瑞信-中国重型卡车行业：加速基础设施刺激的需求见底
Upgrade China heavy-duty truck sector on sales growth from 3Q22. We estimate China heavy-duty truck (HDT) sales to increase 62%/10%/5% YoY in 2H22/2023/2024 after 12 months of sharp decline of ~60% YoY. We revise our China HDT sales estimatesto 0.97mn/1.08mn/1.10mn units (from 0.95mn/1.05mn/1.00mn) in 2022/23/24, with higher construction truck demand assumption on the central government’s significant stimulus on infrastructure fixed asset investments (FAI).
Multiples to rise with sales rebound. We expect the valuation multiples to increase with sector-wide sales growth returning to positive zone from 3Q22, which will boost investors’ confidence in HDT value chain players’ earnings growth. The China HDT sector stocks are now trading at a historical low level in terms of 12-month forward price-to–earnings multiples. After the ~30% share price drop since the beginning of 2022, we believe the current price has priced in investors’ bearish outlook on the Covid outbreak’s impact.
Top picks among truck makers. We prefer truck makers over components makers amid the sector upcycle, due to their: (1) bigger earnings improvements and (2) more share price upside potential post Covid. Historically, truck makers have generally outperformed component makers in sector upcycles, and vice versa. In 2020, truck makers’ (Sinotruk, FAW Jiefang) share prices surged over 50% in 1H20, well above that of component makers (Weichai Power, Weifu High-tech).
