China National Heavy Duty Truck H·Deep | Reconsidering the undervalued, high-growth heavy trucks going overseas and globalization【TF Auto】【TF Auto】

(Source: New Energy Frontier Battle Team)

Summary

Market concerns: As a production tool, heavy-duty trucks’ sales are related to fixed-asset investment and highway freight volume. Ten years ago, with China’s large-scale infrastructure investment, domestic heavy-duty truck sales surpassed one million. Currently, domestic heavy-duty trucks are entering a replacement cycle for existing stock, and the market worries that heavy-duty truck companies may not have enough profit elasticity in the future.

Our view: Leading heavy-duty truck manufacturer 【China National Heavy Duty Truck Group, Sinotruk】 benefits from the accelerated growth of overseas sales, and is expected to enter a new cycle of favorable conditions. Its exports can be further divided into 1-N accelerated development regions (Africa and Southeast Asia) and 0-1 breakthrough developed regions (Latin America and Europe):

Developing regions: Sinotruk’s market share is close to or exceeds 20%. The key is to watch for expansion in heavy-duty truck demand driven by economic development.

Taking Africa as an example: each year Africa’s infrastructure investment is around $100 billion, with an annual growth rate of about 10% in the past two years, while actual investment demand exceeds $150 billion. By obtaining development capital through Africa’s bulk exports, and with many countries’ foreign-exchange reserves reaching historical highs, infrastructure investment is expected to feed back into growth.

Africa currently sells 200k heavy-duty trucks per year; its GDP size is comparable to China’s 20 years ago. As economic growth and infrastructure investment increase, we believe Africa could replicate the domestic pattern, with annual heavy-duty truck sales breaking one million.

In the past, Sinotruk rapidly expanded its market by exporting early + strong cost performance (in the US and Europe, used heavy-duty trucks are 4-5 million, Sinotruk is 2 million+), and also tightly bonded with channel partners (sell more and earn more). Currently, Chinese brands’ market share in Africa is about 70% and Southeast Asia about 40%, while Sinotruk accounts for more than half of Chinese brands.

From a competition perspective, the pricing gap between other Chinese brands and Sinotruk is relatively small, making it difficult for them to ramp up sales quickly. This means large channel partners have insufficient motivation to switch partners, while small channel partners have limited strength. We believe Sinotruk’s market share in Africa is likely to stay at the current level.

Developed regions: Sinotruk is a late entrant, achieving breakthroughs through vehicle model certification + KD plants + channel build-out.

Europe’s annual heavy-duty truck demand is 300k, and Latin America’s is 200k (including 100k in Brazil). Meanwhile, per-vehicle ASP for diesel heavy-duty trucks is 7-8 million, and for new energy it is 10-15 million—far higher than the domestic heavy-duty truck ASP of around 4 million.

However, Europe’s IAA regulations and Brazil’s high tariffs require heavy-duty truck companies to establish KD plants locally (a construction and ramp-up cycle of 2-3 years). With vehicle model certification conducted in parallel and the build-out of pre-sales and after-sales networks, we expect that starting in 2028, Sinotruk’s heavy-duty truck sales in developed regions will accelerate, further speeding up the overall growth rate of profits.

In Europe, Sinotruk has already obtained certifications for one new-energy model and one diesel model, and, together with Austrian Staal, has implemented a KD plant. In March 2026, the first Shandeka heavy-duty truck (Sinotruk’s high-end heavy-duty truck brand) produced at the European plant successfully rolled off the line.

In Brazil, the first round of vehicle model certification is expected to pass by Q2 2026, and the construction of KD plants is being promoted locally. Currently, among domestically produced brands advancing KD plant construction in Brazil, Sinotruk is the only one.

Profit forecasts and valuation discussion:

We expect the company’s revenue for 2025-2027 to be 113.9, 124.6, and 137.1 billion yuan, respectively (YoY +20%, +9%, +10%), and attributable net profit to be 6.83, 7.91, and 9.08 billion yuan (YoY +17%, +16%, +15%); heavy-duty truck business is the core revenue-growth engine, with revenue of 101.1, 110.9, and 122.7 billion yuan for 2025-2027 (YoY +22%, +10%, +11%).

Based on comparable companies, we give the company a 15X valuation for 2026, corresponding to a target share price of HK$48.4 and a target market capitalization of HK$132.6 billion. For the first coverage, we give a “Buy” rating.

Risk warning: Global commercial vehicle sales fall short of expectations, technology innovation falls short of expectations, cost control falls short of expectations; calculation and valuation discussion involve subjectivity.

1. Company overview

1.1 Development history

The company’s predecessor was Jinan Automobile Manufacturing General Factory, established in 1930. In 1960, it produced China’s first heavy-duty truck, filling the blank in China’s heavy-duty truck industry. In 2004, the company’s independently developed new generation heavy-duty truck model HaoWo brand was born; it was launched to the market in 2005. That year, production and sales exceeded 10,000 units, creating a new record in China’s heavy-duty truck industry at the time. In 2013, the Shandeka series products with independent intellectual property rights were officially launched into the market. In 2020, the company launched a new generation high-end national brand “Yellow River” heavy-duty truck globally.

In 1983, the company successfully introduced Austria Steyr’s heavy-duty truck project, becoming the first domestic enterprise to fully introduce foreign heavy-duty truck complete-vehicle manufacturing technology. In 2009, the company reached a strategic cooperation with Germany’s MAN. MAN took a stake in Sinotruk (Hong Kong) Co., Ltd., and the company introduced MAN’s D08, D20, and D26 engines, as well as bridge and complete-vehicle technologies for heavy and medium-duty trucks.

The company currently exports to more than 110 countries and regions, accounting for half of China’s heavy-duty truck exports.

The company’s largest shareholder is China National Heavy Duty Truck Group Co., Ltd., holding 51% of shares. It is an entity supervised by the State-owned Assets Administration Commission. The second-largest shareholder MAN reduced its stake by 2% on January 23, 2026, and currently still holds 23% equity.

Sinotruk’s group market share has been rising rapidly and is now stable at around 25%. According to the First Commercial Vehicle Network, in 2025 the company sold 304k heavy-duty trucks in total, and its share increased to 26.7%. At the same time, export sales have maintained a steady upward trend. According to the First Commercial Vehicle Network, in 2025 export sales exceeded 150k units, up 14% year over year. Both export sales and total sales are #1 in the domestic industry. For 21 consecutive years, it has remained the champion in China’s heavy-duty truck exports.

1.2. The company has good expense ratio control, and net profit margins have been recovering

The heavy-duty truck business contributes most of the company’s main revenue. Except for 2022, when a series of unfavorable factors such as overstimulated consumption caused by the upgrading of emission standards and high inventory levels led terminal demand to keep narrowing, resulting in a decline in heavy-duty truck sales, revenue has been on an upward trend since 2022. Meanwhile, the company’s period expense ratio has continued to decline, driving an improvement in attributable net profit margin.

2. Domestic market: Subsidies continue; product matrix is complete; solidifying its #1 position in the industry

2.1 Seamless connection of the “trade-in for new” policy in 2026

The National Development and Reform Commission and the Ministry of Finance have clarified that in 2026, the government will continue to support scrapping of operating trucks that meet China IV (Guo IV) and below emission standards and replacing them with low-emission trucks, with priority support for replacing them with electric trucks. Subsidy standards will follow the 2025 framework: scrapping eligible old heavy-duty operating trucks can receive a subsidy of 45,000 yuan; purchasing new heavy-duty new-energy operating trucks can receive up to 95,000 yuan. Combined, the maximum can reach 140,000 yuan.

2.2. Breakdown of energy types: new-energy heavy-duty truck sales share continues to rise

Since Q2 2025, detailed implementation rules for new-round “trade-in for new” policies for trucks have been rolled out across provinces, municipalities, and autonomous regions nationwide. The stimulus to the new-energy heavy-duty truck market has gradually become more evident: monthly sales have continued to stay at a high level. From March to December, sales exceeded 10,000 units for eight consecutive months, and the average monthly sales in the second half of the year exceeded 21.5k. In 2025 full year, 196k new-energy heavy-duty trucks were sold, up 190% year over year.

Combined with the “peak season” effect and “volume-boosting” in the year-end before the subsidy policy deadline, in December 2025, new-energy heavy-duty truck sales hit an all-time high: 345k units sold (excluding exports and military vehicles), up 191% year over year.

New-energy heavy-duty truck sales in 2026 continue to grow. In January and February 2026, new-energy heavy-duty trucks sold 24k units in total, up 56% year over year.

In 2025, cumulative heavy-duty truck sales in China were 11.37 million units, up 26% year over year. Considering the industry’s average scrapping cycle of about 8 years, the industry is gradually entering a peak period for scrappage/replacement. Combined with national subsidies, we expect domestic sales to maintain an upward trend over the next three years.

2.3. Sinotruk’s product matrix is well developed; it is pushing high-end positioning, and market share remains high

Sinotruk’s four major brands under its umbrella cover all sub-segments:

• Haowo: one of Sinotruk’s core heavy-duty truck brands in China. On October 28, 2004, the first Haowo heavy-duty truck rolled off the line in Jinan, marking that China’s heavy truck complete-vehicle technology began to align with internationally advanced heavy truck technology. On December 13, 2017, cumulative sales of Haowo heavy-duty trucks surpassed 1 million units. Currently, Haowo heavy-duty trucks have five major series of products, TH7, MAX, TX7, MATE, NX, etc. Vehicle models cover all sub-segments including tractors, cargo trucks, dump trucks, mixers, and special-purpose vehicles, becoming the commercial-vehicle brand with the most products and the most complete product lines domestically.

• Shandeka: the high-end heavy-duty truck brand jointly created by Sinotruk and Germany’s MAN in 2009, sold in more than 50 countries and regions in China and globally. Shandeka products include two series, C and G, covering tractors, cargo trucks, construction vehicles, and various special-purpose vehicles. In January 2013, Shandeka’s first mass-production model—Shandeka C7H—rolled off the line. Over ten years since the brand launched, its market stock has already exceeded 250k units.

• Yellow River: positioned as Sinotruk’s high-end luxury brand. In 2020, Sinotruk launched a new generation Yellow River heavy-duty truck, positioned as a high-end flagship product built for trunk-line logistics transportation.

• Sinotruk Chengdu: based on the HaoWo V series platform, this is a new mid-to-high-end heavy and medium-duty truck brand freshly developed by Sinotruk Chengdu commercial vehicles, covering all sub-segments including cargo trucks, construction vehicles, tractors, mixers, and special-purpose vehicles. As of now, in addition to traditional fuel models, Sinotruk Chengdu has completed the new-energy product layout for the full range and full scenarios, including multiple fuel types such as NG clean energy, pure electric, hydrogen fuel, hybrid, and methanol range-extending, etc.

Taking the high-end brand Yellow River X7 as an example: the Yellow River X7 6×4 tractor features the world’s first 52.28% ultra-high thermal-efficiency diesel engine platform. The vehicle’s aerodynamic drag coefficient is <0.349, and one full tank allows it to travel 4,871 Km. It successfully broke a world Guinness record. At the same time, the vehicle is equipped with an L2+ level intelligent driver-assistance system as standard, and adopts a more advanced vehicle “domain control,” with the capability to be upgraded to an L4 level intelligent driver-assistance system.

Based on high-quality products, in 2025 Sinotruk heavy-duty truck sales topped the domestic market again and market share reached 26.7%. In the first two months of 2026, Sinotruk sold about 53k heavy-duty trucks of various types in total, up about 22% year over year; market share was about 29.5%, up about 1 percentage point year over year. Total sales remained #1.

For new-energy heavy-duty trucks: in 2025 Sinotruk sold 24k units (excluding exports and military vehicles), up 243% year over year, and market share reached 12.2%. In the first two months of 2026, Sinotruk sold 3,365 units in total (excluding exports and military vehicles), up 52% year over year. Share reached 14.5%, remaining stable year over year, and ranked just behind XCMG.

3. Overseas market: Export leader position is consolidated; global expansion accelerates

3.1. China’s exporters mainly focus on Africa and Southeast Asia; market shares in Europe and the US remain relatively low

According to PAKKA statistics, from 2019 to 2024, demand increment for heavy and medium-duty trucks was mainly driven by Africa and the Middle East, Russia/CIS, Australia, India, and South America. Demand in other regions such as China and Europe/US declined to some extent. But in terms of total volume, China, North America, and Europe remain the regions with the highest demand.

According to KERUI think tank, from January to August 2025, Chinese brands mainly exported to Africa and Southeast Asia, with market share in sales of 36% and 26%, respectively; the Middle East and Central/South America were 10%+; regions such as North America and Oceania were only around 1%. Moreover, export increments are also concentrated in Africa, Southeast Asia, and the Middle East.

Discussion by region:

• In Africa and Southeast Asia, the past market was mainly dominated by brands from Europe and the US and by Japanese brands. Now Chinese brands have achieved breakthroughs: market share in Africa has reached 70%, and Southeast Asia 40%. In some countries such as Vietnam, it has already gained a leading share;

• The Middle East and Central/South America markets have relatively low entry difficulty and are led by European and US brands. But in recent years, sales of Chinese brands have been gradually increasing: market share in the Middle East is about 50%. In Central/South America, Chinese brands are sold only in edge markets (such as Chile, Peru, etc.), and Brazil has not sold them yet;

• The CIS market was the largest region for China’s heavy and medium-duty truck exports in 2023 and 2024. However, as CIS local companies gradually restored production and local scrappage taxes increased, exports from China fell sharply in 2025;

• In countries/regions such as North America, Europe, South Korea/Japan, and India, either because of high technology and certification barriers or because of high trade barriers, Chinese brands have basically not entered.

3.2. Sinotruk’s first-mover advantage is evident; export volume has reached half of the national total

Sinotruk was established on November 2001 with its wholly-owned subsidiary Sinotruk Group International Co., Ltd., which serves as the company’s only official window for international trade. Sinotruk’s “go global” strategy, firmly implemented since 2004, has already built up 21 years of overseas market experience.

As the company currently has representative offices and business institutions established in 80 countries and regions globally, it has more than 300 dealers, more than 270 service stations, and 250+ parts sales points in the international market. It has also built 34 KD assembly plants in 27 countries. Among them, Sinotruk has exported heavy-duty trucks to 54 countries in Africa, with more than 300k units. In 2022, export market share reached above 60%. It is the #1 heavy-duty truck brand in Africa with the most sales and service network points and the most new-vehicle sales volume per year. By the end of 2025, the Algeria KD plant officially started production: in January, exports increased 656% year over year. The KD plant in Tanzania has achieved full-load, efficient operations, and in January exports increased 55% year over year.

In 2025, Sinotruk exported more than 150k heavy-duty trucks, up more than 14% year over year. For 21 consecutive years, it has retained the title of China’s heavy-duty truck export champion, holding a market share of over 50% of China’s heavy-duty truck exports. In January 2026, the high-growth trend continued: export volume exceeded 16k units, and the company’s goal is to export 1.7-1.8 million units for the full year. Sinotruk will take “international transformation” as a core growth lever. The company plans that by 2030, annual heavy-duty truck exports will reach 2.5 million units.

Sinotruk’s market share in Africa and Southeast Asia has already reached half of the Chinese brands’ level. At the same time, it is advancing vehicle model certifications in Brazil and Europe. For Brazil, the first round of certifications is expected to conclude by the end of Q2; Europe has already obtained certifications for two heavy-duty truck models. It is simultaneously advancing localization KD plants in both regions to address tariff issues.

4. Profit forecasts and valuation discussion

We expect the company’s revenue for 2025-2027 will be 113.9, 124.6, and 137.1 billion yuan, respectively, growing by 20%, 9%, and 10%, and attributable net profit of 6.83, 7.91, and 9.08 billion yuan, growing by 17%, 16%, and 15%.

• Heavy-duty truck business: Currently, Sinotruk is #1 in market share in Africa. We believe the company can benefit from the rapid development in Africa driving growth in heavy-duty truck demand. Meanwhile, by expanding sales regions, it can sustain overseas sales growth. We expect revenue for 2025-2027 to be 101.1, 110.9, and 122.7 billion yuan, growing by 22%, 10%, and 11% respectively;

• Light-duty trucks, engines, and financial services: Revenue is expected to maintain low-speed growth.

Based on comparable listed commercial vehicle companies, FAW Jiefang, Foton Motor, and Weichai Power have 2026 PE of 22X, 11X, and 14X, respectively. We give Sinotruk a 15X valuation for 2026, corresponding to a target share price of HK$48.4 and a target market capitalization of HK$132.6 billion. For the first coverage, we give a “Buy” rating.

5. Risk warning

Global commercial vehicle sales fall short of expectations: The company’s overseas heavy-duty truck sales share exceeds half. If global economic conditions slow down due to macro factors in the future, suppressing commercial vehicle demand, it may put pressure on the company’s business.

Technology innovation falls short of expectations: The competitive pressure in the company’s industry is significant. If the company’s technology innovation slows down, its products may lose competitiveness, leading to a decline in revenue and profitability.

Cost control falls short of expectations: The company uses multiple measures to control costs. If the results fall short of expectations, it may damage the company’s profitability.

Calculation and valuation discussion involve subjectivity: Some of the calculations in the report are subjective and may differ from future actual circumstances. Comparable companies selected in the valuation discussion include A-share listed companies, and this valuation may not fully reflect the company’s true value.

The company faces share price volatility risk: The company’s share price has risen significantly in the early period, which may cause large fluctuations in the short term.

Securities Research Report 《Sinotruk | Heavy-duty truck leader runs ahead domestically, overseas expansion opens up incremental growth》

External release date: March 28, 2026

Report issuing institution: GF Securities Co., Ltd. (a securities investment advisory business qualification approved by the China Securities Regulatory Commission)

This report’s analysts:

Sun Xiaoya SAC practitioner license number: S1110520080009

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