JPMorgan boosted its price target on Weichai Power (02338.HK) by 30 percent to HKD52, arguing the manufacturer’s shift into high-margin fuel cell technology for data centers is not yet fully priced into the stock.
The bank maintained its Overweight rating on the H-shares, stating that Weichai’s “power transition has moved from concept to quantifiable milestones” and that its earnings structure is shifting toward higher quality and margins.
The upgrade reflects growing conviction in Weichai’s solid oxide fuel cell (SOFC) business, a key technology for providing on-site power to energy-intensive AI data centers. JPMorgan noted that while Weichai’s stock has surged about 90 percent year-to-date, pure-play SOFC peers like Bloom Energy (BE.US) have climbed 160 percent. This suggests, the bank said, that “Weichai Power’s valuation re-rating is not yet complete.”
JPMorgan raised its earnings forecasts for Weichai for 2027 and beyond by more than 10 percent, driven by margin expansion. The bank now expects the company to sell 3,500 AI data center engines in 2026 and sees overseas revenue growing to account for around 60 percent of the total, up from about 50 percent in 2025.
The bullish call positions Weichai as a key beneficiary of the global AI buildout, which is creating unprecedented demand for electricity that traditional power grids cannot meet. Companies like Bloom Energy have seen their valuations soar as hyperscalers turn to on-site fuel cells to power new data centers. JPMorgan’s report suggests Weichai is successfully capturing a piece of this critical and high-growth market.
For investors, the target price hike from a major bank confirms the strategic pivot to SOFC technology is gaining traction. The key catalyst ahead will be the company's ability to execute on its production targets and close the valuation gap with its international peers.
This article is for informational purposes only and does not constitute investment advice.
