Greenridge has upgraded China Yuchai International Limited (CYD.US) to a buy rating, with a target price raised to $60, optimistic about the commercial vehicle and high-horsepower engine market.

On July 27, the overseas research institution Greenridge Global released a report, upgrading the investment rating of China Yuchai International Limited (CYD.US) from Hold to Buy, with the target price raised from $45 to $60. At the time of the report's release, the company's stock price was $45.07. The core logic behind this upgrade stems from the high demand in the domestic commercial vehicle market and the strong need for high horsepower engines (HHP). The sales of medium and heavy commercial vehicles in China increased by 35% and 30% year-on-year, respectively; at the same time, the demand for generator sets in data centers continues to exceed production capacity. Coupled with the planned expansion of Yuchai's high horsepower engine production capacity, the institution has revised upward its sales expectations for high horsepower engines and updated its performance forecast for the fiscal years 2026-2027, predicting that overall revenue will remain largely flat in 2027. The target price was determined by averaging the valuations derived from a forward price-to-earnings ratio of 15 times and an enterprise value multiple (EV/EBITDA) of 6 times. The company's board of directors has approved an annual dividend of $0.87 per share for the 2025 fiscal year, higher than the institution's previous expectation of $0.80, with a payout ratio of approximately 40%, which was distributed on July 28. The company has ample cash reserves, with cash on hand of approximately 7.913 billion yuan and short-term debt of about 2 billion yuan, indicating low debt pressure. The preparation work for MGP (Guangxi Yuchai Marine Power Co., Ltd.)'s Hong Kong IPO is ongoing, but the listing timetable has yet to be finalized. The institution stated that the company has not received any notices regarding the employee investigation of the former GYMCL (China Yuchai International Limited's core domestic operating subsidiary), and currently, it seems that the relevant investigation is unrelated to Yuchai.