China value play IMO; diesel engines for a growing economy. How are they going to power the trucks that have to move all the stuff? :>)
Company: CYD
Date: 12/2/04
Next year's expected earnings: $2.10 (vs. 2.26 estimate)
EPS growth rate used for estimate: 8 (vs. 20% estimate)
Multiple Graham used for estimate: 8.5
Graham Fair Value: $36.22
Current Price: $17.45
$ difference: $18.77
Percent Growth to Fair Value: 107.57%
Per Yahoo, CYD did $1.50 last year. One analyst following; expects 1.84 this year and 2.26 next year.
finance.yahoo.com
I bought some this morning:
Message 20820503
Net sales of Rmb1,454.3 million (US$175.7 million) for the three months ended September 30, 2004 represents an increase of 56% compared to same period last year of Rmb929.3 million (US$112.3 million). Total unit sales of 45,617 diesel engines for the quarter ended September 30, 2004 was 29% higher than the same period last year of 35,427 diesel engines...
Basic and diluted net income per share for the six months ended June 30, 2004 was Rmb11.19 (US$1.35) compared to a basic and diluted net income per share of Rmb9.06 (US$1.09) for the same period in 2003.
Government industry statistics show that in the first nine months of 2004, there was an increase of approximately 16% in sales of trucks and buses in China compared to the same period last year. CYI believes that demand for new trucks and buses would have been higher if not for the implementation of the PRC Road Traffic legislation which came into effect on May 1, 2004, with heavy fines on overloading and non-compliance to vehicle standard specifications such as vehicle weight and length. Demand for new trucks returned in August 2004 with higher unit sales of heavy-duty trucks, buses and mini vans.
Mr Wrixon F. Gasteen, President and Director commented that "the good profit performance for the nine months ended September 30, 2004 was achieved due mainly to the strong unit sales recorded in the first and third quarters of 2004. Yuchai was able to achieve net income growth of approximately 24% for the nine months ended September 30, 2004 compared to same period last year. The market demand for diesel engines in China is expected to remain strong especially for heavy-duty trucks and buses due to continuing development of highways and improvements in logistical efficiency, notwithstanding the Chinese government's continued efforts at cooling its economy. We believe that CYI, as one of the top three manufacturers of diesel engines in China, should be able to take advantage of this growth demand."
CYI believes that 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.
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