On March 27th, Weichai Power Co., Ltd. (000338.SZ) released its 2024 annual report. During the reporting period, the company achieved an operating revenue of 215.7 billion yuan, a year-on-year increase of 0.8%; realized a net profit attributable to the parent company of 11.4 billion yuan, a year-on-year increase of 26.5%; and achieved a non-recurring net profit attributable to the parent company of 10.5 billion yuan, a year-on-year increase of 30.3%.

Large-bore engines for data centers have become a major highlight in the business field. In 2024, the company sold 8,132 large-bore engines, of which overseas sales accounted for 62.2%. Nearly 400 data center products were sold, a year-on-year increase of 148%.

According to the information, large-bore engines are characterized by high unit prices and high gross profits, and are mainly applied to high-end markets such as data centers, emergency power supplies for mines, and mining trucks. In the early days, this market was mainly occupied by overseas brands. In 2009, Weichai Power acquired Baudouin in France and entered the field of large-bore engines. It completed the development and layout of the full series of large-bore high-speed engines in 10 years.

In recent years, the large-bore engine business of Weichai Power has entered a period of rapid development. In 2023, the company's large-bore engines broke into high-end markets such as global data centers and mining trucks. Entering 2024, the breakthrough and application of AI technology have put forward higher requirements for basic computing power, setting off a boom in AI infrastructure construction. Among them, as the core backup power source for data centers, the market demand for large-bore engines has increased significantly, and the corresponding market demand for large-bore engines has also risen sharply. According to calculations by Haitong Securities, from 2025 to 2030, the individual demand for 1,800kW large-bore diesel generators for global data centers is expected to reach 20,000 to 30,000 units, and the market size is about 30 billion to 50 billion yuan. In addition to data centers, large-bore engines also have huge growth potential in fields such as large-scale power generation, marine power, and mining trucks. Haitong Securities estimates that the current global market size of large-horsepower engines is close to 200 billion yuan.

At present, the large-bore engines of Weichai Power have entered multiple mainstream global markets, and the product advantages are obvious. In 2023, the Baudouin 6M33 power generation products of Weichai Power were applied to the construction of the Sichuan-Tibet Railway, providing reliable power during construction in cold and high-altitude areas. In the field of mining truck power, in November 2024, Weichai Power launched China's first 120-400-ton electric drive mining truck power, which has the advantages of good economy, strong environmental adaptability, and low operation and maintenance costs. In the field of data centers, since 2024, Weichai Power has reached cooperation with the three major telecommunications operators, China Telecom, China Mobile, and China Unicom, and has become their strategic supplier. In December last year, Weichai Power launched the Baudouin 20M55, and the maximum power of the adapted generator set can reach 4,250kW, which is the diesel generator set with the highest power in the world. This product mainly targets the power demand of data centers and can meet the stringent requirements of data centers for backup power.

In the wave of global AI infrastructure construction, securities firms generally have a positive outlook on the development prospects of Weichai Power's large-bore engine business and its positive impact on the company's performance. UBS Securities believes that Weichai Power has advantages such as shorter delivery cycles and faster service responses compared to overseas suppliers in the domestic data center field. It is expected that from 2025 to 2029, the compound annual growth rate of the company's large-bore engine profits will reach 26%, and the profit contribution of this business to the company is expected to increase from 11% in 2025 to 23% in 2029. (This article is from the official website of Seetao.com, www.seetao.com. It shall not be reprinted without permission. Otherwise, legal liability will be pursued. If reprinted, please indicate Seetao.com + the original article link.) Editor of the Strategic Column of Seetao.com / Yin Shiqian