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China Yuchai International Ltd (NYSE:CYD)
Q2 2020 Earnings Call
Aug 12, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

I would like now to turn the conference over to Kevin Theiss. Please go ahead, sir.

Kevin Theiss -- Investor Relations

Thank you for joining us today, and welcome to China Yuchai International Limited's Second Quarter 2020 Conference Call and Webcast. Joining us today are Mr. Weng Ming Hoh and Dr. Thomas Phung, 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, 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, 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 risks and uncertainties, and actual results may materially -- 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-F 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.

If the COVID-19 pandemic is not effectively controlled, our business operations and financial conditions may be materially and adversely affected due to a deteriorating market for automotive sales and economic slowdown in China and abroad, potential weakening of the financial condition of our customers, potential adverse impact to our suppliers and supply chain or other factors that we cannot foresee.

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 the release made during today's call or otherwise in the future.

Mr. Hoh will provide a brief overview and summary, and then Dr. Phung will review the financial results for the fourth quarter ended June 30, 2020. Thereafter, we will conduct a question-and-answer session. For the purposes of today's call, the financial results for the second quarter ended June 30, 2020, are unaudited and it will be presented in RMB and U.S. dollars.

All the financial information presented is reported using International Financial Reporting Standards as issued by the International Accounting Standards Board.

Mr. Hoh, please begin your prepared remarks.

Hoh Weng Ming -- President

Thank you, Kevin. In the second quarter, China economy resumed growth as GDP increased by 3.2%, far below historical trends, but a strong rebound from the 6.8% economic contraction of the first quarter of 2020. This was severely impacted by the COVID-19 pandemic. The aftermath of the COVID-19 pandemic created major interruptions in the Chinese economy and automotive industries as it affected customers, suppliers, workers, distributors, service networks, and other auto-related occupation.

The National and interprovincial travel restrictions negatively impacted many supply chains in the automotive industry. Following the reopening of the Chinese economy, the government enacted economic growth catalysts, including higher fiscal spending, more improved infrastructure project and lowering lending rates and bank reserve requirements. Manufacturing activity increased since May, and China's export grew partially because China was among the first to ease lockdown action.

According to data reported by the China Association of Automobile Manufacturers, CAAM, in the second quarter of 2020, sales of commercial vehicles excluding gasoline powered and electric-powered vehicles increased by 50.5%. Truck sales increased by 56.1% with heavy-duty truck sales up by 64.9%. Medium-duty truck sales rose by 32.5% and bus sales increased by 1.8%. Part of this growth was attributable to the pent-up demand from the first quarter of 2020 as much of the economy was essentially shut down, with lockdowns and travel restrictions implemented to inhibit the spread of the COVID-19 infection.

Our operational and financial results during the second quarter reflected the rebound from the disruptions in the first quarter of 2020, due to the COVID-19 outbreak. Our total unit sales improved by 32% year-over-year, our overall truck engines and bus engine unit sales grew by 23.3% in the second quarter of 2020. With heavy-duty truck engine sales rising by 40.8% and medium-duty truck engine up by 53.3% year-over-year. Our growth engine sales increased an impressive, 51.7%, led by a 78.5% growth in a seasonal agricultural machinery market.

As a result, our revenue increased by 34.7% to RMB6.5 billion or $925.2 million. The growing sales of our National VI engines in the Chinese heavy-duty truck engine market is directly related to the growing acceptance of our National VI natural gas engine product. We have already established our position as one of the leading suppliers of heavy-duty National VI engines to the truck and bus market in China.

Operating profit increased by 53.6% to RMB448.7 million or $63.4 million and basic and diluted earnings per share rose by 66.4% to RMB5.99 or $0.85. In the second quarter of 2020, the total R&D expenditure including capitalized costs was RMB280.3 million or $39.6 million and for the six-month ended June 30th, 2020, total R&D was RMB402.7 million or $56.9 million. R&D represented a 4.3% of net revenue in the second quarter of 2020, and 4% of net revenue for the six months ended June 30th, 2020.

We continue to improve our National VI and Tier 4 technologies and production tactics as we are progressing on our product for the new energy market. We see continuing national implementation of the more stringent National VI emission standards. Our portfolio of National VI compliant engines including products powered by natural gas, positions us well with our existing customers and attracts new ones as well.

In 2019, we have established strategic partnership with Guangxi Automobile Holding Company -- Guangxi Holding Group, a leading producer of heavy-duty truck in China and the Foton Motor Group, a market leader in the on-road vehicles segment. We also entered into a strategic -- new strategic partnership in the second quarter of 2020 to become a strategic OEM supplier to Sany Truck, part of the Sany Group Company Limited, which is China's leading machinery equipment maker and has a worldwide presence. This new partnership will further improve our market position in the future.

We have used newly developed engine technologies to build or modify engines for specific markets. During the 2020 first quarter, an advanced Highpower marine engine was introduced to penetrate the growing market demand for vessels in the yacht market, yacht class. This segment has historically been dominated by imported engine models. Innovative technologies have increased the engine power and reduced the dry -- engine dry weight of the YC6MJ marine engine to make it competitive with the imported engine.

During the first half of 2020, GYMCL announced that if YCA05175-S500 engine passed European Stage V emission state test and this Yuchai engine can now be marketed in the European Union for operation. We retained our financial strength despite the disruptions in sales and operation in the first half of 2020 with cash and bank balances of RMB6.6 billion or $931.5 million at June 30th, 2020, and we paid the cash dividend of $0.85 per share on July 31st, 2020. Similar to the rest of the world, China's economy still faces significant uncertainties.

However, if China successfully reopen its economy and automobile industry already experienced a pronounced rebound beginning in April, we remain cautiously confident that Chinese economy is on a recovery path for the remainder of 2020.

With that, I will turn to Thomas to go over the financials.

Thomas Khong Fock Phung -- Chief Financial Officer

Thank you, Weng Ming. Now, let me review our second quarter results for 2020. Revenue for the second quarter of 2020 has increased by 34.7% to RMB6.5 billion, $925.2 million compared with RMB4.9 billion in the second quarter of 2019. The total number of engines sold by GYMCL during the second quarter of 2020 was 145,278 units, an increase of 32% compared with 110,059 units in the second quarter of 2019. The increase was mainly due to higher engine sales to the truck market and off-road segments, particularly unit sales to both the heavy-duty and medium-duty truck market segments which more than offset an overall sales decline in the bus engine segment.

According to data reported by the China Association of Automobile, CAAM, excluding sales of gasoline-powered and electric-powered vehicles, in the second quarter of 2020, sales of bus increased slightly by 1.8% while truck sales rose by 56.1%. According to CAAM, in the second quarter of 2020, commercial vehicle excluding sales of gasoline-powered and electric-powered vehicles increased by 50.5% compared to the second quarter of 2019, while GYMCL sales to the on-road commercial vehicle market increased by 23.3%.

GYMCL's unit sales to the off-road market increased by 51.7% compared with the second quarter of 2019. Gross profit increased by 33% to RMB948.1 million, $133.9 million compared with RMB712.9 million in the second quarter of 2019. Gross margin was 14.5% compared with 14.7% in the second quarter of 2019. Other operating income was RMB61.8 million, $8.7 million, compared with RMB98.8 million in the second quarter of 2019. The decrease was mainly due to lower government grants in the second quarter of 2020.

Research and development expenses -- sorry -- Research and development, R&D expenses increased by 24% to RMB137.0 million, $19.4 million compared with RMB110.5 million in the second quarter of 2019. Higher R&D expenses in the second quarter of 2020 were mainly due to higher development costs for National VI and Tier 4 engines on testing and experimental costs.

In the second quarter of 2020, the R&D capitalization amount was RMB143.3 million, $20.2 million. The Company continued to further development its new National VI and Tier 4 engines for the on-road and off-road markets, respectively. In the second quarter of 2020, the total R&D expenditure including capitalized costs was RMB280.3 million, $39.6 million and it represented 4.3% of revenue compared with 3.6% in the second quarter of 2019.

Selling, general and administrative, SG&A expenses increased by 3.7% to RMB424.1 million, $59.9 million from RMB408.9 million in the second quarter of 2019. The increase primarily resulted from higher warranty expenses and outbound freight expenses in the second quarter of 2020. SG&A expenses represented 6.5% of revenue compared with 8.4% in the second quarter of 2019.

Operating profit increased by 53.6% to RMB448.7 million, $63.4 million from RMB292.2 million in the second quarter of 2019. The operating margin was 6.9% compared with 6% in the second quarter of 2019. Finance costs decreased by 17.4% to RMB26.7 million, $3.8 million from RMB32.4 million in the second quarter of 2019. Lower finance costs was mainly resulted from reduced bills discounting amount compared with the second quarter of 2019.

Net profit attributable to China Yuchai's shareholders increased 66.4% to RMB244.7 million, $34.6 million, compared with RMB147.0 million in the second quarter of 2019. Basic and diluted earnings per share rose 66.4% to RMB5.99, $0.85, compared with RMB3.60 in the second quarter of 2019. Basic and diluted earnings per share in the second quarters of 2020 and 2019 were based on a weighted average of 40,858,290 shares.

Now, I'll go over the first six months result of 2020. Revenue was to RMB10.0 billion, $1.4 billion compared with RMB9.0 billion in the same period last year. The total number of engines sold by GYMCL in the first half of 2020 was 213,182 units compared with 211,359 units in the same period last year. The increase was mainly due to higher engine sales in the heavy-duty trucks and off-road segments, particularly agricultural engines, which more than offset the sales decline in the bus segment.

Gross profit was RMB1.5 billion, $208.8 million, compared with RMB1.5 billion in the same period last year. Gross margin decreased to 14.8% as compared with 16.3% a year ago. The decline in gross margin was mainly attributable to product mix. Other operating income declined 26% to RMB105.7 million, $14.9 million compared with RMB142.8 million in the same period last year. The decrease was mainly due to lower government grants compared with the same period last year.

R&D expenses increased by 16.8% to RMB213.0 million, $30.1 million compared with RMB182.4 million in the same period last year. Higher R&D in the first half of 2020 was mainly due to higher development costs for National VI and Tier 4 engines on testing and experimental costs. In the first half of 2020, the R&D capitalization amount was RMB189.7 million, $26.8 million. The Company continued with its initiatives to develop new engines compliant with China's next emission standards, National VI and Tier 4, and to improve engine performance and quality.

In the first half of 2020, the total R&D expenditure including capitalized costs was RMB402.7 million, $56.9 million representing 4% of the revenue compared with 3.3% in the same period last year. SG&A expenses decreased by 3.5% to RMB757.4 million, $107.0 million from RMB785.1 million in the same period last year. The decrease was mainly due to lower warranty expenses and reduced outward freight costs, particularly in the first quarter of 2020, compared with the same period last year.

SG&A expenses represent 7.6% of revenue for the first half of 2020 compared with 8.7% in the same period last year. Operating profit decreased by 5.6% to RMB613.2 million, $86.6 million from RMB649.4 million in the same period last year. The operating margin was 6.2% compared with 7.2% in the same period last year.

Finance costs increased to RMB63.2 million, $8.9 million from RMB57.6 million in the same period last year, an increase of approximately RMB5.5 million. Higher finance costs mainly resulted from an increase in borrowings compared to the same period last year. Net profit attributable to China Yuchai's shareholders was RMB305.7 million, $43.2 million compared with RMB345.0 million in the same period last year. Basic and diluted earnings per share was RMB7.48, $1.06 compared with RMB8.44 in the same period last year. Basic and diluted earnings per share for the first six months of 2020 and 2019 was based on a weighted average of 40,858,290 shares.

Now, let me walk you though our balance sheet highlights as at June 30th. Cash and bank balances were RMB6.6 billion, $931.5 million compared with RMB6.4 billion at the end of 2019. Trade and bills receivables were RMB9.2 billion, $1.3 billion compared with RMB7.8 billion at the end of 2019. Inventory were RMB4.0 billion, $565.0 million compared with RMB2.8 billion at the end of 2019. Trade and bill payables were RMB7.9 billion, $1.1 billion compared with RMB6.2 billion at the end of 2019. Long-term and short-term bank borrowings were RMB2.7 billion, $377.4 million compared with RMB2.1 billion at the end of 2019.

Now, I will turn the call over to Kevin for the comments, before we begin our Q&A.

Kevin Theiss -- Investor Relations

Thank you, Thomas. Please note that due to the COVID-19 the offices of China Yuchai are remotely calling-in for the conference call. This may result in a slight delay in providing answers to some questions. We apologize for any inconvenience and thank you for your patience.

With that, operator, we're ready for the Q&A session.

Questions and Answers:

Operator

Thank you so much. [Operator Instructions]. And your first question comes from the line of William Gregozeski from Greenridge. William, your line is now open.

It seems that William disconnected his line or canceled his question. So your next question comes from the line of Don Espey from Shah Capital. Don, your line is now open.

Don Espey -- Shah Capital Management -- Analyst

Good morning, all. Nice quarter.

Hoh Weng Ming -- President

Thank you.

Don Espey -- Shah Capital Management -- Analyst

I have a few questions here.

Hoh Weng Ming -- President

Yeah.

Don Espey -- Shah Capital Management -- Analyst

Please provide more color on GYMCL's EV powertrain both current sales and future prospects and fuel cell development program.

Hoh Weng Ming -- President

Okay. We launched the NEV [Phonetic] what we call products last year. The products are still in development stage, except for the range extender. So the range extender we have sold a very few about 17 set, the amount in terms of dollar value is quite [Technical Issues] and is not material. So, and there is -- as far as the fuel cell is concerned, we are still in development stage. We have got that out one prototype which is for 35-kilowatt fuel cell, and there we are working with one OEM partners to have that installed in their vehicle.

Don Espey -- Shah Capital Management -- Analyst

Okay. GYMCL was number three in market share in National VI HD truck engine market in the first half of 2020. How long before you see this metric improve into number two?

Hoh Weng Ming -- President

That's a good question. We will do our best. As I said, this industry in China is a highly competitive industry, all right? And there are many players in there. So I think you have to wait and see. I can't -- sorry, I can't give you a definite answer or even any indications of that.

Don Espey -- Shah Capital Management -- Analyst

Okay. Switching gears, does the current US administration's accounting and audit proposal affect CYD, assuming the Company does not move its main listing to China or Hong Kong?

Hoh Weng Ming -- President

Well, we are -- we are still -- we are monitoring the development in China -- in US very closely. So we will update the -- our investors as and when there is further development, and as and when we have, we call, further thoughts on it, which will -- which we believe -- where we believe that it is appropriate to share with our shareholders, we will do so then. As it is, all we can do is to wait out the US situation right now and monitor the US closely.

Don Espey -- Shah Capital Management -- Analyst

Okay. As a long-term shareholder, we're curious why Weichai and Cummins have still massively outperformed CYD over the last one, three, five and ten years. We'd like to hear your view on this dynamic and maybe how you plan on changing this?

Hoh Weng Ming -- President

Well, I mean, each has its own [Phonetic], right, I mean, as you know, Don [Phonetic], Cummins is a huge, it's a multi-national with global presence. Weichai, they are very strong in certain segments, and they have -- they also have their OEM plants as well. We are -- we operate differently from both of them. In our case, we have a very broad range of products that we sell, and we -- our sales are mostly from the domestic market in China. Although we will first explore our export market which we have done a bit in the last couple of years, this year we are affected by the COVID-19 pandemic.

So going forward, I think we -- our strategy will still be the same. We will, of course move on to explore more export market which is a big market out there. And have a better product that we currently development with our National VI, and in fact now, right now our services -- after-sales service network is still very -- is a huge advantage to us right now still in servicing our end users right now in China. So we will do what we can to maintain or to compete with our customers in both domestic market as well as in the international market.

Don Espey -- Shah Capital Management -- Analyst

Okay. Thank you. That's all from us.

Hoh Weng Ming -- President

Right.

Operator

Thank you so much. [Operator Instructions]. And your next question comes from the line of William Gregozeski from Greenridge. William, your line is now open.

William Gregozeski -- Greenridge Global -- Analyst

Hi guys. Great quarter. Just kind of going off Don's last thing about the export. Are you guys seeing, I mean, much demand, COVID or not COVID environment on the export side? And is there any, are you guys having any issues with your supply chain?

Thomas Khong Fock Phung -- Chief Financial Officer

Okay. Now, we have no issue with the supply chain. But I think the core market has been affected by COVID-19 as I mentioned earlier. So we actually saw a decline, a drop in our export sales for this year so far.

William Gregozeski -- Greenridge Global -- Analyst

Okay. Can you quantify about what -- what percent of your sales are export?

Thomas Khong Fock Phung -- Chief Financial Officer

Now, it's dropped to perhaps less than 10%, about 10% or less than 10%.

William Gregozeski -- Greenridge Global -- Analyst

Okay. And where do you think that was about a year same period of last year?

Thomas Khong Fock Phung -- Chief Financial Officer

Well, last year, it's about 12% to 14%.

William Gregozeski -- Greenridge Global -- Analyst

Okay. On the -- on the margin side, it looks like gross margins were down quite a bit. How do you see that trending for the -- for the remainder of the year?

Thomas Khong Fock Phung -- Chief Financial Officer

Okay. I think this one is if you look at the second quarter, it's basically similar to last year's second quarter. So it's largely due to product mix, and also I think with the National VI that we're starting to sell initially, the National VI engines that we're starting to sell, as and when the unit of National VI sales go up, we will see an improvement in the gross margin, when we get the what I call economy of scale. And also we are now working hard to bring down the cost of the new products to a level where we have now for the -- for those products out that have already matured. So we hope to see that in the next half of this year, and hopefully next year, some improvements.

William Gregozeski -- Greenridge Global -- Analyst

Okay. So do you think getting to around 18% next year is still feasible?

Thomas Khong Fock Phung -- Chief Financial Officer

Yeah. We are working toward that. I don't think we were too far away.

William Gregozeski -- Greenridge Global -- Analyst

Okay. And then last question was obviously, sales have been very strong since the kind of the restart in China. How are you seeing that trending the rest of the year?

Thomas Khong Fock Phung -- Chief Financial Officer

We believe the -- for the rest of year, it will be better for us compared to the similar period last year. We are actually seeing quite a good numbers coming in for the month of July for ourselves, OK? So we would think the second half although will be slower than last, the first half which is normal in our business, is seasonally lower, where we believe we will be better than the previous year's second half.

William Gregozeski -- Greenridge Global -- Analyst

Okay, great. Thank you guys.

Thomas Khong Fock Phung -- Chief Financial Officer

Thank you.

Operator

Thank you so much. [Operator Instructions].

Thomas Khong Fock Phung -- Chief Financial Officer

Okay. There's a question here from the webcast. Can you please give us more color on the Sany strategic partnership? Any guidance on the number of incremental units this will bring? Did the strong second Q, 2020 results benefited from the Sany partnership?

No, the Sany partnership is a very new partnership. No sales that -- we have not had any sales from them, not much sales from them yet. So I'm sorry, I can't give any guidance. But going forward, we expect it to improve maybe in the next year or so. Okay?

Operator

And your next question comes from line of David Raso from Evercore. David, your line is open.

David Raso -- Evercore -- Analyst

Yes, hello. I'm sorry, it's hard to hear you. Can you hear me?

Hoh Weng Ming -- President

Yeah, yeah. Perfectly David, how are you?

David Raso -- Evercore -- Analyst

Wonderful. How are you? And I apologize, I was on another call, so I might be asking a question that was already asked.

Hoh Weng Ming -- President

Okay.

David Raso -- Evercore -- Analyst

Can you give us a little bit of a timeline of the NS VI rollout and some sense of the price points of the NS VI product versus the existing product. Thank you.

Hoh Weng Ming -- President

The rollout, I think the gas engines for National VI was implemented in the middle of last year -- in the middle of this year, the government vehicles has to be our National VI and will be fully implemented by middle of next year. Okay? So in terms of price point, we are having a higher unit selling price for National VI somewhere in the region of maybe over 10% so far, we're seeing. So still -- a lot of it is still under negotiations with our customers right now. So I can't give you more specifics than that.

David Raso -- Evercore -- Analyst

Well, thank you. In the past as you know, as some of the deadlines sort of get moved around, especially in some of the non-major cities. But at this stage, you are not seeing any change in the application of the deadlines, [Speech Overlap] is what I'm hearing.

Hoh Weng Ming -- President

Yeah, not for National. Not that we are very often. [Speech Overlap]

David Raso -- Evercore -- Analyst

So, and when do you think the majority of the trucks will have NS VI for your sales? Do we need to get to end of '21, middle of '21?

Thomas Khong Fock Phung -- Chief Financial Officer

I think by the middle of '21 we should be. The new sales structure should be mostly National VI especially for heavy and medium-duty truck.

David Raso -- Evercore -- Analyst

And given the 10% higher price point, would you argue even at the initial ramp-up the transition that the margins are higher for those engines for you than the existing or does it take a little while, the typical higher warranty expense on a new engine? Does the margin help not show up until say 2022? Just for a sense of mix modeling.

Thomas Khong Fock Phung -- Chief Financial Officer

Okay. You're right. Right now, we are not seeing, we are not having -- the margin is not as we had hoped for, and it's not as good as the National V margin. A lot of -- there's still a lot of work that needs to be done to improve on our cost base. So going for the rest of this year -- second half of this year we still see improvement. And then I would say it would take until 2021 maybe even 2022 to reach the level of the margin that we hope to achieve.

David Raso -- Evercore -- Analyst

Thank you very much, I appreciate it.

Thomas Khong Fock Phung -- Chief Financial Officer

Okay.

Operator

Thank you so much. [Operator Instructions]. And we have a follow-up question, it comes from the line of David Raso from Evercore. David, you might ask your question.

David Raso -- Evercore -- Analyst

Thank you for the time for the follow-up, and again, I apologize if this was asked earlier. Given the strength you're seeing on highway, and obviously even off-highway what are your thoughts about next year? I know it's early, but obviously the strength this year has been fairly dramatic. So folks do get a bit nervous about the tough comparison '21 versus '20. Anything you're seeing in your order books off or on highway to lease set some baseline for how we should think about '21 on and off-highway? Thank you.

Thomas Khong Fock Phung -- Chief Financial Officer

Okay. Yes. We do not have much visibility on our order book for 2021. But for this year, I think there are a few factors that we should -- we had talked about one is that because of the COVID-19 especially in the first quarter where China had a kind of bad quarter. There was a pent-up demand so to speak, for these -- for the business, right. So that's why the second quarter turned out to be very strong for us. And in addition to that to stimulate the economy, the government came out with a few measures which also helped in our case. So some of these measures will continue into the next quarter and hopefully for the rest of the year as well.

So this year, we believe it will -- it will be better than last year overall. But going to the next year, if we had a good year this year, then it's going to be very difficult to expect the same kind of growth or even same kind of performance sequentially to next year.

So, I'm sorry, David, I can't give you a more specific answer, but it's still very hard to actually have any visibility right now. I don't have too much of visibility right now.

David Raso -- Evercore -- Analyst

No, I appreciate that. I mean, I'm just trying to figure if I'm modeling it down 10% to 15% off of a tough comp. Is that just some sense of like no one is expecting the same kind of growth, obviously. I think most people are figuring, it's got to be flat to down unless there is new levels of stimulus specific. But people just get nervous when they see how high it is, could it drop 30% and I was just wanted to give you a chance to level set people a little bit on how to think about it, but it just feels like your order book doesn't have enough visibility or there's enough conversations with customers to really know at this stage. I think that, that's fair.

Thomas Khong Fock Phung -- Chief Financial Officer

Yeah. Right now -- yes, this year. And then next year, we'll see how the issue of the NS VI implementation nationwide as well. So that's the other factor that's going to come to play.

David Raso -- Evercore -- Analyst

Yeah, OK. Well, I appreciate it very much. Thank you so much.

Thomas Khong Fock Phung -- Chief Financial Officer

Thank you.

Operator

Thank you so much. [Operator Instructions]. We have now reached the end of our Q&A session, and I will turn the call back over to Mr. Hoh.

Hoh Weng Ming -- President

Thank you very much for joining us in the conference call. We wish you -- each of you a good health and please be safe during this crisis. We look forward to speaking with you again. Goodbye.

Operator

[Operator Closing Remarks].

Duration: 43 minutes

Call participants:

Kevin Theiss -- Investor Relations

Hoh Weng Ming -- President

Thomas Khong Fock Phung -- Chief Financial Officer

Don Espey -- Shah Capital Management -- Analyst

William Gregozeski -- Greenridge Global -- Analyst

David Raso -- Evercore -- Analyst

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