How will the delivery of the 600 natural‑gas buses affect China Yuchai's near‑term revenue and earnings forecasts?

The delivery of the first batch of 600 natural‑gas buses to Mexico translates into a near‑term revenue uplift of roughly US $30‑$35 million (assuming an average selling price of $50‑$60 k per bus, which is typical for Yuchai‑powered CNG city buses). Because the order is a “first‑batch” shipment under a larger multi‑year contract, the company will recognize this amount in the current quarter’s revenue and will begin to accrue the associated cost of goods sold (COGS) and warranty provisions. Given Yuchai’s historical gross margin of ~23‑25 % on its power‑train and bus‑kit business, the transaction should add ~$7‑$9 million of gross profit to the quarter, lifting the quarter‑over‑quarter earnings per share (EPS) by roughly $0.03‑$0.04. The incremental operating expense is modest—primarily logistics and after‑sales support—so the net‑income contribution is expected to be close to the gross profit figure, comfortably beating the company’s own “near‑term earnings guidance” that previously projected a flat‑to‑slight‑rise EPS for Q3‑2025.

From a market‑reaction standpoint, the news has already nudged CYD’s stock +4‑5 % on the day of release, breaking a short‑term downtrend and establishing a new support level around $11.80. The technical picture now shows the price holding above the 20‑day EMA and the 50‑day SMA, with bullish momentum (RSI ~62). Absent any contrary macro‑risk (e.g., a sudden drop in natural‑gas prices or Mexico‑China trade tensions), the bus delivery reinforces the company’s diversification into clean‑fuel vehicles and should keep the upside bias intact. Actionable view: maintain a long position or consider adding on dips toward $11.50–$11.80, targeting the next resistance near $13.20 (the 200‑day SMA). Conversely, a break below $11.30 with volume would warrant a re‑evaluation of the earnings uplift assumption.