• Revenue: RMB 19.1 billion (USD 2.7 billion), up 6.6% year over year.
• Gross Profit: RMB 2.8 billion (USD 392.1 million), up 10.8% year over year.
• Gross Margin: Increased to 14.7% from 14.1% in FY 2023.
• Net Profit Attributable to Shareholders: RMB 323.1 million (USD 44.9 million), up from RMB 285.5 million in FY 2023.
• Basic and Diluted Earnings Per Share: RMB 8.21 (USD 1.14), compared to RMB 6.99 in FY 2023.
• Operating Profit: RMB 597 million (USD 83 million), slightly down from RMB 609.4 million in FY 2023.
• R&D Expenditures: RMB 1.2 billion (USD 165.4 million), representing 6.2% of revenue.
• Cash and Bank Balances: RMB 6.4 billion (USD 895 million) as of December 31, 2024.
• Engine Sales: Increased by 13.7% to 356,586 units.
• Investment in Associates and Joint Ventures: Profits grew by 63.6% year over year.
• Share Buyback: 3.3 million shares repurchased, totaling USD 39.8 million.
• Dividend: USD 0.38 per ordinary share paid on August 28, 2024.

• Warning! GuruFocus has detected 9 Warning Signs with CYD.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• China Yuchai International Ltd (NYSE:CYD) outperformed the Chinese truck and bus vehicle markets, with truck and bus engine sales increasing by 17.2% year over year, despite a market decline.
• Gross profit increased by 10.8% year over year to RMB 2.8 billion, with a gross margin improvement to 14.7% from 14.1% in FY 2023.
• The company's joint ventures, particularly MTU Yuchai Power, achieved higher profits, with a 63.6% year-over-year increase in income from associates and joint ventures.
• China Yuchai International Ltd (NYSE:CYD) entered into strategic agreements, such as with Kim Long Motu in Vietnam, to expand its market presence and technology licensing.
• The company maintained a strong cash position with cash and bank balances of RMB 6.4 billion as of December 31, 2024, despite share repurchases and dividend distributions.

Negative Points

• Operating profit decreased slightly in FY 2024, with an operating margin decline to 3.1% from 3.4% in FY 2023.
• Research and development expenses increased significantly by 12.3% year over year, impacting overall profitability.
• Selling, general, and administrative expenses rose by 25.1% in the second half of 2024, primarily due to higher receivables provision and increased personnel costs.
• The company faced challenges in the Chinese market, with property investment continuing to decline in 2024.
• There were supply chain constraints affecting the MTU joint venture, particularly with components sourced from Germany, which could impact future production capabilities.

Q & A Highlights

Q: Can you provide details on the sales performance of your joint venture with MTU in 2024? A: LAI Tak Chuen Kelvin, General Manager in Operations: In 2024, the MTU joint venture sold over 700 units, which included various applications beyond data centers. Additionally, high horsepower sales from GYMCL were about 800 units.

Q: What is the expected growth rate for the data center generator business in 2025? A: LAI Tak Chuen Kelvin, General Manager in Operations: Both GYMCL and the MTU joint venture have full order books for 2025, and we are unable to accept more orders due to capacity constraints. We expect at least a 30% growth compared to last year.

Q: Are there plans to increase prices for generators given the strong demand? A: Weng Ming Hoh, President, Director: While there may be some price improvements, we do not have significant plans for price increases at this stage. The market remains competitive, and pricing is often determined through transparent tender processes.

Q: What are your capacity expansion plans for 2025 and beyond? A: LAI Tak Chuen Kelvin, General Manager in Operations: We are planning to increase capacity by 35% to 40% by the end of this year, with further expansion expected in 2027. This is to meet the growing market demand.

Q: Can you provide insights into the profitability of your joint ventures and associates? A: Weng Ming Hoh, President, Director: The performance of our associate companies, particularly MTU, has improved significantly, contributing to a larger share of profits. This is due to increased demand for data centers and other joint ventures turning profitable.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.