Citigroup: Maintaining Weichai Power's (02338) “buy” rating and HK$50 target price core net profit for the third quarter is in line with expectations

The Zhitong Finance App learned that Citi released a research report stating that it will maintain the “buy” rating of Weichai Power (02338) and the target price of HK$50. The company achieved revenue of 58 billion yuan (same below) in the third quarter, up 1% year on year, down 4% from quarter to quarter, and 2% higher than market expectations; core net profit (excluding one-time items) was 3.22 billion yuan, up 14% year on year and 3% quarterly, in line with overall expectations.

According to the bank, Weichai Power's net profit attributable to shareholders in the third quarter was 2,957 billion yuan, down 9% from the previous year, mainly due to holding shares in Ballard Power Systems, which recorded a fair value loss of 410 million yuan in bad debts in the same period last year; in addition, the company recorded an exchange loss of 200 million yuan, compared to 100 million yuan in exchange gains in the same period last year. The actual tax rate also rose to 20.4% from 17.5% in the same period last year.