China Yuchai International Ltd. Q4 FY2022 earnings call

• Chinese economic growth in 2022 was 3% compared to 8.5%-8.4% in 2021, with various sectors like retail sales and real estate investment declining.
• Commercial vehicle industry unit sales declined in 2022 due to COVID-related lockdowns, reduced logistical activity, and fewer infrastructure projects.
• GYMCL reported sales declines in trucks and buses but had some positive aspects like heavy-duty bus sales exceeding market growth in the second half and new energy product sales.
• Notable new orders in 2022 included Macau's order for over 600 new energy buses, an order from Jianghuai Heavy Duty Truck for 100 heavy-duty truck engines, and YC6GN engines powering buses in Mexico.
• Progress in new energy segment: Yuchai engines in hybrid buses, integration of electric axle in EV light bus, range extender in smart mining truck, and introduction of new heavy-duty hydrogen engine.
• Cost savings initiatives: Selling, general and administrative expenses reduced by ~8.2% in 2022, and R&D expenditures decreased by 1.5% in 2022.

For the second half of 2022, revenue was RMB7.5 billion (US$1.1 billion), a 13.6% decline from the same period in 2021. For the full year 2022, revenue was RMB16 billion (US$2.3 billion), down from RMB21.3 billion in 2021. GYMCL's combined truck and bus unit sales declined by 33% year-over-year in the second half of 2022, with truck sales down 33.2% and bus sales down 32.1%. For the full year 2022, GYMCL's truck sales declined by 49.6% and bus unit sales were down 33.2%. Off-road engine sales decreased by 5% year-over-year in the second half of 2022 and by 9.8% for the full year 2022. New energy product engine sales were over 6,300 units for the full year 2022. Gross profit in the second half of 2022 was flat at RMB1.3 billion (US$182.4 million) but gross margin rose to 17% from 16.4% in the same period of 2021. For the full year 2022, gross profit decreased by 7.9% to RMB2.6 billion (US$377.7 million) but gross margin increased to 16.4% from 13.9% in 2021. Revenue contribution: The revenue from different segments varied with the decline in on-road segments and growth in off-road and new energy segments.

• Cautiously optimistic about 2023 due to recent policy changes reducing COVID-19 lockdowns and travel restrictions, which will improve business, investment activities, and the supply chain.
• Anticipates new policies will enhance the investment environment for domestic and export markets and operating environment.

• If COVID-19 pandemic is not effectively controlled, business operations and financial conditions may be materially and adversely affected due to deteriorating market for automotive sales, economic slowdown in China and abroad, potential weakening of customers' financial condition, and adverse impact to suppliers and supply chains.

Q: Are there any questions?

A: Dear speakers, there are no questions at this time.