China Yuchai International Ltd. Q2 FY2023 earnings call

• Economy had signs of recovery but faced challenges; GDP growth, export sector issues, property sector slowdown. - GYMCL's performance: truck unit sales down 10.4% y-o-y but net sales up 55.5% y-o-y; bus engine sales strong, off-road market down 13.3% y-o-y. - R&D spending: RMB465.2 million (5.1% of revenue) invested, focusing on improving engine performance, efficiency, and new energy products. - Restructuring: GYMCL restructured marine and power generation businesses, established new subsidiaries, secured new investments for new energy tech. - Dividend: Board declared cash dividend of RMB0.028 for ordinary shares for 2022 year ended, paid on August 7, 2023.

For the first half of 2023, revenue was RMB9.2 billion (US$1.3 billion), an 7% increase from RMB8.6 billion in first half 2022. Gross profit increased by 14.1% to RMB1.6 billion (US$214.8 million), with a gross margin of 16.9%. GYMCL's truck unit engine unit sales declined 1.5% y-o-y, but bus engine sales saw heavy-duty engine sales rise 149.8%. New energy product unit sales grew by 38.3% to 1,319 units. Revenue contribution from various segments: overall revenue from engine sales and related products, with new energy contributing a growing portion.

• Second half 2023 outlook: Diverse product portfolio key driver of growth; continue upgrading engine products for lower emissions; develop innovative NEV solutions aligning with environmental agenda.

• COVID-19 impact: Could materially affect business operations and financial conditions due to market decline, economic slowdown, customer/supplier issues. - Regulatory and competitive risks: Government and stock exchange regulations, competition, political, economic, social conditions in China and worldwide pose uncertainties. - Property sector risks: Slowdown in property sector affecting related business segments.

Q: Why has CYD decided to amend the corporate documents regarding share repurchase?

A: The opportunity of the AGM to make a change so that the company has greater flexibility to utilize share purchase in any permissible method under the Bermuda Companies Act, and will comply with US equity law for buyback, with announcements made if there's a plan