Half Year 2025 China Yuchai International Ltd Earnings Call
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Speaker #2: Good day, and thank you for standing by. Welcome to the China Yuchai International Ltd. first half 2025 financial results conference call and webcast. At this time, all participants are in listen-only mode.
I would now like to hand, the conference over to your first speaker today Kevin. Please. Please go ahead.
Thank you for joining us today and welcome to China as UGI International Limited's Conference call and webcast for the first half of 2025 ended on June 32025 join.
Speaker #2: After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press Star, 1, 1 on your telephone keypad.
Joining us today are Mr. Wei Ming Hoh and Mr. Johnson, Lou President and Chief Financial Officer of <unk>.
Speaker #2: You will not hear an automatic message advising that your hand is raised. To withdraw a question, please press Star, 1, and 1 again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link, and your time during the conference.
I respectfully.
In addition, we also have in attendance Mr. Kelvin Lai General manager of operations of <unk> and chairman of M. T U UTI power company limited or empty you dry power.
Speaker #2: Please be advised that today's conference is being recorded. I would now like to hand the conference over to ur first speaker today, Kevin Theiss.
Before we begin I will remind all listeners that throughout this call. We may make statements that may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995. The words believe expect anticipate project target optimistic.
Speaker #2: Please go head.
Speaker #3: Thank you for joining us today, and welcome to China Yuchai International Ltd's conference call and webcast for the first half of 2025, ended on June 30, 2025.
Speaker #3: Joining us today are Mr. Wei Ming Ho, and Mr. Choon Loo, President and Chief Financial Officer of CYI, respectively. In addition, we also have in attendance Mr. Kelvin Lai, General Manager of Operations of CYI, and Chairman of MTU Yuchai Power Company Ltd, or MTU Yuchai Power.
Confident that continue to predict intend aim will or similar expressions are intended to identify forward looking statements.
All statements other than statements of historical fact are statements that may be delaying and may be deemed forward looking statements.
Speaker #3: Before we begin, I would like to remind all listeners that throughout this call, we may make statements that contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward looking statements include but are not limited to statements concerning the company's operations and financial performance and condition and are based on current expectations beliefs, and assumptions, which are subject to change at any time.
Speaker #3: The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "confident that," "continue to," "predict," "intend," "aim," "will," or similar expressions are intended to identify forward-looking statements.
The company cautions that these statements by their nature involve risks and uncertainties and actual results may differ materially depending on a variety of important factors such as government and stock exchange regulations competition, political economic and social conditions around the world and in China, including those discussed in the <unk>.
Speaker #3: All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements include but are not limited to statements concerning the company's operations, and financial performance and condition, and are based on current expectations, beliefs, and assumptions which are subject to change at any time.
Company's form 20-F under the headings risk factors results of operations and business overview.
And the other reports filed with the Securities and Exchange Commission from time to time.
All forward looking statements are applicable only as of the date. They are made and the company specifically disclaims any obligation to maintain or update the forward looking information.
Speaker #3: The company cautions that these statements, by their nature, involve risk and uncertainties in actual results may differ materially depending on a variety of important factors, such as government and stock exchange regulations, competition, political, economic, and social conditions around the world and in China, including those discussed in the company's Form 20 F's under the headings Risk Factors, Results of Operations, and Business Overview.
Whether of the nature contained in the press release made during today's call or otherwise in the future.
Mr. Hoh will provide a brief overview and summary, and then Mr. Lu will review the financial results for the first half year ended June 32025, thereafter, there will be a question and answer session.
For the purposes of today's call. It 45, and <unk> 44 financial numbers are unaudited and presented in RMB and U S dollars.
Speaker #3: And in other reports filed with the Securities and change Commission from time to time. All forward-looking statements are applicable only as of the date they are made, and the company's specifically disclaims any obligation to maintain or update the forward-looking information whether of the nature contained in the press release, made during today's call, or otherwise in the future.
All financial information presented is reported using the FRS accounting standards.
As issued by the International Accounting standards Board Mr. Hoh. Please begin your fiscal year.
Speaker #3: Mr. Ho will provide a brief overview and summary and then Mr. Loo will review the financial results for the first half year ended June 30, 2025.
Thank you Kevin we are pleased to report that our sales in the first half of 2035.
Our portfolio.
The roadmap of category.
Speaker #3: Thereafter, there will be a question and answer session. For the purposes of today's call, the 2025 and 2024 financial numbers are unaudited and presented in RMB and US dollars.
Revenue increased by 34% year over year to RMB 13 billion.
Solid bumpers ideally.
Gross profit rose by 33% year on year to RMB, one 8 billion.
Speaker #3: All financial information presented is reported using the IFRS accounting standards as issued by the International Accounting Standards Board. Mr. Ho, please begin your prepared remarks.
57 million.
Operating profit increased by 42 by 3% year over year and profit.
<unk> been able holders of company rose by 52, 2% year over year.
Yeah.
Speaker #4: Thank you, Kevin. We are pleased to report that our annual sales in the first half of 2025 outperformed nearly every on-road market category. Revenue increased by 34% year over year to RMB 13.8 billion or US dollars 1.9 billion.
Earnings per share were 5%.
8% higher year over year to RMB $9 75, all U S dollar.
$1 six.
This growth in our financial result was due to the sale of our light duty.
Medium duty.
Speaker #4: Gross profit rose by 30.3% year over year to RMB 1.8 billion or US dollars 257 million. Operating profit increased by 42.3% year over year and profit to equity holders of company rose by 52.2% year over year.
The engine, our new energy.
That.
High horsepower engines and solutions, we provide to our customers.
Our sales exceeded the in vehicle unit sales as our market categories and demonstrating it because of year over year sales growth in the first part.
Speaker #4: Earnings per share were 65%, 65.8% higher year over year to RMB 9.75 or US dollars a dollar 36. This growth in our financial result was due to the sale of a light-duty medium-duty and heavy-duty engines of new energy products, high horsepower engines, and solutions we provide to our customers.
According to data from the China Association of automobile manufacturers.
And talking about it.
But market sales, excluding gasoline and electric powered vehicles.
First half a little high.
Declined by two 6% year over year, while our combined trucks and buses.
Net sales were up by 48.
Yes.
Speaker #4: Our sales exceeded the vehicle unit sales in our market categories and demonstrated significant year over year sales growth in the first half of 2025.
Our overall traffic and sales increased by plus all by 3% year on year compared to the heavy truck.
I think the net sales decline by both parties.
Our truck engine sales and net sales growth was led by a 47% Europe year over year rise in the important heavy duty truck segment.
Speaker #4: According to data from the China Association of Automobile Manufacturers (CAAM), truck and bus unit market sales, excluding gasoline and electric-powered vehicles, in the first half of 2025 declined by 2.6% year over year, while our combined truck and bus unit sales are up by 38% year over year.
In contrast, with a negative two by 8% year over year.
And the heavy duty truck market unit.
According to <unk>.
Yes.
Loan growth in the base.
Engine segment.
Segment heavy duty truck segment is mainly attributable to Edmond.
Speaker #4: Our overall truck engine sales increased by 44.3% year over year compared to CAM truck market unit sales declining by 1.8%. Our truck engine sales unit sales growth was led by a 40.7% year over year rise in heavy-duty truck segment.
E train trailer.
Our overall bus engine unit sales in what's happening.
<unk> achieved a 9% year over year growth.
Yeah, but it feels self Natalie so about 5% year on year.
With AAV duty bus engine unit sales increased by 44% year over year course untrusted.
Speaker #4: The contrast to the negative 2.8% year over year growth in the heavy-duty truck market unit sales according to CAAM. We experienced strong growth in the heavy-duty market truck engine segment or heavy-duty truck engine segment, which is mainly attributable to gas engine sales for heavy-duty trailers.
5% decline.
N C a N a BBB bucket.
Our off road market unit sales increased by 17, 5% year over year.
What's happened is the Fi led by an engine sales increase of 31, 5% year over year in the marine and power generation market.
Speaker #4: Our overall bus engine unit sales in the first half of 2025 achieved 8.9% year over year growth, compared with CAM bus unit sales of negative 7.5% year over year.
It affects us require significant amounts of reliable electric power auction.
Backup sources of electric power essentially guarantee.
Speaker #4: Our heavy-duty bus engine unit sales increased by 14.4% year over year contrasted with a 13.5% decline in CAM heavy-duty bus unit sales. Our off-road market.
Interrupted data center operations.
This demand has generated robust growth in our power generation operators in the post happens and fun.
Each hypothetically answer each Hyde Marine and density power company with us.
And Rolls Royce power systems Division.
Speaker #4: Unit sales increased by 17.5% year over year in the first half of 2025, led by an engine sales increase of 31.5% year over year in the marine and power generation market.
It's about the second phase cooperation and development, Paul <unk> type I would venture.
Included in the second phase will be the MTO series 4000, other guests generation engines, which are expected to begin shipment in late 95.
Speaker #4: Data centers required significant amounts of reliable electric-powered function, and backup sources of electric power, are essential to guarantee uninterrupted data center operations. This demand has generated robust growth in our power generation operations in the first half of 2025.
Right.
Also.
Eddie MTR in 2000.
Model N Gen and each Hyatt branded receipt units.
You saw that in the near future or power doesn't rush it because it has the least additional customer and application requirements.
Speaker #4: Each high-capacity or CHI marine and genset power company limited and Rolls-Royce Power Systems Division have started the second phase of cooperation and development of the MTU Yuchai Power Group venture.
And you didn't it feels like that's a reputation.
Rose by Sun himself by 2% year over year.
In engine sales of agricultural equipment experienced modest growth in first half.
Speaker #4: Included in the second phase will be the MTU Series 4000 oil and gas generation engines, which are expected to begin shipment in late 2025.
The successful sales growth of a broad range of engines and is a testament to.
A lot of research and development expertise.
Speaker #4: Also, by adding MTU 2000 model engine and Yuchai branded VC Series diesel engine in the near future, our power generation business is enhanced to service additional customers and application requirements.
Manufacturing proficiency and less service network.
In addition to improving our engine for that automotive technologies.
<unk>.
Developing additional new.
And as you grow that including those using alternative fuels.
Such as hydrogen methanol.
Speaker #4: Engine unit sales for industrial applications rose by 27.2% year over year, and engine sales for agriculture equipment experienced modest unit growth in the first half of 2025.
And I'm wondering a combustion pathologies.
Despite the increase in total disposal since those have been 75 to 551 million bytes.
Our U S pallets of itself by 1 million.
Speaker #4: The successful sales growth of our broad range of engines is a testament to our research and development expertise, our manufacturing proficiency, and large service network.
Including capitalized costs.
R&D represented 4% of revenue in the first half that has been fine.
Compared to the four 5% of revenues plus hopper full.
Speaker #4: In addition to improving our engine products and automotive technologies, RMD is developing additional new energy products, including those using alternative fuels, such as hydrogen, methanol, and ammonia combustion technologies.
Our strategic alliance produced a year over year increase in profit.
About by I guess Nielsen.
Profit results from N U.
He tied and improve operations as well across other ventures in both hot spot.
Speaker #4: Despite an increase in total R&D expenses in the half of 2025 to 551,7 million or US dollars 77.1 million including capitalized costs, R&D represented 4% of revenue in the first half of 2025, as compared to 4.5% of revenue in the half of 2024.
S T a.
We are well established in the last Chinese engine market.
We've used the national markets as important drivers of future sales growth.
Although nearby box us in ASEAN region, a prime it is often at Parisian.
Our subsidiary each had machine machinery policies those pilot.
Speaker #4: Our strategic alliance produced a year-over-year increase in profits propelled by higher sales and profit results from MTU Yuchai and improved operations as well across other ventures in the first half 2025.
Ramping up production of a range of diesel engines, Paul on the off road applications.
Truly a comprehensive strategic cooperation powered technology licensing.
Important supply and related support.
Yeah further deepening our market penetration into the growing market.
Speaker #4: As the we are a well-established in the large Chinese engine markets, we view international markets as important drivers of future sales growth. Our nearby markets in ASEAN region are prime areas for penetration.
The companies pay the David casualty without U S.
The other the reshape.
On July 720 to five and I think the company's confidence in future revenue profit and cash flow generation.
Speaker #4: Our subsidiary Yuchai Machinery Power System, Thailand, is now ramping up production of a range of diesel engines for on- and off-road applications. Through a comprehensive strategy cooperation covering technology licensing, component supply, and related support through Vietnam, we are further deepening our market penetration into the growing ASEAN markets.
Sure I'll be most of the day show a little better.
Cash and bank balances were RMB, four 8 billion or you just spoke about the $1 billion.
At June 30 F.
Right.
With that I would now like to turn the call look at persistency, Luke I'll Chief Financial Officer will provide more detail on the financial results. Thank you you may begin your remarks.
And do you remain now let me review our six months results ended June 30, or do anything different.
Speaker #4: The company paid a cash dividend of US 50 cents per ordinary share, on July 7, 2025, highlighting the company's confidence in future revenue profits and cash flow generation and to show our commitment to building shareholder value.
Revenue was RMB 13, 8 billion or U S. Dollar $1 9 billion compared with RMB 10, 3 billion first half to Anthony for the call.
Speaker #4: Cash and bank balances were RMB 7.8 billion, or $1.1 billion, as of June 30, 2025. With that, I would now like to turn the call over to Mr. Choon Singh Loo, our Chief Financial Officer, who will provide more detail on the financial results.
And just so in first half 'twenty five increased by 39, 9%.
250396 units compared with 192743 units in first half 'twenty 'twenty four.
Speaker #4: Choosing, you may begin your remarks.
Speaker #5: Thank you, Wing Ming. Now let me review our unaudited six-month results ended June 30, 2025. Revenue was RMB 13.8 billion or US dollars 1.9 billion compared with RMB 10.3 billion in the first half of 2024.
The increase was mainly due to higher sales in almost every segment.
Segment, the company's truck and bus.
Rose by 8% year on year first half three into the fire.
Despite a decline of two 6% weakness in the homeless showed weaker markets.
Speaker #5: The total number of engines sold in the half of 2025 increased by 29.9% to 250,396 units compared with 192,743 units in the first half of 2024.
Excluding just the beam and electric powered vehicles as reported by the China Association of automobile manufacturers C. A T M.
The comedies trucking geez, we're up 44, 3% year over year comparatively middle East group.
Speaker #5: The increase was mainly due to higher sales in almost every engine segment, the company's truck and bus engine unit sales rose by 38% year on year in the first half of 2025.
One 8% in truck market unit sales as reported I E.
In particular, our lead and lag.
<unk> truck unit sales were 47% and two 1%.
Speaker #5: Despite a decline of 2.6% witnessed in the commercial vehicle markets, excluding gasoline and electric-powered vehicles, as reported by the China Association of Automobile Manufacturers, CAAM.
How are you.
In contrast to see a end market issues drove a negative two 8% and one 3% respectively.
The company is heavy duty bus sales rose by 14, 4% compared to a C and basmati misuse.
Speaker #5: The company's truck engines were up 44.3% year over year compared with negative growth of 1.8% in truck market units sales as reported by CAAM.
A reduction of 55%.
Overall bus engine unit sales increased by eight 9% in first half to 825 E Suntrust to some 0.5% decline in overall market in the U S.
Speaker #5: In particular, heavy and light-duty truck engine unit sales were 40.7% and 82.1% higher year over year, in contrast to CAAM market unit sales growth of negative 2.8% and 1.3%, respectively.
As reported by C E.
I just used to off road markets increased by 17, 5%.
In first half two and 35 and G suite to the marine and power generation markets drove the ultimate.
Speaker #5: The company's heavy-duty bus engine sales rose by 14.4% compared to a CAAM bus market unit sales reduction of 13.5%. Overall, bus engine unit sales increased by 8.9% in the first half of 2025, in contrast to a 7.5% decline in overall market unit sales as reported by CAAM.
Segment growth will be both the E 145% year on year increase.
Sales for industrial applications rose by 27, 2% year over year first half to 825, well and gene shiels for agricultural human experience modest growth.
It sounds to be pretty fine.
Gross profit increased by 33% to RMB, one 8 billion or U S dollar to around 57 million from RMB, One 4 billion.
Speaker #5: Engine sales to off-road markets increased by 17.5% year over year in the first half of 2025. Engine sales to the marine and power generation markets drove the off-road segment's growth, with a 31.5% year-on-year increase.
First half 'twenty 'twenty four.
The increase was mainly due to higher steel slowly.
Overall gross margin was 15, 3% in the first half to 835 compared with <unk>, 7%.
Speaker #5: Sales for industrial applications rose by 27.2% year over year in the first half of 2025, while engine sales for agricultural equipment experienced modest growth in the first half of 2025.
After a pretty full.
Other operating income increased by 27, 2% to RMB $231 4 million or U S. Dollar 39 million compared with RMB $174 1 million in first half 'twenty 'twenty four.
Speaker #5: Gross profit increased by 30.3% to RMB 1.8 billion or US dollars 257 million from RMB 1.4 billion in the first half of 2024. The increase was mainly due to higher sales volume.
The increase was mainly driven by the recognition of <unk>.
I don't know, what your licensing fees and the higher repeat or.
Texas.
Speaker #5: Overall gross margin was 13.3% in the first half of 2025, compared with 13.7% in the first half of 2024. Other operating income increased by 27.2% to RMB 221.4 million or US dollars 30.9 million compared with RMB 174.1 million in the first half of 2024.
Research and development R&D expenses increased by 21, 1% to RMB 476.
<unk> 7 million or U S dollar $66 6 million.
Compared with RMB $393 6 million in the first half to Anthony fall due to higher spend per member and personnel costs.
Total R&D expenditure, including capitalized costs were RMB, 551, 7 million or U S. Dollar $77 1 million, representing 4% of revenue in the first half due to the far east as compared to RMB $463 2 million and fault.
Speaker #5: The increase was mainly driven by the recognition of technology licensing fees and the higher rebate or value-added taxes. Research and development R&D expenses increased by 21.1% to RMB 476.7 million or US dollars 66.6 million compared with RMB 393.6 million in the first half of 2024, due to higher experimental and personnel costs.
5% of revenue in first half 'twenty 'twenty four.
Selling general and administrative SG&A expenses.
<unk> by 37, 4% to RMB, $962 5 million or U S border.
$134 5 million from RMB $755 7 million in first half 'twenty default.
Speaker #5: Total R&D expenditures, including capitalized costs, were RMB 551.7 million, or $77.1 million, representing 4% of revenue in the first half of 2025, compared to RMB 463.2 million and 4.5% of revenue in the first half of 2024.
This increase was mainly due to higher personnel expenses.
With the same period last year.
SG&A expenses represent that.
10% of revenue for first half two zero to five seven.
Seven 3% for first half going into default.
Operating profit increased by 42, 3% to RMB 600 billion, one 7 billion or U S. Dollar $36 9 million compared to RMB $436 9 million in first half two Anthony fault.
Speaker #5: Selling, general, and administrative (SG&A) expenses increased by 27.4% to RMB 962.5 million, or $134.5 million, from RMB 755.7 million in the first half of 2024. This increase was mainly due to higher personnel expenses compared with the same period last year.
The operating margin was four 5% in contrast to fall by 2% in the first half basically full.
Higher operating profit and margin were achieved by increased use in gross profit combined with lower growth in operating expenses.
Speaker #5: SG&A expenses represented 7% of revenue for the first half of 2025, compared with 7.3% for the first half of 2024. Operating profit increased by 42.3% to RMB 621.7 million or US dollars 86.9 million compared to RMB 436.9 million in the first half of 2024.
My name is cost decreased by 31, 3% to RMB $32 2 million or U S. $4 5 million from RMB $40 9 million in first half students in the fall primarily due to lower programs and less bill discounting the.
Michelle financial results of Associates and joint ventures grew by 40.
Speaker #5: The operating margin was 4.5% in contrast to 4.2% in the first half of 2024. Higher operating profit and operating margin were achieved by increased sales and gross profit combined with lower growth in operating expenses.
42, 6% to a profit of <unk>.
<unk> is the $1 4 million or U S dollar $8 6 million compared with RMB $43 1 million in the first half going to default.
The improvement was mainly driven by higher office I N T U S Public company limited.
Speaker #5: Finance calls decreased by 21.3% to RMB 32.2 million, or $4.5 million, from RMB 40.9 million in the first half of 2024, primarily due to lower turnarounds and less due discounting.
Income tax expense increased by 13, 4% to RMB one.
<unk> dollars 2 million or U S ball, a $16 2 million compared with RMB $102 4 million in first half 2024.
Speaker #5: The share of financial results of the associates and joint ventures grew by 42.6% to a profit of RMB 61.4 million or US dollars 8.6 million compared with RMB 43.1 million in the first half of 2024.
Net profit attributable to equity holders of the company increased by 52, 2% to RMB $365 8 million or U S border I was thinking $1 1 million compared with RMB $240 3 million in first half 'twenty 'twenty four.
Speaker #5: The improvement was mainly driven by higher profits at MTU Yuchai Power Company Limited. Income tax expense increased by 13.4% to RMB 16.2 million or US dollars 16.2 million compared with RMB 102.4 million in the first half of 2024.
Basic and diluted earnings per share were RMB nine form satisfies our U S border 136, compared with RMB five eight.
Turning to default.
Basic and diluted earnings per share for the top 25 and for something in the fall where based on the reader are rich.
Speaker #5: Net profit attributable to equity holders of the company increased by 52.2% to RMB 355.8 million, or $51.1 million, compared with RMB 240.3 million in the first half of 2024.
That would be the 500 and it didn't bounce.
302 shares and $40 million 858000, and towards 90 shares respectively.
We will now go over some key financial highlights.
At June 30th two Anthony.
Can you fight.
Speaker #5: Basic and direct earnings per share were RMB 9.75 or US dollars 1.36 compared with RMB 5.88 in the first half of 2024. Basic and direct earnings per share for the first half of 2025 and the first half of 2024 were based on the weighted average of 87 million 518,322 shares and 40 million 858 thousand and 290 shares respectively.
Cash and bank balances were RMB, seven 8 billion or U S. Dollar $1 1 billion compared with RMB six 4 billion at the end of 'twenty 'twenty four.
Trade and bills receivables or RMB, <unk> 7 billion or USD, one 8 billion compared with RMB eight 8 billion at the end of 2024.
Inventory were RMB, four 7 billion or U S dollar $6 55.
4 million.
Speaker #5: We will now go over some key financial highlights as of June 30, 2025. Cash and bank balances were RMB 7.8 billion, or $1.1 billion, compared with RMB 6.4 billion at the end of 2024.
Compared with RMB, four 7 billion at the F 'twenty for sure.
And bills payable were RMB, one 9 billion or USD, one 7 billion compared with RMB eight 5 billion at the end of 'twenty 'twenty four.
Short term and long term loans and borrowings were RMB, two 2 billion or U S. Dollar $304 6 million compared with RMB, two 5 billion at the end of 2024.
Speaker #5: Trade and bills receivables were RMB 12.7 billion or US dollars 1.8 billion compared with RMB 8.8 billion at the end of 2024. Inventories were RMB 4.7 billion or US dollars 655.4 million compared RMB 4.7 billion at the end of 2024.
I will now turn the call over to <unk> for a command for Q&A session.
Please note some officers of China, you Chi are remotely calling into the conference call. This.
This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience and thank you for your patience.
Speaker #5: Trade and bills payables were RMB 11.9 billion, or $1.7 billion, compared with RMB 8.5 billion at the end of 2024. Short-term and long-term loans and borrowings were RMB 2.2 billion, or $354.6 million, compared with RMB 2.5 billion at the end of 2024.
If you'd like to ask questions in Chinese please kindly translate your own questions into English before returning to management for answers.
And before we start the Q&A, we would also like to announce that the management will be attending the forthcoming UBS conference on September 1st and second and Bank of America Merrill Lynch Conference last September eight through 10.
Speaker #5: I will now turn the call over to Kevin for a comment for the Q&A session.
Speaker #6: Please note that some officers of China Yuchai are remotely calling into the conference call. This may result in a slight delay in providing answers to some questions.
People are interested in a one on one or small group meeting please contact the salespeople at these banks.
The meeting schedule and travel plans, we will not be able to accept outside.
Speaker #6: We apologize for any inconvenience and thank you for your patience. If you would like to ask questions in Chinese, please kindly translate your own questions into English before turning to management for answers.
Meeting request outside of the conference revenues.
Now operator, we are ready for questions.
Thank you Dear participants as a reminder, if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced to read. Your question. Please press star one and one again I tended to be you can submit your questions why the webcast.
Speaker #6: And before we start the Q&A, we would also like to announce that the management will be attending the forthcoming UBS conference on September 1st and 2nd, and the Bank of America Merrill Lynch Conference for September 8th through the 10th.
Mr Obama compile the Q&A queue. These would take a few moments.
Speaker #6: If you are interested in a one-on-one or small group meeting, please contact the salespeople at these banks. Given the tight meeting schedule and travel plans, we will not be able to accept outside meeting requests outside of the conference venues.
Okay.
And now we're going to take the first question.
And this comes from the line of Lee from go out and pay high time Securities. Your line is open. Please ask your question.
Oh.
Speaker #6: Now, operator, we are ready for the questions.
Thank you this evening I am.
Speaker #2: Thank you, dear participants. As a reminder, if you wish to ask a question, please press Star, 1, 1 on your telephone keypad and wait for your name to be announced.
Alice from Guadalajara to also greetings. Thank you for having me and congratulations to your very outstanding results with first half <unk>.
Speaker #2: To withdraw a question, please press Star, 1, and 1 again. Alternatively, you can submit your questions via the webcast. Please then bow and compile the Q&A.
My question is on the on the capacity. So do you have any plan to raise more capacity for the JV is MDU or.
Speaker #2: This will take a few moments. And now we're going to take our first question. And it comes from a line of Yiming Liu from Guangxi, Haitong Securities.
For the G Y M C L entity. Thank you.
Yeah.
Good morning, you know, what you mean pieces Kelvin Lai.
Speaker #2: Your line is open. Please ask your question.
Regarding on the capacity in the field.
Actually we had.
Speaker #7: Thank you. This is Yiming. Analyst from Guangxi, Haitong Securities. Thank you for having me and congratulations to your very outstanding results for the first half of.
Sufficient capacity on to MCU joint venture side.
The only thing he said the supply of the components of each in that limited our production that depression. So if we can have the sufficient component supply from Germany, and the reach and increasing our capacity there but for the.
Speaker #7: My question is on the capacity. So do you have any plans to raise your capacity for the JV with MTU or for the GYMCL entity?
Our main operation the huge high operation.
I am showing that.
Turning to capacity is about 2000.
Speaker #7: Thank you.
And we had extension plan and then we will be ready by end.
Speaker #8: Good morning. Yiming, this is Kelvin Lai. Regarding the capacity and the actuary, we had sufficient capacity on the MTU, the joint venture side.
End of Q3 or later and later.
Q4, and then we will have some more.
Expansion is about 40% increase of the capacity by the end of this year and so next year that we can enjoy more more product.
Speaker #8: The only bottleneck is the supply of the components, which has limited our production at present. If we can secure a sufficient supply of components from Germany, we can then increase our capacity there.
Automotive D I'll see you at the end.
Okay. Thank you and the other question from me is on the guidance for the full year. So do you have any guidance on the same unit sales.
Speaker #8: But for the our main operation, the Yuchai operation at the GYMCL and at the currently, the capacity is about 2,000. And we had extension planned, and then we'll be ready by the end of Q3 or later or early Q4, and then we will have some more extension about 30% increase of the capacity by the end of this year.
For the whole year, five and so suddenly do you have any guidance for the data center related generally turns.
Manny you need some that there'll be plenty.
Thank you.
Sorry, it's a little bit.
We as a policy, we do not provide guidance.
Speaker #8: And so, next year, we can enjoy a more productive world of the engine. Yeah.
Thank you.
Yeah.
Okay alright. Thanks.
All my questions.
Yes.
Thank you.
Speaker #7: Okay. Thank ou. And the other question from me is on the guidance for the full year. So do you have any guidance on the sale the unit sales for the whole year 2025?
Now we're going to take our next question.
Yeah.
And the question comes from the line of done aspect from Shah Capital. Your line is open. Please ask your question.
Thanks for taking our questions we have a few questions actually.
Speaker #7: And specifically, do ou have any guidance for the data center-related generators and how many units of that will be sold for the whole year 2025?
First question does your Chi has 10%.
Or higher market share in long bore engines for data centers and also do you foresee this market share holding or improving going forward.
Speaker #7: Thank ou.
Speaker #8: Sorry, Mr. Liu. I have a policy we do not provide guidance. Thank you.
Oh Gosh this is Kelvin again.
Speaker #7: Okay. All right. Thanks. Those are all my questions. Thank you.
Thank you for your question.
Speaker #8: Thank you.
We our market share on the.
Speaker #2: Thank you. Now we're going to take our next question. And the question comes to the line of Don Asprey from Shaw Capital. Your line is open.
Longboard engine or the.
Well, it's I mean, that's what the data center.
Vacation and that'd be a market share as well with 10% of the overall market.
Speaker #2: Please ask your estion.
We belief.
Speaker #9: Thanks for taking our questions. We have a few questions, actually. First question, does Yuchai have 10% or higher market share in Longbor engines for data centers?
We can maintain a similar share and then the Uh huh.
At least a decent next year, yes.
Great. Thank you.
When do you.
See you chose net return surpassing 5% of sales.
Speaker #9: And also, do you foresee this market share holding or improving going forward?
From two 6% in first half.
Speaker #8: Don, this is Kelvin again. Thank you for your question. Our market share on the Longbor engine or the wallet, I mean, for the data center application and then the our market share is well ahead of the 10% of the growth of our market.
Can you talk about initiatives to accomplish this objective.
Well I mean, there's a lot of factors that will determine the return on sales I don't know now is that there's too many of those actually try to spin it out so for now we have not we have not.
Speaker #8: And we believe we can maintain a similar share and then the at least and then at this and next year, yeah.
Clearly back to Leslie.
So.
<unk> announced a target date for the <unk>.
Our return on sales.
Speaker #9: Great. Thank you. And when do you see Yuchai's net return surpassing 5% of sales from 2.6% in first half? And can you talk about initiatives to accomplish this objective?
That said as I said earlier, if we do not provide any guidance.
Okay.
Thanks, that's all from us thank you.
Thank you thank.
Thank you.
Yeah participants as a reminder, if you wish to ask a question. Please press star one one on your telephone keypad. Okay. Sure everyone has the opportunity to ask a question today, please commit yourself to two questions.
Speaker #8: Well, I mean, there's a lot of factors that will determine the return of sales, Don. Now, there's too many to actually try to pin it down.
Speaker #8: So for now, we have not really prepared to actually sort of announce a target date for the return of sales. As I said earlier, we do not provide any guidance.
And now we're going to take over next question.
And the question comes from the line of Wayne Shang from UBS. Your line is open. Please ask your question.
Thank you for taking my question. The first question is about the ASP increase and you didn't mention that you may consider race a S. Four data center engine.
Speaker #9: Okay, thanks. That's all from us. Thank you.
Speaker #8: Thank you.
Speaker #2: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press Star, 1, 1 on your telephone keypad. To ensure everyone has the opportunity to ask a question today, please limit yourself to just two questions.
This year in the.
Second half so any color on that thank you.
Yeah.
Okay.
Yeah, I mean, we have not really let's say increase the average selling price for data center.
Speaker #2: And now we're going to take our next question. And the question comes from the line of Weishan from UBS. Your line is open. Please ask your question.
Much of this year.
As I say I think we really produce the engine and we sell it into our OEM customer are the Oems have done and done well will determine the actual price of the sign up or that we should see a data set that is south of the eggs are customer yes.
Speaker #10: Thank you for taking my question. The first question is about the ASP increase. Are you saying that you may consider raising ASP for data center engines?
Sure.
Price is up slightly.
Speaker #10: This year, in second half. So any color on this? Thank you.
But yeah, it's costly.
Sorry could you you mean for the first half or the first week and half.
Speaker #8: Okay. I think we have not really increased the average selling price for data centers much this year. As I said, I think we only produced the engines.
Barbassa means in upper Lewisville guidance other than again, we did not provide guidance.
Sure. My second question is you did mention you would've liked to expand from engine, making two generally generate them, making yourself are you well expand our business could you give us some color on this howard well.
Speaker #8: And we sell the engines to our OEM customer. The OEM customers would in turn will determine the actual price of the final product, which is the genset that is sold to the end customer.
Speaker #8: Yes, our engine price has gone up slightly. But yeah, it has gone up slightly.
Just trying to stay into revenue growth and that's a profit per unit growth.
Yes.
Now this oh, maybe we actually I'll I'll call before.
Speaker #10: Sorry. Could you you mean for the first half or the first second half?
It's really just to sell engines.
Speaker #8: For the first half, we do not provide guidance. Again, we do not provide guidance.
You only do a dent at only eight.
And if customers want us to do it right. So the reason for this is we don't know.
Speaker #10: Sure. My second question is, you did mention you would like to expand from engine making to generator making. So you will expand the business.
It wasn't.
I'm pleased with our hospital, the real customers, which is the whole yes by building the old Gen sets actually competing with customers right. So I'll, let the end user has a really specific need for it otherwise we'd rather not.
Speaker #10: Could you give us some color on this? How will this translate into revenue growth and the profit per unit growth?
Do that and let all of our possible visa all yet and with it.
Oh no no I think that's a big revenue gain from from this.
Speaker #8: Now, this we actually our core business is really just to sell engines. And we only do gensets only if any customers wanted us to do it, right?
Ah Okay. Thank you.
Oh, I forgot who met Shan Shan Wang from UBS. Thank you.
Thank you.
Speaker #8: So the reason for this is we do not want to compete with our customers the real customers, which is the OEMs. By building the whole gensets, we actually will compete with customers.
No, but I'm going to take our next question.
And the question comes from the line of Kim <unk> from TICC. Your line is open. Please ask your question.
Speaker #8: Right? So unless the end user has a really specific need for it, otherwise, we rather not do that. And let our customer, which is the OEM, deal with it.
Thank you I'm from CIC see Oh No. My question. Scott are there are two questions from me. The first country is about Oh, Yeah, I'm Oh Highway engines. So we think from the here and now.
Speaker #8: So we do not.
Speaker #10: Thank you. So that's nice.
Speaker #8: That's a big revenue gain from this.
Speaker #10: Okay, thank you. I forgot to mention, I'm Sheng Wei from UBS. Thank you. Bye.
And to have a strong partner has a strong market share in that.
I'll talk on the bus engines, Taiwan or the reasons why the company has shown strong market share in our on highway engines and also we are we see the rapid growth of new olive adoption in China's commercial vehicle sector. So.
Speaker #2: Thank ou. Now we're going to take our next question. And the question comes to the line of Yin Si from CICC. Your line is open.
Speaker #2: Please ask your estion.
Speaker #11: Thank you. I'm an Yin Si from CICC. May I have my questions for there are two questions. From me. The first question is about the on-highway engines.
So I want to know how our company.
I couldn't be negatively impacting accommodates engine business. This is my first question and my second question, if not from becoming a significant amounts of cash.
Speaker #11: So we see from this year that Yuchai has a strong market share in both truck and bus engines. I wonder what the reason is for the company having such a strong market share in the on-highway engines.
So can we expect in a common capital allocation patents, all higher shareholder would take any shade teams in the near future. Thank you.
Okay. Let me let me answer the first question and I will leave the second question and then to <unk>.
Speaker #11: And also, we see the rapid growth of new energy adoption in China's commercial vehicle sector. So I want to know how our companies see this phenomenon, and could this negatively impact the company's engine business?
That's all I need to answer.
Regarding on the.
The truck.
Always a mountain that try and vessel sales.
Our truck sales in as.
So much better than the last year, and then maybe because of that we have some of the AR.
Speaker #11: This is my first question. And my second question is that the company holds a significant amount of cash on hand. So can we expect any upcoming capital operation plans or higher shareholder return initiatives in the near future?
New customer.
From there from the tier one and tier two.
Yeah.
I'm going to stop using these you try engine and therefore, there has been with UBM plc.
And on the second question on the second the second reason is also because of the introduction of the new guests and then we should see or you are also highly about $2 40.
Speaker #11: Thank you.
Speaker #8: Okay. Let me answer the first question, and then I will leave the second question and then to our CFO, Weng, to answer. So regarding on the truck and on highways, market on the truck and buses sales, and our truck engine sales and then it's a much better than the last year and then maybe because of the we have some of the new customer and then the from the Tier 1 and Tier 2 OEM and then they are I mean, start using the Yuchai engine and then for their heavy-duty medium-duty engine mainly.
Trade market in the in the Chinese domestic market. So they are one of the major reason 30th that'd be cause a baseball. So it's what I said one of our major.
<unk> contribution to the growth in the first half of the songs.
Regarding on the bus segment were similar.
Export markets are one of the major.
Major driver of the growth and also with <unk>, we had <unk>.
Also quite successful on them on the heavy duty.
Speaker #8: And on the second question, on the second second reason, also because of the our introduction of the new gas engine. And then which is the OEM also highly adaptive for the trailer market in the in the Chinese domestic market.
Buses segment and then the bottom.
It was a process an existing 11 midterm and told me about so this is where you sell them at a major dry on the globe.
So first of all thank you.
Speaker #8: So they are the one of the major reasons. Thirdly, and then because of the export. So the export is one of our major contributions to the growth in the first half of the 2025.
I would think about it as a compression so thanks banking before questions. So, yes, our cash and bank balances increase.
And somebody right compared to last year June nausea, so the cash and we will continue to deploy.
Speaker #8: Regarding on the bus segment, very similar. Export market is one of the major growth, major drive of the growth. And also we have also quite successful on the heavy-duty buses segment and then the for those buses and existing 11-meter or 12-meter about.
Capex right.
Operation and maintenance Capex.
And also you may notice that our R&D expenses also increased so that and we're continuing to you know to produce.
We use our cash where I see this effect in terms of are there any specific plans in future.
Speaker #8: So this is where our major drive on the growth of the first half. Thank you.
You will not be any comment at this point.
Okay.
Hi, Thank you.
Speaker #5: I will take second questions. Thank you for your questions. So yes, our cash and bank balances increase quite handsomely, right, compared to last year during the end of last year.
Thank you.
No I was going to take our next question and it comes from the line of Anthony from Daiwa Capital markets. Your line is open piece asked a question.
Speaker #5: So the cash that we will continue to deploy in our CAPEX, right, including our operational maintenance CAPEX, and also you notice that our R&D expenses also increase.
Hi, This is Andy Lee from Taiwan, I congratulate the result, I just want to walk us around the powertrain.
The topic of just quickly wanted to clarify the 2000 capacity from Detroit, Brian You mentioned, just now is it 30% of Ah I want to clarify that.
Speaker #5: So that will continue to, you know, to use our cash wisely in this aspect. In terms of whether any specific plan in the future, you ow, that we will not make any comment at this point.
And what's the execution right now understand you you you have some talk at all.
Speaker #2: I see. Thank you. Thank you. Now we're going to take our next estion. And it comes to the line of Andeli from Daiwa Capital Markets.
Capacity sure are in there.
On the last call.
Is there any update on how's the execution, there and what about the latest negotiating negotiation activities with your clients right now from the data Center point.
Speaker #2: Your line is open. Please ask your estion.
Speaker #12: Hi. This is Andeli from Daiwa. And congratulations on the result. I just want to ask around the power gen topic. Just quickly, I want clarify the 2,000 capacity from Yuchai brand you ioned just now.
Hello, Andy you said Kevin.
Thanks for your question.
First of all and that'd be guiding on the huge hi, Brian I mean, not all of them.
I mean, you know spread than the.
All our factory currently the production of 2000 units is already the I mean, the highest we can do so they'll be confirming that there will be about 30% increase more than sort of the same increase by end of this year.
Speaker #12: Is it 30% up? I want to clarify that. And was the execution right now on stand you have some target or capacity share in the last the last call?
So.
At this stage and then the.
Speaker #12: Is there any update? And how's the execution there? And what about the latest, you know, negotiation activities with your clients right now from the data center part?
Majority of our high horsepower engine, it's going to the data center.
In the first half of 2025.
It's about 650 engine for the data center and the rest this going for other indications as well.
Speaker #8: Hello Andeli. It's Kelvin. Thanks for your question. First of all, and then regarding on the Yuchai brand, I mean, our own in-house brand and the our factory currently, the production of 2,000 units is already the, I mean, the highest we can do.
It's a shallow.
Couldn't tie them then.
Also.
That's wrong.
<unk> also market on the data center projects and I think that no matter how much you can increase and they say it's difficult to meet up the current demand and also this is also a risky operation as well I'm sure there'll be a couple more.
Speaker #8: So we confirmed that there will be about a 30% increase, or more than a 30% increase, by the end of this year. At this stage, the majority of our high-horsepower engines are going to the data center.
Speaker #8: And in the first half of 2025, there are about 650 engines for the data center, and the rest is going for other applications as well.
In a more consolidated way at that meeting to the expansion plan of our own factory. So that we will we will see at the household market score.
In the year to $1 6 billion beyond that before we had any pending for further extension.
Speaker #8: So this is our current plan. And then because the strong demand of the market on the data center projects and I think the no matter how much and then we increase and then it's difficult to meet up the current demand.
I know that that means the 2000 capacity.
Well high horsepower is not at all.
Oh, yeah that signs up for that.
Or are there other applications as well.
This is a field fault so last possible positive nothing.
Okay.
Speaker #8: And also this is also a risky operation as well. So that we are more in a more conservative way and then into the expansion plan of our factory.
Yeah, Jess Oh, what about the latest auction on negotiation with your data center clients.
Oh, what do they mean.
Any like the pricing color and Oh, I I I I remember the last time, you mentioned is quite competitive so and they do the auction and the pricing are quite you know Paul shared with us at all.
Speaker #8: So that we will see how the markets go on in the year 2026 on and beyond and then before we have any planning for further expansion.
Speaker #8: Thanks. Yeah. Add to that. I mean, the 2,000 capacity that we have for high-horsepower is not entirely for data centers, right? So there are other applications as well.
Yes, what was the dynamic there.
Okay. Okay, I think we are.
I think that's helpful.
Bye.
I call it the chance of us.
Speaker #8: That this is useful. So, but a large portion of it we are going to data center. Okay?
My need to issue they did when they were off a tender.
It's not kind of there'll be the asset.
Speaker #9: Okay. Cheers. What the latest auction or negotiation with your data center clients?
I was surprised by it but.
So oh this battle through a whole yet so the Oems.
Speaker #8: What do you mean?
We could probably participated tender through more than one OEM.
Speaker #9: Any like the price and color and I remember the last time you mentioned it's quite competitive as well and they do the auction and the pricing are quite, you know, considering as well.
Oh, yes, especially as our customers and the Oems.
To sell hotels or the end customer so what about that.
But it does yeah. It does it feel very competitive administrative filing.
Speaker #9: Yes. What was the dynamic there?
A shortage of capacity you're right about the math.
Speaker #8: Yeah. I'm sorry. Okay. I ink for buying the for purchase of such magnitude, usually they will ask for tenders if not tenders will be they're asking for they will ask for several suppliers to supply, right?
So a lot of pricing for these are the final throws up.
As Joe said.
It's amazing.
How come it yourself.
Yeah.
Got it thanks.
Speaker #8: So a of this is done through our OEM. So the OEMs we could probably participate in the tender. Through more than one OEM, because OEMs essentially are customers and the OEMs will sell on sale to the end customer.
Thank you.
Yeah.
Now well go and take our next question.
And it comes to that kind of a fresh from global Securities. Your line is open. Please ask your question.
I first want to congratulate the team for what's going on.
Speaker #8: So, but then still in terms of competitiveness, yeah, there's still a very competitive industry despite a shortage of capacity right now in the ketplace.
The number of supposed these learnings are terrific.
So congratulations to everyone. My question is the following.
Speaker #8: So a lot of pricing for these final products for gensets is determined by our customers themselves.
So that what was transforming China as you can tell he was at Biogen and Asia business unit, but when I look at the release this morning.
Amazing to read that most of the business units at 30% plus ups.
Speaker #9: Got it. Cheers. Thanks.
This year, while Linda.
Speaker #2: Thank ou. Now we're going to take our next question. And it comes to the line of Gustavo Freres from Global Securities. Your line is open.
<unk> flips, so there's something else going on and I just want understand do you guys find a specific reason for beating the market. So badly. These first top of the 275. Thank you.
Speaker #2: Please ask your estion.
Speaker #13: Yes. Hello to everyone. I want to first say congratulations to the team. The results published this morning are amazing. You guys are doing a terrific job.
Okay.
Alright, thanks, guys.
Basically in the case of vehicles gives me the team up with the.
Speaker #13: I don't think I recall seeing these numbers so strong numbers in the conference call for a long time. And I guess my question is, I thought or in my mind, I thought that what was going, what was transformed?
The Oems are cut some oes, who actually well I think we need a market share in the market.
And also they're willing to.
Use holiday multiple engine.
Most of our competitors and so that one.
It's one of the reason.
That happened in a policy issue that happened just what I guess, how do we think the relationship both possible yes.
Speaker #8: Oh, you're breaking up, Mr. Freres. We can't hear you.
So these are the other what.
Speaker #2: Excuse me, vo?
What I call a significant driver of that is.
Speaker #13: Yes?
Speaker #2: Are you repeating your question again, please? Excuse me, Gustavo. Your line is breaking up. We cannot hear you. Please, can you repeat your question again?
Export I would say foster has gone very well and it's been increasing double digits over the last.
So I was just and still continuing to improve our the good thing about this is that we do not need to sell them that she loves takes all euro six compliant.
Speaker #13: Can you hear me now?
Speaker #2: Yes. Yes, we can.
Essentially zero five below simply because the areas of countries that are exposed to.
Speaker #13: Okay. Sorry about that. I just want to first congratulate the team for what's going on. The numbers published this morning are terrific. So congratulations to everyone.
All the countries in the world, except North America, and European markets right. So that one.
Speaker #13: My question is the following: I thought that what was transforming China's Yuchai was the power generation business units. But when I look at the release this morning, it's amazing to read that most of the business units are up 30% plus this year.
That does give us a little bit better.
So in that sense, okay. So that's kind of what drives that could drive up costs yeah.
This year the data center, that's been introduced group it data centers and those are those competitors who participated in this segment also seems very good.
Speaker #13: While the industry is flat, there’s something else going on. I just want to understand if you guys find a specific reason for beating the market so badly this first half of 2025.
Demand for.
We have quite a few things going for it and they all came together this year.
Thank you very much.
Speaker #13: Thank ou.
Yes.
Speaker #8: Okay, Don. Right. Thanks for Mr. Freres. Basically, in the case of vehicle engines, we team up with the OEMs, our customer OEMs, who actually are winning some market share in the market.
Thank you.
Now we're going to take over next question.
This amendment.
And the question comes from the line of Jack how long from a two hour I'm far Securities. Your line is open. Please ask your question.
Speaker #8: And also, they are willing use our more of our engines as opposed to our competitors' engines. So that one is one of the reasons that happened.
Thank you for the opportunity and congratulations on your comments.
My question is we haven't seen very booming demand for obviously data center market.
Speaker #8: And of course, it didn't happen just overnight. We have been cultivating the relationship for quite a number of years, right? So the other, what we call a significant driver, is that our export sales have been growing very well.
Does the company have any plans to expand OSB, including they're actually sales to overseas Internet Giants.
Currently in India, working with OEM that are all.
Our major customer so the.
Speaker #8: And it's been increasing by double digits over the last several years. And still continuing to improve. The good ing about export sales is that we do not need to sell them the national six or Euro 6 compliant engines.
Cover the domestic market in overseas market as well so we.
We will.
Maintaining and pet.
Pet package.
And then they work through our OEM minutes or so.
So both domestic and overseas market.
Speaker #8: At least, it's ually Euro 5 or below. Simply because the areas, the countries that we export to, are all the countries in the world except North America and the European markets.
Theres also some change recently.
The Chinese the the Internet are the major player in there. So they are approaching us in Srs and then two pacing the order so the.
Speaker #8: All right? So that one does give a little bit better margin as well in the sense, okay? So the third one drive, the third driver, of course, is the this year is the data centers that's been a huge growth in data centers.
We will also and Andrea.
And then Deb a question then of West Coast Sam's instead, but it's just.
Not all of the.
I mean, the order to the older humbled by all major one is still coming from Oems.
Speaker #8: And those all those competitors who participated in this segment are also seeing very good demand, so. So we have a quite a few things going for us.
Thanks, Bob.
Answering your question. So I think the bulk of our sales is close to the domestic market.
Speaker #8: And they all came together this year.
The diversity of our business, even quite strong so yeah.
Maybe it would be subject to the law in the domestic market.
Speaker #13: Thank you very much.
Speaker #8: Thank ou.
And they really thought that's gone up to the export market, especially in a conversation like Malaysia and.
Speaker #2: Thank you. Now we're going take our next question. Just give us a moment. And the question comes from the line of Ja. Hao Wang from Jua Hanfa Securities.
Though Singapore.
But that's not that's a battle.
Yeah.
Okay. Thank you.
Speaker #2: Your line is open. Please ask your estion.
Thank you.
Speaker #14: Thank you for the portunity and congratulations on your very outstanding performance. My question is, we have seen very booming demand for overseas data center markets.
And now we're going to take our next question.
And the question comes from the line of Jackie you from C. G. S. International Your line is open. Please ask your question.
Speaker #14: Does the company have any plans to expand overseas including directly sales to overseas internet giants?
Hi, so thank you for taking my question. So my question is about the capacity of the D. C engines I want to first clarify on the number of cars southern units capacity could you clarify if this is the overall capacity, So, Florida JV Park Plaza being a house parts.
Speaker #8: Currently and then they are working with our OEM. They are our major customer. So they cover the domestic market and overseas market as well.
And also could you share further and you know how it's part what is the bottleneck for the capacity.
Speaker #8: So we will maintain and this practice and then they work through our OEM and then for both our domestic and overseas market. And there's also some change recently.
Yes.
Okay. So the.
The 2000 units that you mentioned, yes. It is for the overall high horsepower last bar is indeed.
Speaker #8: It's from the Chinese, the internet, the major player. And then they are approaching us directly and then facing the order.
But the follow up is with the cadence of that is the data centers.
Right now the other constraint.
Australia is part of us that penalty.
Speaker #8: So the we will also and then they are adapting and then their requests and then the work goes to them with them. But this is a not all the I an, not all the order come from, but our major order is still coming from OEM, yeah.
The.
The result of casting capacity wishes.
They see it in India machining capacity, so that if somebody that we're working on right now are the ones that you have to be resolved them should they come back at it and.
Speaker #8: Thanks. I'm rowing a question. I think the bulk of our sales has gone to the domestic market. The domestic market is actually quite strong.
You should be able to improve decrease of pumps.
Volume for the walls.
Now this is all the time you add any type of spot rates for the MTO.
Speaker #8: So we have been servicing them more on the domestic market. And we have very little that's gone out to the export market, especially in Southeast Asia, like Malaysia and also Singapore.
MTO side, it's basically the suppliers.
The capacity is there, but the combos, which talks about policies are.
Countries.
Speaker #8: There are some, but not necessarily compared to our business this year.
There's limited capacity that themselves and so they have to locate the component then you'll be trying to get a budget that's a K a.
Speaker #14: Okay. Thank you.
There's a bottleneck.
Speaker #2: Thank you. And now we're going to take our next question. And the question comes to the line of Jackie Yu from CGS International. Your line is open.
Thank you and my follow up my follow up on the capacity of the JV part so from what I understand I'm curious find so this German component is being supplied to both the China factory.
Speaker #2: Please ask your estion.
Speaker #15: Hi. So thank you for taking my question. So my question is about the capacity of the DC engines. I want to first clarify on the number of 2,000 units capacity.
In other countries I just sure. If this is a concern about the end market S. P.
And how much how much it's a difference between the.
Speaker #15: Could you clarify if this is the overall capacity, so for the JV part plus the in-house part? And also, could you share for the in-house part, what is the bottleneck for the capacity, please?
S P a china market versus overseas market.
Okay.
The.
Speaker #15: Thank ou.
On the joint venture operations.
Speaker #8: Okay. So the 2,000 units that you mentioned, yes, it's for the overall high-horsepower. Last four engines. But the bulk of would be catered to the data centers.
Because of the Uh huh.
The joint venture agreement that they had some component that we need to procure from the from the German operation. So that's why in that that we are not allowing them to localize those items and at the moment the Navy's Osha those items nbn beings.
Speaker #8: Right now, the constraint that we have is not so much the assembly. It's in the we just resolved the casting capacity, which is it's in the machining capacity.
There's a piece of the pie and then being a bottleneck for the whole operation.
And those items.
Yeah.
Speaker #8: So that's something we're working on right now. Once that we resolve the machining capacity, then we should be able to improve, increase on some volume for the volume.
No.
Now what do you think Q2 supply to China.
So we're surprised the world why operational things to you.
So that's why.
Uh huh.
<unk> for the Chinese operation.
Speaker #8: Now, this is for the Yuchai side. Whereas for the MTU side, it's basically the supply of components. The capacity is there, but the components, which come from overseas reference countries, have limited capacity there itself.
So somehow iberdrola and that depends on the overall demand of the global market.
There will be some.
Our power on CNN 40 for the German operation and also for the U S operation as well so that's why.
Speaker #8: And so they have to allocate the components, and we have been trying to get as much as we can. And that's the bottleneck.
We are always an M b a.
There's some.
So I'll take <unk> and then the Ethernet and IP at the order book already.
Yeah. Thank you.
Speaker #14: Thank ou. May I follow up on the capacity of the JV part? So from what I understand, MTU is supplying the so this German component is being supplied to both the China factories and also in other countries.
Thank you very much.
Maybe I'll pause there.
Christian program costs.
The question is if any trials it will raise the dividend payout and repurchase.
There's no plan for Liberty purchase right now, but in terms of dividend.
Speaker #14: I could you share if this is a concern about the end market ASP? And how much is the difference between the ASP in China market versus overseas market?
Great.
Although we do not have a formal dividend payout policy.
So.
It would be likely.
Wiley continues at breakfast grateful thank.
Speaker #14: Thank ou.
Thank you.
Speaker #8: I mean, on the joint venture operation, the because of the joint venture agreement, then there's some component that we need to procure from the German operation.
Yeah participants as a reminder, if you wish to ask a question. Please press star one to one on your telephone keypad I tentatively you can submit your questions why the webcast DSP.
Speaker #8: So that's why. And then we are not allowing them to localize those items. And at the moment, the main thing is that those items are being in subscription high and then being a bottleneck for the whole operation.
Dear speakers, we will just keep amendment to our participants.
And I have a question from Anthony from Daiwa capital market. Your line is open. Please ask your question.
Speaker #8: And the those items they are not not only and then to supply to China, but they will also supply the worldwide operation of the MTU.
Oh can I have a follow up on the JV profit I remember last quarter last last result, you mentioned that there was another session in in our in your JV thought with just a reach a breakeven how it stopped shipment and all of the segments performing these days.
This first half.
Okay.
I've learned that they were broken.
Yes, it's actually make it a little bit more profit this year, but it's still not material yet.
People looked at those above.
Profit from <unk>.
From the leap on the <unk> joint venture.
Okay got it thank you.
Thank you.
Okay.
We have now reached the end of our question and answer session I will turn the call back over to Mr. Holt. Please go ahead.
Yeah.
Okay. Thank you all for participating in our conference call.
Every one of our views of health and we look forward to speaking with you again. Thank you.
My apologies, we just got one more question comes so are you happy to take that please.
Navin.
Jackie This amendment.
Yeah.
And the question comes the line of Martin Cheung from H D Capital. Your line is open. Please ask your question.
Hi management, thanks for taking the bus.
For taking my last question I, just wanted to clarify thats for the <unk>.
Data center engine shipments.
How many have you shifted from new China, how many U.
It was shipped from the <unk> for the first half of the year.
Alright Martin.
And the first half of 2025.
Our own operation that you try and then they ship 615 unit.
For the market and the.
<unk> joint venture is a 350, so total which are about 1000 altogether for the first half.
Are they owe for the data center or yeah, Okay, great. Thank you Jeff.
It's just one data center.
Okay very clear.
Manny I guess, a breakdown for like domestic and overseas I think you mentioned that for UGI.
Yourself that mostly for <unk>.
Domestic hub out further and to you Jamie.
So Dan you, Jamie and then there is.
Or is it more shale photo for exports through our OEM, but.
Assuming me an NDA for the domestic market.
Okay got it.
I got it last one that May I ask about your order visibility.
We still are expanding.
Capacity are you still fully booked this year and.
If you take a new owner.
When will be like this.
I mean, the fastest time that you could deliver.
Okay.
We actually had affordable for this year and for all your time brand and also for the joint venture it Brian.
For the next year on the 20th 96.
The joint venture is a stunning receiving order yeah.
Okay.
Okay. Thank you thanks very much.
Thank you.
And this was our last question for today and now I would like to turn back to Mr Hall for any closing remarks.
Right, Yeah, I think maybe that earlier so yeah. Thank you I'll.
See you again.
Yes.
Thank you.
This concludes today's conference call. Thank you for participating now disconnect have a nice day.