China Yuchai International's CEO Discusses Q2 2012 Results

China Yuchai International Ltd. (CYD) Q2 2012 Earnings Call August 10, 2012 8:00 AM ET

Operator

Ladies and gentlemen, thank you for standing by and welcome to the China Yuchai International Ltd. Q2 2012 Earnings Webcast. (Operator instructions.) I must advise you that this conference is being recorded today, August 10, 2012. I would now like to hand the conference over to your first speaker for today, Mr. Kevin Theiss. Please go ahead, sir.

Kevin Theiss

Thank you for joining us today and welcome to China Yuchai International Ltd.'s Q2 2012 conference call and webcast. My name is Kevin Theiss and I am with Grayling, China Yuthai's US investor relations advisor. Joining us today are Mr. Benny Goh, President; and Mr. Kok Ho Leong, Chief Financial Officer.

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," "targets," "optimistic," "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 are based on current expectations or beliefs including but not limited to statements concerning the company's operations, financial performance, and condition. 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 including those discussed in the company's reports filed with the Securities and Exchange Commission from time to time. The company specifically disclaims any obligation to maintain or update the forward-looking information whether of the nature contained in this conference call or otherwise in the future.

Mr. Goh will provide a brief overview and summary, then Mr. Leong will review the financial results for Q2 and the half year ended June 30, 2012. Thereafter we will conduct a question-and-answer session. For the purposes of today's call, the financial results are unaudited and they will be presented in RMB and US dollars. Mr. Goh, please start your presentation.

Benny Goh

Thank you, Kevin. Good evening, everyone. According to the China Association of Automotive Manufacturers, CAAM, overall diesel-powered commercial vehicle sales were 15.3% lower and the unit sales of heavy-duty diesel-powered trucks and trailers declined by 33.6% in Q2 2012 as compared with the same quarter last year. Unit sales in the first half of 2012, diesel-powered commercial vehicles declined by 13.7% and diesel-powered truck and trailers declined by 31.7% as compared with the same period last year.

Even in such a weak commercial vehicle market environment there were areas of growth, as unit sales of completed passenger busses rose 3.2% with large, medium, and light busses recording higher sales in Q2 2012 versus the same quarter of 2011. For unit sales in the first half of 2012, completed busses rose by just 1% as compared to the same period last year. As the leading player to the medium and large bus sectors in China, we continue to benefit from higher bus sales. Our diversified product mix, especially with our natural gas engine products benefiting each engine class, enable us to defend our gross margin and maintain our competitive edge despite the evolving commercial vehicle market.