China Yuchai International - H2 2025
February 24, 2026
Transcript
Operator (participant)
Good day, and thank you for standing by. Welcome to China Yuchai International Limited, second half, 2025 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference call is being recorded. I would now like to turn the conference over to Kevin Theiss. Please go ahead, sir.
Kevin Theiss (Head of Investor Relations)
Thank you for joining us today, welcome to China Yuchai International Limited conference call and webcast for the 2025 second half and year ended on December 31, 2025. Joining us today are Mr. Weng Ming Hoh and Mr. Choon Sen Loo, President and Chief Financial Officer of CYI, respectively. In addition, we have in attendance Mr. Kelvin Lai, General Manager of Operations of CYI and the Chairman of MTU Yuchai Power Company Limited. 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, confident that, continue to, predict, 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 statements. These forward-looking statements include, but are not limited to, statements concerning the company's operations and its financial performance and condition, and are based on current expectations, beliefs, and assumptions, which are subject to change at any time. The company cautions that these statements, by their nature, involve risk and uncertainties, and actual results may differ materially depending on a variety of important factors, such as government and stock exchange regulations, competition, political, economic, and social conditions around the world and in China, including those discussed in the company's Form 20-Fs and under the headings Risk Factors, Results of Operations, and Business Overview, and in other reports filed with the Securities and Exchange Commission from time to time.
All forward-looking statements are applicable only as of the date they are made, and the company specifically disclaims any obligation to maintain or update the forward-looking information, whether of the nature contained in a press release made today or today's conference call or otherwise in the future. Mr. Hoh will provide a brief overview and summary, and then Mr. Loo, will review the financial results for the second half and fiscal year ending December 31, 2025. Thereafter, we will conduct a question and answer session. For the purposes of today's call, the 2025 second half and fiscal year numbers are unaudited, the 2024 second half year are unaudited, and the 2024 fiscal year financial results are audited. Financial results are presented in RMB and U.S. dollars.
All the financial information presented is reported using the IFRS accounting standards, as issued by the International Accounting Standards Board. With that, Mr. Hoh, please begin your prepared remarks.
Weng Ming Hoh (President and Director)
Thank you, Kevin. We are pleased to report a strong sales and profit growth in second half and full year of 2025. For second half 2025, our revenue in the second half increased by 33.5% year-over-year to RMB 11.8 billion, or $1.7 billion. Our gross profit increased by 58.4% year-over-year to RMB 2.2 billion, or $317 million, and our gross margin rose to 18.9%. Our operating profit increased by 993.1% year-over-year to RMB 469.2 million, or $66.7 million.
Basic and diluted earnings per share improved by 108.7 million year-over-year to RMB 4.57, or $0.65. For fiscal year of 2025, revenue increased by 38.9% to RMB 34.7 billion, or $3.5 billion. Gross profit increased by 44.3% year-over-year to RMB 4.1 billion, or $578.7 billion. Gross margin rose to 16.5%. Operating profit improved by 82.7% to RMB 1.1 billion, or $155.2 million. Basic and diluted earnings per share increased by 34.4% to RMB 14.32, or $2.4.
Our revenue growth in 2025 second half and year was generated by higher unit sales in nearly every reporting category. Gross profit and margin were enhanced by the increased unit sales volume, especially for heavy-duty and high-horsepower engines. Our off-road engines unit sales in 2025 increased by 13% year-over-year, with marine and genset engines and industrial engines each recording unit sales growth of over 34% year-over-year. The fast-growing demand for backup generators to provide reliable electric power for data center operations created rapid growth for our engines. Combined sales of MTU, Yuchai Power, and Yuchai branded high-horsepower engines to data centers exceeded 2,000 units in 2025, up from 750 units in the prior year. To meet the expected increase in demand for our power generating engines, production capacity expansion is well underway.
Exports were an important sales channel as our globalization has been increasing. Our agreement in Vietnam includes Yuchai support for construction of our partner's production facility, which complements our pilot production operation. Buses powered by Yuchai natural gas engines were delivered in Mexico, bringing the total Yuchai engine count to 2,400 units, powering buses in the Nuevo León region of Mexico. Our foundry began batch delivery of advanced casting to Germany, demonstrating the acceptance of our casting product quality by the customer. We are expanding our international sales and service support offices, as we believe potential new international partnerships will strengthen our global reach. Our strategy remains to sell into multiple end markets with a growing and diverse product portfolio. R&D expenses increased by 37.3% to RMB 1.4 billion or $192.3 million.
In the fiscal year of 2025, Yuchai continued to enhance engine efficiency and performance of its National VI and Tier 4 emission compliance engines and power generation engines. progress continued on developing new energy products, including alternative fuel engines, using hydrogen, methanol, and ammonia combustion technologies. Total R&D expenditure, including capitalized costs, was RMB 1.5 billion, or $217.1 million. Our strategic alliances and joint ventures produced a 9.4% year-over-year growth in profit in 2025, propelled by a higher sales and profit, mainly by MTU Yuchai. Recently, we took proactive steps to strengthen our technological capabilities and supply chain resilience by improving access to key components and advancing our participation in critical technology development.
We have acquired a 27.97% equity interest in Nanyue Diankong Industrial Technology Company, which is a national high-tech industrial leader specializing in fuel injection system, including common rail system, unit pump, and mechanical pumps. In addition, we became a limited partner in the Guangxi Yuchai Double Growth Fund, a private equity fund focused on investing in emerging and invest in innovative technologies. Our indirect subsidiary, Guangxi Yuchai Marine and Genset Power Company, filed an application for listing with the Hong Kong Stock Exchange in January 26. The potential listing is subject to review and approval by the Hong Kong Stock Exchange and relevant regulatory authorities and market conditions. We believe this action will provide more resources to enhance their operations growth.
Highlighting the company's confidence in future revenue, profits, and cash flow generation, we paid a cash dividend of 0.53%, $0.53 per ordinary share in July 2025, to show our commitment to building shareholder value. Cash and bank balances were over RMB 7.9 billion year or $1.1 billion, as at December 31, 2025. With that, I'd now like to turn the call over to Mr. Choon Sen Loo, our Chief Financial Officer, who will provide more details on the financial results. Choon Sen.
Choon Sen Loo (CFO)
Thank you, Weng Ming. Let me review our unaudited six months and full year results ended December 31st, 2025. For the six months, our revenue increased by 33.5% to RMB 11.8 billion, or $1.7 billion, compared with RMB 8.8 billion in second half 2024. Total number of engines sold increased by 28.7% to 210,913 units, compared with 163,843 units in second half 2024.
The increase in the total number of engines sold in second half 2025 was primarily driven by a 49.2% year-over-year rise in truck and bus engine unit sales, which significantly outpaced the 13% year-over-year growth in market shares of truck and bus vehicles, excluding gasoline and electric-powered vehicles, as reported by the China Association of Automobile Manufacturers, CAAM. Truck engine unit sales in second half 2025 rose by 59.4%, led by a 100.61% year-over-year gain in heavy-duty truck engines. Off-road engine unit sales increased by 7.5% year-over-year, led by strong growth of more than 22% in both industrial and marine and genset unit sales, offsetting lower agricultural engine unit sales.
Gross profit increased by 50.4% to RMB 2.2 billion, or $317 million, up from RMB 1.4 billion in second half 2024. Gross margin increased to 18.9% in second half 2025, compared with 15.9% in second half 2024. The increase was mainly due to higher unit sales volume, a change of sales mix with higher unit sales of heavy duty and high horsepower engines, and continuing cost reduction initiatives. Other operating income decreased by 44.1% to RMB 224.5 million, or $31.9 million, compared with RMB 401.5 million in second half 2024. The decrease was mainly due to lower government grants.
Research and development expenses increased by 48% to RMB 884.9 million, or $124.5 million, compared with RMB 581.1 million in second half 2024. Mainly driven by higher experimental costs, increased personnel expenses, higher mold costs, and impairments related to fuel cell development. Total R&D expenditure, including capitalized costs, were RMB 984.2 billion, or $128.6 million, representing 8.3% of the revenue in second half 2025, as compared with RMB 726 million or 8.2% of the revenue in second half 2024.
Selling general and administrative, SG&A, expenses increased by 4.9% to RMB 1.1 billion, or $157.7 million, from RMB 1 billion in second half 2024. This increase was mainly due to increased personnel expenses and higher consultancy fees, partially offset by lower accounts receivable provisions compared with the same period last year. SG&A expenses represented 9.4% of the revenue in second half 2025, compared with 12% for second half 2024. Operating profit rose by 103.1% to RMB 469.2 million, or $66.7 million, from RMB 160.1 million in second half 2024. Operating margin was 4%, compared with 1.8% in second half 2024.
The increase was generated by higher unit sales volume, a change of sales mix with higher unit sales of heavy duty and high horsepower engines, and lower SG&A expense as percentage of the total revenue. Finance cost decreased by 20.2% to RMB 29.6 million, or $4.2 million, from RMB 37.1 million in second half 2024. Primarily due to lower bank term loans and reduced bills discounting. The share of financial results of the associates and joint ventures decreased by 15.1% to RMB 49.7 million or $7.1 million, compared with RMB 58.1 million in second half 2024. The decrease was mainly due to reduced profits at Y&C Engine Co., Ltd.
Income tax expense was RMB 213.5 million, or $30.4 million, compared with RMB 26.4 million in second half 2024. The tax increase was due to higher profits in second half 2025 as compared with second half 2024, and higher deferred tax expenses. Net profits attributable to the equity holders of the company increased by 107.4% to RMB 101.6 million or $24.4 million, compared with RMB 82.7 million in second half 2024. Basic and diluted earnings per share was RMB 4.57 or $0.65, compared with RMB 2.19 in second half 2024.
Basic and diluted earnings per share for second half 2025 and second half 2024 were based on the weighted average of 37,515,322 shares, and 37,809,894 shares, respectively. Now, we review the unaudited financial results for the fiscal year ended December 31, 2025. Revenue increased by 20.9% to RMB 24.7 billion or $3.5 billion, compared with RMB 19.1 billion in FY 2024.
The total number of engines sold in FY 2025 increased by 29.4% year-over-year to 461,309 units, compared with 356,586 units in FY 2024. Truck and bus engine units rose by 42.8%, compared with CAAM data for greater market sales growth, excluding gasoline and electric powered vehicles of 4.5% for 2025. Total truck engine unit sales rose by 50.7% year-over-year, compared with a 5.9% year-over-year increase from CAAM data for truck unit sales.
Heavy-duty truck engine sales increased by 80.1% year-over-year in 2025, followed by a 34.2% year-over-year increase in medium-duty truck engines, and a 67.6% year-over-year improvement in light-duty truck engine sales. Off-road engine unit sales increased by 13% year-over-year, with both industrial and marine engine set unit sales growth of more than 24% year-over-year, offsetting lower agricultural engine unit sales. Gross profit increased by 44.3% to RMB 4.1 billion, or $578.7 million, from RMB 2.8 billion in FY 2024. Gross margin increased to 16.5%, compared with 14.7% in FY 2024.
The increase was mainly due to higher unit sales volume, a change of sales mix to higher unit sales of heavy-duty and high horse engine power, high horsepower engines, and continuing cost reduction initiatives. Other operating income decreased by 22.5% to RMB 445.9 million, or $63.4 million, compared with RMB 575.7 million in FY 2024. This was primarily due to lower bank interest income and reduced government grants. R&D expenses increased by 37.3% to RMB 1.4 billion, or $192.3 million, compared with RMB 984.7 million in FY 2024, primarily driven by higher experimental costs, increased personnel expenses, and impairment related to fuel cell developments.
Yuchai had continued with its initiatives to enhance the engine efficiency and performance of its National VI and Tier 4 emission standard compliant engines and power generation engines for data centers and marine applications, while also enhancing its new energy solutions. Total R&D expenditure, including capitalized costs, was RMB 1.5 billion or $217.1 million, representing 6.2% of the revenue in FY 2025, compared with RMB 1.2 billion or 6.2% of the revenue in FY 2024. SG&A expenses increased by 14.3% to RMB 2.1 billion or $294.7 million, representing 8.4 million of the revenue in FY 2025, compared with RMB 1.8 billion or 9.5% of the revenue in FY 2024.
This was mainly due to higher personnel expenses and consultancy fees, as well as increased good sales and service expenses that partially offset lower accounts receivable provisions. Operating profit increased by 82.7% to RMB 1.1 billion or $155.2 million, compared with RMB 597 million in FY 2024. The operating margin was 4.4%, up from 3.1% in FY 2024. Finance cost decreased by 20.8% to RMB 61.8 million, or $8.8 million, from RMB 78 million in FY 2024, primarily due to lower bank term loans.
The share of financial results of the associates and joint ventures increased by 9.4% to income of RMB 111.1 million, or $15.8 million, compared with income of RMB 101.5 million in FY 2024. The improvement was mainly driven by higher profits of 18.3% at MTU Yuchai Power Company Limited, and increased profits at Guangxi Purem Yuchai Automotive Technology Company, partially offset lower profits at Y&C Engine Co Limited. Income tax expense increased by 160% to RMB 329.7 million, or $646.9 million, compared with RMB 128.8 million in FY 2024.
The tax increase was driven by higher profit in FY 2025 as compared with 2024 and higher income tax expenses. Net profit attributable to the company's shareholders increased by 66.3% to RMB 537.4 million, or $76.5 million, compared with RMB 323.1 million in FY 2024. Basic and diluted earnings per share rose by 34.4% to RMB 14.32 or $2.04, compared with RMB 8.21 in FY 2024. Basic and diluted earnings per share for FY 2025 and FY 2024 were based on the weighted average of 37,518,322 shares and 39,385,703 shares, respectively.
Now, we'll go through some balance sheet highlights as of December 31, 2025. Cash and bank balances were RMB 7.9 billion, or $1.1 billion, compared with RMB 6.4 billion at the end of financial year 2024. Trade and bills receivables were RMB 10.4 billion, or $1.5 billion, compared with RMB 8.8 billion at the end of FY 2024. Inventories were RMB 5.6 billion or $791.8 million, compared with RMB 4.7 billion at the end of FY 2024. Trade and bills payables were RMB 11.1 billion, or $1.6 billion, compared with RMB 8.5 billion at the end of FY 2024.
Short-term and long-term loans and borrowings were RMB 2 billion or $287.4 million, compared with RMB 2.5 billion at the end of financial year 2024. I will now turn the call over to Kevin for a comment for Q&A session.
Kevin Theiss (Head of Investor Relations)
Thank you, Mr. Loo. Please note some officers of China Yuchai are remotely calling into the conference call. This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience, thank you for your patience.
If you would like to ask a question in Chinese, please kindly translate your own question to English before turning to the management for answers. Before we start the Q&A, we would also like to announce that management will be attending the forthcoming Jefferies Conference on March 19th, the HSBC Conference on April 14th-16th, Bank of America Merrill Lynch conference in Shenzhen on May 13th, JP Morgan conference on May 20th-22nd, and the UBS conference in Hong Kong on May 26th-29th.
If you are interested in a one-on-one or a small group meeting, please contact the salespeople at these banks. Given the tight meeting schedule and travel plans, we will not be able to accept meeting requests outside the conference venues. Now, operator, we are ready for questions.
Operator (participant)
Thank you. We will now begin the question and answer session. As a reminder to ask question, please press star one and one on your telephone and wait for your name to be announced. To cancel a request, please press star one and one again. Question, please press star one and one. If you'd like to ask question, please press star one and one.
Kevin Theiss (Head of Investor Relations)
Operator, I've seen the questions online. I'll read out the questions from Weiliang Tan. The question is that, "Thanks for the information and congrats on the strong results year-over-year. Can you potentially share more on much higher expenses in second half where effective tax rate is about 44%?" I'm Choon Sen, I'm CFO of CY, I will take these questions. I think this question is a tax expense, we should look at the full year, right? From a full year basis, there's a 7%-8% higher due to the different tax. On year-on-year basis, we wrote off about a net basis for RMB 100 million. That is actually non-cash item.
Choon Sen Loo (CFO)
You know, that is also due to the generality of accounting that, you know, we look at the future profits for all entities. Eventually, then we need to impair those different tax assets that, you know, should only be assessed. The company has decided to write off those different tax asset, reduce it to the level to sustain for the future profit. That's also part of the accounting requirements that we have done that. Yeah. If you exclude that, you know, you come down to about 20-21% effective tax rate on a year-on-year basis.
The changes is probably only about 1%-2%, if you look at 2025 and 2024. Okay, I hope that answer your questions, Weiliang Tan.
Operator (participant)
Thank you. We do have questions from the phone line. The first question comes from Wei Shen of UBS. Please go ahead.
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Thank you for good morning and good evening. Thank you for taking my question. My question is about the other operating income. I found that in 2024, it decreased a lot, and I'm wondering what's the reasons and what's the outlook in 2026? Thank you.
Choon Sen Loo (CFO)
Okay, I'm Choon Sen Loo here. Your question is on the Wei Shen. The question is on the other operating income, right?
Weng Ming Hoh (President and Director)
I just want to confirm your question?
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Yes.
Weng Ming Hoh (President and Director)
Yes. Okay.
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Yes.
Weng Ming Hoh (President and Director)
That the reduction is mainly due to the lower government grants. In 2025, probably, you know, a lot of people on the call may know that there are quite tighten up the incentive policy issued by the Chinese government. That has reduced substantially. It's actually half of the government grant that we have received in 2024. You know, in 2025 compared to 2024. If your question, next question is that whether that will continue in this trend, right? That one, again, you know, we won't project that, you know, what will be the incentive from the government.
For now, you know, I would think that the trend it probably will remain as, 2025.
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Okay, thank you. My next question is about the share of the joint venture cat profit in 2025. Because we only have the combined results, we don't have the details. Do you have the numbers for the MTU joint venture? What's the profit growth for the joint venture? Thank you.
Kelvin Lai (General Manager of Operations)
Uh-
Weng Ming Hoh (President and Director)
Sorry.
Kelvin Lai (General Manager of Operations)
Oh, yeah, you go ahead, yeah.
Weng Ming Hoh (President and Director)
Okay. Well, we let Kelvin Lai answer that. He's the chairman of MTU. He can tell you all about it.
Kelvin Lai (General Manager of Operations)
Okay. Thank you. Thank you for the question. The joint venture last year, they generate the net profits about RMB 211 million. They're increasing by 22% from the year 2024. The sales volume and also the revenue is much higher, about 30% + increase. The reason why the profit not as good as the volume sales or the revenue generated, because of the product mix has been changed. Yeah, we sold less the 20-cylinder engine, the profit and also the revenue is a little bit lower than the other version, yeah.
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Okay. Got it. Thank you.
Operator (participant)
Thank you for the questions. One moment for the next question. Our next question, we have the line from Fiona Lim from Bank of America. Please go ahead.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
Hi. Good morning and good evening. This is Fiona from Bank of America. I also have two questions for the management team. The first one is that in the second half in 2025, we see that the company's gross profit margin improved quite a lot year-over-year. Could you please elaborate more about the reasons behind? Is it because we have more delivery to the power generation clients so that we have a better product mix and hence the higher gross margin?
Weng Ming Hoh (President and Director)
Okay.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
That is the first question. Yeah.
Weng Ming Hoh (President and Director)
Okay, let me answer that question. Actually, if you look at the unit sales that we have disclosed in the announcement, the unit sales actually go down by about 30%. That's one of the major reasons why the profit improved, is due to the increase in volume. Two, also because of a high horsepower engines, we sold more than we did last year. I mean, again, significantly more. If you look at our numbers, again, in the announcement, go up from 750 to 2,000. Those are two major contributions, contributors to the improved performance.
Of course, with a higher volume that we have, higher unit sales, that will kind of leverage the fixed cost, and that contributes to the better gross margin too.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
Okay. I have a follow-up question. Given the better product mix in 2025, what's our guidance for 2026?
Weng Ming Hoh (President and Director)
Well, it's gonna be quite challenging, difficult to provide good guidance in China. You know, in China, the sales, a lot of it is due to government policies, driven by government policies, right? We haven't seen much yet. The last year, the one of the biggest reasons for the increase in revenue or unit sales is because of the government policy, the replacement policy, Guo Sanquan. That one has actually drive growth, quite a fair bit of our vehicle sales, and also quite a bit of our non-vehicle sales as well, volume. Whether or not the government is going to continue with that and how strongly they're gonna push that next year, it's yet to be seen. That will also determine the, the impact on the, overall, unit sales growth plan.
There is a what I call bright spot. We see a lot of big demand in the data centers last year, and that has maintained, and we expect it to improve this year, it's hard to give you a percentage for the growth. I think we expect that to improve by double digits this year for the data centers. Overall, I think this year's non data center sales is gonna be more or less the same if the government continues with the what we call policies from last year.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
Thank you. My second question is about our R&D expenses. In 2025, we see that the R&D expenses are increased over 30%. Looking at 2026, what do you expect our R&D expenses growth rate? What's our key R&D focuses looking at 2026 and 2027?
Weng Ming Hoh (President and Director)
Okay. Our R&D expenses for this grown by is around about 5% of our revenue, right? It goes kind of still about 10 times the revenue. The other one that we should talk about is that what type of our research we're working on. There are a few things we're working on. One of them is, of course, new energy side of things. We are still developing and continue to develop on the new energy side, especially in the range extender EV and try to get our system, which is already commercialized in, to be stacked into or developed into our customers' vehicles.
Other areas will be new, kind of, new areas, new energy systems, things like ammonia, methanol, and hydrogen power combustion engines other than fuel cells, right? If you, also, the Chinese government is now also considering introducing National VII emission standards in the coming two to three years. That, for that, we are also starting to do some R&D to get ourselves ready for that, for that emissions requirement. There are quite a few areas that we're working on in addition to our continuous improvement on the product to get more efficient and more fuel efficient as well. There are quite a few areas we're working on.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
Thank you. That's very clear.
Weng Ming Hoh (President and Director)
Mm.
Fiona Lim (Global Financial Crimes Compliance Specialist of Global Economic Sanctions)
my questions.
Weng Ming Hoh (President and Director)
Thank you.
Operator (participant)
For the questions. One moment for the next question. Our next question comes from Ying Si of CICC. Please go ahead.
Ying Si (Equity Research Analyst)
Hey, thanks, and congratulations. I have two questions to ask. The first one is about the about the future business in of the HPP engines. We noticed that Caterpillar has announced its reciprocating generators can be used as prime power for data centers. How does Yuchai view this industry trend? Do we have some existing natural gas engines, engine products and technologies to support this industry trend? This is my first question. Thank you.
Weng Ming Hoh (President and Director)
Kelly, would you like to-?
Kelvin Lai (General Manager of Operations)
Okay, yeah, let me take this question. The high horsepower engine business forecast still depends on the development of those internet service provider, how fast they build the data center. We do expect there will be still a growth in the year 2026 when comparing to 2025. We don't have the exact figure because so far, we don't receive, I mean, the order from the various customer. Regarding on your question regarding on the natural gas generator. From Yuchai, we do have our natural gas engine, and for the power generation.
We have the technology, and we have the right product as well. Our product, the natural gas engine will be very similar to the diesel engine, they have the using our 16VC engine, that will be generate, I mean, about 2 MW for the power generation using natural gas. The application of the natural gas for highest powers is mainly on the industrial application at the moment.
In the region of the China or Asia, and then the, I mean the customer, and then we were considering the cost of the engine, and then they are not using the natural gas engine for the AI for the data center at this stage.
Ying Si (Equity Research Analyst)
Very clear, and thanks. My second question is about our significant market share gain in truck, in truck and bus engines, especially in 2025. How do you view the 2026 outlook for domestic truck and bus industry sales? Whether Yuchai market share growth can be sustainable? This is my second question. Thank you.
Weng Ming Hoh (President and Director)
Okay. You're talking about vehicle engines. you know, the major vehicle OEMs in the market, some of them are start using our engines. In particular, I think, we have been working with this vehicle OEMs for quite a while to get our engines certified and designed to their vehicles. Two of them have already come to fruition last year. Excuse me.
Ying Si (Equity Research Analyst)
Okay.
Weng Ming Hoh (President and Director)
One of the, one of two of them have already come to fruition last year. That's why we see a big, sort of growth in, in our heavy-duty truck, segment of the market. Correct. With that, we expected to continue to 2026, barring any unforeseen. We, we do expect to see a continued growth in the, in that, area.
Wei Shen (Equity Research Analyst of China Auto & Industrials Research)
Got it. Thank you.
Operator (participant)
Thank you for the questions. As a reminder, if you'd like to ask question, please press star one one. Our next question comes from Steven Liu of Guotai Junan Securities. Please go ahead.
Steven Liu (Equity Research Analyst)
Hello, good morning, and good evening. Thank you very much for taking my question. I've got two questions. The first one is about your backlog, especially for those associated with the data center business. If we compare your backlog right now and, like half a year ago, I'm just wondering, is that getting larger? If you look at the demand and supply, is the supply getting more and more constrained? It's getting more and more tap tighter. Is that what is happening for those data center engines? Thank you.
Weng Ming Hoh (President and Director)
Kelly?
Kelvin Lai (General Manager of Operations)
It has to be, I mean, separate the operation, because for the Yuchai brand, high horsepower engine, most of the component supply, they are generally come from China. The, I mean, on the supply side, we didn't have much problem there, because they had providing the most component to for our engine assembly. The cost-wise, they had increasing the price this year, mainly because of the raw material increasing recently. That cost a cost markup.
For the joint venture side and the, we do have the bottleneck, and then regarding on the supply because of the supply chain from from our partners and from Germany, and then they do have some constraint and causing the supply of the component, then the will be limited, and then for the operation in the Chinese joint venture.
Steven Liu (Equity Research Analyst)
All right. Thanks. I guess I didn't get it clear, so I'm trying to ask about your backlog. I mean, the order that you received from your customer. Is the size of that getting larger during the past few months?
Kelvin Lai (General Manager of Operations)
No. I mean, we are still, they're working very hard to fulfill those requirements. Yeah. I mean, the delivery so far are still about between 3 to 4 months anyway, yeah.
Steven Liu (Equity Research Analyst)
All right. Okay. My second question is about export. Do you see any, like, increase on your European business? What is the, like, the detailed segment about that? Is that about, like, a diesel engines or gas engines? I mean, what is the outlook of your European business? Thanks.
Kelvin Lai (General Manager of Operations)
Are you referring to high horsepower engine or referring to the truck engine?
Steven Liu (Equity Research Analyst)
mostly about the large horsepower engine.
Kelvin Lai (General Manager of Operations)
Okay. Yeah. For the export market, if we referring to the Yuchai brand, I mean, the Yuchai brand operation, our export markets only account for a small percentage, about 10%, mainly in Asia. For the engine joint venture side, there will be. I mean, because we sell full by our OEM, and those, and then we'll have about over 20% or 25% of the export opportunity, and it's also on growing as well. Yeah.
Weng Ming Hoh (President and Director)
those export are to the Asian market.
Kelvin Lai (General Manager of Operations)
All right. Yeah, Asian market as well. Yeah. Mm-hmm.
Steven Liu (Equity Research Analyst)
All right, I see. Thank you very much.
Operator (participant)
Thank you for the question. At this time, there are no further questions from the phone line. We have now reached the end of our Q&A session. I would like to turn the call back over to Mr. Hoh.
Weng Ming Hoh (President and Director)
Well, thank you all for participating in our conference call. We wish each of you good health, and we look forward to speaking with you again. Thank you.