Daiwa: Upgrading Sinotruk Jinan Truck (03808) to "Buy" with the target price raised to HKD 49.2.

Daiwa released a research report stating that the management of Sinotruk Jinan Truck (03808) participated in the bank's non-deal roadshow on the 7th. The bank believes overseas demand is strong, and it expects market share to further expand from 2026 to 2028. The rating has been upgraded from "Outperform" to "Buy," with the 12-month target price significantly raised from HKD 29.4 to HKD 49.2. In response to strong overseas demand and the potential for further market share expansion, revenue forecasts for 2026 to 2027 have been increased by 17% to 20%. The bank's earnings per share projections for 2026 to 2028 are 5% higher than the market consensus. The report cites management guidance indicating that domestic sales of heavy-duty trucks in 2026 are expected to be around 800,000 to 850,000 units, with over 400,000 units sold overseas; the company's domestic market share target is approximately 19%, and overseas sales are expected to exceed 200,000 units. Domestic sales in 2027 are anticipated to be flat year-on-year, while overseas sales are expected to see substantial growth, with the company's overseas targets set for double-digit growth year-on-year. Since July, the mandatory installation of automatic emergency braking systems has led to some demand being pulled forward in the second quarter, resulting in weak sales in July; management expects sales to rebound quarter-on-quarter in the fourth quarter. In terms of electric trucks, the company sold about 25,000 units in the first half of the year, an increase of approximately 140% year-on-year, making it the number one in market share in mainland China for the first time; management aims for electric trucks to reach breakeven by 2026 and export 1,000 units by 2027. As of the first half of the year, Africa and Southeast Asia accounted for approximately 47% and 28% of overseas sales, respectively, followed by the Middle East, Latin America, the CIS, and Australia; management is optimistic about infrastructure and mining demand in Africa and Southeast Asia and indicated that Latin America is expected to grow over 70% year-on-year, while Australia is expected to grow over 100% year-on-year.