AIDC and new energy rev up; ICE holds firm: Large-bore engines catch the AIDC tailwind, while SOFC unlocks long-term growth potential

Research evidence excerpt

AIDC and new energy rev up; ICE holds firm: Large-bore engines catch the AIDC tailwind, while SOFC unlocks long-term growth potential

y-y. Their ASP -7

exceeded CNY500,000, far above our estimated 2025 ASP of c.CNY35,800 for the segment. 25/07 25/10 26/01 26/04 26/07

In new energy, revenue reached CNY3.04bn/CNY1.69bn in 2025/1Q26, up c.100%/c.200%

y-y. According to CVWorld, China’s new energy heavy-truck sales reached 102,600 units in Source: Gildata

5M26, up 68% y-y. We expect such rising penetration to support continued expansion of

Weichai’s new energy business. On solid oxide fuel cells (SOFC), we believe it could Research Analysts

become a potential longer-term power solution amid robust AIDC demand in North America China Electronics and Autos

and tight gas turbine supply. Weichai has strengthened its technology base through its

strategic investment in Ceres Power and subsequent licensing agreements. While near-term Xiapei Fan - NOI

earnings contribution is likely to be limited, progress in SOFC commercialization could noiresearch@nomura.com

extend Weichai’s long-term growth runway and provide a valuation catalyst, in our view. SAC Registration No.: S1720526050001

Legacy ICE business remains solid, with market leadership supporting resilience Dehua Di - NOIThe commercial-vehicle sector is cyclical, but Weichai’s leadership in its legacy internal noiresearch@nomura.com

combustion engine (ICE) business provides resilience. In 2022, when China heavy-truck SAC Registration No.: S1720526010001

sales fell 51.8% y-y (CAAM), Weichai’s vehicle and components revenue declined 40.8% y-y

and total revenue fell 13.9% y-y (per Weichai’s IR activity records), both outperforming the Jie Dai - NOI

industry.