Ladies and gentlemen, thank you for standing by. Welcome to the China Yuchai International Limited’s Fourth Quarter 2015 Earnings call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session [Operator Instructions] I must advise this conference is being recorded today, the 24th of February 2016. I would now like to hand the conference over to your first speaker for today Mr. Shiwei Yin. Please go ahead, sir.

Thank you for joining us today, and welcome to China Yuchai International Limited's 2015 fourth quarter and full-year conference call and webcast. Joining us today are Mr. Weng Ming Hoh and Mr. Kok Ho Leong, President and Chief Financial Officer of CYI, respectively. In addition, we also have in attendance Mr. Kelvin Lai, VP of Operations of CYI. Before we begin, I will remind all listeners that throughout this call, we may make statements that may contain Forward-Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, expect, anticipate, project, targets, optimistic, intend, aim, will or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that may be deemed forward-looking. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations, financial performance and condition. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including those discussed in the Company's reports filed with the Securities and Exchange Commission from time-to-time. The Company specifically disclaims any obligation to maintain or update the forward-looking information, whether of the nature contained in the script or otherwise. Mr. Hoh will provide a brief overview and summary, and then Mr. Leong will review the financial results for the fourth quarter and full-year ended December 31, 2015. Thereafter, we will conduct a question-and-answer session. For the purposes of today's call, the financial results for the fourth quarter and full-year of 2015 are unaudited, and they will be presented in RMB and U.S. dollars. All of the financial information presented is reported using International Financial Reporting Standards as issued by the International Accounting Standards Board. Mr. Hoh, please start your presentation.

Thank you, Shiwei. The year 2015 was a challenging year for the diesel engine sector in China, due to sluggish construction and manufacturing activities as well as a result of China's slowing economy and upgrading emission standards in both on and off-road segments which impacted our customers purchasing decision. Again, in such challenging environment we maintain our profitability by selling higher priced engines compliant with stricter emission standards that’s stimulating our optional days. The annual rate of growth of the Chinese economy was 6.8% in the fourth quarter of 2015 as construction and manufacturing sectors continues to lead the slowdown. The sales of commercial vehicles excluding gasoline-powered and electric-powered vehicles third quarter declined of 4.7% and 14.4% in the fourth quarter and full-year included there on slides respectively compared to the same period in 2014. The heavy-duty and medium-duty truck and bus segments recorded even higher declines. Net revenue for the fourth quarter of 2015 was RMB2.9 billion or $450.7 million compared with RMB3.9 billion in the fourth quarter of 2014 a 25.4% decline. Market demand for engines especially medium and heavy-duty commercial engines for truck remain weak. In addition, off-road markets such as construction equipment and mining continues to experience lowered engine demand, while sales of natural gas engines were negatively affected by a lower fuel price. However, the decline in our engine sales were partially offset by this higher average selling price as we sold more additional full compliant engines. Despite the downturn in the truck market our diversified engine portfolio enabled us to mitigate this client through increase sale to international markets. In 2015, we won a competitive bid for the supply of 1300 engines for school buses that were exported to Saudi Arabia. As one of the largest Chinese bus engine export orders in 2015, our…

Thank you, Weng Ming. I will now proceed to report on our financial performance for the fourth quarter and full-year of 2015. Let me start with fourth quarter results. Our net revenue for the fourth quarter of 2015 decreased by 25.4% to RMB2.9 billion, US$450.7 million compared with RMB3.9 billion in the fourth quarter of 2014. The total number of GYMCL engines sold in the fourth quarter of 2015 was 60,143 units compared with 93,094 units in the same quarter a year ago, representing a decrease of 35.4%. As reported by the China Association of Automobile Manufacturers CAAM, in the fourth quarter of 2015, sales of commercial vehicles excluding gasoline-powered and electric-powered vehicles decreased by 4.7%. The market remained weak in the heavy- and medium-duty truck segments, which registered a decline in sales of 12.2% and 9.0%, respectively. The market was also weak in the heavy- and medium-duty bus segments, which registered a decline in sales of 29.4% and 31.6%, respectively. Gross profit decreased by 28.7% to RMB692.1 million US$106.6 million compared with RMB970.1 million in the same quarter of 2014. The gross profit decline was mainly attributable to lower unit sales in the fourth quarter of 2015 compared with the same quarter of 2014. Gross margin was 23.7% in the fourth quarter of 2015 compared with 24.7% in the same quarter of 2014. Other operating income was RMB25.8 million US$4.0 million, compared with RMB13.8 million in the same quarter of 2014. This increase was mainly due to foreign exchange gain in the fourth quarter of 2015 as compared to a loss in the corresponding quarter of 2014. Research and development R&D expenses declined by 7.6% to RMB122.5 million US$18.9 million from RMB132.6 million in the same quarter of 2014. As a percentage of net revenue, R&D spending was 4.2%…

Thank you sir [Operator Instruction] We have the first question from the line of Sandy Mehta. Please ask your question.

Yes good morning and thanks for taking my call. A few questions, can you comment on the inventory situation in the channel? And what you are seeing in terms of inventory levels out there?

Hello Sandy, this is Kevin. And regarding on the inventory on the channel, we would anticipate at the moment it's quite healthy and because it seems that limitation of the National IV from National III, the [indiscernible] there has been diminishing and also the [indiscernible] and then to increasing their stocks of the new vehicles, because of the cost demand and they are concerning about pricing increasing from the National III to National IV. And then the whole channel and then the announced [indiscernible] levels is just quite healthy and I believe that is in the range of about two to three months.

Okay. And then the second question is any thoughts on the dividend what you are thinking of or how you will approach the dividend declaration in a few months time?

Okay. This is Weng here [Sandy] (Ph). It's a little early now to talk about dividend. I think the Board hasn’t taken any decision of this concept yet. So when the time comes, we will defiantly let you know.

Okay. And one final question, you talked about better prospects for your international sales, you have some good order for example from Saudi Arabia, what is the overall level of international sales as a percentage of your total mix? And how do you see international sales growing going forward?

Okay. Last year we saw about 42,000 unit - at quarter it was 42,000 units of engine as a directly by supply through our OEM. So that is mixed about close probably about [25%] (Ph) 30% at our total sales volume now. We continue to see growth in our international sales, we believe that this year it would still be better coming from our traditional markets within the South East Asian and Middle East region. Obviously we will get to see some from the [indiscernible] as well, all right. And interestingly thereafter we have setup of the Europeans joint ventures in European embassy. We have seen some sales now, of some interest now in our engines in the European markets. So that’s looking good.

I'm sorry the number you said was 30%?

No, 13%, one three. About…

13% okay.

Yes.

13%. And are these international sales are they sort of at the same margin level as your domestic business are perhaps higher?

Well it depends on the engine mix, Sandy, if it is the highest range engine, yes it will be higher and lower has been lower, but the mix is probably about the same compared to our domestic sales, I mean depending on where you export to, some countries will like bigger engines, other countries will like smaller engines.

And when you telling internationally deal sort of have a - what is the selling factor, is it the price or you’re the quality, the reputation, what sort of gets you the sale?

Well we've been selling internationally for a long time now, Sandy, particularly the [indiscernible] market which is our biggest export market. We have a law association with these countries, with this people for them China is [indiscernible] to China and also goods produced out of China well receive within [indiscernible].

Okay. Thank you so much. Thank you.

Okay we have a question from the webcast. It is any timeline on these similar incentives? Well, it is very hard to predict what [indiscernible] do so far that starting official that were seen, the diesel engine market aspect for those a new emission standard that has come up, that can be good or bad you know so we don’t really know, for now we haven’t seen anything officially yet.

[Operator Instructions] As there are no further questions at this time, I would like to hand the call back to your speakers for today for any closing remarks.

Thank you all for participating in this conference call. We look forward to speaking with you again. Thank you and good-bye.