporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important Disc