Chairman of the world's largest independent diesel engine maker--Guangxi Yuchai Machinery Group--Yan Ping at an interview on March 10^th told that the Group is intending to split the construction machinery sector for the initial public offering (IPO) and its program includes A shares or H shares. But he noted that it was not a good time for IPO in the near term due to the current scenario of stock market at home and abroad.  

Yan Ping said that the orders for diesel engines were increased sharply in the first two months. In February, the company received orders for 65, 000 engines. It was the highest in history. The output in the first two months far exceeded the projected goal. The sales volume of this year is still expected to keep a growth of 10%. He added that the Group is to pump in 25 billion Yuan to the technical upgrade and expansion in the next 5 years and the scheduled 3 billion Yuan investment to technical upgrading for this year will not be reduced.  

Guangxi Yuchai Machinery Co., Ltd., a subsidiary of Yuchai Group, was listed in the US stock market in 1994 with the name of China Yuchai International (CYD). However, over the past 15 years, CYD still has not been able to get funding at the capital market.  

The core business of Yuchai includes six sectors. They are diesel engines, construction machinery, logistics and mechanical & electrical products, auto parts, auto chemicals and special purpose vehicles. Its annual output and sales volume of various diesel engines and small and medium-size construction machinery reaches 600, 000 and 10, 000 separately. In 2008, Yuchai achieved a sales income of 20.8 billion Yuan. Its diesel engines occupy almost half of the domestic high-end diesel engine market.  

Author: Lu Zhou                 Source: China Securities Journal