China Yuchai's Q4 2024 Earnings Call: Contradictions in JV Profitability, Capacity Expansion, and Market Outlook

These are the key contradictions discussed in China Yuchai International Limited's latest 2024Q4 earnings call, specifically including: JV Profitability and Capacity Expansion Challenges, export sales outside of China, and expectations for engine market performance in China:



Strong Performance in Truck and Bus Engine Sales:
- China Yuchai International Limited's truck and bus engine sales increased by 17.2% year-on-year for the full year 2024, outperforming the overall market which saw a 2.6% decline.
- The growth was driven by the company's successful management of production costs and competitive pricing strategies.

Data Center Generator Business Expansion:
- The company's genset engine sales rose significantly in 2024, with MTU joint venture sales exceeding 700 units, including applications for data centers.
- The expansion was primarily due to strong demand in the data center sector and strategic partnerships, such as the MTU Yuchai Power venture.

Increased Research and Development Expenditure:
- China Yuchai's R&D expenditure for 2024 totaled RMB1.2 billion, representing 6.2% of revenue, with a 21.2% increase in the second half of 2024.
- This investment was focused on enhancing engine efficiency, new energy solutions, and alternative fuel technologies like hydrogen.

Shareholder Returns and Cash Management:
- The company completed a share buyback program worth $39.8 million and distributed a cash dividend of $0.03 per share.
- These actions reflect the company's confidence in its financial health and commitment to returning value to shareholders, while maintaining a strong cash balance of RMB6.4 billion.