HKSE: 2338 SZSE: 000338

WeichaiWeichai PowerPower Co.Co. LtdLtd 20072007 InterimInterim ResultsResults AnnouncementAnnouncement

29 August, 2007

1 Agenda

11 2007 Interim Result Highlights 3

22 Business Review 9

33 Industry Review 18

44 Outlook and Future Strategies 32

2 20072007 InterimInterim ResultResult HighlightsHighlights

3 Key Financial Highlights (HKFRS)

As at 30 June RMB Million (except EPS) 2007 2006 Change (%) Turnover 9,308.4 3,493.6 +166.4

Gross Profit 2,118.7 885.0 +139.4 Operating Profit 1,250.6 391.0 +219.8 (before financial cost） Net Profit 1,072.1 320.7 +234.3 Attributable to Equity Holders of 926.2 318.7 +190.6 the Company EPS Basic (RMB per share) 2.30 0.97 +137.1

4 Key Financial Highlights (PRC GAAP)

As at 30 June RMB Million (except EPS) 2007 2006 Change (%) Turnover 15,340.4 8,663.9 +77.06

Gross Profit 3,545.6 1,914.0 +85.2 Operating Profit 1,612.8 703.1 +129.4 (before financial cost） Net Profit 1,342.8 590.9 +127.2 Attributable to Equity Holders of 975.2 437.8 +122.75 the Company EPS Basic (RMB per share) 1.87 0.84 +122.6

5 Significant Turnover Growth

Under HKFRS Under PRC GAAP

RMB Million RMB Million 15,340.4 15,000 10,000 9,308.4 .1% 77 12,000 + 8,000 4% 6. 16 8,663.9 6,000 + 9,000

4,000 3,493.6 6,000

2,000 3,000

0 0 1H 2006 1H 2007 1H 2006 1H 2007

• Achieved market structure adjustment with growth in heavy-duty , engineering machinery, coach, yacht and exports segments. Heavy-duty engine and coach achieved huge growth • Shaanxi Fast Gear continues market leading position in gear box industry, enjoying a market share of 86% in market of load capacity of 8 tonnes (and above), and 96% in market of above 15 tonnes • Capitalizing synergy from power assembly, Shaanxi Zhangqi achieved double increase in turnover, and the Company’s market share increased to 12% as well.

6 Stable Growth in Gross Margin of Key Products

Gross Profit Margin of Engines Gross Profit Margin of Gear Box

% 29.7% 30% 27.9% 6.5 42% + 33.9% 4% 25% 35% 0. 30.7% +1 20% 28%

15% 21%

10% 14%

5% 7%

0% 0% 1H 2006 1H 2007 1H 2006 1H 2007

• Gross profit margin of engines has increased from 27.9% in the first half of 2006 to 29.7% this year, representing an increase of 1.8 percentage points • Gross profit margin of gear box has increased from 30.7% in the first half of 2006 to 33.9%, representing an y increase of 3.2 percentage points

7 Other Financial Highlights

Under HKFRS RMB Million 1H 2007 1H 2007 Change (%) Total Assets 24,000.8 7,128.8 +236.7 Equity attributable to equity 7,745.7 2,984.6 +159.5 shareholders Asset/Debt Ratio (%) 56.02 57.18 -2.03 Current Ratio (%) 107.77 101.37 +6.3

Under PRC GAAP RMB Million 1H 2007 1H 2007 Change (%) Total Assets 21,027.7 16,165.6 +30.08 Equity attributable to equity 4,507.6 3,665.5 +22.97 shareholders Asset/Debt Ratio (%) 65.6 64.9 +1.08 Current Ratio(%) 110.32 106.27 +3.81

8 BusinessBusiness ReviewReview

9 Engines business —Further Steady Industry Leading Position

Heavy-duty Truck Wheel Loader

Unit Unit 60,000 84% 82.40% 49,010 82% 50,000 40,384 81% 300,000 255,822 40% 39,820 38% 40,000 79% 250,000 36% 31,060 78.00% 78% 200,000 33.40% 34% 30,000 153,334 32% 76% 150,000 30% 20,000 75% 28.80% 85,435 28% 73% 100,000 26% 10,000 44,197 72% 50,000 24% 22% 0 70% 0 20% 1H 2006 1H 2007 1H 2006 1H 2007 Engines of Weichai Power Heavy-Duty Truck Industry Sales of Weichai 50 wheel loader Market Share Sales of 50 wheel loader in industry Market Share

• The Group sold 140,179 units of diesel engines in total, an increase of 68.81% • The market share in heavy-duty truck increased to 33.4%, representing an increase of 6.4 percentage point, ranked #1 in the industry. • The market share in wheel loaders with a load capacity of 5 tonnes (and above) increased to 82.4%, representing an increase of 2.7 percentage point, ranked #1 in the industry.

10 Market Diversification for Engines – Rapid Growth for Coach & Yacht Sales of yacht engine Sales of coach engine increased 52.6% increased 207.4%

Unit Unit

1,600 6% 1,600 1,479.0 52. 1,386.0 1,400 + 1,400 4% 07. 1,200 1,200 +2 1,000 908.0 1,000 800 800

600 600 481.0 400 400 200 200 0 0 1H 2006 1H 2007 1H 2006 1H 2007

• Implemented market diversification strategies and actively explore markets in coach, yacht and generators • Developed engines of 240-480 horsepower to meet coach needs • Fully met yacht market demands for quality engines

11 Smooth Launch of WD12 with Product Structure Upgraded

• Building diversity product platform, launched “12-litre high-speed high-power WD12 engines”, the only mature product of the same kind in , and leading heavy-duty engine upgrading from 10L to 12L, driving a new generation for heavy-duty engine in China • In 2006 the Company sold 2,224 units in total and 6,469 units in 1H 2007, expecting sales of 15,000 units for 2007, representing an increase of seven fold. • The average price of WD12 engine is RMB20,000 higher than WD615, and a higher gross profit margin at 4 percentage point. Adjustment in product structure has further enhanced the Company’s profitability.

12 Gear Box—the No.1 Brand in China

Gear Box（Fast）

Unit •The market share in heavy- 300,000 duty truck with a load capability of 15 tonnes (and 250,000 243,655 above) reached to 96%, an 6% 2. 200,000 11 increase of 4 percentage + point. 150,000 114,596 •Key products transition from 100,000 9 gear to 12 gear, the sales of

50,000 12 gear increased from 240 units in the first half of 2006 0 to 16,087 units in the period 1H 2006 1H 2007

Shaanxi Fast Gear is the largest manufacturer of gear box for heavy duty in the PRC, currently they have an integrated production capability with a year production of 500,000 units of gear boxes and 15 million units of gears

13 Strong Growth in Axles & Heavy-duty Truck Engine

Heavy-duty Truck Axles (Shaanxi Hande) (Shaanxi Zhongqi) Unit Unit 35,000 81,781 30,611 80,000 30,000 % 6.6 25,000 +7 .1% 60,000 04 +1 46,315 20,000 15,001 40,000 15,000

10,000 20,000 5,000

0 0 1H 2006 1H 2007 1H 2006 1H 2007 • Hande Axles is the #1 brand in heavy-duty truck with dominance in 13T (and above) market in China • The market share in heavy-duty truck increased rapidly, reaching 12%. Shaanxi Zhongqi is one of the most competitive manufacturers of heavy-duty trucks with a load capacity of 15 tons (and above ) in China

14 Parts Business—Stable Growth

Zhuzhou Spark Plugs Futong Air Conditioner

RMB Ten 1H 2006 RMB Ten 1H 2006 Thousand Thousand % .2 1H 2007 1H 2007 2 9,714.0 25,000 22,007 9,960 +3 0% 5. 20,000 +9 7,960 7,350 % % .3 15,000 .3 5,960 92 11,286 8 6 11 + 10,000 + 3,960

1,960 5,000 847 (39) 231 388 -40 0 Sales Income Net Profit Sales Income Net Profit Zhuzhou Gears Internal Accessories

RMB Ten 1H 2006 RMB Ten % 1H 2006 Thousand 9.4 Thousand +1 1H 2007 .2% 39,152 53 1H 2007 40,000 2,000 + 1,796 32,805 1,600 30,000 1,172 % .5% 3.3 1,200 37 16 + 20,000 800 10,000 400 66 909 2,393 48 0 0 Sales Income Net Profit Sales Income Net Profit

15 Surging Export of Engines

Total Export of Engines by Country (Sales and Growth)

1H 2006 2,500 4000% 1H 2007 3500% 2,000 3000%

2500% 1,500 2000%

1500% 1,000 1000%

500 500% 0%

0 -500% Russian Algeria South Iran Kazakstan Saudi AngoraTurkey Vietnam CartedSyria Sudan AmericaKenya Taiwan Africa Arabia

• Weichai Power has established 18 overseas service institutions, now actively expanding service network for cooperation and market promotion activities to boost overseas sales. • Currently, the products of Weichai has exported to 97 countries (regions) • In the first half of 2007, Weichai Power has exported 7,098 units of engines, comparing 3,184 units last year, an increase of 122.9%

16 Key Customers in Heavy-duty Truck

Except Shaanxi Zhongqi, Weichai Powew has signed strategic agreement with key heavy-duty truck manufacturers like Beiqi Futian, Chongqing Hongyan, North-Benz, Jianghuai Automotive, First Auto and Hualing Automobile

17 Key Customers in Construction Machinery

Weichai Power has signed strategic cooperation agreement (3-5 years) with key manufacturers in construction machinery industry, including Guangxi Liugong, China Infrastructure Machinery, Lingong Shandong, Xuzhou Xugong, and Puyuan, which has effectively ensured stable development in construction machinery market.

18 Key Customers in Coach

Weichai Power has successfully cooperated with , , Jinlu, and Zhong tong in coach market

19 IndustryIndustry ReviewReview

20 Strong Growth of Heavy-duty Truck in China

Sales of Heavy-duty Trucks in the Automobile Industry in China (as at 30 June) Strong Demand for 300 Horsepower Unit Unit 300,000 120,000 100,000 258,225 250,000 100,000 8% 6. 6 % + .8 200,000 80,000 34 +3 153,334 150,000 60,000 48,000

100,000 40,000 23,000

50,000 20,000

0 0 1H 2006 1H 2007 2005 2006 2007 Forecast

• In the first half of 2007, implementation of the toll-by-weight and over-weight polices facilitated the rapid development of the heavy-duty truck industry in China, representing an increase of 66.8% • Heavy-duty truck with a large tonnage indicated a strong development trend, especially 300+ horsepower engines

21 Lowered Concentration in Heavy-duty Truck Industry

Heavy-duty Truck Industry

2005年上半年 2006年上半年 2007年上半年 安徽华菱 安徽华菱 其他 安徽江淮 1% 其他 安徽华菱 其他 0% 3% 2% 5% 安徽江淮 2% 4% 东风汽车 东风汽车 安徽江淮 北方奔驰 1% 17% 2% 东风汽车 20% 2% 北方奔驰 北方奔驰 重庆红岩 33% 3% 3% 5% 重庆红岩 北汽福田 重庆红岩 7% 北汽福田 6% 一汽集团 7% 一汽集团 9% 北汽福田 21% 一汽集团 21% 陕西重汽 12% 中国重汽 26% 陕西重汽 7% 陕西重汽 16% 11% 中国重汽 12% 21% 中国重汽 21%

‧ In recent years, market share concentration leve of heavy-duty truck industry was lowered. Shaanxi Zhongqi, Beiqi Futian, Chongqing Hongyan and North-Benz etc. recorded strong growth with significant increases in market shares, while Jianghuai Automotive and Hualing Heavy-Duty Automobile have become new competitors with strong increase of market share. • Weichai Power has signed strategic agreement with the key heavy-duty truck manufacturers like Beiqi Futian, Chongqing Hongyan, North-Benz, Jianghuai Automotive and Hualing Automobile

22 Continued Stable Growth on Wheel Loaders with 5 tones Load Capacity

Sales of Wheel Loaders with a Load Capacity of 5 tones (as at 30 June)

Unit 49,010 50000 % 3.1 +2 39,820 40000

30000

20000

10000

0 1H 2006 1H 2007

Benefited from the increase of export and further enhanced by the increase in infrastructure investments in China, growth rate of wheel loaders with a load capacity of 5 tones maintained at 23.1%

23 Engineering Machinery: Rising Concentration

Engineering Machinery

2005上半年 2006年上半年 2007上半年 其他 其他 柳工 12% 柳工 成工 8% 柳工 20% 24% 其他 8% 成工 26% 30% 徐工 8% 7% 徐工 成工 龙工 8% 5% 山工 18% 3% 山工 龙工 徐工 4% 龙工 临工 27% 9% 临工 19% 27% 山工 12% 临工 6% 19%

• Keen competition has led to increasing industry concentration. Guangxi Liugong, China Infrastructure Machinery, Lingong Shandong and others have become the major supplier of 10 wheel loader • Weichai has signed strategic agreement with companies like Guangxi Liugong, China Infrastructure Machinery, Lingong Shandong, Xuzhou Xugong and others, which form solid and sustainable foundation for development

24 Surging Demand for Coach

Total Sales（as at 30 June） Huge Potential

Unit Fast municipal 20,000 development % 2.3 +2 16,717 Highway passenger 15,000 13,672 transport plan

10,000 Blooming tourism

5,000 Coach market has been growing for 7 years. China has become the world’s 0 largest coach consumption country 1H 2006 1H 2007 Coach >10m maintained strong growth due to robust demand for municipal• 2007年上半年全国大型客车的销售量达到 public transport, highway passengerxx%的强劲增长 transport and blooming tourism

25 Optimistic in 2H 2007

1 China’s continuing marco economy growth lays the solid 1 foundation for growing highway transportation facilities and engineering machinery markets

22 Rising domestic demands e.g. national projects, regional infrastructure development and fast growing cargo throughput

33 Immense export markets of heavy-duty truck and engineering machineries

4 Trend of heavy-duty and high-tonnage for heavy-duty truck 4 triggered by policies including toll by weight and over- weighting

55 “Early consumption” of heavy-duty truck triggered by future implementation of the new Sino III standard

26 Evaluation on Future Risks

• Heavy-duty truck industry is facing challenges from Sino III regulations, giving uncertainties to markets in 2008

• Lowering concentration level in Heavy-duty truck industry with increasing manufacturers and over-capacity

• Financing pressure faced by high-debted companies due to marco-economy measures and rising rates

27 Our Strategies

Establish two Sino III platforms by capitalizing on technology edge: i). 11 Landking 4 valves with advanced international standard; ii) 2 valves in low cost

2 Accelerate market shift to 12L engine, aiming at 50% of the total 2 production volume

3 Provide total solution to customers, enhance competitive advantages by 3 capitalizing on synery

4 Further adjust product structure by rising the portion of engineering 4 machinery, coach, yacht and generator to combat market fluctuation risk

5 Accelerate internationalization strategy by building internationalized sales 5 and service network, exports expansion and founding international brand

28 OutlookOutlook andand FutureFuture StrategiesStrategies

29 Future Strategies

Continue power assembly advantage in China, accelerate upgrading of heavy- Continue power assembly advantage in China, accelerate upgrading of heavy- duty engine and multi gear box and increase profitability. Realize transition from 1 duty engine and multi gear box and increase profitability. Realize transition from single product advantage to multi-product advantage single product advantage to multi-product advantage

Further product diversification in coach>10m, yacht, generator, engineering Further product diversification in coach>10m, yacht, generator, engineering machinery other than wheel loader and quickly expand market share 2 machinery other than wheel loader and quickly expand market share

Accelerate international partnership. Achieve significant exports growth to a level Accelerate international partnership. Achieve significant exports growth to a level 3 of 20% of the total sales volume of 20% of the total sales volume

Expand Shaanxi Zhongqi with the following sales targets: 60,000 units in 2007; Expand Shaanxi Zhongqi with the following sales targets: 60,000 units in 2007; 4 80,000 units in 2008; 100,000 units in 2010 80,000 units in 2008; 100,000 units in 2010

Expand limousine parts market 5 Expand limousine parts market

30 Corporate Operation Principles

1 UnifiedUnified Strategy Strategy Principle: Principle: formulate formulate unified unified development development strategy strategy toto ensure ensure synchronized synchronized pace pace between between HQ HQ and and subsidiaries subsidiaries

Independent operation principle: capitalize individual advantage 2 Independent operation principle: capitalize individual advantage andand insist insist independent independent segment segment operation operation and and growth growth under under the the unifiedunified strategy strategy

3 ResourcesResources sharing sharing principle: principle: effect effectivelyively consolidate consolidate resources resources to to realizedrealized synergy synergy and and establish establish unified unified competitive competitive advantage advantage

31 The Three Major Strategic Modules

1 SupportSupport the the development development plan plan of of 100,000 100,000 units units of of heavy-duty heavy-duty trucktruck by by Shaanxi Shaanxi Zhongqi Zhongqi

Further strengthen the core competitiveness of the power 2 Further strengthen the core competitiveness of the power assemblyassembly module module comprises comprises engines engines and and transmissions transmissions

3 EnlargeEnlarge the the scale scale of of the the automobile automobile electron electron and and parts parts module module

32 Excellent Management Team

TheThe new new management management comprising comprising professional professional experts experts fromfrom heavy-duty heavy-duty truck, truck, engine engine and and gear gear box box and and investment investment expertsexperts from from finance finance mana managementgement is is forming forming core core competitivenesscompetitiveness

OptionOption incentive incentive scheme scheme for for core core management management and and senior senior technologytechnology experts experts will will be be proposed proposed after after regulator regulator approvalapproval

33 Thank You!

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