Weichai Power (000338.SZ): Generac's generator supply agreement with Amazon strengthens long-term visibility; reiterate Buy

Generac (GNRc, not covered) – a global leader in backup power systems and a key US partner of Weichai Power (via Baudouin-branded large diesel engines) announced a long-term back-up generator supply agreement with Amazon after market close on September 16 (US local time). Generac's share price jumped 33% in after-hours trading post the announcement. We see positive implications for Weichai Power and reiterate our Buy rating on both the A-shares and H-shares. On September 16, Generac announced that the company has entered into a transaction agreement with Amazon that combines an equity-linked warrant package with a long-term supply commitment. Alongside the warrant, the parties signed a long-term supply agreement, with initial generator deliveries expected to total $2.4bn in 2027-28. As a key large engine supplier to Generac (thru its wholly-owned Baudouin), we see positive implications to Weichai: the initial deliveries look substantial compared to Generac's data center backlog coming