Good day and thank you for standing by. Welcome to the China Yuchai International Limited 2022 Unaudited Second Half and Full Year Financial Results Conference Call. At this time all participants are in listen-only mode. After the speakers' presentation, there will be the question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kevin Theiss. Please go ahead.

Thank you for joining today, and welcome to China Yuchai International Limited's second half year and full year ended December 2022 conference call and webcast. Joining us today are Mr. Weng Ming Hoh and Mr. Choon Sen Loo, President and Chief Financial Officer of CYI, respectively. In addition, we also have in attendance Mr. Kelvin Lai, VP of Operations of CYI. 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, confident that, continue to, predict, intend, aim, will or similar expressions are all 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 conditions and are based on current expectations, beliefs and assumptions, that are subject to change at any time. The company cautions that these statements by their nature involve risks and uncertainties. And actual results may differ materially depending upon 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 20-F under the headings Risk Factors, Results of Operations and Business Overview and in other reports filed with the Securities and Exchange Commission from time-to-time. If the COVID-19 pandemic is not effectively controlled, our business operations and financial conditions maybe materially and adversely affected due to a deteriorating market for automotive sales and economic slowdown in China and abroad, a potential weakening of the financial condition of our customers, potential adverse impact to our suppliers and supply chains or other factors that we cannot foresee. 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. Hoh will begin, will provide a brief overview and summary, then Mr. Loo will review the financial results for the second half and full year ended December 31, 2022. Thereafter, we will conduct a question-and-answer session. For the purposes of today's call, the 2022 and 2021 second half financial results and the 2022 year financial results are unaudited, and they will be presented in RMB and U.S. dollars. The 2021 year results are audited. All the financial information presented is reported using the International Financial Reporting Standards as issued by the International Accounting Standards Board. Mr. Hoh, please begin your prepared remarks.

Thank you, Kevin. Following the sluggish 2.5% GDP growth year-over-year in the first half of 2022, the Chinese economy continued its slow growth trend with 3.9% year-over-year growth for the third quarter of 2022 and 2.9% in the fourth quarter. Quarter-over-quarter economic growth between the third quarter and the fourth quarter of 2022 Q2 was flat. For fiscal year 2022, Chinese economic growth was 3%, down sharply from 8.5% - 8.4% growth experienced in 2021. The total retail sales in China declined by 0.2% and the investment in real estate development declined by 10% in fiscal 2022 year. According to data reported by China Association of Automobile Manufacturers, total industry unit sales of commercial vehicles, excluding gasoline-powered and electric-powered vehicles, for the second half of 2022 declined by 26.3% year-over-year with truck and bus unit sales down by 27.5% and 18.4%, respectively. For the fiscal year 2022, commercial vehicles engine sales were down by 21.4% year-on-year, with truck unit sales 22.9% lower and bus unit sales down 27.1%. COVID-related lockdowns and travel restrictions in China resulted in reduced demand for commercial vehicles and logistical activity declined, and there were fewer infrastructure and construction projects in 2022. The real estate market suffered for financial liquidity and uncertainties. In addition, the interruption of the supply chain also affected production schedule. In this uneasy Chinese commercial vehicle environment, our subsidiary, Guangxi Yuchai Machinery Company Limited, or GYMCL, reported a combined truck and bus unit sales decline of 33% year-over-year in the year – second half of 2022. Truck sales was 33.2% lower and bus sales declined by 32.1%. However, GYMCL heavy-duty bus sales decreased by 16.9% by exceeding their market growth. GYMCL's engine sales in the off-road segment experienced a more modest unit sales reduction of 5% year-over-year in the second half of…

Thank you, Weng Ming. Now let me give you our unaudited six months' results ended December 31, 2022. Revenue was RMB7.5 billion or US$1.1 billion compared with RMB8.6 billion in the second half 2021. The total number of engines sold by GYMCL in second half 2022 declined by 18.1% to 140,305 units compared with 131,449 units in the second half of 2021. The decrease was mainly due to lower engine sales in the truck, bus, marine and power generation application market, partially offset by higher sales in agricultural and industrial engines. According to data reported by the China Association of Automobile Manufacturers, CAAM, in the second half 2022, commercial vehicle unit sales, excluding sales of gasoline-powered and electric-powered vehicles, decreased by 26.3% compared to the second half of 2021, as sales of trucks and buses declined by 27.5% and 18.4%, respectively, reflecting weak demand in these market segments. Gross profit was RMB1.3 billion or US$182.4 million, compared with the same amount of RMB1.3 billion in second half 2021. Gross margin increased to 17% as compared with 15.4% in second half 2021. The increase in gross margin was mainly attributable to a change in revenue mix with an increase in off-road segment over the on-road segment, cost reductions and lower sales rebates. Other operating income increased by 22.9% to RMB251.3 million or US$36.1 million compared with RMB204.5 million in second half 2021. The increase was mainly due to higher government grants. Research and development, R&D, expenses decreased by 19.7% to RMB428 million or US$61.4 million compared with RMB533.1 million in the second half of 2021 due to lower R&D expenses incurred in commercial vehicle engines that were partially offset by higher R&D expenses incurred in marine engines and power generation engines and new energy products. Total R&D expenditures, including capitalized costs,…

Thank you. Please note, some officers of China Yuchai are remotely calling in to the conference call. This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience, and thank you for your patience. With that, operator, we are now ready to begin the Q&A session.

Dear speakers, there are no questions at this time. Please continue.

Okay. Thank you all for participating in our conference call. We wish each of you good health, and please be safe during this pandemic. We look forward to speaking with you again. Goodbye.

That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.