1. Event On April 27, Weichai Power (61.12, -5.30%, -7.98%) released the 2009 annual report. The company realized total operating revenue of 35.525 billion yuan, an increase of 7.24% year-on-year, and net profit attributable to shareholders of listed companies was 3.407 billion yuan. The net profit of non-recurring gains and losses was 3.293 billion yuan, a year-on-year increase of 75.84%, basic earnings per share of 4.09 yuan, and basic earnings per share after deducting non-recurring gains and losses of 3.95 yuan. At the same time, the company released the first quarter of 2010 performance report. In the first quarter of 2010, the company achieved a total operating revenue of 15.173 billion yuan, an increase of 146.08% over the same period of the previous year, and a net profit attributable to owners of the parent company of 1.619 billion yuan, an increase of 348.21% over the same period of the previous year. The basic earnings per share was 1.94 yuan, a year-on-year increase. 351.16%. 2. Analysis and judgment Strong growth in downstream customers of the company and no worry in its annual performance The current revenue structure of the company is that nearly 40% of its income comes from the engine business, which constitutes about 75% of the company's net profit, of which 85% of the gross profit of the company's gross profit is accounted for by the engines supporting the logistics and transportation heavy trucks. about. In January-March 2010, cumulative sales of heavy trucks totaled 267,500 units, an increase of 162.8% year-on-year, and sales in March reached 118,000 units, a record high. At present, the companies in the heavy-duty truck industry chain have full orders and the prosperity rate has not dropped. The absolute leader in the high horsepower engine sector has a long-standing problem of low transportation efficiency in the domestic transportation industry. With the increase in overload management and transportation costs, structural upgrading may become a new development opportunity in light of the future development of the heavy truck industry. In particular, from the perspective of policy, the increase in the amount of trade-in subsidies will also create conditions for the replacement of old heavy trucks with new large-capacity heavy trucks. In the high horsepower engine sector, the company's 12L "blue engine" is second to none. After many years of research and development, the Weichai 12L engine is the only mature high-power platform in China. And in 12L and above displacement engines, because the downstream customers are more specialized and the product prices are more inclusive, the brand effect will be more pronounced. It should be said that companies in the 12L above the competitive advantage than the 12L below the displacement section should be stronger. With the development of the heavy-duty trend, once the 12L machine becomes a trend, the company will occupy a favorable preemptive advantage. 3. Investment advice According to the situation in the first quarter, we raised the EPS of the company in 2010 and 2011 to 5.88 and 6.06 yuan, and the current stock price of 64.15 yuan, which corresponds to 10.9 times and 10.58 times for PE in 2010 and 2011 respectively. The valuation is at the bottom of the industry, considering 2010 For the certainty of the growth of the company and the future development prospects in the medium and small engine sector, we maintain our investment rating for the company. The main risk factors for the company's future come from the following aspects. First, the domestic macroeconomic growth is lower than expected, sales of heavy trucks have fallen sharply, which has affected the sales growth of the company; second, the increase in steel prices has exceeded expectations. Pneumatic Actuated Ball Valve,Full Welded Ball Valve,Split Body Ball Valve,Pneumatic Actuator Ball Valve RST VALVE GROUP CO.,LTD , https://www.stainlesssteel-valves.com