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.

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.

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. We continued to increase sales in our natural gas engine sector and maintain our leadership in the on-road diesel engine market through our ongoing introduction of new products and closer collaboration with our OEM customers. In recent years, the policies of the Chinese government have encouraged energy conservation and emissions reduction. China’s ’12 five-year plan targets a 16% and 17% reduction in energy use and carbon dioxide emissions respectively per unit of economic output by 2015. Out of seven strategic investment areas identified under the ’12 five-year plan, three are related to energy – namely clean energy, energy conservation, and clean energy vehicles. Under the…

Thank you, Benny. Let me first walk you through our Q2 2012 financial results. Net revenue for Q2 2012 was ¥3.43 billion, $541.7 million compared with ¥4.02 billion in Q2 2011. The total number of diesel engines sold by GYMCL during Q2 2012 was 109,329 units compared with 129,236 units in Q2 2011, a decrease of 29,970 units or 21.5%. This was mainly due to weaker demand in the commercial vehicle market especially in the truck segment. However, a greater number of natural gas engines were sold this quarter compared with Q2 2011 as we executed our engine diversification strategy and maintained our dominance in the bus market. The decline in net sales was ¥590.9 million or 14.7% as compared to the same period in 2011. Thanks to our increased sales of engines meeting higher emissions standards and natural gas engines across the light, medium and heavy-duty markets our average selling price increased both top sequentially and versus the same quarter a year ago. Gross profit was ¥674.1 million, $106.6 million compared with ¥771.1 million in Q2 2011. Gross margin increased to 19.7% in Q2 2012 as compared with 19.2% a year ago. The higher gross margin was attributable to lower costs of raw materials. This gross margin increase was partially offset by the higher direct label and (inaudible) overhead cost per unit as the sales volume decreased in Q2 2012. Other income was ¥11.6 million, $1.8 million, a decrease of ¥9.7 million from ¥21.4 million in Q2 2011. This decrease was mainly due to unrealized foreign exchange revaluation losses. Research and development, R&D expenses were ¥95.3 million, $15.1 million compared with ¥82.0 million in Q2 2011, an increase of 16.2%. As a percentage of net revenue, R&D spending rose to 2.8% compared with 2.0% in Q2 2011. The increase…

Certainly, sir. We will now begin the question and answer session. (Operator Instructions.) Your first question comes from the line of Mr. Alex Potter from Piper Jaffray. Please ask the question, sir. Alex Potter – Piper Jaffray: Yep, hi guys. Thanks for taking the call. So I guess first of all just from a broad market standpoint, obviously the truck market in China is still pretty weak. Are you guys seeing any sort of incremental pickup in demand on the year-over-year sequential basis, and if not when do you think that will start to materialize?

Hi, Alex. Right, I think the market is still very weak. In fact we are seeing this quarter actually a much lower demand in our truck market than in Q1, so this is not a good sign. At first we anticipated this picking up towards the second half of the year. What we are now looking at is that probably it will take a while, towards the end of the year or if not early next year before the truck market recovers. That is actually more or less in synch with the fact that with a change of government it might also catalyze the incentives that we are all looking forward to. Right now there are virtually no incentives that are concrete enough for the market to be [stood] up. Alex Potter – Piper Jaffray: Okay. Very good. And I had another question here, just kind of a housekeeping issue: on a percent of sales basis taxes were obviously somewhat big in the quarter, bigger than what I had expected. Can you give any sort of forward-looking guidance on what sort of tax rate we should be modeling for an effective tax rate basis for the next couple quarters?

Yes, Leong here. If you look at our effective tax rate we are always around 15% or slightly above that. You can do your mathematics. The underlying driver is our main operating subsidiary, which is the Guangxi plant is operating from the western province. It has been enjoying the preferential tax treatment of 15%. From the year 2011 onwards, for another three years, they are now under this high technology incentive scheme by where they also enjoy 15% of preferential tax. And thereafter well, our main operating [unit] GYMCL can still continue to apply either under the western development incentives or the high technology incentives. So we have succeeded in applying under both schemes so we will see how it goes when we reach the point to apply for the tax incentives again. So [bearing on the circumstances we can see], we are continuing to operate at this level of tax rate, slightly above 15%.

Thank you, sir. Your next question comes from the line of Mr. David Russell from I.S.I. Group. Please ask your questions, sir. David Russell – I.S.I. Group: Thank you for the opportunity. Two questions, one about gross margins and one about the off-highway demand: first, obviously the gross margins were impressive given that volumes were down. You obviously mentioned raw material costs are down. You also mentioned pricing was up year-over-year and sequentially. Just so I’m clear, is that incorporating mix or was it apples-to-apples? Because you mentioned the mix was more light engine so it seemed like a lot of mix issues working against you, volume working against you; so I’m trying to figure out how you were able to keep your gross margins up, so maybe more color on the raw materials… I’m just trying to understand how to think about your margins the next couple quarters say even if volumes get worse; and then of course on the upside if volumes get better, what that could mean. It’s just that it was impressive that gross margins were up with that type of volume decline.

David, this is Leong here. Maybe I would want to answer both in the quarter as well as the year-to-date. If you look at both at these two periods, either as a quarter period to year-to-date, we have a similar gross profit trend. We defended it well I think. On the raw materials side you can see that even in the international scene the metal prices are coming down, and also in China with domestic purchases we have witnessed a similar trend that the purchasing price is lower. Actually, our overseas purchasing partner has dropped even more but it does not form a significant part of our raw material costs. So overall these are the contributing factors for the raw materials cost decline. As for the sales mix, there’s a few factors. On the one hand we have some pressure because we are selling more of the light-duty engines, but on the other hand we are selling and increasing our range of products to sell – those are higher emission standards engines. And this effectively I think increased our average sales price. So as a result of all these factors you can see we are able to defend our gross profit in spite of the fact that we are moving more to the light-duty engine. David Russell – I.S.I. Group: And I’m sorry, on the pricing – so pricing on an apples-to-apples basis, you are getting a higher price for your engines today than this time last year despite volumes down?

The answer is twofold. If we are selling the same model we are facing price pressure and that is a fact. It is not only affecting us; it’s also other competitors in the same business. And on the other hand there are certain customers that used to buy in the larger volumes, but at the reduced volume they are not able to enjoy the previously favorable sales price. So that adds another dimension that helped us to increase our sales price in that [space]. So it cuts both ways when the sales volume comes down. David Russell – I.S.I. Group: And my last question and then I’ll get off the line: off-highway equipment, typically production improves the last few months of the year as manufacturers get ready for Chinese New Year. Have you had any conversations with your off-highway customers that suggests that we will or won’t see that seasonal pickup? And if we will, maybe put it in perspective versus last year.

David, off-highway there are [K] classifications. We are talking about some of the construction, we are talking about a bit of the marine and also the power gen. Let’s look at it one to another: in terms of construction, it’s still a bit hazy right now. We do not see a lot of [FEI] and in our discussions with our major customers it’s still a bit hesitant. They are not going to stock up at this moment; they’re still looking for some clarity in where the incentives of the government and also where the development is going to take place after the change of the leadership. In terms of the marine off-highway, yes, we see some traction in that. In fact we are looking at a lot of growth even in the first half of the year, and s we are fairly optimistic in terms of the marine side. Power gen is relatively flat and we believe this may pick up towards the last quarter of the year as our economy starts to improve; however, we are still pretty much cautious about this area as well. David Russell – I.S.I. Group: Thank you very much.

Thanks, David.

Thank you, sir. (Operator instructions.) Your next question comes from the line of Mr. Jerry Revich from Goldman Sachs. Please ask your question. Ravi Gill – Goldman Sachs: Hi, this is Ravi Gill on for Jerry. I guess one question on the natural gas market: can you say more about the natural gas engine opportunity? What’s the size of the potential market, and in which regions of China do you see that developing?

Okay, right now we see that the natural gas market provides the biggest opportunity obviously in the busses, and that is because the busses are very much a municipal vehicle so within the cities themselves the infrastructure is very much in place. And so we have seen that traction and we see that as a growing market. As a matter of fact, we are anticipating probably about 8% of our sales will be in the natural gas engines by 2015. For the truck market, right now we are bullish about it but we still need to have a few factors to be in place for this to really take off, and that is really for the filling stations between cities. Having said that, of course the technology of LPG in the tanks will allow us to have a longer radius of operation for the trucks and that will also help in this growth as well. Ravi Gill – Goldman Sachs: Okay, and then can you talk more about maybe the current economics for the truck owners? What are the incremental costs to owning a nat gas engine versus a diesel? And what kind of payback are they seeing on their investment?

Right now we are looking at the price difference of about 20% to 25% for a natural gas engine versus a typical diesel engine. That is of course the initial high investment that they see in terms of price difference, but the operating impact is that they should see a payback within a year or a year and a half. So the cost savings are pretty substantial from that angle. What we have actually kind of guessed is that for the price per kilometer for a diesel is maybe 45 to 50 whereas in a gas engine it’s about 35 per kilometer, so that’s about a 20% cost savings in operations. So that’s a fairly attractive means of really switching into a new form of cleaner engine as well. Ravi Gill – Goldman Sachs: Okay, thanks. And just one final question: what’s the timing of the national [Four Engine Standards] and how much do you expect that to increase engine prices?

We used to be very bullish about that not having a huge impact on driving the demand, but now as we look at it it’s time for July, 2013. Having said that, we are looking at the fact that because of the poor economy we suspect that maybe the authorities may not enforce it very closely; so in other words, there will still be a [national three engines] in the market as [national four] will be in place. So what we see is there’s going to be some kind of a kickoff but it’s not going to be as dramatic as we initially envisaged. And not only the price difference but because of the emissions capability of the [zero four] engines they are looking at about a 20% kind of price difference. Ravi Gill – Goldman Sachs: Okay, thanks for taking my questions.

Thank you.

Thank you very much. Your next question comes from the line of Ms. Sandy Mehta from Value Investment. Please ask your question. Sandy Mehta – Value Investment : Yes, thanks for taking my question. It looks like you guys did a great job in cash generation so it seems like your net cash balance, which is cash minus all debt has increased by $175 million. So you know, you have $463 million of cash which is now 90% of your market cap. But if I look at your receivables balance it still seems about $300 million above the normal level that you’ve had the past few years, so my question is this: do you still expect your receivable balance to come down a little bit over the next few quarters and that could potentially release another $300 million in cash that could be on the balance sheet as net cash? Thank you.

Okay, this is Leong here. When you look at the receivables, that line item that we disclosed is the combination of trade receivables as well as bill receivables, so there are two components. At the moment a large part of this balance, a significant portion of this balance is actually from bill receivables which are bank instruments. So when we are holding to this instrument we can discount it for cash, so this is the combination of the dynamics between whether it is cheaper to hold onto this bill and discounting it or it is cheaper to have other funding instruments. So my short answer to you is well, it depends on the money market situation. So it is the only assurance I can give to you is that a significant part of this balance comes from bank-backed instruments because we are dealing with the major OEMs in China and they have the ability to issue such instruments as a form of payment to us. There’s also another question that’s come out from the audience sending in by fax. I will answer it at the same time because it is related to funding. Somebody has asked have we issued any interest-bearing securities in 2012? We have not announced anything but as usual, as a company of our size where we are dealing with a large volume, we have to explore all different options of funding – whether it’s a strict bank loan or a factoring of our accounts receivables or discounting our bills receivable, or even entering into financing bonds as we have done in 2011. These are all options on the table that we will consider, depending on the market dynamics, especially the money market dynamics. Sandy Mehta – Value Investment : So is it fair to assume that if money market rates or your factoring rates come down then some of these trade bills that you have, you might factor them and then release as cash?

The answer is yes. Sandy Mehta – Value Investment : And if I may ask another question, a few quarters ago there was a lot of excess inventory of engines and trucks in the channel. Has that been worked down quite a bit, that now that the inventory in the channel is a lot less now we’re more at normal levels? Thank you so much.

Sandy, we have spoken to some customers recently and we are looking at the inventories coming down somewhat but still relatively high. But I think it is good news that it’s [leveling a bit out]. Some are saying that they see about three months’ of inventory, which is acceptable in this kind of situation. Sandy Mehta – Value Investment : Thank you.

Thank you very much. Your next question comes from the line of Mr. Jonathon Brodsky. Please ask your question, sir. Jonathan Brodsky – Advisory Research: Gentlemen, thank you very much for speaking with us today. As it relates to the balance sheet, given the considerable cash level it was a bit surprising to see sort-term and long-term interest-bearing loans go up during the period although we saw receivables go down as well as cash and cash equivalents go up. Why would you take out relatively high interest-bearing notes at around 4.5% given the extremely high levels of cash that you’re carrying and the opportunity to factor some of your receivables.

Yeah, just to refresh a little bit of what we have done: in 2011 we actually issued a total of ¥2.39 billion of short-term financing bonds over three tranches. The first one was in March, followed by July and followed by November. So the number that you are seeing on June 30 carries the second and third tranches. The second tranche is ¥700 million, the third tranche is ¥690 million so it is something that we have carried out in 2011. But the big question behind this question will be what is our funding strategy because given such a sizable company like Yuchai we have to continually explore various funding options. For example, if you (inaudible) with a short-term notes you never have a chance to move to medium-term notes, whether we want to move into the future or not. But as a company, as we mature we have to explore various options. So my quick answer to you is what we are holding now as of June 30th is the result of what we have issued in the year 2011. Jonathan Brodsky – Advisory Research: But I guess, just coming back to that, the financing costs continue to escalate and yet your cash levels continue to go up. So I’d just ask you to perhaps help us understand other than preparing for the future and making sure you have financing in place, it seems to me to be getting to the point of excess – and perhaps you can explain why cash has held at such a high level, but if you take the receivables that you mentioned, the majority of them are bills receivable. And you can factor them at 80% and then you have your cash and your cash equivalents. You’re looking at a company with certainly more than $1 billion of excess cash and you’re continuing to borrow. So other than preparing for the future, can you explain to us why you would do that?

Yeah, okay. One of the reasons we’ve continued to do such an arrangement with the bank, it is part of our process of continuing to engage with the bank to build up the relationship so that the bank will expect a big company like us to have a variety of instruments with them because we do help them in the sense of meeting their fixed volume in various types of financing instruments. That is good for us because they’ll help us to lead into other funding options and also to be able to continue to accept. As you know in China, if you read the news and you can hear from other competitors there are other players that can’t get loans even though the interest rate is coming down. So a big company like us, we have to continue to engage the bank. But we are mindful of the question because having a large cash balance is a good thing and it’s also a cautious thing. We value this comment. Jonathan Brodsky – Advisory Research: I’ll stop after this, but let me just follow up on that. Does a traditional line of credit not exist where you’re paying a fee but you’re not actually holding the debt on your balance sheet – does a concept like that exist, number one? But number two, the cash and the cash equivalents – is it earmarked for something or is this money that’s just genuinely sitting on your balance sheet for defensive purposes or for projects that you want to use in the future?

Yeah, okay. Also there is some further color for you, because you see this balance is in the month of June, this bank balance. In the month of July we have a tranche of ¥700 million of bonds that are due to be repaid, and also in November we have another ¥690 million. So you can see in our funding needs we have to consider when our other obligations are falling due. Further than that it’s also that we have been operating a lot of CAPEX, a lot of operating and R&D on our own internal spend and some of them as you can see in our recent announcement that we are going on to building up our high cost power facilities and our new [priorities], you can see our new announcement. These are all activities that we have to build out our cash to fund, because basically we are funding all this through our internal spend without going to the market to raise anything. Jonathan Brodsky – Advisory Research: Right, okay. Okay, what about the concept of just a traditional line of credit where you can have a commitment to a bank but not actually have to take the loans on your balance sheet?

Okay, this is not the case in China. Unlike you say in some international banks they give you a certain line of credit, they have a certain commitment fee and if you are not using the line they’ll charge you – this is not the concept in China. So I hope I’ve made it clear. Jonathan Brodsky – Advisory Research: No, that’s very helpful. So just to replay what you said, going into the next quarter you have approximately ¥1.3 billion of loans that need to be repaid, so we should in theory see debt coming down again in the next quarter and cash going down correspondingly.

That’s correct. Jonathan Brodsky – Advisory Research: Great, thank you gentlemen very much. It’s been very helpful.

Thanks, Jonathon.

Your next question comes from the line of Bing Wang from Bank of America. Please ask your question. Bing Wang – Bank of America Merrill Lynch: Hi, thank you for taking my question. I have really two; number one, from the margin contribution. You mentioned you are doing another [broad CNG] engine so what’s the margin level for the CNG engine compared to the existing diesel engine? That’s the first margin question. And secondly, in the passenger car in (inaudible) 2013 they will have bought emission (inaudible). That’s not to mention the (inaudible) increased about 20%. What’s the margin [of the optimum price increase] and will you have (inaudible) components to increase the costs? So what’s the margin compared to the [Chine Engine 3] standards?

Okay, can you repeat your first question? Bing Wang – Bank of America Merrill Lynch: My first question is on the CNG engines margin compared to the diesel engine margin. And also on the CNG propulsion for long term, what are your expectations about the CNG truck obtaining market share in the overall truck market? You mentioned it will be about 8% of your products, so for the long term what’s the number it will be? Thank you.

Okay, the natural gas engine, the margins are obviously much higher than the contemporary engines. We’re looking at in the range of over 30% so it’s something that is a very nice margin to have. As to what the ultimate size is, right now that’s still much a guess but my speculation is that at least on the natural gas side by 2015 it could possibly be a couple of hundred thousand engine at the rate it’s going, which is still not much compared to the heavy-duty trucks which have about 800,000 engines already. So this is a very conservative number at this point in time, but we’ll have more clarity next year when the infrastructure is being rolled out and with the government putting more emphasis on this area. Bing Wang – Bank of America Merrill Lynch: Thank you. Now, for my second question on the [China 4] emissions standard engine, the margin compared to a [China 3] emissions standard (inaudible)?

The margins of Emission 4 versus Emission 3, that’s the question? Again, we’re talking about the difference of approximately between about a 10% caliber difference in margin. Bing Wang – Bank of America Merrill Lynch: Higher or lower?

Of course it’s higher, that’s right. Bing Wang – Bank of America Merrill Lynch: Thank you.

Thank you very much, sir. Your next question comes from the line of [Mr. Wang Hao] from Citi. Please ask your question, sir. [Wang Ho] – Citi : Hi, good morning, gentlemen, thank you for your time. Just two questions. First of all, Benny was commenting that the Q3 situation is actually pretty tough and I just wanted to make sure I understood correctly. You said the Q3 run rate is actually similar to Q1? Is that correct?

No, actually we see Q3 probably very similar to Q2. [Wang Ho] – Citi : So sequentially the demand is roughly the same as Q2?

This is what we are anticipating, that’s right. [Wang Ho] – Citi : Okay, understood. And then in terms of the timing of the recovery now, we think it could be at the earliest the end of this year or even going into early ’13?

I would guess it will probably be more ’13 would be a more realistic target. End of this year we should see actions being taken and in place that will kind of lay the groundwork for Q1 next year’s recovery. [Wang Ho] – Citi : So in terms of August, I think the heavy-duty truck market is still negative growth year-over-year. So it seems like if the recoveries push into ’13 that means we may not even get a positive year-over-year month even by Q4 this year. Is that a logical thing to think?

That’s a logical conclusion, that’s right. [Wang Ho] – Citi : Wow, so that’s quite tough. And secondly, have we been gaining market share in the heavy-duty truck engine market and lastly, in terms of pricing, given how soft the demand is are we seeing pricing pressure? Or because we’re doing relatively well in terms of market share actually the pricing is stable?

In the heavy-duty truck market I would say that more share is really a challenge, and for everybody it’s going to be the same sort of difficulties. So I think we are probably in the same category as well. Margin pressures continue to be the same as we answered the first question with Alex and David at that time. We see for the same category engine we are actually going through a lot of pressures but what we are trying to do is really prevent price erosion by giving better incentives; for example, improved royalties or increased service levels. [Wang Ho] – Citi : Okay, so just looking at pricing in isolation it’s actually been relatively stable because we’re giving some non-pricing types of incentives.

That’s right. So we want to upsell if possible, and in this way we are looking at trying to upsell to some of our better and higher-grade engines. So that’s one way to go about [fighting] on price. [Wang Ho] – Citi : And then in terms of market share, because I remember on the last call we said we were gaining market share. But you just said basically it’s now harder to gain market share. Are market shares roughly year-to-date the same year-over-year? Is that correct?

For the heavy-duty segment, yes, I think it’s about the same. Earlier on in my [remarks] I was talking about having the largest market share because we’re actually in terms of light-duty and the heavy-duty combined we have sold approximately the largest number of engines so far. [Wang Ho] – Citi : Understood. So I guess one more question is on the off-road side, on the construction machinery side, are things better or worse than the heavy-duty truck market do you think?

Actually construction is pretty dim right now, actually – that’s on the construction side. But we see a lot of upside on the marine engines, so that’s the price point that we are seeing so far. [Wang Ho] – Citi : And also the bus market obviously.

Absolutely. [Wang Ho] – Citi : Understood, understood. Thank you so much for your insight and candid feedback. Thank you.

Thanks.

Thank you, sir. Your next question comes from the line of Mr. [Himan Sho Sha from Shagato]. Please ask your question. [Himan Sho Sha – Shagato]: Good evening, gentlemen. Benny, can you talk about the positive contributions from joint ventures especially in 2013 as we have been losing a lot of money on all those joint ventures? And then I have a follow-up question.

Okay, Himan Sho. For us, we look at our joint ventures – the CIMC-Chery, we’ve got the YC6K engine and that’s really one of our top engines that we have today. And today I am very optimistic about this joint venture because when the heavy-duty truck market takes off this will be our prized JV because we will be able to capture a sizable segment because of the good engine that we have. Currently we’re still very much in the pickup capability – right now we have a 15,000 engine unit capability but we are not selling to that number right now, as you know because the heavy-duty market is still in a slump. [Himan Sho Sha – Shagato]: Okay. What about passenger vehicle, diesel engines and joint ventures. I think we have about 70% ownership?

Yes, we have 70% in Jining. As I said just now we did a share swap to very much focus on the passenger cars. We have some traction. We are building the [4D] passenger cars and we’ve got several orders. So next year we are optimistic that there will be more orders coming in and one of the thinkings that we have right now is not only in the trailer market but once we get our correct certification we could possibly export these 4D passenger cars overseas as well. [Himan Sho Sha – Shagato]: The company has a lot of cash and you know, even for a market leader it’s trading at the lowest valuation in the industry. So I’m just curious why is the Board of CYI not contemplating a stock buyback especially at these kinds of prices?

Well, the first thing this is under Board direction. We are the management of our company; really we will not want to second guess what the Board wants to do. But having said that, I think you are right – we have a lot of cash and I think the cash is really for strategic purposes because we are in the [past time] today. We want to make sure that we have the cash for the right investment opportunities going forward. I think the last point I want to make is that really a strong balance sheet is a key for our business. We want to make sure that we continue to do well in our cash position so that we are poised for [appreciable] growth. [Himan Sho Sha – Shagato]: But there are more [startup] machinery companies which are not even taking market share unlike Yuchai trading at substantially higher valuations than where CYI trades. So why is the Board not being opportunistic over here?

Himan Sho, I’m sorry – I can’t speak for the Board. I’m management. So we are doing our best in running the business. We’ve got to let the Board speak on their behalf during the AGM. [Himan Sho Sha – Shagato]: Thank you.

Thank you very much, sir. Ladies and gentlemen, we have now reached the end of our Q&A session and I will turn the call back over to Mr. Goh.