Group 1 - China Yuchai International Limited declared a cash dividend of US$0.53 per ordinary share for the year ended December 31, 2024, to be paid on July 7, 2025, to shareholders of record as of June 25, 2025 [1] - The company is a leading powertrain solution provider in China, primarily through its subsidiary Guangxi Yuchai Machinery Company Limited, which specializes in various engine types for multiple applications [2] - In 2024, Yuchai sold a total of 356,586 engines, including diesel, natural gas, and new energy products such as pure electric and hybrid engines [2]

Group 1 - China Yuchai International Limited (NYSE: CYD) is a vertically integrated and cash-rich company that specializes in engine production [1] - The company has a strong balance sheet, indicating financial stability [1] - There are positive indicators for the company, including cycles inflection and a significant deep value discount [1]

Group 1 - China Yuchai (CYD) is a notable stock in the Auto-Tires-Trucks sector, currently outperforming its peers with a year-to-date return of approximately 62.5% compared to the sector's average return of -20.1% [4] - The Zacks Rank for China Yuchai is 1 (Strong Buy), indicating strong analyst sentiment and an improving earnings outlook, with a consensus estimate for full-year earnings having increased by 19.1% in the past quarter [3][4] - The Automotive - Original Equipment industry, to which China Yuchai belongs, has an average loss of 6.9% this year, further highlighting CYD's superior performance within its industry [6] Group 2 - Xos, Inc. (XOS) is another stock in the Auto-Tires-Trucks sector that has shown strong performance, with a year-to-date return of 19.8% and a Zacks Rank of 2 (Buy) [5] - The Automotive - Domestic industry, which includes Xos, has experienced a decline of 27% this year, indicating that XOS is also outperforming its industry despite the overall negative trend [6]

Part I [Key Information](index=7&type=section&id=Item%203.%20Key%20Information) The company faces principal risks from its dependence on the Chinese economy, evolving NEV policies, supply chain reliance, and potential U.S. delisting - The company's business heavily relies on the Chinese economy and government policies, especially regarding emissions standards and New Energy Vehicles (NEVs)[32](index=32&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - Sales to the **top five customers** constituted **39.1% of total revenue** in 2024, with the largest customer group contributing **16.2%**[42](index=42&type=chunk) - China's transition to NEVs poses a significant competitive threat, with **12.9 million NEV units sold** in 2024, representing **40.9% of total vehicle sales**[51](index=51&type=chunk) - The company faces risks from PRC regulations on overseas listings and stringent cybersecurity laws (CSL, DSL, PIPL) impacting data handling[92](index=92&type=chunk)[140](index=140&type=chunk) - The Holding Foreign Companies Accountable Act (HFCAA) poses a delisting risk if PCAOB inspections are hindered, though 2022 inspections vacated prior negative determinations[147](index=147&type=chunk)[150](index=150&type=chunk) [Information on the Company](index=49&type=section&id=Item%204.%20Information%20on%20the%20Company) CYI is a Bermuda-based holding company primarily owning a 76.4% stake in Yuchai, a leading Chinese powertrain manufacturer expanding into new energy products and international markets - The company's primary operating asset is its **76.4% ownership** in Guangxi Yuchai Machinery Company Limited (Yuchai)[153](index=153&type=chunk)[156](index=156&type=chunk) - Yuchai is expanding its new energy product portfolio, including hydrogen combustion engines, range extenders, and full electric power systems, via its subsidiary Yuchai Simlan[173](index=173&type=chunk)[183](index=183&type=chunk)[190](index=190&type=chunk) Yuchai Engine Sales Breakdown (2022-2024) | Product Category | 2022 Units Sold | 2023 Units Sold | 2024 Units Sold | % Change (2024 vs 2023) | | :--- | :--- | :--- | :--- | :--- | | Light-duty engines | 94,340 | 72,875 | 101,676 | +39.5% | | Medium-duty engines | 162,018 | 169,498 | 164,986 | -2.7% | | Heavy-duty engines | 58,336 | 62,611 | 76,002 | +21.4% | | **Total Engines Sold** | **321,256** | **313,493** | **356,586** | **+13.7%** | - Yuchai possesses a total production capacity of approximately **633,000 units per year**, with an additional **30,000 units** for new energy products, and commenced operations at a new Thailand factory in 2024[203](index=203&type=chunk)[205](index=205&type=chunk) - In 2024, Yuchai signed a 15-year technology licensing agreement with Vietnam's Kim Long Motor for **US$28 million** in total fees[222](index=222&type=chunk) [Operating and Financial Review and Prospects](index=79&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) In FY2024, revenue grew 6.0% to RMB 19.1 billion, driven by a 13.7% increase in engine sales, leading to improved gross margin and a 13.1% rise in net profit Key Financial Performance (2023 vs. 2024) | Metric | 2023 (RMB'000) | 2024 (RMB'000) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 18,046,349 | 19,133,575 | +6.0% | | Gross Profit | 2,543,473 | 2,818,501 | +10.8% | | Operating Profit | 609,449 | 596,974 | -2.0% | | Profit for the year | 422,856 | 491,742 | +16.3% | | Profit Attributable to Equity Holders | 285,518 | 323,055 | +13.1% | | Basic EPS (RMB) | 6.99 | 8.21 | +17.5% | Cash Flow Summary (2024) | Cash Flow Item | Amount (RMB'000) | | :--- | :--- | | Net cash from operating activities | 779,416 | | Net cash from investing activities | 113,101 | | Net cash used in financing activities | (526,635) | - Capital expenditures in 2024 totaled **RMB 537.9 million**, primarily for expanding and upgrading Yuchai's production capacity and technology development[308](index=308&type=chunk) - The company has significant off-balance sheet arrangements, including **RMB 1.0 billion** in discounted bills receivable with recourse and **RMB 1.4 billion** in endorsed bills to suppliers with recourse as of December 31, 2024[311](index=311&type=chunk)[312](index=312&type=chunk) [Directors, Senior Management and Employees](index=94&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees) The company's Board comprises nine members, with majority designation by Hong Leong Asia, and its 2014 Equity Incentive Plan expired, while new equity schemes diluted subsidiary interests - The Board of Directors consists of **nine members**, with the controlling shareholder, Hong Leong Asia, having the right to elect a majority via a special share[315](index=315&type=chunk) - The company's 2014 Equity Incentive Plan expired in May 2024, with all **270,000 outstanding options** expiring unexercised in July 2024[359](index=359&type=chunk)[364](index=364&type=chunk) - In 2024, new equity schemes at Yuchai and MGP diluted Yuchai's interest in MGP from **100% to 93.46%**, and the company's effective interest in MGP from **76.4% to 71.4%**[96](index=96&type=chunk)[97](index=97&type=chunk) Employee Count by Location | As of December 31, | Singapore | PRC | Others | Total | | :--- | :--- | :--- | :--- | :--- | | 2022 | 15 | 8,583 | 122 | 8,720 | | 2023 | 15 | 8,036 | 126 | 8,177 | | 2024 | 15 | 8,802 | 113 | 8,930 | [Major Shareholders and Related Party Transactions](index=110&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) Hong Leong Asia is the controlling shareholder with 48.70% ownership and a special share, while significant related party transactions occur with the GY Group and its affiliates Major Shareholders (as of Dec 31, 2024) | Identity of Person or Group | Number of Shares | Percentage | | :--- | :--- | :--- | | Hong Leong Asia Ltd | 18,270,965 | 48.70 % | | Coomber Investments Limited | 7,537,160 | 20.10 % | | Shah Capital Management | 4,345,471 | 11.58 % | - A special share held by a Hong Leong Asia affiliate grants the right to elect a majority of directors and provides veto power over shareholder resolutions[379](index=379&type=chunk) - Significant related party transactions with the GY Group and its affiliates included **RMB 2.1 billion** in engine and parts sales and **RMB 1.9 billion** in parts and supplies purchases in 2024[390](index=390&type=chunk)[869](index=869&type=chunk) - The company charges Yuchai an annual management and consulting fee, which was **US$1.0 million** plus a supplemental fee of **RMB 6 million** for fiscal year 2023[354](index=354&type=chunk)[388](index=388&type=chunk) [Financial Information](index=116&type=section&id=Item%208.%20Financial%20Information) This section covers legal proceedings, particularly historical disputes with Yuchai's minority shareholder, and details the company's dividend distributions, primarily sourced from Yuchai - The company has engaged in past legal proceedings with Yuchai and the GY Group over corporate governance, now intended to be managed via Reorganization and Cooperation Agreements[395](index=395&type=chunk)[396](index=396&type=chunk) Dividend History (2020-2024) | Fiscal Year | Dividend paid by Company (per share) | Dividend paid/payable by Yuchai to Company (RMB'000) | | :--- | :--- | :--- | | 2020 | US$ 1.70 | 151,796 | | 2021 | US$ 0.40 | 115,654 | | 2022 | US$ 0.28 | 155,411 | | 2023 | US$ 0.38 | 191,553 | | 2024 | - | (Approved for payment) | - Dividends from Yuchai are subject to PRC regulations, requiring tax liabilities and statutory reserve contributions, and are subject to a **10% withholding tax** for the company as a non-resident enterprise[398](index=398&type=chunk)[466](index=466&type=chunk) [Additional Information](index=119&type=section&id=Item%2010.%20Additional%20Information) As a foreign private issuer, the company's corporate governance differs from NYSE standards, and it is subject to exchange controls in Bermuda and China, with specific tax implications across Bermuda, Singapore, PRC, and U.S. jurisdictions - As a foreign private issuer, the company is exempt from certain NYSE corporate governance rules, including requirements for a majority of independent directors or fully independent committees[407](index=407&type=chunk)[423](index=423&type=chunk) - The company is non-resident for Bermuda exchange control, allowing free fund transfers, but its Chinese subsidiary Yuchai is subject to PRC foreign exchange controls on currency conversion and remittance[445](index=445&type=chunk)[448](index=448&type=chunk) - Under PRC tax law, dividends from Yuchai are subject to a **10% withholding tax**, while Yuchai benefits from a reduced **15% Enterprise Income Tax rate** under the High Technology Incentive Scheme[466](index=466&type=chunk)[476](index=476&type=chunk) - For U.S. federal income tax purposes, the company believes it was not a Passive Foreign Investment Company (PFIC) for 2024, though this status is subject to annual re-evaluation[495](index=495&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=143&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from variable-rate borrowings and foreign currency risk from various currencies, managing these through debt mix and derivative instruments - A **50 basis point change** in interest rates would impact the company's profit before tax by approximately **RMB 12.5 million (US$1.7 million)** for 2024[509](index=509&type=chunk) Foreign Currency Exposure (Net Assets/Liabilities) as of Dec 31, 2024 | Currency | Net Exposure (RMB'000) | | :--- | :--- | | Singapore Dollar | 126,011 | | Euro | 7,687 | | US Dollar | 69,047 | | Others | (3,438) | Foreign Currency Sensitivity (Impact on Profit Before Tax from 10% Strengthening) | Currency | 2024 Impact (RMB'000) | | :--- | :--- | | Singapore Dollar | 12,601 | | Euro | 769 | | US Dollar | 6,905 | Part II [Controls and Procedures](index=85&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management and the independent auditor concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[521](index=521&type=chunk) - Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[525](index=525&type=chunk) - The independent registered public accounting firm provided an unqualified attestation report on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[526](index=526&type=chunk) [Corporate Governance and Other Matters](index=86&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) This section details corporate governance, including the audit committee financial expert, Code of Conduct, a terminated share buyback plan, and cybersecurity risk management oversight Principal Accountant Fees (2023-2024) | Fee Type | 2023 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Audit fees | 8,426 | 10,613 | | Audit-related fees | 352 | 216 | | Tax fees | 173 | 10 | | All other fees | 224 | 432 | | **Total** | **9,174** | **11,271** | - The company adopted and terminated a share buyback plan in 2024, repurchasing **3.34 million shares** for approximately **US$39.8 million**[538](index=538&type=chunk)[539](index=539&type=chunk) - The company maintains a cybersecurity risk management program, with the Audit Committee providing oversight and management responsible for assessment and implementation guided by PRC laws[545](index=545&type=chunk)[546](index=546&type=chunk)[551](index=551&type=chunk) Part III [Financial Statements](index=90&type=section&id=Item%2018.%20Financial%20Statements) This section presents the audited consolidated financial statements for 2022-2024, with an unqualified auditor opinion, noting a critical audit matter regarding development cost capitalization and a reclassification of warranty expenses - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and internal control over financial reporting as of December 31, 2024[565](index=565&type=chunk)[572](index=572&type=chunk) - A critical audit matter was identified concerning the capitalization of development costs, totaling **RMB 204.3 million** in 2024, due to complex management judgment in qualifying activities and expenses[569](index=569&type=chunk)[571](index=571&type=chunk) Consolidated Statement of Financial Position (Abridged) | Metric (RMB'000) | Dec 31, 2023 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | 25,757,618 | 27,048,094 | | Total Liabilities | 13,581,993 | 14,748,529 | | Total Equity | 12,175,625 | 12,299,565 | | - Equity attributable to equity holders | 9,226,528 | 9,164,625 | - Assurance-type warranty expenses were reclassified from selling, general and administrative expenses to cost of sales for 2024, with comparative figures adjusted accordingly and no impact on operating profit[270](index=270&type=chunk)[912](index=912&type=chunk)

Core Viewpoint - China Yuchai International Limited has announced the implementation of an equity incentive plan for its subsidiary, Guangxi SKY Cloud Technology Co., Ltd., aimed at motivating employees and enhancing long-term growth [1][5]. Group 1: Equity Plan Details - The equity incentive plan involves an increase in the registered capital of Sky Cloud by RMB 1.25 million, representing a 20% interest in the enlarged registered capital [2]. - The Sky Cloud Interest will be granted in two phases, with Phase One amounting to RMB 1,080,002 at a subscription price of RMB 1 per RMB 1 registered capital [3]. - The remaining interest will be granted in Phase Two by June 30, 2027, at a subscription price of 80% of the latest audited net assets value or RMB 1, whichever is higher [3]. Group 2: Participants and Structure - Participants in the equity plan include selected employees, directors, and senior officers of Sky Cloud, who will hold interests through separate partnership vehicles [4]. - The interests will be held in different proportions according to the terms of the equity plan, which includes various lock-up restrictions [4]. Group 3: Company Overview - China Yuchai, through its subsidiary Yuchai, is a leading powertrain solution provider in China, specializing in a wide range of engines for various applications [7]. - In 2024, Yuchai sold 356,586 engines, reinforcing its position in the market [7].

Company Overview - China Yuchai International Limited (NYSE: CYD) is a significant manufacturer of diesel and natural gas engines, primarily serving commercial vehicles, industrial equipment, and power generation sectors [1]. Industry Position - The company has maintained a strong market presence and continues to hold a firm grip on its industry segment, indicating stability and potential for growth in the engine manufacturing market [1]. Research Principles - Grassroots Trading emphasizes providing objective and unbiased research, focusing on small- to mid-cap companies while also identifying opportunities in larger companies, which reflects a comprehensive approach to equity market analysis [1].

Financial Data and Key Metrics Changes - EBIT sales outperformed the Chinese truck and bus vehicle markets, with truck and bus engine sales up by 1.6% year-on-year in the second half of 2024, and a 17.2% increase for the full year 2024, compared to a 9.9% decline in vehicle sales [8] - Revenue for the full year 2024 rose by 6.6% year-on-year to RMB 19.1 billion or USD 2.7 billion, while gross profit increased by 14.3% year-on-year in the second half of 2024 [9][10] - Gross margin improved to 40.7% compared to 40.1% in FY 2023, attributed to higher revenue and cost reduction initiatives [10] Business Line Data and Key Metrics Changes - Agricultural engine sales were flat in 2024, while industrial engine sales increased by 11% year-on-year, and marine and genset engine sales rose by 25.5% year-on-year [9] - Total number of engines sold in FY 2024 increased by 13.7% to 356,586 units, driven by higher sales in truck, bus, industrial, and marine markets [31] Market Data and Key Metrics Changes - The operating environment in China was challenging, with a GDP increase of 5% year-on-year in 2024, but property investment continued to decline [15] - The total value of goods and services in ASEAN rose to $3.6 trillion, creating a trade surplus of almost $1 trillion in 2024 [15] Company Strategy and Development Direction - The company is focusing on enhancing engine efficiency and performance, developing next-generation emission standard engines, and advancing new energy solutions, including hydrogen technologies [17][18] - A strategic cooperation agreement was entered into for technology licensing and component supply, with a total licensing fee of $38 million [14] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about significant growth in the data center generator business, with an expected growth rate of at least 30% in 2025 [50] - The company anticipates a challenging but improving operating environment, with expectations for better performance in 2025 due to increased demand and capacity expansion plans [96] Other Important Information - R&D expenditures increased by 21.2% in the second half of 2024, representing 0.2% of revenue, with total R&D expenditures for FY 2024 at RMB 1.2 billion [16] - The company initiated a share buyback plan, repurchasing 3.3 million shares for a total cost of $39.8 million, demonstrating confidence in future revenue and profit generation [19][20] Q&A Session Summary Question: What were the sales figures for the data center generator business? - The MTU joint venture sold about 700 units in 2024, including various applications [45] Question: What is the expected growth rate for the data center generator business in 2025? - The order book for 2025 is already full, with expected growth of at least 30% [50] Question: What is the profitability of the generator business? - Specific margin details could not be disclosed, but the MTU joint venture is expected to have a premium due to international branding [47] Question: Will there be a price increase for generators? - There may be some improvement in pricing, but no significant plans for immediate increases [59] Question: What is the capacity expansion plan for 2025 and 2026? - The company plans a 35% to 40% increase in capacity by 2026 [68] Question: What are the challenges in the supply chain? - There are supply chain issues due to shortages of key components imported from Germany [112]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 6% year over year to RMB 19.1 billion or $2.7 billion for the fiscal year 2024, compared to RMB 18 billion in 2023 [21] - Gross profit rose by 10.8% to RMB 2.8 billion or $392.1 million, with a gross margin increase to 14.4% from 14.1% in the previous year [22] - Net profit attributable to shareholders increased to RMB 323.1 million or $44.9 million, compared to RMB 285.5 million in FY2023 [25] Business Line Data and Key Metrics Changes - Truck and bus engine sales increased by 17.2% year over year for FY2024, while agricultural engine sales remained flat and industrial engine sales rose by 11% [5][7] - Marine and genset engine sales saw a significant increase of 25.5% year over year [7] - The total number of engines sold in FY2024 increased by 13.7% to 356,586 units compared to 313,493 units in FY2023 [21] Market Data and Key Metrics Changes - The Chinese truck and bus vehicle market experienced a 9.9% year-over-year decline in sales, while the company’s truck and bus engine sales outperformed this trend [5] - The overall operating environment in China was challenging, with GDP growth of 5% year over year in 2024 [11] Company Strategy and Development Direction - The company is focusing on enhancing manufacturing capabilities in Thailand for diesel engines and has entered a strategic cooperation agreement with Kimlong Motor in Vietnam for technology licensing [10] - Investment in research and development (R&D) increased by 12.3% to RMB 984.7 million or $137 million, representing 6.2% of revenue, as the company continues to develop new energy products and improve engine efficiency [23][12] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in the data center generator business, expecting at least a 30% growth in 2025 due to a full order book [35] - The company anticipates a significant increase in demand for its products, particularly in the data center segment, which is expected to impact revenue positively [55] Other Important Information - The company initiated its first share buyback plan, repurchasing 3.3 million shares for a total cost of $39.8 million, and paid a cash dividend of $0.38 per share [15] - R&D expenditures, including capitalized costs, were RMB 1.2 billion or $165.4 million for FY2024, reflecting a commitment to innovation and development [12] Q&A Session Summary Question: What were the sales figures for the data center generator business? - The MTU joint venture sold over 700 units, including various applications, while the GYN sold about 800 units [31] Question: What is the expected growth rate for the data center generator business in 2025? - The company expects a significant growth rate of at least 30% for both GYMCO and the MTU joint venture in 2025 [35] Question: Will the profit attributed to minorities remain high in the future? - Management noted that the performance of associate companies has improved significantly, contributing to higher profits attributed to minorities [37] Question: How will other operating income be treated in the future? - Other operating income is influenced by government grants and VAT rebates, and while some components may be recurring, it is subject to various factors [80][82] Question: Will there be a price increase for generators due to strong demand? - Management indicated that while there may be some improvement in pricing, there are no significant plans for immediate price increases [42] Question: What is the capacity expansion plan for 2025 and 2026? - The company plans to increase capacity by 35% to 40% in 2025, with further increases planned for 2026 [46]

Core Viewpoint - China Yuchai International Limited reported its unaudited consolidated financial results for the second half of 2024 and the fiscal year 2024, highlighting a mixed performance with increased engine sales but a decline in operating profit and net profit compared to the previous year [1][2]. Financial Highlights for 2H 2024 - Revenue for 2H 2024 was RMB 8.8 billion (US$ 1.2 billion), slightly down from RMB 8.9 billion in 2H 2023 [3]. - The total number of engines sold increased by 10.9% to 163,843 units compared to 147,700 units in 2H 2023, driven by higher sales in truck, bus, industrial, marine, and power generation markets [4]. - Gross profit rose by 14.3% to RMB 1.4 billion (US$ 195.7 million), with a gross margin of 15.9% compared to 13.9% in 2H 2023 [5]. - Other operating income increased by 31.2% to RMB 401.5 million (US$ 55.9 million) due to higher government grants and technology licensing fees [6]. - R&D expenses increased by 25.6% to RMB 591.1 million (US$ 82.2 million), representing 8.2% of revenue [7]. - SG&A expenses rose by 25.1% to RMB 1.1 billion (US$ 147.0 million), accounting for 12.0% of revenue [8]. - Operating profit declined to RMB 160.1 million (US$ 22.3 million) with an operating margin of 1.8% [9]. - Net profit attributable to equity holders was RMB 82.7 million (US$ 11.5 million), down from RMB 107.1 million in 2H 2023 [11][12]. Financial Highlights for FY 2024 - Revenue for FY 2024 was RMB 19.1 billion (US$ 2.7 billion), an increase from RMB 18.0 billion in FY 2023 [14]. - The total number of engines sold increased by 13.7% to 356,586 units compared to 313,493 units in FY 2023 [15]. - Gross profit increased by 10.8% to RMB 2.8 billion (US$ 392.1 million), with a gross margin of 14.7% [16]. - Other operating income rose by 30.1% to RMB 575.7 million (US$ 80.1 million) [17]. - R&D expenses increased by 12.3% to RMB 984.7 million (US$ 137.0 million), representing 6.2% of revenue [18]. - SG&A expenses were RMB 1.8 billion (US$ 252.1 million), representing 9.5% of revenue [19]. - Operating profit was RMB 597.0 million (US$ 83.0 million), down from RMB 609.4 million in FY 2023 [19]. - Net profit attributable to equity holders was RMB 323.1 million (US$ 44.9 million), compared to RMB 285.5 million in FY 2023 [22]. - Basic and diluted earnings per share increased by 17.5% to RMB 8.21 (US$ 1.14) from RMB 6.99 in FY 2023 [22]. Balance Sheet Highlights - As of December 31, 2024, cash and bank balances were RMB 6.4 billion (US$ 895.0 million) compared to RMB 6.0 billion at the end of FY 2023 [26]. - Trade and bills receivables were RMB 8.8 billion (US$ 1.2 billion) compared to RMB 7.8 billion at the end of FY 2023 [26]. - Inventories were RMB 4.7 billion (US$ 647.5 million) compared to RMB 4.6 billion at the end of FY 2023 [26]. - Trade and bills payables were RMB 8.5 billion (US$ 1.2 billion) compared to RMB 7.6 billion at the end of FY 2023 [26]. - Short-term and long-term loans and borrowings remained stable at RMB 2.5 billion (US$ 349.1 million) [26]. Management Commentary - The President of China Yuchai highlighted profitable sales growth and free cash flow generation, with on-road engine sales outperforming the overall Chinese truck and bus vehicle markets [25]. - The company is expanding its joint venture with MTU Yuchai and enhancing its product portfolio to meet increasing demand, particularly in power generation [25]. - A share buyback program was initiated, repurchasing 3.3 million shares for a total of US$ 39.8 million [25].

Core Viewpoint - China Yuchai International Limited has entered into a strategic cooperation agreement with Kim Long Motor Hue to enhance its presence in the ASEAN-Korean trade areas through technology licensing and support for an engine factory in Vietnam [1][3]. Group 1: Strategic Cooperation Agreement - The agreement includes technology licensing rights for specific engine models primarily for trucks, buses, and commercial vehicles in Vietnam [2]. - Kim Long Motor will have exclusive sales rights for the licensed engines in Vietnam and priority sales rights in other ASEAN countries and South Korea, along with aftermarket service rights [2]. - The licensing agreement is valid for 15 years with total licensing fees amounting to US$28 million [2]. Group 2: Support and Services - China Yuchai will provide technical services for the construction of the engine factory, including equipment installation and commissioning, at Kim Long Motor's expense [3]. - The company will supply all engine assembly parts and service kits for the engines manufactured by Kim Long Motor in Vietnam [3]. Group 3: Company Background - China Yuchai, through its subsidiary Guangxi Yuchai Machinery Company Limited, is a leading powertrain solution provider in China, specializing in a variety of engines for different applications [5]. - In 2023, Yuchai sold 313,493 engines, establishing a strong market presence and reputation for high-quality products and reliable after-sales support [5].