4Q23 net profit +58% YoY; Payout increased to 50%; Higher earnings forecast on margin

（以下内容从招银国际《4Q23 net profit +58% YoY; Payout increased to 50%; Higher earnings forecast on margin》研报附件原文摘录）
潍柴动力(000338)
Weichai’s net profit in 2023 surged 84% YoY to RMB9bn, which is in line withthe profit range of RMB8.58-9.32bn announced in Jan. In 4Q23, net profit grew58% YoY to RMB2.5bn. It’s worth noting that Weichai has declared a finaldividend of RMB0.293/shr. This, together with the interim dividend, implies thatthe payout ratio has reached 50% (up from 45% in 2022). We revise up our2024E/25E earnings forecast by 19%/20%, mainly due to higher marginassumptions across different segments. We maintain our positive stance onWeichai (sector top pick) as we see (1) the replacement cycle, (2) higher salescontribution of gas trucks, and (3) exports offering certainty on HDT industrysales growth in 2024E. We revise up our SOTP-based TP for Weichai H/A toHK$22/RMB20.4 from HK19.4/RMB17.8. Maintain BUY.
Key highlights in 4Q23. Net profit grew 58% YoY to RMB2.5bn, driven by20% YoY revenue growth (to RMB53.6bn) and 3.3ppt YoY gross marginexpansion (to 23.7%). The gross margin in 4Q23 is the highest one since4Q18.
Strong engine growth in 2023. The segment revenue grew 55% YoY toRMB60.8bn, driven by a 28% increase in engine sales and increase inblended ASP (due to more contribution of HDT engines based on ourestimate). The segment profit surged 1.7x YoY to RMB7.7bn, driven by5.5ppt YoY expansion of segment margin.
Automobiles & components turned to profit in 2H23. The segment(mainly includes HDTs and parts) recorded RMB610mn of segment profit in2H23 (vs RMB24mn in 2H22 and -RMB16mn in 1H23), driven by operatingleverage.
Forklifts & supply chain solution (KION’s operation) continued to seerecovery. The segment profit surged 10x YoY to RMB4.9bn in 2023 from alow base. According to KION’s latest guidance, the adjusted EBIT isexpected to grow 0-19% YoY in 2024E.
Agricultural machinery helped by better margin. While the segmentrevenue dropped 9% YoY to RMB16.2bn in 2023, the segment marginexpanded 1ppt YoY to 4.1%. This helped boost the segment profit by 23%YoY.
Risk factors: 1) weakness in engine export; 2) lower-than-expectedreplacement demand; 3) an increase in component costs.