[买入评级]WEICHAI POWER(000338/02338.HK):EXTENDS TO SOFC MARKET;JV TO LAUNCH FUEL CELL RANGE EXTENDER .

时间:2018年05月17日 12:03:16 中财网


What's new
On May 16, Weichai Power signed a strategic cooperation agreementwith British solid oxide fuel cell (SOFC) maker Ceres Power.
Comments
Weichai to buy a 20% stake in Ceres for ?40mn. Weichai plans toinvest ?17mn for a 10% stake in Ceres at a price of ?15.08/sh, andadd a 10% equity holding in the firm at a price of ?16.45 following thesigning of further commercial agreements.
JV to obtain exclusive licensed technology from Ceres and sell fuelcell systems, battery piles and battery cells in China. Ceres’ SOFCscurrently support 50% energy-conversion efficiency, mainly forcommercial, transportation, data centers and residential markets. Thefirst product of the joint venture between Weichai and Ceres Powerwill be a 30kW range extender system for electric buses.
Weichai: from acquiring mature companies to holding stakes intechnology start-ups. We expect Weichai to develop to acomprehensive manufacturer and provider of power system,hydraulic system and intelligent system solutions in the long term,meanwhile extending from diesel engines to solid fuel cell technologyamid the rise of electric vehicles.
Valuation and recommendation
We expect Weichai to be a major heavy-duty equipment maker in theworld. We think that alternative energy and hydraulic systemtechnology will bring the firm both challenge and good growthopportunities. Maintain BUY on Weichai-A/H and TP of Rmb12.5and HK$14.4 (14x/13x 2018e P/E, 49% and 50% upside respectively)。

Risks
Use and technology advances of fuel cells disappoint.
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