Good day, and thank you for standing by. Welcome to the China Yuchai International Limited First Half 2024 Financial Results Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would like to now turn the conference over to Kevin Theiss. Please go ahead, sir.

Thank you for joining us today and welcome to China Yuchai International Limited’s conference call and webcast for the first six months of 2024 ended on June 30th, 2024. 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, General Manager 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 operation and financial performance and condition, 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 risk and uncertainties, and actual results may differ materially depending on a variety of important factors, such as government and stock exchange regulations, competition, political and economic and social conditions around the world and in China, including those discussed in the company's Form 20Fs under the headings, Risk Factors, Results of Operations and Business Overview and other reports filed with the Securities and Exchange Commission from time to time. 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 this release made towards 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 year ended June 30, 2024. Thereafter, we will conduct a question-and-answer session. For the purposes of today's call, the 2024 and 2023 first-half year financial numbers are unaudited and they will be presented in RMB and U.S. dollars. 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. We are pleased to report higher revenue, operating profits, and highed earnings to share in the first half of 2024 compared with the same period last year. Sales grew by 12.4% on a 16.3% increase in unit sales on a year-over-year basis. We achieve engine unit sales growth in every market category except pickups, which is a small portion of our sales. Combined unit sales of our engines in the truck and bus market grows by 32.8% year-over-year compared with data from China Association of Automobile Manufacturers, CAAM, showing truck and bus vehicle sales growth of 4.4% year-over-year. Our unit sales in the important truck engine market grew by 35.6% year-over-year compared to an increase of 3.7% for truck vehicle sales according to CAAM data. Our heavy-duty truck engine sales grew by 32.9% year-over-year compared with a 0.3% increase in the CAAM heavy truck vehicle sales in the first half of 2024. And our medium duty truck engine sales grew faster than CAAM medium-duty truck vehicle sales with a year-over-year increase of 33.1% compared to [17.4%] (ph). Likewise, our light duty truck engines sales also exceeded the CAAM vehicle sales growth growing by 45.6% compared to 5.4% year-over-year in the first half of 2024. Similarly, our bus engine sales in the heavy, medium, light and light duty market segments witnessed a year-over-year growth of 40.3%, 32% and 28.2%, respectively in the first half of 2024. Our engine sales in the off-road markets exceeded 104,000 units for the first half of 2024, representing a 6.4% year-on-year growth. These sales were led by a 13.1% increase in engine sales in the industrial segment compared to the same period last year. Marine and generator engine unit sales increased by 5.3% with higher demand from data centers. New energy product unit…

Thank you, Weng Ming. Now let me review our un-audited six month results entered June 30, 2024. Revenue were RMB10.3 billion or US$1.4 billion compared with RMB9.2 billion in first half 2023. The total number of engines sold by Yuchai in first half 2024 increased by 16.3% to 192,743 units compared with 165,793 units in the first half of 2023. The increase was mainly driven by a 35.6% increase in truck engine sales, with heavy duty truck engine sales up by 32.9%. Additionally, bus engine sales rose by 21.7%, and engine sales for industrial applications increased by 13.1%. Sales increased in all product territories except pickups. According to data reported by the China Association of Automobile Manufacturers, CAAM, in first half 2024, commercial vehicle unit sales, excluding gasoline-powered and electric-powered vehicles, increased by 4.4% compared to first half 2023 as truck and bus sales increased by 3.7% and 9%, respectively. Gross profit was up by 16.8% to RMB1.7 billion or US$242.9 million from RMB1.5 billion in first half 2023. Gross margin grew to 16.8% as compared with 16.2% in first half 2023. The increases in gross profit and gross margin were mainly attributable to higher engine sales, especially sales of heavy-duty vehicle engines and industrial engines, and contributions from ongoing cost reduction efforts. Other operating income increased by 27.8% to RMB174.1 million or US$24.4 million, compared with RMB136.2 million in first half 2023. The increase was mainly due to government grants as the government's rebate on value-added tax. Research and development, R&D, expenses decreased by 3.1% to RMB393.6 million or US$55.2 million, compared with RMB406 million in first half 2023. The company continues to invest in research and development for on-road engines in the commercial vehicle markets and off-road engines as well as new energy products. Total R&D expenditures, including…

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.

Thank you. [Operator Instructions] And the first question comes from the line of Gary Nash from Nash Consulting. Please go ahead. Your line is now open.

Thank you. First, good evening, good morning, where appropriate to everyone. I guess my question is, how much is your 2024 capital expenditures? And in which products or areas are you investing?

Okay. In 2024, we are investing in few areas. Firstly, I think it is the power generation. There is quite a good demand, especially for standby power generation [indiscernible] for the data centers application. And the demand is actually quite strong, so that's why we're increasing our capacity in that area. We're also investing in the wind turbine main shaft which is a new area that we are getting into. And the other area of investment is in the new energy cell.

Thank you.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of [Jessica Lynn] (ph). Please go ahead, your line is now open.

Hello, good morning.

Hi.

Hello. My question is, how many of the shares has the company purchased under the buyback plan that was announced in June?

We have purchased more than more than half of our target, so close to about 2.7 million. And the last part of it is from the aftermath.

Perfect. Thank you.

Thank you. As there are no further questions on the phone line, I would now like to hand back to the room for any questions on the webcast. We have now reached the end of our Q&A session. I would now like to turn the call back over to Mr. Hoh.

Thank you all for participating in our conference call. We wish each of you a good health and look forward to speaking with you again. So goodbye for now.

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