China Yuchai International Limited

Good day, and thank you for standing by. Welcome to the China UChai International Limited first half 2025 financial results conference call and webcast. At this time, all participants are in listen-only mode. 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, one, one on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the conference. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Kevin Seas. Please go ahead.

Thank you for joining us today, and welcome to China Yuchai International Limited's conference call and webcast for the first half of 2025, ended on June 30, 2025. Joining us today are Mr. Wei-Ming Hou and Mr. Chun-Sin Liu, President and Chief Financial Officer of CYI, respectively. In addition, we also have in attendance Mr. Calvin Lai, General Manager of Operations of CYI and Chairman of MTU Yuchai Power Company Limited or MTU Yuchai Power. Before we begin, I will remind all listeners that the WAPIS 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, 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 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. The company cautions that these statements by their nature involve risk 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 company's Form 20Fs 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, whether of the nature contained in the press release, made during today's call, or otherwise in the future. Mr. Ho will provide a brief overview and summary, and then Mr. Liu will review the financial results for the first half year ended June 30, 2025. 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 U.S. dollars. 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 report.

Thank you, Kevin. We are pleased to report that our unit 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. Drop profit rose by 30.3% year-over-year to RMB 1.8 billion or US dollars 257 billion. Operating profit increased by 42.3% year-over-year and profit to equity holders of company rose by 52.2% year-over-year. Earnings per share were 65.8% higher year-over-year to RMB9.75 or US$1.36. This growth in our financial results was due to the sale of light duty, medium duty and heavy duty engines, our new energy products, high-force power engines and solutions we provide to our customers. 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. According to data from the China Association of Automobile Manufacturers, CAAM, truck and bus unit market sales, excluding gasoline and electric-powered vehicles in first half decline by 2.6% year-over-year, while our combined truck combustion engine unit sales were up by 38% year-over-year. 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 unit sales growth was led by a 40.7% year-over-year rise in the important heavy-duty truck set in contrast to the negative 2.8% year-over-year growth in the heavy-duty truck market unit sales, according to CAM. We experienced strong growth in the HD market truck engine segment, or heavy-duty truck engine segment, which is mainly attributable to gas engine sales or heavy-duty trailers. Our overall bus engine unit sales in first half 2025 achieved 8.9% year-over-year growth, compared with CAM bus unit sales of negative 7.5% year-over-year. 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 unit sales increased by 17.5% year-over-year first half 2025 led by an engine sales increase of 31.5% year over year in the marine and power generation market. Data centers require significant amounts of reliable electric power to 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 2025. Each high subsidiary from CHI Marine and Genset Power Company and Rolls-Royce Power Systems Division has started the second phase cooperation and development of the MTU Each High Power Boat Venture. Included in the second phase will be the MTU Series 4000 oil and gas generation engine, which are expected to begin shipment in late 2025. Also, by adding MTU 2000 model engine and each high-branded V-Seed series diesel engine. In the near future, our power generation business is enhanced to service additional customers and application requirements. Engine unit sales for industrial applications rose by 27.2% year-over-year, and engine sales for agricultural equipment experienced modest unit growth in first half 2025. 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. 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. Despite an increase in total R&D expenses in first half 2025 to US$57.1 million including capitalized costs, R&D represented 4% of revenue in first half 2025 as compared to 4.5% of revenue in first half 2024. Our strategic alliance produced a year-over-year increase in profit propelled by higher sales and profit results from M-EU, E-Chai and improved operations as well across other ventures in first half 2025. As we are well established in the large Chinese engine market, we view international markets as important drivers of future sales growth. Our nearby markets in ASEAN region are prime areas for penetration. Our subsidiary, E-Chai Machinery Power Systems Thailand, is now wrapping up production of a range of diesel engines on the off-road applications. Through a comprehensive strategic cooperation covering technology licensing, component supply, and related support to Vietnam, we are further deepening our market penetration into the growing ASEAN market. The company paid a cash dividend of US$51 for ordinary shares 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. Cash and bank balances were RMB 7.8 billion or US dollars 1.1 billion as at June 30, 2035. With that, I would now like to turn the call over to Mr. Chun Sing Lu, our Chief Financial Officer, who will provide more details on the financial results. So thank you and begin your remarks.