Soochow Securities released a research report stating that in July, heavy truck production reached 81,000 units, with year-over-year and month-over-month changes of +58.4%/-17.4% respectively. Heavy truck wholesale sales reached 85,000 units, with year-over-year and month-over-month changes of +45.6%/-13.3% respectively. The firm expects August 2025 heavy truck wholesale sales to reach approximately 82,000 units, representing a 31% year-over-year increase. July heavy truck export sales totaled 27,000 units, with year-over-year and month-over-month changes of +25.4%/-7.5% respectively. July new energy heavy truck sales reached 16,700 units, with year-over-year and month-over-month changes of +152%/-7.6% respectively, achieving a penetration rate of 25.8%, with year-over-year and month-over-month changes of +11.6/-0.1 percentage points respectively. July natural gas heavy truck sales totaled 14,000 units, with year-over-year and month-over-month changes of -21.7%/+4.0% respectively, achieving a penetration rate of 21.8%, with year-over-year and month-over-month changes of -16.7/-2.3 percentage points respectively.

Soochow Securities' main viewpoints are as follows:

July Sales: Production, wholesale and retail meet expectations, exports exceed expectations

Industry Volume: July production, wholesale and retail met expectations, exports exceeded expectations. 1) Production: July heavy truck production reached 81,000 units, with year-over-year and month-over-month changes of +58.4%/-17.4% respectively; 2) Wholesale: July heavy truck wholesale sales reached 85,000 units, with year-over-year and month-over-month changes of +45.6%/-13.3% respectively; 3) Insurance registrations: July heavy truck terminal sales reached 64,000 units, with year-over-year and month-over-month changes of +38.3%/-7.2% respectively; 4) Exports: July heavy truck export sales totaled 27,000 units, with year-over-year and month-over-month changes of +25.4%/-7.5% respectively; 5) Inventory: July heavy truck enterprise inventory decreased by 4,000 units, channel inventory decreased by 6,400 units. According to Soochow Securities' calculations, current industry total inventory stands at 133,000 units, maintaining a reasonable level.

Industry Structure: New energy heavy trucks decline month-over-month, natural gas heavy trucks continue declining

July new energy heavy truck sales reached 16,700 units, with year-over-year and month-over-month changes of +152%/-7.6% respectively, achieving a penetration rate of 25.8%, with year-over-year and month-over-month changes of +11.6/-0.1 percentage points respectively. July natural gas heavy truck sales totaled 14,000 units, with year-over-year and month-over-month changes of -21.7%/+4.0% respectively, with a penetration rate of 21.8%, year-over-year and month-over-month changes of -16.7/-2.3 percentage points respectively. The average oil-gas price differential in July was 2.1 yuan, up 0.3 yuan month-over-month from June.

July Market Share: Dongfeng/Foton domestic sales share increases year-over-year and month-over-month, SINOTRUK/Foton export share increases year-over-year and month-over-month

Vehicle Market Share: 1) Terminal: In July 2025, domestic FAW Jiefang/Dongfeng/SINOTRUK/Shaanxi Heavy Truck/Foton terminal sales market shares were 21.3%/21.8%/15.9%/10.3%/13.8% respectively, changing by -2.4/+1.1/-1.9/+0.01/+3.5 percentage points compared to full year 2024, and +1.5/+0.8/-1.0/-0.8/+0.4 percentage points month-over-month from June. 2) Exports: In July 2025, domestic FAW Jiefang/Dongfeng/SINOTRUK/Shaanxi Heavy Truck/Foton export market shares were 15.9%/9.9%/46.9%/13.6%/8.6% respectively, changing by -3.3/+0.9/+6.0/-8.0/+4.6 percentage points compared to full year 2024, and -1.3/-3.4/+4.2/-1.8/+1.2 percentage points month-over-month from June.

July Market Share: Weichai share declines year-over-year and month-over-month, drops to second place

Engine Market Share: Weichai share declines month-over-month, dropping to second place. 1) Overall: July Weichai/Cummins/Xichai/SINOTRUK/Yuchai market shares were 16.8%/17.8%/15.6%/8.9%/13.7% respectively, changing by -10.7/-0.8/-0.5/+1.7/+0.2 percentage points compared to full year 2024, and -1.1/+0.5/+0.5/-0.3/-0.2 percentage points month-over-month from June; 2) Weichai: July Weichai terminal supporting volume reached 11,000 units, with year-over-year and month-over-month changes of 21.7%/-13.0% respectively. By vehicle manufacturer, July Weichai's supporting rates in Shaanxi Heavy Truck/SINOTRUK/FAW Jiefang were 52.6%/42.4%/17.0% respectively, changing by +2.8/-1.6/+1.2 percentage points month-over-month from June, and -17.7/-14.1/-5.9 percentage points compared to full year 2024. By fuel type, July Weichai diesel/natural gas engine market shares were 11.7%/49.2% respectively, changing by -5.6/-10.2 percentage points compared to full year 2024, and -3.8/+0.2 percentage points month-over-month from June.

Investment Recommendations

The firm is optimistic about the sector's full-year performance driven by National IV policy stimulus. It recommends SINOTRUK (000951.SZ, 03808) + Weichai Power (000338.SZ), and emphasizes the performance improvement potential of FAW Jiefang (000800.SZ) + Foton Motor (600166.SH).

Risk Factors

Domestic heavy truck industry recovery falling short of expectations, natural gas prices rising beyond expectations.