NEW YORK, March 28 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.
On Friday, China Yuchai shares closed at $15.03 on the New York
(Reporting by Bill Berkrot; Editing by Jan Paschal)