Truck engines rev up Weichai profit 95.5pc
Weichai Power, a heavy-truck and diesel engine maker in Shandong province, expects the implementation of Euro III emission standards to boost demand, although it says the vehicle industry will take a hit from a slower economy this half of the year.
The firm yesterday said first-half net profit rose 95.5 per cent to 1.66 billion yuan (HK$1.89 billion) and revenue 39.9 per cent to 20 billion yuan.
No interim dividend would be paid out, but the firm proposed to distribute to all shareholders six shares for every 10 shares they held through a conversion of capital reserves based on its total share capital of 520.65 million shares. This will lift its share capital to 833.05 million.
The company sold 137,000 heavy-duty truck engines in the first half, up 60.4 per cent from last year.
Figures from the China Association of Automobile Manufacturers showed Weichai's share in the 14-tonne gross weight heavy-duty truck market was 36.1 per cent.
Sales of heavy-duty trucks grew 48.6 per cent to 380,139 units and those of diesel engines rose 43.9 per cent.
Weichai said earlier that it had charged higher prices for its heavy trucks and generated more sales with vehicles that met higher emission standards as a way to offset higher steel prices.
The mainland missed the Euro III emission standard in July last year because of a lack of qualified engines and good petrol. It still has to fully implement the standard this year, while European countries are complying with the Euro V emission standard.
Weichai chairman Tan Xuguang said the company was already successfully producing China IV emission engines that are in line with international benchmarks, and that it had already completed research and development of China V emission standard engines.
The Chinese Academy of Social Science estimated demand for new trucks in the country at 300,000 to 400,000 units annually because heavy trucks need to be replaced every five to seven years.