Two Decades Post-IPO, Weichai Power's Market Value Soars 30-Fold, Distributing RMB 28 Billion in Dividends

Rhea-AI Summary

Weichai Power Co., revealed impressive financial achievements in 2023, with revenue reaching RMB 213.96 billion, a 22.2% increase, and net profit surging by 83.8% to RMB 9.01 billion. The company enhanced its dividend strategy, raising the cash dividend ratio to 50%. Weichai commemorated its 20th anniversary with a seminar, highlighting its growth and innovation journey. The company's strategic mergers and acquisitions have propelled it to the forefront of the heavy machinery sector, with a global presence and exceptional market value growth.

Positive

• Impressive financial achievements in 2023 with revenue reaching RMB 213.96 billion, a 22.2% increase.
• Net profit surged by 83.8% to RMB 9.01 billion, with basic earnings per share jumping 84.5% to RMB 1.04.
• Enhanced dividend strategy with a cash dividend ratio of 50% for the year.
• 20th-anniversary seminar highlighted growth and innovation journey, led by Tan Xuguang.
• Strategic mergers and acquisitions propelled Weichai to the forefront of the heavy machinery sector.
• Global presence through international acquisitions and focus on key strategic areas like fuel cell technology.
• Exceptional market value growth exceeding 30-fold since listing, with dividends exceeding RMB 28 billion distributed over 20 years.

Negative

• None.

A Legacy of Growth: Weichai Power Champions Unprecedented Expansion and Returns

Innovation Through Unity: Weichai Leads with a Vision for Shared Value Development

WEIFANG, China, March 26, 2024 /PRNewswire/ -- Weichai Power Co., Ltd. (2338.HK, 000338.SZ), in its latest annual report released on March 26, unveiled significant financial achievements for the year 2023. The company recorded revenue of RMB 213.96 billion, a notable increase of 22.2% compared to the previous year. Net profit attributable to shareholders surged by 83.8% to RMB 9.01 billion, while basic earnings per share jumped 84.5% to RMB 1.04.

In a move reflective of its commitment to shareholder returns, Weichai Power announced an enhancement of its dividend strategy, increasing the cash dividend ratio to 50% for the year. This strategic decision underscores the company's robust financial health and its focus on sustaining high returns for its investors.

Weichai Power Co., Ltd. commemorated the 20th anniversary of its Hong Kong listing with a seminar on March 26 in Weifang, China, attended by a wide range of participants from the global financial community, investors, and media. The event highlighted the company's journey of reform and innovation over the past two decades. Tan Xuguang, chairman of Shandong Heavy Industry Group, Weichai Power, and China National Heavy Duty Truck Group, delivered a keynote speech, "Growth, Value, Future", discussing the company's five strategic models and four development approaches.

In 2004, Weichai Power became the first company from China's internal combustion engine sector to go public in Hong Kong, raising US$170 million and setting a record with its initial offering being oversubscribed by 928 times and international placement oversubscribed by 52 times, the highest since 1998. Following China's market reforms in 2007, Weichai Power completed a merger with Torch Automobile Group, resulting in a Shenzhen Stock Exchange listing. This innovative approach marked Weichai Power as the first company to transition from an H-share to an A-share listing through a merger, a move recognized for its creativity in the global financial market. This strategy has been instrumental in advancing Weichai Power's international presence and has laid the foundation for further domestic and international mergers and acquisitions.

In an aggressive move in 2005, Weichai Power Co., Ltd. laid down RMB 1.02338 billion for Torch Automobile Group, in what was then the largest cash acquisition deal in China's capital markets. This strategic merger not only brought together Weichai's engines, Fast Gear's transmissions, and Hande's axles into a pioneering "golden powertrain integration" model but also reversed integrated giants like Shaanxi Heavy Duty Automobile, Lovol Agricultural Equipment and Lovol Construction Machinery. The ambitious amalgamation has propelled Weichai to the forefront of the heavy machinery sector, claiming top spots in global sales for its heavy-duty engines and transmissions, as well as leading positions in China's agricultural equipment, axle and heavy-duty truck markets.

In 2009, Weichai Power's acquisition of the French company Baudouin marked the company's inaugural venture into the international market, signaling a strategic pivot towards global capital markets. This acquisition spearheaded a series of international acquisitions, including but not limited to, Kion Group (Germany) and Linde Hydraulics (Germany), PSI (US), Ceres (UK), Ballard Power Systems (Canada), Aradex (Germany), VDS (Austria), and Fischer (Switzerland). These acquisitions have enabled Weichai Power to focus on key strategic areas including large bore high power density engines, advanced hydraulics, continuously variable transmission (CVT) powertrains, and fuel cell technology, culminating in the creation of a leading-edge intelligent logistics industrial chain. Weichai Power's international footprint, as measured by its transnational index, has reached 48.57%, underscoring the company's prominence on the global stage.

Over the past two decades, Weichai Power has evolved into a global conglomerate with diversified interests spanning power systems, commercial vehicles, agricultural machinery, and intelligent logistics solutions. Financially, the company has seen a remarkable trajectory of growth. From 2004 to 2023, revenue surged from RMB 6.2 billion to RMB 214 billion, reflecting a thirty-threefold increase. Net profit attributable to the parent company escalated from RMB 540 million in 2004 to RMB 9.01 billion in 2023, marking a sixteen-fold increase. This financial growth underscores Weichai Power's comprehensive capabilities, exceptional investment value, and widespread brand recognition across the capital markets. The company's total market value has exceeded RMB 140 billion, a 30-fold increase since its listing. Weichai Power has witnessed exceptional market value growth, surpassing 40 times its initial listing value. Over the past 20 years, the firm has distributed dividends exceeding RMB 28 billion.

The Weichai chairman, Tan Xuguang, reflected on the company's journey, emphasizing how the two decades of collaborative efforts and mutual success have cemented a formidable partnership network worldwide. At Weichai Power, we envisage "growth, value, and future" as our core guiding principles. "Growth" is interpreted as the ambition to rank among the world's leading enterprises. "Value" signifies our aspiration to be acknowledged as a globally respected powerhouse. Looking ahead, Weichai Power is poised for an even more promising future, characterized by ceaseless energy, boundless potential, and enduring excellence. We remain a beacon of innovation and leadership, continually attracting the attention and support of stakeholders globally.

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SOURCE Weichai Power Co.,Ltd

FAQ

What was Weichai Power's revenue in 2023?

Weichai Power's revenue in 2023 was RMB 213.96 billion, reflecting a 22.2% increase.

What was the percentage increase in net profit for Weichai Power in 2023?

Net profit for Weichai Power surged by 83.8% to RMB 9.01 billion in 2023.

What is Weichai Power's enhanced dividend strategy for the year?

Weichai Power increased its cash dividend ratio to 50% for the year.

Who delivered the keynote speech at Weichai Power's 20th-anniversary seminar?

Tan Xuguang, chairman of Shandong Heavy Industry Group, Weichai Power, and China National Heavy Duty Truck Group, delivered the keynote speech.

What strategic move did Weichai Power make in 2005?

In 2005, Weichai Power laid down RMB 1.02338 billion for Torch Automobile Group, marking the largest cash acquisition deal in China's capital markets at that time.