Good day and thank you for standing by. Welcome to the China Yuchai International First Half 2023 financial results. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Kevin Theiss. Please go ahead sir.

Thank you for joining us today and welcome to China Yuchai International Limited first half year ended June 30, 2023 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 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 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, which 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 provide a brief overview and summary, then Mr. Loo will review the financial results for the first half ended June 30, 2023. Thereafter, we will conduct a question-and-answer session. For the purposes of today's call, the 2023 and 2022 financial results are unaudited and they will be presented in RMB and US dollars. 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. And economy showed signs of recovery in the first half of 2023, but still face challenges from external and internal factors. According to official data the GDP growth rate for the first half of 2023 was 5.5% year-over-year, with a 6.3% increase in the second quarter compared to 4.5% in the first quarter. However, these figures were influenced by low base effect of the pandemic-induced lockdown initiated in 2020. The export sector after a decline in the first half of the year as high inflation in major markets and geopolitical tensions reduced foreign demand for Chinese students. The property sector also continues to experience a slowdown as property investments fell by 7.9% year-over-year, and property sales dropped by 5.3% in terms of floor space in the first six months of 2023. The real estate marked was affected by tight financial conditions and uncertainties of demand, the economic outlook for second half of 2023 remains uncertain as the economic momentum of 2023 has slowed down as overall demand has not met expectations. According to data reported by China Association of Automobile Manufacturers, total industry net sales of commercial vehicles, excluding gasoline-powered and electric-powered vehicles for the first half of 2023 increased by 8.3% year-over-year with truck unit sales up by 6% and a smaller bus unit sales were up 28.1%. In this Chinese commercial vehicle environment, our main subsidiary Guangxi Yuchai Machinery Company Limited or GYMCL reported a combined trucks unit engine unit sales decline of 1.5% year-over-year in the first half of 2023. Truck unit sales were 10.4% lower year-on-year with net sales 55.5% higher year-over-year. Increase in bus engine sales were led by 149.8% rise in heavy-duty engine sales far exceeding the macro segment growth. Spot market also contributed to the strong sales. GYMCL engine sales…

Thank you, Weng Ming. Now let me review our unaudited six months results ended June 30, 2023. Revenue was RMB9.2 billion or US$1.3 billion compared with RMB8.6 billion in first half 2022. The total number of engines sold by GYMCL in first half 2023 declined by 8.4% to 165,793 units compared with 180,911 units in the first half 2022. The decrease was mainly due to lower engine sales in the truck and agriculture application markets, partially offset by higher engine sales in the bar, industrial and marine and power generation markets. According to data reported by the China Association of Automobile Manufacturers in the first half 2023, commercial vehicles unit sales excluding gasoline power and electric-powered vehicles increased by 8.3% compared to first half 2022 as truck and bus sales increased by 6% and 28.1%, respectively. Gross profit increased by 14.1% to RMB1.6 billion or US$214.8 million compared with RMB1.4 billion in first half 2022. Gross margin increased to 16.9% as compared with 15.9% in first half 2022. The increase in gross profit and gross margin was mainly attributable to margin improvement across most market segments with greater sales of larger engines and contributions from ongoing cost reduction efforts. Other operating income increased by 59.3% to RMB 136.2 million, or US$18.8 million compared with RMB 85.5 million in the first half 2022. The increase was mainly due to higher government grants received and recognized. Research and development R&D expenses decreased slightly to RMB 406 million, or US$56.2 million compared with RMB 408.5 million in the first half 2022. The company continues to invest in research and development for on-road engines in the commercial vehicles market and off-road engines as well as new energy products. Total R&D expenditures including stabilized costs were RMB 465.2 million, or US$64.4 million, representing 5.1% of…

Thank you. Please note, some officers of China Yuchai are remotely calling into 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 ready to begin the Q&A session.

[Operator Instructions] I am showing we have no questions on the phone line. Please continue.

There's a question on the webcast. Mr. Seng has asked why has CYD decided to amend the corporate documents regarding share repurchase?

Okay. The opportunity of the AGM to make a change so that you've given an option and you will provide the company with a greater flexibility to utilized share purchase came in any method that is permissible under the Bermuda Companies Act. And we of course have to comply with US equity law for this buyback and if there is any plan we will make announcement to that effect.

Okay. Mr. Hoh, would you please provide your closing comments?

Okay. All right. Thank you all for participating in our conference call. We wish each of you good health and we look forward to speaking with you again. Goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.