Weichai Power Shares Surge on Twin Tailwinds: AI Data Contract and Daiwa Upgrade

Shares surge 8.23% as Daiwa upgrades to Buy and Weichai secures a $600M supply contract for AI data-center power systems, signaling a strategic pivot beyond truck engines.

Weichai Power delivered its biggest single-day jump in months on Monday, with shares climbing 8.23% to EUR 4.19 as investors cheered a potent combination of fresh analyst optimism and a blockbuster deal for AI data-center infrastructure. The move snapped the stock out of a recent lull and pushed it back above its 50-day moving average, a technical milestone that had eluded the shares in prior sessions.

The catalyst for the rally came from two directions. First, Daiwa Capital Markets upgraded the Chinese industrial heavyweight from "Outperform" to "Buy" and lifted its price target to HKD 54, citing expectations of a dramatic acceleration in gas-generator deliveries during 2027 and 2028. The Japanese brokerage forecasts earnings growth of 14% to 29% over that period, driven by demand for large engines used in power generation. Second, Weichai revealed it had secured a supply contract worth more than $600 million for power systems and equipment destined for AI-focused data centers — a deal that underscores the company’s strategic pivot away from its traditional reliance on cyclical truck engines.

That pivot is gaining recognition across the Street. Bank of America has described Weichai as a fixture in the global data infrastructure build-out, pointing to its subsidiary Baudouin’s role in supplying Generac, a US firm managing large-scale data-center projects. The message from analysts is clear: the margin profile of the data-center business, while still unproven at scale, promises greater stability than the volatile heavy-truck segment. Large investors appear to agree — net capital inflows from institutional buyers have been recorded for six consecutive trading sessions on the Hong Kong Stock Exchange.

Technically, the stock still has ground to recover. Monday’s close at EUR 4.19 leaves it roughly 15% below the 52-week high of EUR 4.95 touched in early May, though it has already rebounded sharply from October’s trough of EUR 1.51. The shares currently trade about 50% above their 200-day moving average, and the recent push above the 50-day line signals improving short-term momentum. On the flip side, the relative strength index sits at a subdued 41.5, hinting that the advance may have room to run before overheating.

Weichai’s transformation is also being rewarded with shareholder-friendly gestures. For the 2025 fiscal year, management has announced a final dividend equivalent to RMB 3.74 per ten shares, with the ex-dividend date expected in late June. The payout reinforces the message that the company intends to share the spoils of its expansion into AI-adjacent markets.

The company’s product portfolio remains broad — spanning drivetrains, commercial vehicles, agricultural machinery, hydraulics, axles, transmissions, and fuel-cell research. But the energy-solutions segment, particularly gas generators and backup power systems for data centers, is fast becoming the central narrative. Whether Weichai can accelerate deliveries as anticipated from 2027 onward will determine whether this week’s jump marks the start of a new leg higher or merely a brief spike in a longer consolidation.