Earnings call transcript Q2 2023

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Operator

Good day and thank you for standing by. Welcome to the China Yuchai International First Half 2023 financial results. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn the conference over to Kevin Theiss. sir. ahead go Please

Kevin Theiss

joining first and XX, half webcast. call for Yuchai XXXX to International and Limited year us you welcome today China conference Thank ended June

Choon Mr. of Officer respectively. Hoh Joining Chief CYI Weng today President and are and us Mr. Sen Loo, Financial Ming

of we addition Operations attendance Lai, VP Mr. In Kelvin in of have CYI.

forward-looking statements. Reform Before statements financial include call statements other statements Litigation make are than contain statements aim, forward-looking of based we subject to All to within are but are and Private of are expressions I forward-looking at expectations, meaning not Act statements that targets, time. conditions which concerning remind and statements, the on and These intended that, similar continue be listeners all words operations anticipate, statements. will begin, current the to The company's may beliefs we any that limited predict, this forward-looking of the fact, identify believe, are deemed intend, and throughout statements XXXX. project, performance or to confident historical that may will change Securities may expect, optimistic, assumptions,

actual the XX-F filed Exchange and and and world their depending factors The social statements cautions these competition, economic uncertainties. differ regulations, Risk Overview with time-to-time. under Form the in Results around headings from government Securities company's of discussed China, Commission the those reports and the Factors, including political, other and involve as in upon and such Business conditions Operations in may by that and risks And a company variety important results materially nature of stock exchange

any our materially chains automotive adversely abroad, our a is to suppliers supply deteriorating of affected and conditions forward-looking All the the and financial and as information, made for potential we they during or release, in potential cannot slowdown call otherwise and pandemic financial the condition or date operations impact made, factors statements to in our COVID-XX foresee. and are whether business the nature market of disclaims only the adverse China future. update are other the of or weakening contained not customers, press to economic that obligation specifically due maintain a effectively and applicable in sales the company controlled, If of maybe today's forward-looking the

Hoh Mr. Loo review the will and first then results ended Mr. financial for a brief provide XX, June summary, overview half XXXX. the will

conduct will Thereafter, a we question-and-answer session.

dollars. For unaudited Standards RMB XXXX Accounting call, in results of the International be information by issued presented Financial financial is using reported XXXX presented and the The and US today's International purposes Standards they the financial will are and as Reporting Board. the

Mr. your prepared remarks. Hoh, please begin

Weng Ming Hoh

recovery you, factors. external challenges of first GDP X.X% to data Kevin. in internal X.X% And quarter first the still of was to the official year-over-year, Thank and signs X.X% in XXXX but a quarter. from the in second economy the face the compared rate XXXX, growth increase for with of half half showed According first

sector export low reduced influenced initiated demand as The first foreign for of students. year However, in half base these in the pandemic-induced effect inflation the in a Chinese markets after were lockdown by of XXXX. tensions geopolitical major decline and figures the high

of the by economic for the remains momentum tight uncertainties financial affected XXXX uncertain as half down outlook of in X.X% XXXX. property investments months The The second met X.X% property was in continues the as slowdown overall by estate to property six experience sector marked real expectations. slowed has has a and of of of sales first terms also as dropped year-over-year, fell and demand XXXX demand, not conditions space by floor economic

by for the X.X% Association commercial year-over-year According and unit XXXX to increased vehicles, excluding gasoline-powered industry smaller were by a unit electric-powered half data China bus up Automobile sales XX.X%. net truck of sales X% of with reported sales vehicles up by of total and Manufacturers, first

environment, our the unit half Yuchai Limited X.X% Chinese Guangxi decline reported commercial year-over-year In main Machinery sales this XXXX. subsidiary first a vehicle of of trucks combined in Company or unit engine GYMCL

were XX.X% lower with sales higher heavy-duty Increase XXX.X% XX.X% exceeding by were engine sales year-over-year. sales bus unit segment rise growth. Truck year-on-year net in sales far engine led macro in the

in and generation year-over-year offsetting sales. reduced Spot sales GYMCL to market agricultural in increased unit of of sales year-over-year XX.X% sales. the contributed off-road Industrial market also first the the reduction marine strong power engine unit experienced half partially unit sales XXXX.

units compared of from to XXXX X,XXX billion the billion and New in half energy the X% a grew RMBX.X the [ph] one product XX.X% of by base half or Revenue low to billion in XXXX by billion US$X.X RMBX.X half sales first first to for XXXX. second XXXX. in half unit grew first RMBX.X

or gross billion RMBX.X by Our increased outpacing RMBX.X profit million growth billion XX.X% XXXX. US$XXX.X to in with one half revenue compared

engines the larger of many our half to ender thanks in markets. first margin more gross to diverse Our XXXX XX.X% across user of improved sales

Operating by RMBXXX.X margin XX.X% or to the and X.X%. increased million, operating million profit rose to US$XX.X

basic the RMBX.XX with one half in compared share diluted of RMBX.XX XXXX. XXXX, per $X.XX first and earnings or For half to increased XX.X%

invest We our powertrain development to substantially engines research products of meet deliver customers. that the and in that needs

revenue million RMBXXX.X the X.X% half of $XX.X spending to in R&D or capitalized XXXX. including Our of our million costs or amounted first

engines. and performance the diesel improve efficiency our to gas and of aims R&D Our

increasing the are We our also on emerging new focus energy new R&D for market. products

products for alternative We that enhanced and energy development. avenue continue new fuel development efficiency, fuels, use is for reduction. The of and the engines use alternative market emission engines develop fuel another improved to

energy. that renewable developed hydrogen and have can run For instance on clean engines by we

energy developing new innovative We the to committed products are market. for our also

customers, have bus leading systems well-received segment. hybrid especially coach been the Our Chinese among

customers. products buses major XX-liter city Group key our model or the in hybrid Yuchai's Co., hybrid and one producer largest engine of a our new Yutong buses a China. powering manufactured One electric is in by These were China in of part Nanjing, YCAXXN gas

bus chosen this for with also has engine in than hybrid buses. They've important buses Yuchai X,XXX operator A city more Wuhan, their ordered China, Yuchai another engine. equipped in

the global proprietary This powered in engineering leading [Technical automated motor Difficulty] Group significant fuel Also control electric details and resulting manufacturers. savings. the software mechanical is a XXX-kilowatt Xin-Lan Yuchai a optimizes performance that [indiscernible] Yuchai gearbox, transmission Xin-Lan machinery Mixer engine Sunny hybrid [indiscernible] the of Truck. system

our Series Guangxi operations its Marine GYMCL these and Power will has services. GYMCL we other focused, new and integrated make GYMCL its generation operation businesses comprehensive and To in to -- XXXX. enable in engine generation to marine offer power to continue products sorry Marine operations competitiveness restructured This Guangxi more has a markets. and new and half businesses. restructure established Yuchai Power subsidiary, Generation a Marine Genset enhance -- Power our Company has related GYMCL Yuchai been and which move its solutions Limited, This customers. and our the has power MTU to incorporated more and XXXX first

and and GYMCL totaling accelerates has energy new unrelated Power Company Technology of development in technologies new subsidiary Limited XXXX. million New Xin-Lan and RMBXX the This new to Yuchai secured Energy enhances development. investment new research investments outside investors product

a create incorporated will group systems cloud-based a Cloud for subsidiary control GYMCL proprietary also machineries. off-road to intelligent Yun on and on company. focus operations oversee developing Cloud technology Also Yun and or IT Xing and Xing vehicles networks new processors for

a XX, XXXX, of a the our strong Board ended for balances dividend declared financial XXXX. for cash or paid was balance and share maintained the August June As strength, of we bank on December billion sheet. Directors of cash US$XXX.X ordinary the were and XX, With RMBX.X year RMBX.XXX XXXX, X, million which

engine key performance remains XXXX, second half our cleaner vehicle. diverse of to we cost a in technologies participate which products, lower and profitability customer’s and portfolio operational upgrade to our our and train lower Looking our emissions driver emission systems. Customers to building product their power with environment, a leverage contribute enhance low our growth the of to in continue

with in are products developing society's agenda. new our We align innovative also environmental our NEV solutions that

to would the will I you results. Sen, remarks. call over on our the Loo, may Choon With to begin that, financial Sen Chief Choon who Officer turn like details more your Financial provide now

Choon Sen Loo

Thank Weng Ming. you,

XXXX. number GYMCL was first XXXX our results billion billion first to engines Now let US$X.X The by months June declined of RMBX.X compared RMBX.X or in billion XX, in Revenue half XXXX. half six X.X% review by XXX,XXX total with by generation sold higher me ended offset half lower decrease in The XXXX. mainly in sales due units markets, was sales application markets. XXX,XXX with engine to bar, first partially compared and agriculture engine in industrial power the the units marine the truck and and unaudited

XXXX, excluding XX.X%, half to reported China in first According and sales gasoline increased respectively. XXXX electric-powered unit of bus X.X% X% compared sales by vehicles increased commercial the to and data truck by as first vehicles Automobile Association half by Manufacturers and the power

Gross XXXX. was with attributable margin first compared RMBX.X gross most The segments and billion to as Gross increase sales with efforts. RMBX.X profit first XX.X% increased and or ongoing XXXX. mainly increased larger by billion XX.X% across with in half margin million market contributions improvement gross US$XXX.X cost engines reduction greater profit compared to of in half from in to XX.X% margin

as received XX.X% by government XX.X market Research half on-road development in slightly or US$XX.X or to commercial compared first new million, expenses recognized. XXX.X products. the energy The RMB grants continues in R&D engines increased million due income engines in research million higher compared company million operating mainly XXXX. and as XXX.X increase with million, to invest off-road and XXX and to the million RMB XXXX. to well Other for US$XX.X first RMB development with half was vehicles The RMB the and decreased in

in million, were revenue or US$XX.X Total R&D half X.X% XXXX. expenditures of revenue first RMB XXXX, half X.X% including to stabilized XXX.X or compared million, as million, of XXX.X RMB in costs representing first

XXX.X revenue XXXX. half The and by mainly compared XXX.X in general period X.X% million personnel was with other increased RMB higher and and first first XX.X% the million selling SG&A with compared same expenses expenses in of first provision administrative, to X.X% half SG&A half or million, XXXX. from last RMB US$XXX.X due for expenses to administrative of increase represented year. Selling, XXXX

million X.X% in XXX half first XXXX. million, The Operating by first to from million compared X.X% was with profit operating US$XX.X half XXXX. RMB in rose RMB XXX.X XX.X% or margin

due ventures Finance RMB Power in to improvement MTU Y&C with RMB share US$X.X profits or costs primarily This to XX.X compared a Engine RMB Limited higher at XXXX. at RMB first and million, of The X.X% to profit of return or Yuchai profitability XXXX. joint million million million, XX.X results and million, from first Company Company a was was XX.X loss a half in XX.X half declined US$X.X the of million Limited. associates of financial by

expense with XX.X for adjustment and was taxable under XXX.X million XXXX. change as RMB in income prior year. or the million, to in half was mainly provision US$XX.X RMB first XXXX The higher tax due half first compared million Income in the

earnings million, US$XX.X diluted or XXXX on to X.XX equity million share XXXX with attributable XXXX. compared shares. company was profit and RMB million, half first were with for first Basic US$X.XX Net based of of earnings half X.XX, and on in RMB half first a were RMB holders per first XX.X Basic weighted XX,XXX,XXX XXX.X per compared share in average and diluted half RMB XXXX.

receivables go Now at bank million the Cash year X through year of billion end billion of end X.X XXXX. or US$X.X let X.X million of financial of were US$XXX.X June Trade or XXXX. billion were financial RMB X.X or billion US$XXX.X RMB at the XX, RMB with sheet the me balances bill highlights XXXX. billion our compared Inventories and with RMB X.X and with billion end XXXX. balance as were X.X compared RMB at RMB billion compared financial

billion X.X and Short-term borrowings with were Trade year end billion compared with of RMB million were end and at XXXX. financial and RMB RMB US$XXX.X of US$X.X X.X billion compared bills X the XXXX. long-term or billion X the at year payables or loans billion RMB financial

now turn a our before the Q&A. begin to I Kevin over comment will we for call

Kevin Theiss

calling China you that remotely ready some answers With we of inconvenience We slight for begin Thank may Q&A call. This to the the are patience. and conference delay into Please in officers some in apologize thank your providing questions. result to session. you. note, a Yuchai operator any are for

Operator

questions no Please have we the continue. phone showing line. am on I Instructions] [Operator

Kevin Theiss

why to decided the CYD There's Seng a documents corporate webcast. question repurchase? has on has asked the Mr. regarding amend share

Choon Sen Loo

any any option opportunity that a and The an the purchase came provide given in to will make have is permissible with of course US under and AGM of a utilized will law to effect. make the we buyback company share so Okay. And is Bermuda equity change flexibility this there with comply you to the to that greater for Act. we method that Companies you've if plan announcement

Kevin Theiss

your Hoh, Okay. Mr. closing you would comments? please provide

Weng Ming Hoh

you of participating for in Thank wish health forward good to again. We all Goodbye. call. with Okay. our you All conference speaking and right. each look we you

Operator

for Thank conference This concludes participating. call. today's you

You disconnect. may now

China Yuchai International Limited (CYD) 10 Aug 232023 Q2 Earnings call transcript