China Yuchai (NYSE:CYD)

SINGAPORE, May 22, 2012 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company"), announced today changes to its joint venture entered into by its main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL") with Zhejiang Geely Holding Group Co., Ltd. ("Geely") and Zhejiang Yinlun Machinery Co, Ltd. ("Yinlun").

Pursuant to the Equity Joint Venture Agreement entered into between GYMCL, Geely and Yinlun, two joint venture companies were to be established for the development, production and sales of a proprietary diesel engine and its parts for passenger vehicles. Subsequently in 2008, Jining Yuchai Engine Company Limited ("Jining Yuchai") and Zhejiang Yuchai Sanli Engine Company Limited ("Zhejiang Yuchai") were established in Jining, Shandong Province and Tiantai, Zhejiang Province, respectively. The main product of the joint ventures was to be a 4D20 diesel engine and the technology for the new diesel engine was to be purchased from Geely subject to certain specified design technology standards being met. GYMCL was the controlling shareholder with 52% in both joint ventures with Geely and Yinlun holding 30% and 18% shareholding, respectively.

Further to discussions between GYMCL, Geely and Yinlun, in order to streamline the operations of both joint venture companies and to ensure that GYMCL's resources and costs are prudently allocated, a share swap agreement has been entered into such that GYMCL exits from Zhejiang Yuchai and focuses only on Jining Yuchai. The share swap involves GYMCL transferring its 52% shareholding in Zhejiang Yuchai to Yinlun, and Yinlun transferring its 18% shareholding in Jining Yuchai to GYMCL. Upon the completion of the share swap, GYMCL will hold a 70% shareholding in Jining Yuchai with Geely maintaining its 30% shareholding. The technology for the 4D20 diesel engine purchased from Geely will be entirely owned by Jining Yuchai. The share swap between GYMCL and Yinlun at historical cost, will result in a cash payment of Rmb 25 million from Yinlun to GYMCL.

As a result of the share swap, GYMCL through Jining Yuchai will concentrate on continuing the development and production of the 4D20 diesel engine which is central to the joint venture, and Zhejiang Yuchai's focus will be on manufacturing crankshafts. As earlier reported, the second- and third-generation prototype 4D20 diesel engines are currently undergoing developmental tests which are scheduled to be completed at the end of 2012.

First Quarter 2012 Results

• Net revenue was RMB 3.7 billion (US$ 585.0 million) compared with RMB 4.2 billion in the first quarter of 2011;
• Gross profit was RMB 779.4 million (US$ 123.8 million), a 21.2% gross margin compared with RMB 944.1 million in the first quarter of 2011, a 22.3% gross margin;
• Operating profit was RMB 347.2 million (US$ 55.2 million) compared with RMB 428.5 million in the same quarter a year ago;
• Net earnings attributable to China Yuchai's shareholders were RMB 167.9 million (US$ 26.7 million) versus RMB 230.5 million in the same quarter in 2011;
• Earnings per share were RMB 4.50 (US$ 0.72) compared with RMB 6.18 for the same period in 2011.

Mr. Benny H Goh, President of China Yuchai, commented, "The weak market conditions continued into the first quarter of 2012 and were exacerbated by higher fuel costs as well as sluggish demand from the OEMs despite a decrease in their inventory levels. The Chinese truck and diesel engine markets continue to stagnate as construction activity across China slowed down. While we are still encountering strong headwinds due to the continued softening in the commercial vehicle market, we are attempting to mitigate the impact through our diversification strategy of being in different industries and offering diesel engines of different sizes. The bright spot in the current market is the bus segment which has continued to show growth. Our development of new products such as our high horse power marine and power generator engines and suite of natural gas engines will help us when the market recovers. "

SINGAPORE, March 6, 2012 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company") announced today that its main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL") has inaugurated a new project to develop and produce a full portfolio of natural gas powered engines to complement its existing suite of diesel engines. Customers will be offered a greater choice of GYMCL's engines to meet their needs, especially in the large bus, mid- to heavy-duty truck, power generator and marine engine markets.

In recent years, the policies of the Chinese government have encouraged energy conservation and emissions reduction. China's 12th Five-Year Plan targets natural gas to make up 8.3% of the primary energy mix by 2015, which represents approximately 9.2 trillion cubic feet of gas, or more than three times the consumption in 2008. The major oil companies, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (SINOPEC) and China National Offshore Oil Corporation (CNOOC) are actively building pipelines and natural gas facilities to increase the use of natural gas. These firms currently operate five gas product facilities, have 10 plants under construction with another five gas facilities in the planning stages. Two pipelines linking western to eastern China are in operation with a third under construction which will provide approximately 72 billion cubic meters of natural gas into eastern China.

The 12th Five-Year Plan also calls for between 10%-20% of municipal buses and large trucks to be powered by gas by 2020. In the gas-rich areas of China, there are now 101 liquefied natural gas (LNG) filling stations with plans to expand to 380 stations by the end of 2012. In 2009, when the development of new alternative energy diesel engines by GYMCL was announced, sales of high-quality and reliable gas powered engines rose 287% between 2009 and 2011.

Fourth Quarter 2011 Results

• Net revenue was RMB 3.7 billion (US$ 594.6 million) compared with RMB 3.8 billion in the fourth quarter of 2010;
• Gross profit was RMB 1.0 billion (US$ 164.4 million), a 27.7% gross margin compared with RMB 1.3 billion in the fourth quarter of 2010, a 34.8% gross margin;
• Operating profit was RMB 636.4 million (US$ 101.0 million) compared with RMB 793.9 million in the same quarter a year ago;
• Net earnings attributable to China Yuchai's shareholders was RMB 342.6 million (US$ 54.4 million) versus RMB 448.9 million in the same quarter in 2010;
• Earnings per share was RMB 9.19 (US$ 1.46) compared with RMB 12.05 in the same period in 2010.

Mr. Benny H Goh, President of China Yuchai, commented, "We are pleased with our performance in the difficult environment in China in 2011. While challenges were experienced in certain segments such as the heavy-duty diesel engine sector, our broad and diverse portfolio of diesel engines allowed us to leverage on our strength in the light-duty engine segment. In 2011, we also made progress into the market for off-road applications. Our off-road applications, noticeably in the engineering machinery, agricultural equipment and marine sector, although making up a small segment of sales in 2011, showed promising growth."

SINGAPORE, Jan. 19, 2012 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company"), announced today that its wholly owned subsidiary Venture Lewis Limited ("VLL") has entered into a loan agreement with HL Global Enterprises Limited ("HLGE") ("2012 Loan Agreement") for the extension of a loan of S$83,000,000 ("Loan") to HLGE. The original amount of the Loan was S$93,000,000 which was granted to HLGE in February 2009 to refinance the zero coupon, unsecured, non-convertible bonds ("Bonds") issued by HLGE in 2006 and which matured on July 3, 2009 ("Maturity Date").  However, the principal amount was reduced to S$83,000,000 pursuant to a partial repayment of S$10,000,000 made by HLGE in February 2011. The Company through another wholly owned subsidiary, Grace Star Services Ltd., owns 48.12% of the issued ordinary shares of HLGE.

The unsecured Loan has, pursuant to the terms of the 2012 Loan Agreement, been extended for one year from July 2012 and is due for repayment in July 2013. Under the terms of the 2012 Loan Agreement, the interest payable is the aggregate of a margin of 1.50% per annum, a reduction from 1.75% per annum from the previous loan extension and the 12-month Singapore Interbank Offer Rate expressed in a percentage rate fixed by the Association of Banks in Singapore for Singapore Dollars as of January 18, 2012 which was 0.584%. In the event the interest rate charged on external funds utilized by China Yuchai for their investment in HLGE is increased, the Company has a right to negotiate with HLGE with a view to agreeing on an increase in the interest rate payable by HLGE under the 2012 Loan Agreement subject to compliance with certain regulatory requirements.  A negative pledge undertaking against any disposal or creation of security over substantially all of HLGE's assets without VLL's consent is also included.

The Company's Board of Directors approved the Loan extension at a reduced interest rate after taking into account (i) the continued challenges facing HLGE's hospitality operations in China from increasing competition and the uncertain global economic outlook impacting on its results; (ii) difficulties faced by HLGE in obtaining financing from financial institutions, (iii) the need to provide continuing support to HLGE to allow it sufficient time to successfully dispose of its non-core and non-performing assets in an orderly manner to repay the Loan, and (iv) potential acquisition opportunities being explored by HLGE to grow its earnings base and improve its cash flow. This transaction has also been reviewed and approved by the Company's audit committee who has determined that the terms of the Loan extension are fair and reasonable and are not prejudicial to the interests of the Company's shareholders. In coming to its decision, in addition to the various factors set out in this paragraph, the audit committee also considered the costs and sources of funding for the Loan, reduction in interest income to the Company from a corresponding reduction in the interest rate charged, and the recoverability of the Loan based on a valuation of HLGE's assets.

SINGAPORE, January 5, 2012 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company") announced today that Mr. Yuwei Zhong, a Deputy General Manager of its major operating subsidiary, Guangxi Yuchai Machinery Company Limited, ("GYMCL"), had at GYMCL's 2012 Sales and Marketing Conference, shared that GYMCL's target in 2012 was to sell 568,000 diesel engine units. This would represent an approximate 9.1% increase from expected 2011 unit sales.

Thrid Quarter 2011 Results

SINGAPORE, July 22, 2011 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company") announced today that further to its announcement on March 10, 2011, its key subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL") will be issuing the second tranche of its RMB-denominated unsecured short-term financing bonds ("Bonds") amounting to RMB 700 million on July 22, 2011. The second tranche of the Bonds will mature on July 22, 2012. GYMCL issued the first tranche of the Bonds amounting to RMB 1 billion on March 9, 2011. The par value and issue price of each Bond is RMB 100.

SINGAPORE, July 4, 2011 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited (NYSE: CYD) ("China Yuchai" or the "Company"), announced today that its main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), recently introduced China's first prototype diesel engine compliant with Euro VI emission standards. As China's first Euro VI-compliant automotive diesel engine, GYMCL's heavy-duty model YC6L-60 diesel engine has set another milestone in its history of technological achievement.

At a press conference hosted by GYMCL at its offices in Yulin City, Guangxi Province, the National Passenger Car Quality Supervision and Inspection Center (Tianjin Automotive Test Center) released the test results of the YC6L-60 engine which was jointly developed over a four-year period, between GYMCL and researchers from Tianjin University's National Key Laboratory of engine combustion. The results indicate that the nitrogen oxide emissions and particulate matter emissions of the YC6L-60 were well below the Euro VI emission requirements hence meeting the Euro VI emission standard. There are three key features of GYMCL's YC6L-60 engine: (a) a proprietary low-temperature combustion technology which reduces the fuel injection pressure requirement hence improving the life span of the fuel injection system and other core parts of the engine; (b) the use of medium-intensity cooled exhaust gas recirculation (EGR) technology resulting in a clean and economic combustion process; and (c) the use of selective catalytic reduction (SCR) technology combined with diesel particulate filter (DPF) regeneration capability will reduce urea consumption during the after-treatment process resulting in cost savings to end-users.

Since its introduction in the European Union (EU) in 2009, the Euro VI emission standard is, by far, the most stringent emission standard in the world. As the EU has announced plans to implement the Euro VI emission standards beginning in 2013, most European engine producers have been actively developing their products accordingly. The introduction of China's first Euro VI-compliant diesel engine by GYMCL demonstrates its world-class research and development capabilities.  

Our primary sources of cash are funds from operations generated by Yuchai, as well as debt financing obtained by us. Our operations generated positive net cash flows in 2008, 2009 and 2010. Our primary cash requirements are for working capital, capital expenditures to complete the expansion of production capacity and funding our business expansion and diversification plan. We believe that our sources of liquidity are sufficient for our operational requirements over the next twelve months from the date of this Annual Report. However, under the current market conditions there can be no assurance that our business activity will be maintained at the expected level to generate the anticipated cash flows from operating activities.

As our business continues to grow, we will also require additional funds for increased working capital requirements and to finance increased trade accounts receivable. We expect to fund our capital expenditures and working capital requirements primarily from funds from operations generated by Yuchai and, to the extent that is insufficient, from bank loans and other financing activities by Yuchai and us.

First Quarter Results:

• Net revenues for the first quarter of 2011 were RMB 4.2 billion (US$645.5 million) compared with RMB 5.1 billion (US$773.2 million) in the first quarter of 2010
• Gross profit was RMB 944.1 million (US$144.0 million) in the first quarter of 2011, compared with RMB 1.0 billion (US$156.4 million) in the first quarter of 2010
• Net income attributable to China Yuchai shareholders in the first quarter of 2011 was RMB 230.5 million (US$35.2 million), or earnings per share of RMB 6.18 (US$0.94), compared with RMB 271.8 million (US$41.5 million), or earnings per share of RMB 7.29 (US$1.11), in the first quarter of 2010.

Mr. Boo Guan Saw, President of China Yuchai, commented, "Engine sales in the first quarter of 2011 have improved compared to the fourth quarter of 2010, but unit sales were down year-over-year. The higher inventory in the supply chain during the first quarter of 2011, combined with higher fuel prices and tightening credit resulted in slower sales in the first quarter. Although we are experiencing a large improvement in off-highway application engine sales, which rose 45% in the first quarter compared with the same quarter a year ago, this improvement did not fully offset the drop in sales of automotive engines. Moving forward, we will be working to continue improving off-highway engine and heavy-duty engine sales, which will result in better margins. While we penetrate the higher-margin, heavy-duty diesel engine market, we intend to maintain our light-duty market presence by focusing on the more profitable models and improving competitiveness by reducing product costs and increasing unit sales. In March 2011, we began to see some recovery in engine sales compared to the first two months of 2011 when sales in March increased 35% over February as a result of improved automotive sales."

Fourth Quarter Results:

• Net revenue was RMB 4.0 billion (US$ 606.5 million) compared with RMB 3.2 billion (US$ 490.6 million) in the fourth quarter of 2009;
• Gross profit increased to RMB 1.3 billion (US$ 200.7 million) from RMB 781.2 million (US$ 118.0 million) in the fourth quarter of 2009;
• Operating margin increased to 20.3% from 10.9% in the fourth quarter of 2009;
• Total net profit attributable to China Yuchai's shareholders was RMB 461.7 million (US$ 69.7 million), or earnings per share of RMB 12.39 (US$ 1.87), compared with RMB 195.6 million (US$ 29.5 million), or earnings per share of RMB 5.25 (US$ 0.79) in the fourth quarter of 2009.

"Our high-quality products, innovative new engines developed by our leading research and development programs, and excellent customer service provide a competitive advantage that will strengthen our leadership position in the large Chinese automotive market," Mr. Saw concluded.

Company unable to report earnings as expected:

• Net revenues for the fourth quarter of 2010 were RMB 4.0 billion (US$ 606.5 million) compared with RMB 3.2 billion (US$ 490.6 million) in the fourth quarter of 2009.

The Company will report the detailed unaudited consolidated financial results for the fourth quarter and full year 2010 as soon as they are available which will be followed by an earnings call for the investment community.

SINGAPORE, Jan. 31, 2011 /PRNewswire-Asia-FirstCall/ -- China Yuchai International Limited, announced today that its wholly-owned subsidiary Venture Lewis Limited has entered into a loan agreement with HL Global Enterprises Limited to extend the loan of S$93,000,000 originally granted to HLGE in February 2009 to refinance the zero coupon, unsecured, non-convertible bonds issued by HLGE in 2006 and which matured on July 3, 2009. This Loan was due to be repaid in July 2010 but was extended for one year pursuant to a loan agreement entered into in February 2010.

The financial highlights for the third quarter of 2010 are:

• Net revenue was RMB 3.3 billion (US$ 497.6 million) compared with RMB 3.5 billion (US$ 524.0 million) in the third quarter of 2009;

• The gross margin increased to 23.1% from 19.9% in the third quarter of 2009;

• Operating margin increased to 10.7% from 7.6% in the third quarter of 2009;

• Total net profit attributable to China Yuchai's shareholders was RMB 217.5 million (US$ 32.5 million), or earnings per share of RMB 5.84 (US$ 0.87), compared with RMB 160.2 million (US$ 23.9 million), or earnings per share of RMB 4.30 (US$ 0.64) in the third quarter of 2009.

Mr. Boo Guan Saw, President of China Yuchai, commented, "We are encouraged by our strong third quarter results and the significant margin expansion due to the successful transition in our product mix. After three years' thorough preparation, our heavy-duty engines have begun to gain traction in China's heavy-duty market. While our award-winning hybrid engines continue to enhance our brand equity and market leadership in the Chinese bus market, our heavy-duty YC6K product line should propel our entry into the higher-barrier heavy-duty truck market. We continue to invest in R & D and in-sourcing facilities to maintain our technology and production leadership in China. With the CIMC-Chery joint venture expected to come to production at the end of 2010, we remain optimistic over increasing our market share in the heavy-duty engine market in 2011."

Mr. Boo Guan Saw, President of China Yuchai, commented, "Our market share in the more profitable heavy and medium-duty engines has been increasing in the first half of 2010 compared with a year ago. We are introducing new engine models and increasing our production capacity of heavy-duty engines to improve our competitive position in this important segment. Pricing in the heavy-duty market remains favourable. We also see good opportunities in the industrial, marine and power generation markets to expand our sales and market position in both the domestic and international markets especially with our new engines. We have made great strides in enhancing the efficiency of our new automated foundry to increase production of key components and reduce costs. Also, production capacity at our new assembly facility at Xiamen has reached 50,000 units annually to supply to our customers in South-Central China."

"Combining our increased in-sourcing capabilities through the new foundry and assembly plant, with the expansion of our product lines through our 3 strategic joint ventures, CIMC-Chery, Caterpillar and Geely, China Yuchai is in a better position to maintain its leadership position in China's diesel engine industry. The CIMC-Chery joint venture is expected to commence production of its heavy-duty YC6K diesel engines at the end of 2010 which will add capacity to our heavy-duty engine volume. We have invested approximately RMB 140 million to double production of our 6L and 6M heavy-duty diesel engines from 62,000 units to a forecasted 120,000 units in early 2011. The remanufacturing joint venture with Caterpillar is expected to begin operations at Suzhou Industrial Park, Jiangsu Province in 2011 and the joint venture with Geely is expected to yield the first-generation prototype of the 4D20-2L diesel engine by the end of 2010. As urbanization continues in China with ongoing infrastructure investment and anticipated acceleration in public housing construction, trucks and buses will play an important role in the demand for transportation. According to the People's Bank of China, China's economy grew 10.3% in the second quarter of 2010 compared with 11.9% in the first quarter of 2010 due to the effects of the Chinese government's credit tightening policy. Notwithstanding that 2010 is expected to continue to be a growth year in China, China's slowing growth momentum could have an impact on our operating performance in the subsequent quarters of 2010 as compared with the first six months of 2010," Mr. Saw concluded.

Share holders take action to recommend changes to China Yuchai management positions.

Link to letter.

Source: PR Newswire (July 9, 2009 - 6:54 AM EDT)