Mainland-based heavy-engine manufacturer Weichai Power expects its strong first-quarter results will carry over into the second half of this year if sales stay high and the global economy improves.

The company recorded a 180 percent increase in its net profits to 710 million yuan for the first three months of the year, while its revenue rose 32.3 percent to 9.1 billion yuan.

Its net profits gained 186 percent year-on-year to 2.01 billion yuan in 2007, and its revenue increased threefold to 27.4 billion yuan.

The company's chairman and CEO, Tan Xuguang, attributed the growth to a merger with its peer, Torch Automobile Group Co (TAGC), last year, plus the impetus in the sales of 12-liter, high-powered engines.

Tan said that whether the growth pace remains steady depends on the central government's tightening measures toward the overheated economy.

The US economic trend is expected to affect sales as well.

Weichai reported a 182 percent growth in its exports of engines for heavy-duty vehicles and machineries last year.

Sales of the 12-liter engines jumped fivefold to 14,000 units last year.

The company anticipates the sales could reach 40,000 units by the end of this year.

And it said the sales of multi-gear boxes could double from the 33,000 units sold in 2007.

Regarding the imminent launch of 71/5-liter engines, Tan said he expects the production capacity of the models will reach 100,000 units in three years.

The company's directorate secretary, Dai Lixin, revealed that the company's capital expenditure for 2008 is over 1 billion yuan.

In spite of the unstable market conditions, Tan said the company has no intention of easing plans to issue 60 million A-shares.

Still, he stressed that whether the plan comes to fruition depends on the market conditions in the second half of the year.

Weichai's board approved a fund-raising proposal last year to sell 60 million A-shares in a bid to raise up to 5.6 billion yuan.

Tan said the material price hike hurt the sale of some of its subsidiaries, but the unexpected jump didn't affect the company's operations as a whole.

(HK Edition 05/06/2008 page2)