SINGAPORE - China Yuchai International Limited (NYSE: NYSE:CYD), a leading manufacturer and distributor of engines in China, has announced the immediate termination of its share buyback plan. The plan, which was initiated on June 7, 2024, authorized the company to repurchase up to $40 million worth of its ordinary shares or 4 million shares, whichever was met first.
As of today, China Yuchai has bought back a total of 3,339,968 shares, totaling approximately $39.8 million. These shares are to be held as treasury shares, resulting in a reduction of the company's outstanding shares from 40,858,290 to 37,518,322.
China Yuchai, through its subsidiary Guangxi Yuchai Machinery Company Limited, specializes in the production and sale of a broad range of engines for various vehicle types and industrial applications. In addition to engines ranging from diesel to natural gas and hybrids, the company also manufactures diesel power generators. China Yuchai has a strong market presence in China, supported by a network of regional sales offices and customer service centers offering distribution, maintenance, and retrofitting services.
In 2023, the company sold 313,493 engines, affirming its position as a significant player in the Chinese engine market. China Yuchai has a history that dates back to 1951 and has since developed a strong brand, an experienced research and development team, and a substantial market share with its high-quality products and services.
The termination of the share buyback plan is a notable development for investors and stakeholders of China Yuchai. This news is based on a press release statement issued by the company and does not include any forward-looking statements or promotional content. The information presented here is intended to provide a factual report on the company's recent corporate action regarding its share repurchase program.
In other recent news, Guangxi Yuchai Machinery Co., Ltd. has made significant strides in its global expansion, launching its first overseas production facility in Thailand. The new factory will produce a range of engines, with plans for future expansion, including the construction of new factories in Vietnam. The company's strategic move into Thailand is expected to enhance its product competitiveness and market share in Southeast Asia.
In another development, China Yuchai International Limited has expanded its joint venture with Rolls-Royce (OTC:RYCEY) Power Systems. The collaboration aims to enhance manufacturing capabilities and product range to meet increasing market demand, with mass production expected to commence in the second half of 2025.
On the financial front, China Yuchai reported substantial growth in its H1 2024 earnings and revenue. The company experienced a 12.4% increase in sales, driven by a 16.3% rise in unit sales across various product categories. Engine unit sales in the truck and bus markets surged by 32.8% year-over-year, leading to a 34.7% increase in net profit and a 16.8% rise in gross profit.
Despite these positive developments, the company's selling, general, and administrative expenses saw a significant increase of 30.3%. Analysts have highlighted the company's focus on research and development, new energy products, and equity incentive plans for employees as crucial factors for investors considering China Yuchai International. These recent developments provide a snapshot of China Yuchai's current business operations and financial performance.
InvestingPro Insights
China Yuchai International's recent termination of its share buyback plan comes amid a period of strong financial performance and market recognition. According to InvestingPro data, the company's stock has shown impressive momentum, with a 30.2% price total return over the last three months and a substantial 44.65% return over the past six months.
The company's financial metrics further underscore its solid position. With a P/E ratio of 9.81 and a price-to-book ratio of 0.34, China Yuchai appears to be trading at attractive valuations. This aligns with an InvestingPro Tip highlighting that the company is "Trading at a low P/E ratio relative to near-term earnings growth."
Moreover, China Yuchai has demonstrated consistent revenue growth, with a 15.32% increase in the last twelve months as of Q2 2024. This growth, coupled with a dividend yield of 3.25%, makes the stock potentially appealing to both value and income-focused investors. An InvestingPro Tip notes that the company "Has maintained dividend payments for 20 consecutive years," which may provide reassurance to shareholders following the buyback termination.
For investors seeking a deeper understanding of China Yuchai's potential, InvestingPro offers additional insights, with 10 more tips available for this stock. These tips could provide valuable context for assessing the company's future prospects in light of its recent corporate actions.
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