China Yuchai International Announces Unaudited 2023 Second Half-Year and Full Year Financial Results
- Revenue increased by 18.9% to RMB 8.9 billion in the 2023 second half year compared to 2H 2022.
- Gross profit rose to RMB 1.4 billion, with a gross margin of 16.2% in 2H 2023.
- Operating profit was RMB 221.8 million, and basic and diluted earnings per share were RMB 2.62 in 2H 2023.
- Total number of engines sold increased by 5.2% to 147,700 units in 2H 2023.
- For FY 2023, revenue grew by 12.6% to RMB 18.0 billion, and gross profit increased by 16.7% to RMB 2.9 billion.
- Basic and diluted earnings per share for FY 2023 increased by 30.7% to RMB 6.99.
- Net profit attributable to equity holders of the Company was RMB 107.1 million in 2H 2023 and RMB 285.5 million for FY 2023.
- Cash and bank balances were RMB 6.0 billion, trade and bills receivables were RMB 7.8 billion, and inventories were RMB 4.6 billion as of December 31, 2023.
- China Yuchai's President highlighted the company's performance in the truck, bus, marine, and generator markets, emphasizing growth opportunities despite economic challenges.
- R&D expenses increased by 9.9% in 2H 2023, and SG&A expenses rose by 31.7%, impacting the operating margin.
- The total number of engines sold decreased by 2.4% for FY 2023 compared to FY 2022, mainly due to lower sales in certain markets.
- Income tax expense increased significantly in 2H 2023 and FY 2023 compared to the previous periods.
- Finance costs also saw an increase in both 2H 2023 and FY 2023, affecting the company's financial performance.
Insights
The reported increase in revenue of 18.9% for 2H 2023 and 12.6% for FY 2023 by China Yuchai International Limited indicates a robust performance in a challenging economic environment. The growth in heavy-and medium-duty engine sales, particularly in the truck and bus markets, as well as the marine and power generation sectors, underscores the company's strategic diversification. The slight uptick in gross margin from 16.1% to 16.2% suggests improved cost management, despite the overall cost pressures facing manufacturers. However, the decrease in basic and diluted earnings per share from RMB 3.06 to RMB 2.62 for 2H 2023 raises potential concerns about profitability and cost control moving forward.
Investors should note the increase in SG&A expenses, which outpaced revenue growth and may indicate rising operational costs that could erode future margins. Additionally, the increase in finance costs due to higher bills discounting suggests a more expensive capital structure, which could impact the company's financial flexibility. The significant improvement in the share of financial results from associates and joint ventures is noteworthy, as it reflects better operational performance and could be a sign of future earnings potential from these partnerships.
The company's balance sheet shows a healthy cash position, which provides strategic flexibility for future growth opportunities or to weather economic downturns. Nonetheless, the increase in trade receivables and borrowings warrants monitoring for potential liquidity risks. The overall financial performance of China Yuchai presents a mixed picture, with strong revenue growth but some areas that require careful management to sustain profitability.
China Yuchai's performance can be contextualized within the broader commercial vehicle market in China, which, according to CAAM, experienced a 28.2% increase in sales for 2H 2023. This industry-wide growth trend aligns with China Yuchai's increased engine sales, suggesting that the company is maintaining its market share. However, the decrease in total engine sales for the full year, despite the overall market growth, may indicate competitive pressures or a shift in market demand away from the company's product mix.
The emphasis on R&D investment, particularly in National VI and Tier-4 emission standard compliant engines and new energy products, positions China Yuchai favorably in a market that is increasingly focused on environmental standards and innovation. While R&D expenses have increased, the proportion of revenue dedicated to R&D has decreased slightly, which may raise questions about the company's long-term commitment to innovation relative to its revenue growth.
From a market perspective, the company's strategic focus on diversifying its product portfolio to serve multiple end markets appears to be a prudent approach in mitigating risks associated with economic fluctuations and sector-specific downturns. The reported growth in the marine and generator business, as well as the positive developments in key joint ventures, points to the potential for China Yuchai to leverage these segments for future growth.
China Yuchai's financial results must be viewed against the backdrop of the Chinese economy's growth of approximately 5.2% in 2023. Despite this economic expansion, the weak property market and decline in non-government fixed asset investment reflect a challenging macroeconomic environment that can affect industrial demand. The company's ability to grow revenue in such a context is indicative of strong sector-specific dynamics, particularly in the commercial vehicle sector.
Consumer confidence and deflationary pressures mentioned in the report are critical factors that can influence the company's performance. Subdued consumer confidence can impact the demand for commercial vehicles, which in turn affects engine sales. Deflationary pressures can lead to competitive pricing strategies and potential margin compression. China Yuchai's ability to maintain gross margin growth in this environment is noteworthy, but continued vigilance is required to navigate potential economic headwinds.
The increase in income tax expense due to under-provision in prior years and higher taxable income is a reminder of the importance of accurate financial forecasting and provisioning. The company's strong balance sheet, with increased cash and bank balances, provides a buffer against economic uncertainty and positions it to capitalize on growth opportunities as they arise.
Financial Highlights for 2H 2023
- Revenue increased by
18.9% toRMB 8.9 billion (US ) compared with$ 1.3 billion RMB 7.5 billion in 2H 2022; - Gross profit was RMB 1.4 billion (
US ) compared with$ 202.4 million RMB 1.2 billion in 2H 2022. Gross margin was16.2% in 2H 2023 compared with16.1% in 2H 2022; - Operating profit was RMB 221.8 million (
US ) compared with$ 31.3 million RMB 231.3 million in 2H 2022; - Basic and diluted earnings per share were RMB 2.62 (
US ) compared with$ 0.37 RMB 3.06 in 2H 2022; - Total number of engines sold increased by
5.2% to 147,700 units compared with 140,345 units in 2H 2022.
Revenue was
The total number of engines sold in 2H 2023 increased by
According to data reported by the China Association of Automobile Manufacturers ("CAAM"), in 2H 2023, commercial vehicle unit sales in
Gross profit was
Other operating income increased by
Research and development ("R&D") expenses increased by
Selling, general and administrative ("SG&A") expenses increased by
Operating profit was
Finance costs increased by
The share of financial results of the associates and joint ventures climbed to a profit of RMB 32.5 million (
Income tax expense was
Net profit attributable to equity holders of the Company was
Basic and diluted earnings per share were
Basic and diluted earnings per share for 2H 2023 and 2H 2022 were based on a weighted average of 40,858,290 shares.
Financial Highlights for FY 2023
- Revenue grew by
12.6% toRMB 18.0 billion (US ) compared with$ 2.5 billion RMB 16.0 billion in FY 2022; - Gross profit increased by
16.7% toRMB 2.9 billion (US ), a$ 411.7 million 16.2% gross margin, compared withRMB 2.5 billion and a gross margin of15.6% in FY 2022; - Operating profit increased by
17.4% toRMB 609.4 million (US ) compared with$ 86.0 million RMB 519.3 million in FY 2022; - Basic and diluted earnings per share increased by
30.7% toRMB 6.99 (US ) from$ 0.99 RMB 5.35 in FY 2022; - Total number of engines sold decreased by
2.4% to 313,493 units compared with 321,256 units in FY 2022.
Revenue was
The total number of engines sold in FY 2023 decreased by
According to CAAM, commercial vehicle unit sales in
Gross profit increased by
Other operating income increased by
R&D expenses increased by
SG&A expenses were
Operating profit grew by
Finance costs increased by
The share of financial results of the associates and joint ventures was income of RMB 62.1 million (
Income tax expense was
Net profit attributable to China Yuchai's shareholders was
Basic and diluted earnings per share were
Basic and diluted earnings per share for FY 2023 and FY 2022 were based on a weighted average of 40,858,290 shares.
Balance Sheet Highlights as at December 31, 2023
- Cash and bank balances were RMB 6.0 billion (
US ) compared with$ 852.7 million RMB 4.9 billion at the end of FY 2022; - Trade and bills receivables were RMB 7.8 billion (
US ) compared with$ 1.1 billion RMB 6.8 billion at the end of FY 2022; - Inventories were RMB 4.6 billion (
US ) compared with$ 656.4 million RMB 4.9 billion at the end of FY 2022; - Trade and bills payables were RMB 7.6 billion (
US ) compared with$ 1.1 billion RMB 6.9 billion at the end of FY 2022; - Short-term and long-term loans and borrowings were RMB 2.5 billion (
US ) compared with$ 358.7 million RMB 2.3 billion at the end of FY 2022.
Mr. Weng Ming Hoh, President of China Yuchai, commented, "Our strategy of maintaining a diverse product portfolio serving multiple end markets proved effective in generating profitable revenue growth amid uncertain times. In 2023, the Chinese economy grew by approximately
"Despite these challenges, we are pleased to report that our heavy-duty engines for the truck and bus markets experienced robust growth in the second half of 2023. In addition, our marine and generator business achieved over
"Our strong balance sheet provides the resources to take advantage of future growth opportunities," Mr. Hoh concluded.
Disclaimer Regarding Unaudited Financial Results
Investors should note that the Company has not yet finalized its consolidated financial results for FY 2023. The financial information of the Company presented above is unaudited and may differ materially from the audited financial statements of the Company for FY 2023 to be released when it is available.
Exchange Rate Information
The Company's functional currency is the
Unaudited 2H 2023 and FY 2023 Conference Call
A conference call and audio webcast for the investment community has been scheduled for 8:00 A.M. Eastern Standard Time on February 27, 2024. The call will be hosted by the President and Chief Financial Officer of China Yuchai, Mr. Weng Ming Hoh and Mr. Choon Sen Loo, respectively, who will present and discuss the financial results of the Company followed by a Q&A session.
Analysts and institutional investors may participate in the conference call by registering at: https://register.vevent.com/register/BIaa9ad5e8ac7a497b938a4b7ca61e8015 at least one hour before the scheduled start time. A reply email will be sent with instructions and numbers to join the call.
For all other interested parties, a simultaneous webcast can be accessed at the investor relations section of the Company's website located at http://www.cyilimited.com. Participants are encouraged to join the webcast at least 10 minutes prior to the scheduled start time. The recorded webcast will be available on the website shortly after the earnings call.
About China Yuchai International
China Yuchai International Limited, through its subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), engages in the manufacture, assembly, and sale of a wide variety of light-, medium- and heavy-duty engines for trucks, buses, passenger vehicles, construction equipment, marine and agriculture applications in China. GYMCL also produces diesel power generators. The engines produced by GYMCL range from diesel to natural gas and hybrid engines. Through its regional sales offices and authorized customer service centers, GYMCL distributes its engines directly to auto OEMs and retailers and provides maintenance and retrofitting services throughout China. Founded in 1951, GYMCL has established a reputable brand name, strong research and development team and significant market share in
Safe Harbor Statement:
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements including, but not limited to, statements concerning China Yuchai group of entities' operations, financial performance and condition are based on current expectations, beliefs and assumptions which are subject to change at any time. China Yuchai 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
For more information:
Investor Relations
Kevin Theiss
Tel: +1-212-510-8922
Email: cyd@bluefocus.com
-- Tables Follow --
CHINA YUCHAI INTERNATIONAL LIMITED UNAUDITED CONSOLIDATED INCOME STATEMENTS For the six months ended December 31, 2023 and 2022 | |||||
| Second Half of 2022 | ||||
RMB '000 | US$ '000 | RMB '000 | US$ '000 | ||
Revenue | 8,875,346 | 1,253,102 | 7,462,131 | 1,053,572 | |
Cost of sales* | (7,441,906) | (1,050,716) | (6,258,913) | (883,690) | |
Gross profit | 1,433,440 | 202,386 | 1,203,218 | 169,882 | |
Other operating income, net | 306,161 | 43,227 | 251,264 | 35,476 | |
Research and development expenses | (470,531) | (66,434) | (427,957) | (60,423) | |
Selling, general and administrative | (1,047,307) | (147,869) | (795,272) | (112,284) | |
Operating profit | 221,763 | 31,310 | 231,253 | 32,651 | |
Finance costs | (46,533) | (6,570) | (40,241) | (5,682) | |
Share of results of associates and joint | 32,452 | 4,582 | 1,849 | 261 | |
Profit before tax | 207,682 | 29,322 | 192,861 | 27,230 | |
Income tax expense | (37,869) | (5,347) | (2,578) | (364) | |
Profit for the period | 169,813 | 23,975 | 190,283 | 26,866 | |
Attributable to: | |||||
Equity holders of the Company | 107,141 | 15,126 | 124,857 | 17,629 | |
Non-controlling interests | 62,672 | 8,849 | 65,426 | 9,237 | |
169,813 | 23,975 | 190,283 | 26,866 | ||
Net earnings per common share | |||||
- Basic | 2.62 | 0.37 | 3.06 | 0.43 | |
- Diluted | 2.62 | 0.37 | 3.06 | 0.43 | |
Unit sales | 147,700 | 140,345 | |||
CHINA YUCHAI INTERNATIONAL LIMITED UNAUDITED CONSOLIDATED INCOME STATEMENTS For the years ended December 31, 2023 and 2022 (RMB and US$ amounts expressed in thousands, except per share data) | ||||
|
| |||
RMB '000 | US$ '000 | RMB '000 | US$ '000 | |
Revenue | 18,046,349 | 2,547,948 | 16,030,636 | 2,263,351 |
Cost of sales* | (15,130,711) | (2,136,291) | (13,532,102) | (1,910,585) |
Gross profit | 2,915,638 | 411,657 | 2,498,534 | 352,766 |
Other operating income, net | 442,362 | 62,457 | 336,756 | 47,546 |
Research and development expenses | (876,578) | (123,763) | (836,438) | (118,096) |
Selling, general and administrative expenses* | (1,871,973) | (264,303) | (1,479,561) | (208,899) |
Operating profit | 609,449 | 86,048 | 519,291 | 73,317 |
Finance costs | (100,175) | (14,144) | (95,472) | (13,480) |
Share of results of associates and joint ventures | 62,078 | 8,765 | (29,093) | (4,108) |
Profit before tax | 571,352 | 80,669 | 394,726 | 55,729 |
Income tax expense | (148,496) | (20,966) | (59,065) | (8,339) |
Profit for the period | 422,856 | 59,703 | 335,661 | 47,390 |
Attributable to: | ||||
Equity holders of the Company | 285,518 | 40,312 | 218,581 | 30,860 |
Non-controlling interests | 137,338 | 19,391 | 117,080 | 16,530 |
422,856 | 59,703 | 335,661 | 47,390 | |
Net earnings per common share | ||||
- Basic | 6.99 | 0.99 | 5.35 | 0.77 |
- Diluted | 6.99 | 0.99 | 5.35 | 0.77 |
Unit sales | 313,493 | 321,256 | ||
*Comparatives
Management has reclassified certain freight charges from selling and distribution (within selling, general and administrative expenses) to cost of sales. These freight charges were incurred prior to ownership transfer as part of the obligation to fulfil deliveries to the customers. The comparative figures in the Income Statement for the six months and full year ended December 31, 2022 had been adjusted to conform with the current year's presentation. The changes to 2022 comparatives have no impact on the operating profit for the period of the Group, its financial position or cash flows.
CHINA YUCHAI INTERNATIONAL LIMITED SELECTED UNAUDITED CONSOLIDATED FINANCIAL POSITION ITEMS For the years ended December 31, 2023 and December 31, 2022 (RMB and US$ amounts expressed in thousands) | |||
December 31, 2023 |
| ||
RMB '000 | US$ '000 | RMB '000 | |
Cash and bank balances | 6,039,471 | 852,707 | 4,850,743 |
Trade and bills receivables | 7,813,228 | 1,103,143 | 6,792,958 |
Inventories | 4,649,027 | 656,392 | 4,937,755 |
Trade and bills payables | 7,634,273 | 1,077,876 | 6,919,421 |
Short-term and long-term loans and borrowings | 2,540,294 | 358,662 | 2,341,432 |
Company | 9,226,528 | 1,302,685 | 9,008,946 |
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SOURCE China Yuchai International Limited
FAQ
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