China Yuchai International Limited Announces Strong Performance for Q1 2004

Business Wire, May 11, 2004

Business Editors

SINGAPORE--(BUSINESS WIRE)--May 11, 2004

China Yuchai International Limited (NYSE:CYD) today announced very strong performance for the quarter ended March 31, 2004 with net income increasing by 66% to Rmb 195.1 million (US $23.6 million) as compared to net income of Rmb 117.6 million (US $14.2 million) for the same period in 2003. This significant improvement in performance is due to particularly strong market demand for Guangxi Yuchai Machinery Company Limited's (Yuchai) diesel engines, and in particular to increases in unit sales of Yuchai's 6108 medium-duty, 4-series light-duty diesel and industrial engines.

Net sales increased by approximately 31% to Rmb 1,577.1 million (US $190.5 million) for the quarter ended March 31, 2004 compared to same period last year of Rmb 1,207.2 million (US $145.8 million). Total unit sales of 64,401 diesel engines for the quarter ended March 31, 2004 was 24% higher than the same period last year.

The overall gross margin of 32.3% for the quarter ended March 31, 2004 has declined by approximately 2.6% as compared to 34.9% gross margin for the first quarter of 2003 mainly due to the change in the product mix arising from more sales of the lower margin 4-series light-duty and industrial engines during the first quarter of 2004.

For the quarter ended March 31, 2004, selling, general and administrative expenses decreased by approximately 9% due mainly to lower advertising, promotion and sales commission expenses.

For the quarter ended March 31, 2004, trade account receivables and inventories increased as a result of higher sales volume and normal seasonality factors. Cash balances has decreased and bank borrowings have increased for the quarter ended March 31, 2004 mainly due to increased capital expenditure payments made during the first quarter of 2004.

Basic and diluted net income per share for the quarter ended March 31, 2004 was Rmb 5.52 (US $0.67) compared to a basic and diluted net income per share of Rmb 3.33 (US $0.40) for the same period in 2003.

Mr. Wrixon F. Gasteen, President and Director stated that "the strong profit performance for the first quarter of 2004 is commendable. The fact that this was achieved prior to the full-scale launch of the new 300 horsepower heavy duty 6113 series of diesel engines augurs well for the remainder of 2004. Despite recent announcements by the Chinese government to introduce measures on certain sectors to avoid overheating of the economy, we expect that the market demand for diesel engines in China will increase with the continued expansion of the highways and toll roads in China leading to increasing demand for new trucks, buses and construction equipment."

Mr. Gasteen further stated that "in the first quarter of 2004, Yuchai signed a technical co-operation agreement with Japan's Yamaha for the joint development of Yuchai's YC61082LC diesel engine for ships. The engine will be mainly used in high-speed powerboats and vessels with speeds of up to 110km/hr. This technical co-operation will enable Yuchai to further diversify the markets for its products."

Yuchai has a strong brand name in China with an extensive sales and marketing network. Yuchai's products are of good quality and provide reliable performance. Yuchai has established itself as a major manufacturer of diesel engines in China with a significant market share.

China Yuchai International Limited has filed with the U.S. Securities and Exchange Commission a copy of this press release on Form 6-K. A copy of such filing has also been sent to The New York Stock Exchange. Reference is made to such filing for cautionary statements which identify factors that could affect the forward looking statements contained in this press release.

Contact Information:

China Yuchai International Limited

Executive Office

16 Raffles Quay

#26-00 Hong Leong Building

Singapore 048581

Tel: (65) 6220 8411

Fax: (65) 6226 0502

Contact persons:

Mr. Wrixon F. Gasteen, President

Mr. Philip Ting, Chief Financial Officer

Note 1: The Company's functional and reporting currency is Renminbi, the translation of amounts from Renminbi to U.S. dollars is solely for the convenience of the reader. Translation of amounts from Renminbi to U.S. dollars has been made at the rate of Rmb 8.2771 = US$1.00, the rate quoted by the People's Bank of China at the close of business on March 31, 2004. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. dollars at that rate or at any other certain rate on March 31, 2004 or at any other date.

Note 2: All financial data (both in Renminbi and U.S. dollars) is unaudited.

CHINA YUCHAI INTERNATIONAL LIMITED
UNAUDITED CONSOLIDATED INCOME STATEMENTS
For the three months ended March 31, 2004
(RMB and US$ amounts expressed in thousands, except per share data)



                                          For Quarter ended March 31,
                                        ------------------------------
                                           2003      2004       2004
                                        ---------- ---------- --------
                                         Rmb'000    Rmb'000   US$'000

Net sales                               1,207,155  1,577,145  190,543
Cost of goods sold                        785,533  1,067,790  129,005

                                        ---------- ---------- --------
Gross profit                              421,622    509,355   61,538

Research and development cost              36,315     25,465    3,077
Selling, general and administrative
 expenses                                 197,752    180,563   21,815

                                        ---------- ---------- --------
Operating income                          187,555    303,327   36,646
Finance cost                                5,558      5,944      718
Other net income                                -     (1,557)    (188)
                                        ---------- ---------- --------
Income before income taxes and
  minority interests                      181,997    298,940   36,116

Income tax expense                         27,947     42,993    5,194
                                        ---------- ---------- --------
Income before minority interests          154,050    255,947   30,922

Minority interests in income of
 consolidated subsidiaries                 36,432     60,888    7,356
                                        ---------- ---------- --------
Net income                                117,618    195,059   23,566
                                        ========== ========== ========

Net income attributable to common          Rmb        Rmb       US$
 shares
  Basic and diluted                        3.33       5.52      0.67
                                        ========== ========== ========


    Note: The Company's functional and reporting currency is Renminbi,
        the translation of amounts from Renminbi to U.S. dollars is
        solely for the convenience of the reader. Translation of
        amounts from Renminbi to U.S. dollars has been made at the
        rate of Rmb 8.2771 = US $1.00, the rate quoted by the People's
        Bank of China at the close of business on March 31, 2004. No
        representation is made that the Renminbi amounts could have
        been, or could be, converted into U.S. dollars at that rate or
        at any other certain rate on March 31, 2004 or at any other
        date.


CHINA YUCHAI INTERNATIONAL LIMITED
Selected Balance Sheet Items
(Rmb and US$ amounts expressed in thousands)


                                         As of             As of
                                       December          March 31,
                                        31, 2003           2004
                                       ----------       -----------
                                       (Audited)        (Unaudited)
                                       ----------       -----------

                                          RMB          RMB       US$

Cash Balances                           631,938      478,077   57,759

Trade Accounts Receivable, Net          849,611    1,358,147  164,085

Inventories, Net                        877,334    1,055,364  127,504

Working Capital                         962,804    1,176,869  142,184

Total Assets                          4,033,632    4,766,371  575,850

Trade Accounts Payable                  731,966    1,043,927  126,122

Short-Term and Long-Term Borrowings     298,000      398,000   48,084
(including a loan from a related party)

Shareholders' Equity                  1,991,687    2,186,746  264,192

Note:  The Company's functional and reporting currency is Renminbi,
 the translation of amounts from Renminbi to U.S. dollars is solely
 for the convenience of the reader.  Translation of amounts from
 Renminbi to U.S. dollars has been made at the rate of Rmb 8.2771 =
 US $1.00, the rate quoted by the People's Bank of China at the close
 of business on March 31, 2004.  No representation is made that the
 Renminbi amounts could have been, or could be, converted into U.S.
 dollars at that rate or at any other certain rate on March 31, 2004
 or at any other date.