We maintain a "recommended" rating for Weichai Power. According to the report, the heavy-duty truck industry is expected to rebound in the second half of 2009. While demand for heavy-duty trucks is projected to decline by approximately 5% in 2009, the growth rate is anticipated to exceed 15% in the latter half of 2009 and throughout 2010. This positive outlook is driven by improving economic conditions and increased infrastructure investment. Weichai Power specializes in high-power, high-speed diesel engines. In 2007, the company held a market share of around 80% in the 15-ton and above heavy-duty automotive power supply segment, as well as a 78% share in the 5-ton and above loader power supply market. These figures highlight its strong dominance in China's internal combustion engine sector. The company has key clients in the heavy-duty vehicle industry, such as Shaanxi Heavy Duty Truck, Chongqing Hongyan, and Beiqi Foton, with whom it maintains stable and long-term partnerships. Additionally, Weichai has significant growth potential in both the passenger car engine and construction machinery engine markets. As the heavy truck industry undergoes structural changes, Shaanxi Zhongqi, a subsidiary of Weichai, holds a strong position in the over-15-ton standard heavy truck market. This positions the company to benefit from government policies aimed at boosting domestic demand and sustaining economic growth.

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