================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 6-K ---------------------- REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE MONTH OF FEBRUARY 2005 COMMISSION FILE NUMBER 1-13522 ---------------------- CHINA YUCHAI INTERNATIONAL LIMITED (Translation of Registrant's name into English) ---------------------- 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): NOT APPLICABLE. ================================================================================
This Report on Form 6-K shall be deemed to be incorporated by reference in the prospectus, dated March 24, 2004, of China Yuchai International Limited (the "Company" or "CYI") included in the Company's Registration Statement (Registration No. 333-111106) on Form F-3 and to be part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished by the Company with the U.S. Securities and Exchange Commission (the "SEC"). The Company wishes to caution readers that the news release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including without limitation, statements relating to the Company's financial performance and growth prospects, are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the risks and factors that could cause actual results to differ materially are: the Company's ability to control Guangxi Yuchai Machinery Company Limited ("Yuchai"); the Company's ability to consolidate Yuchai's financial results; changes in the capital markets and interest rates; political, economic and social conditions in China such as government policies with respect to foreign investment, economic growth, inflation and the availability of credit; the effects of competition in the diesel engine market; the effects of inflation; the ability of Yuchai to control its expenses, capital expenditures and receivables, finance its working capital and capital expenditures and commercially introduce new products in the future; the Company's ability to successfully implement the agreement it reached with Yuchai in July 2003; the effects of uncertainties in the Chinese legal system which could limit the legal protections available to foreign investors, including with respect to the enforcement of foreign judgments in China; and the effects of China becoming a member of the World Trade Organization. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company can give no assurance that its expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in the Company's Annual Report on Form 20-F filed with the SEC under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 1. OTHER EVENTS On February 28, 2005 in Singapore, the Company issued a news release announcing (i) its unaudited consolidated financial results for the year ended December 31, 2004; (ii) the issuance of convertible bonds; (iii) the filing of Amendment No. 6 to Schedule 13D by Coomber Investments Limited together with other related parties; and (iv) recent developments with respect to corporate governance at Yuchai. A copy of the news release dated February 28, 2005 is attached hereto as Exhibit 1.1 and is incorporated herein by reference. 2. EXHIBITS 1.1 News release of the Company dated February 28, 2005.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly organized. CHINA YUCHAI INTERNATIONAL LIMITED By: /s/ Philip Ting Sii Tien --------------------------------------- Name: Philip Ting Sii Tien Title: Chief Financial Officer and Director Dated: February 28, 2005
EXHIBIT INDEX 1.1 News release of the Company dated February 28, 2005.
CHINA YUCHAI INTERNATIONAL LIMITED 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 TEL : (65) 6220 8411 FAX : (65) 6226 0502 EXHIBIT 1.1 FOR IMMEDIATE RELEASE CHINA YUCHAI INTERNATIONAL LIMITED ANNOUNCES GOOD PERFORMANCE FOR 2004 Set forth below are the unaudited consolidated financial results for China Yuchai International Limited (CYI) for the year ended December 31, 2004 (the 2004 Unaudited Financial Results). Consistent with CYI's prior financial statements (audited and unaudited), the 2004 Unaudited Financial Results have been prepared on a consolidated basis with the financial statements of Guangxi Yuchai Machinery Company Limited (Yuchai). CYI is currently discussing with its independent auditors whether consolidation of Yuchai's financial statements is an appropriate accounting treatment under U.S. GAAP. CYI cannot assure you what the outcome of these discussions will be, and investors should be aware that CYI's financial results would differ materially if Yuchai were not consolidated. Inability to consolidate Yuchai could accordingly have a material adverse effect on CYI. SINGAPORE, FEBRUARY 28, 2005 - China Yuchai International Limited (CYI) today announced good performance for the year ended December 31, 2004 with net income of Rmb491.4 million (US$59.4 million). CYI's net income for the same period in 2003 was Rmb438.2 million (US$52.9 million). This significant improvement in performance is due to continued buoyant market demand for engines manufactured by its Chinese subsidiary Guangxi Yuchai Machinery Company Limited (Yuchai) and, in particular, good customer acceptance of Yuchai's 6112 heavy-duty diesel engines and 4 cylinder light-duty diesel and industrial engines. Net sales of Rmb5,582.0 million (US$674.4 million) for the year ended December 31, 2004 represent an increase of approximately 22% compared to the same period last year of Rmb4,569.9 million (US$552.1 million). Total unit sales of 206,628 diesel engines for the year ended December 31, 2004 was 20% higher than the same period last year. The overall gross margin of 28.2% for 2004 was 1.9% lower than previous year due mainly to higher raw material costs and product sales mix. For the year ended December 31, 2004, selling, general and administrative expenses increased by approximately 17% due mainly to higher staff costs, transport charges and operating expenses, arising from higher unit sales volume. Research and development expenses have increased to Rmb136.9 million (US$16.6 million) from Rmb94.6 million (US$11.4 million) for the previous year due to higher development expenses on the new 6113 super heavy-duty diesel engine. Interest expenses increased to Rmb31.8 million (US$3.8 million) for the period ended December 31, 2004 as compared to Rmb23.6 million (US$2.9 million) for same period last year due to an increase of Yuchai bank loans during the year.
CHINA YUCHAI INTERNATIONAL LIMITED 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 TEL : (65) 6220 8411 FAX : (65) 6226 0502 The improvement in profit performance was due to higher unit sales of Yuchai's 6112 heavy-duty diesel, 4-series light-duty diesel and industrial engines. In June 2004, Yuchai commissioned its new 6113 super heavy-duty diesel production line with a capacity of 20,000 units per annum. Initial sales performance indicates gradual customer acceptance of this new 350hp diesel engine which is expected to see improved sales in 2005. For the year ended December 31, 2004, inventories rose due to increased production for seasonal requirements in 2005. Cash balances have increased due to better collections during the year end period though bank loans have also increased due to increased capital expenditure payments and loans to a Yuchai related company - Yuchai Marketing and Logistics Company Limited ("YMLC"). As at year ended December 31, 2004, the amount due to Yuchai, from YMLC, was Rmb205 million. The authorization for this loan is still being disputed. Basic and diluted net income per share for the year ended December 31, 2004 was Rmb13.90 (US$1.68) as compared to a basic and diluted net income per share of Rmb12.40 (US$1.50) for the same period in 2003. Government industry statistics show that, in 2004, there was an increase of approximately 16% in sales of trucks and buses in China compared to the same period in 2003. 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. This new legislation brought in heavy fines for overloading and non-compliance with vehicle standard specifications, such as vehicle weight and length. However, demand for new trucks increased in fourth quarter of 2004 with higher unit sales of heavy-duty trucks, buses and mini vans. Mr Teo Tong Kooi, CYI's new President and Director commented that "the good profit performance for 2004 was achieved mainly because of the strong unit sales for the heavy-duty, light-duty diesel engines and industrial engines. Yuchai was able to achieve net income growth of approximately 12% for the year ended December 31, 2004 compared to same period last year. Despite the lower unit sales in the second quarter of 2004 due mainly to the strict implementation of the Road Traffic legislation, the market demand for diesel engines in China is expected to remain strong especially for heavy-duty trucks and buses as a result of the continuing development of highways and improvements in logistical efficiency, in China, notwithstanding the Chinese government's continued efforts to cool 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." It is generally expected that the market demand for diesel engines in China will increase over time with the continued expansion of the highways and toll roads in China leading to increased demand for new trucks, buses and construction equipment.
CHINA YUCHAI INTERNATIONAL LIMITED 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 TEL : (65) 6220 8411 FAX : (65) 6226 0502 A breakdown of sales according to size and horsepower range highlights how CYI believes Yuchai is successfully adjusting its strategy to meet market demand and grow market share. (A) Sales of light-duty (4 cylinder) engines for mini buses and small trucks continue to experience high growth in China. Yuchai sales of the light-duty engines grew 58%, benefiting from the additional light-duty engine production capacity (40,000 units per year) commissioned in April 2003. In 2004, the gross margin from light-duty engines has improved due to higher production levels and cost reductions. (B) Sales of medium-duty (6 cylinder, 140 - 200 Hp) engines for 5 to 7 tonne trucks and buses continued to decline in China. With the improvement in the high way system, transportation companies now find that vehicles of this engine capacity are less economic than the newer larger units. Yuchai's sales of medium-duty engines decreased, by 2% in 2004, in line with this trend. (C) Sales of heavy-duty (6 cylinder, 250 - 400 Hp) engines for 10 to 15 tonne trucks, large buses, coaches and large construction equipment continue to experience high growth. Yuchai's sales of 6112 (6 cylinder, 285 Hp) engines grew by 16%, in 2004. The new 6113 (6 cylinder, 300 - 350 Hp) has seen increasing customer demand since its introduction in 2004. Sales of this new product are expected to be strong over the next few years and it should become a significant contributor to profit growth for Yuchai. 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. OTHER EVENTS Issuance of convertible bonds The issuance of CYI's US$25 million 2.0% convertible bonds due 2012 described in CYI's February 7, 2005 press release was completed on February 23, 2005.
CHINA YUCHAI INTERNATIONAL LIMITED 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 TEL : (65) 6220 8411 FAX : (65) 6226 0502 Schedule 13D Amendment No. 6 On February 15, 2005, Coomber Investments Limited together with other related parties filed with the U.S. Securities and Exchange Commission Amendment No. 6 to the Schedule 13D reporting their beneficial ownership of 24.3% of CYI's common stock. CYI disagrees with a number of the assertions contained in the Schedule 13D amendment, and is preparing a response to the filing. Guangxi Yuchai Machinery Company Limited As previously disclosed, CYI continues to seek implementation of the July 2003 Agreement which CYI entered into in an attempt to resolve the continuing difficulties which CYI has faced with respect to its investment in Yuchai. However, although approximately 19 months have passed since the July 2003 Agreement was entered into, the parties have yet to fully implement it. The parties have had periodic discussions as to possible alternatives for implementation, but have yet to reach a mutually acceptable solution. Although CYI hopes that implementation of the restructuring contemplated in the July 2003 Agreement will resolve the continued corporate governance difficulties which CYI has had with respect to Yuchai, CYI is not presently able to determine when or on what terms any such restructuring will be implemented, if at all. As a result, no assurances can be given that disagreements with Yuchai's Chinese shareholders will not recur, or that CYI will continue to be able to fully exercise its controlling interest in Yuchai if such disagreements recur. Any recurrence of these disagreements could have a material adverse effect on CYI's financial condition, results of operations, business or prospects, including CYI's ability to consolidate Yuchai's financial statements or to declare and receive dividends. For example, although CYI has requested Yuchai to declare dividends, Yuchai has not to date done so for either of its 2003 or 2004 financial years. No assurance can be given as to when Yuchai, and in turn CYI, will declare or pay any such dividends. CYI is also considering other alternatives to address these disagreements, including litigation and/or arbitration if necessary, so as to protect the interests of CYI's shareholders and preserve the value of CYI. * * * CYI 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. China Yuchai International Limited Executive Office 16 Raffles Quay #26-00 Hong Leong Building Singapore 048581 Tel: (65) 6220 8411 Fax: (65) 6226 0502
CHINA YUCHAI INTERNATIONAL LIMITED 16 RAFFLES QUAY #26-00 HONG LEONG BUILDING SINGAPORE 048581 TEL : (65) 6220 8411 FAX : (65) 6226 0502 Contact persons: Mr Teo Tong Kooi, President and Director Mr Philip Ting, Chief Financial Officer and Director Note 1: CYI'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 8.2765 = US$1.00, the rate quoted by the People's Bank of China at the close of business on December 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 December 31, 2004 or at any other date. Note 2: All financial data (both in Renminbi and U.S. dollars) is unaudited. SAFE HARBOR STATEMENT UNDER THE PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This news release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including without limitation, statements relating to our financial performance and growth prospects, are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the risks and factors that could cause actual results to differ materially are: our ability to control Guangxi Yuchai Machinery Company Limited ("Yuchai"); our ability to consolidate Yuchai's financial results; changes in the capital markets and interest rates; political, economic and social conditions in China such as government policies with respect to foreign investment, economic growth, inflation and the availability of credit; the effects of competition in the diesel engine market; the effects of inflation; the ability of Yuchai to control its expenses, capital expenditures and receivables, finance its working capital and capital expenditures and commercially introduce new products in the future; our ability to successfully implement the agreement we reached with Yuchai in July 2003; the effects of uncertainties in the Chinese legal system which could limit the legal protections available to foreign investors, including with respect to the enforcement of foreign judgments in China; and the effects of China becoming a member of the World Trade Organization. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. CYI DOES NOT INTEND TO REGISTER ANY PORTION OF ANY OFFERING UNDERTAKEN AS ALL OR PART OF THE NEW FINANCING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.
CHINA YUCHAI INTERNATIONAL LIMITED UNAUDITED CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004 (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA) Year Ended December 31 ------------------------------------------------------------- 2002 2003 2004 2004 ---- ---- ---- ---- Rmb'000 Rmb'000 Rmb'000 US'000 Audited Audited Unaudited Unaudited (Note) Net sales .................................................. 3,513,047 4,569,950 5,582,095 674,451 Cost of goods sold ......................................... 2,371,080 3,192,794 4,006,886 484,128 --------- --------- --------- ------- Gross profit ............................................... 1,141,967 1,377,156 1,575,209 190,323 Research and development cost .............................. 75,532 94,594 136,960 16,548 Selling, general and administrative expense ................ 426,128 561,151 658,320 79,541 --------- --------- --------- ------- Operating income ........................................... 640,307 721,411 779,929 94,234 Interest cost .............................................. 25,144 23,624 31,757 3,837 Other (income)/expense, net ................................ (10,287) 881 (5,682) (687) --------- --------- --------- ------- Income before income taxes and minority interests ........................................ 625,450 696,906 753,854 91,084 Income tax (credit)/expense ................................ 83,242 112,924 105,165 12,707 --------- --------- --------- ------- Income before minority interests ........................... 542,208 583,982 648,689 78,377 Minority interests in income of consolidated subsidiaries .............................................. 129,775 145,800 157,292 19,004 --------- --------- --------- ------- Net income ................................................. 412,433 438,182 491,397 59,373 ========= ========= ========= ======= Net income attributable to common shares Rmb Rmb Rmb US$ Basic and diluted ........................................ 11.67 12.40 13.90 1.68 ========= ========= ========= ======= 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 8.2765 = US$1.00, the rate quoted by the People's Bank of China at the close of business on December 31, 2004. No representation is made that the Renminbi amounts could have been, or could be, converted into U.S. dollars at that rate or at any other certain rate on December 31, 2004 or at any other date.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET ITEMS (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS) As of As of December 31, 2003 December 31, 2004 ----------------- ----------------- Audited Unaudited ------- --------- RMB RMB US$ (Note) Cash and Cash Equivalents 631,938 722,672 87,316 Trade Accounts Receivable, Net 849,611 875,565 105,789 Inventories, Net 877,334 1,346,545 162,695 Amount due from related company 32,886 205,000 24,769 Net Current Assets 962,804 1,348,596 162,943 Total Assets 4,033,632 5,368,174 648,604 Trade Accounts Payable 731,966 1,089,717 131,664 Short-Term and Long-Term Borrowings 290,000 530,000 64,037 Shareholders' Equity 1,991,687 2,483,084 300,016 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 8.2765 = US$1.00, the rate quoted by the People's Bank of China at the close of business on December 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 December 31, 2004 or at any other date.