China Yuchai International Ltd (NYSE:CYD) Q4 2019 Earnings Conference Call - Final Transcript

Mar 30, 2020 • 08:00 am ET

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China Yuchai International Ltd (NYSE:CYD) Q4 2019 Earnings Conference Call - Final Transcript

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Executive
HOH Weng Ming

13.6%, while the medium-duty truck sales declined by 10.4% compared with the fourth quarter of 2018. Heavy-duty bus sales increased by 17.9% and medium-duty bus sales rose by 18.1% compared with the 2018 fourth quarter.

From a full year perspective, statistics from CAAM show that overall unit sales of autos in China fell 8.2% in 2019 from 2018, with a total of 25.8 million vehicles sold in 2019. This decline followed the 2.8% decrease in 2018.

In the commercial vehicle market in China, CAAM has reported 2019 annual unit sales, excluding gasoline-powered and electric-powered vehicles, decreased by 4.5% overall compared with 2018. This decrease included a 4.7% decline in the truck segment and a 2.6% decrease in unit bus sales.

Sales of heavy-duty trucks increased by 2.1% while the medium-duty truck sales declined by 21.7%. Heavy-duty bus sales increased by 8% and medium-duty bus sales declined by 2.3%. Auto sales have been affected by slower economic growth in 2019.

In addition, the first stage of the National VI emission standards was implemented nationwide in July 1, 2019 for gas engine driven vehicles. This early launch of the National VI emission standards for gas engines, as well of the mandatory implementation of diesel vehicles to be enforced between July 2020 and July 2021.

In the fourth quarter of 2019, our total engine sales were 94,649 unit compared with 93,881 units in the fourth quarter of 2018. Our overall unit sales into the truck engine market were down 4.3%, while we achieved 49.8% growth in the heavy-duty truck engine sales, far surpassing the 13.6% sales increase in the heavy-duty truck market.

Our new natural gas National VI truck engines were well received in the marketplace in the fourth quarter of 2019, as demand for National VI engines accelerated due to mandatory national implementation.

Our sales in the bus engine market increased by 11.7%, which exceeded the 10.4% growth in unit bus sales. This growth was led by double-digit growth in both the heavy and medium-duty bus engine market. Our overall off-road sales increased by 11.9% in the fourth quarter of 2019 with double-digit growth in industrial engine sales.

For 2019 year, our engine unit sales were 376,148 units compared with 375,731 units in 2018. Our truck engine sales were down 1.2% but outperformed the 4.7% decline in the overall truck market. Our sales to the heavy-duty truck market achieved double-digit growth compared with 2018. Our bus engine sales decreased by 10.1% as our sales to the light-duty bus market dropped by double-digit. Our overall off-road sales increased by 9.3% in 2019, led by double-digit growth in industrial engines.

As a technology leader, we design our growth strategy by developing next generation engines before the government mandatory implementation, which enable us to capture early orders and establish our leading market position.

For 2020, we have commercially introduced a portfolio of new diesel engine model complaint with the on-road National VI emission standards for the launch of the National VI vehicles by our OEM