China Yuchai worth a look for investors -Barron's
NEW YORK, March 28
NEW YORK, March 28 (Reuters) - Investors may want to have a look at China Yuchai (CYD.N) as its earnings are expected to rise sharply, along with demand for its diesel engines, according to a report in Barron's financial newspaper.
The Chinese government's massive stimulus program has sparked demand in many sectors that require diesel engines and units sold are expected to rise 25 percent this year, according to the report.
That forecast may prove to be conservative if January's spike in sales is any indication, the article said.
The company also recently signed a joint venture deal with Caterpillar Inc (CAT.N) to rebuild older engines that should appeal to Chinese customers, the report said.
The weekly financial newspaper also noted China Yuchai's attractive valuation. Its New York-traded shares are trading at less than six times projected profits -- well below the typical multiple of 24 for the machinery and equipment sector, Barron's noted.
Analyst Mark Hake of Hake Investment Research expects the company to post 2010 adjusted earnings of $2.58 per share, up from $1.67 in 2009, the newspaper said.
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