Daiwa raised the target price for SINOTRUK to 29.4 yuan, optimistic about domestic and foreign demand for heavy trucks next year

According to a research report published by Daiwa on the 6th, the target price for SINOTRUK (03808) has been raised to HKD 29.4, a 35% increase from the previous HKD 21.7, maintaining an "Outperform" rating. The firm expects that as the United States enters a rate-cutting cycle, demand for Chinese-made heavy trucks in overseas markets will remain strong next year. On the other hand, it believes that the domestic market will continue to be supported by the trade-in stimulus policy, bolstering domestic heavy truck demand. The firm is optimistic about SINOTRUK's leading position in the Chinese heavy truck market and anticipates that its global market share will further increase.

Daiwa has raised the company's revenue forecast for 2025 to 2027 by 0% to 1%, reflecting a stronger-than-expected recovery in domestic heavy trucks driven by trade-in subsidies. Due to economies of scale, the firm has also raised the company's gross margin forecast for 2025 to 2027 by 0.2 to 0.3 percentage points. Based on improved industry sales prospects, the target price-to-earnings ratio has been adjusted from 8.5 times to 9.8 times, and the valuation benchmark has also shifted. (rh)
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