The basic conclusion: heavy trucks are the most cyclical market segment in the automotive industry and one of the industries benefiting from the country’s 4 trillion infrastructure investment. The peak sales period usually occurs in the 1st and 2nd quarters of each year, that is, new construction projects. At the beginning of the construction period, it has entered a sensitive period in the industry. Therefore, we conducted field research on the company in the near future. The company's current production schedule is in line with our expectations. The capacity utilization rate of the engine business is equivalent to 70% of the same period in 2008, and the production line consists of three. The class was changed to double classes. We expect the company's engine production and sales in February to reach around 20,000 units, a slight decrease from the same period in 2008. It is expected that the company’s engine production and sales volume in the first quarter of 2009 will be between 60,000 and 80,000 units, which is a decrease of 20-40% compared with the same period of 2008; we understand that in 2008, there were still 540,000 heavy truck shipments in the entire industry. Nearly 40,000 stocks remained in the sales cycle, which led to the sharp decline in sales of most companies since the fourth quarter of last year.

Among them, Shaanqi and Fukuda, which account for about half of the engines of Weichai trucks, also belong to companies with large inventory pressure. Therefore, the sales of these enterprises in January were lower than those of CNHTC; the incremental part of Shaanxi Automobile and Foton in 2008 mainly came from The tractors used for highway logistics accounted for about 50% of the tractors at the end of 2008. The tractors were dragged down by the sluggish export market. There has been no improvement in demand so far. This is a change in the sales volume of the two companies that is lower than that of heavy trucks. Another reason (see Exhibits 2 and 3); As the Weichai heavy truck engine market share exceeds 40%, we expect the company's sales performance to be closer to the industry's average level, and the peak sales period in March will also increase. However, the recovery in profitability of the company's heavy truck business relied heavily on the warming of the logistics tractor market. We expect to see some reaction in the second half of 2009; Weichai is currently experiencing the worst period, but he will also benefit from 4 trillion infrastructure projects. The investment demand has been driven, but there are also risks. Under the “stock” competition environment in 2009, the company’s engine business is facing downward pressure on prices, which may greatly weaken the company’s profitability.

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