The long, winding, and difficult road of diesel engine maker China Yuchai (NYSE:CYD) just sent investors back into the ditch.

I'm not normally one to pimp my own prior columns, but this is a strange company with a convoluted ownership structure, and I strongly suggest that newcomers read my pastpieces to get up to speed.

So what's new? The company reported earnings today, and they weren't good. Since the company doesn't report quarterly results, I had to go back into past filings and jerry-rig the figures to estimate how the company did. It looks like sales fell about 12% year over year, while the company reversed year-ago operating income into an operating loss.

Although units shipped rose 11% for the year, the company saw its product mix shift toward lighter-duty engines, which carry lower margins. What's more, the company had to deal with higher raw material costs and tightening credit, which I presume is part of the government's effort to keep a lid on growth and inflation.

The company made roughly $43.5 million worth of provisions for bad loans and trade balances to a related company. These costs rankle me; they're the wages of the self-dealing that has worried me about this company before. It's also important to note that the reorganization agreement from early April 2005 still has not been implemented; in fact, it's been extended until Dec. 31, 2006.

Clearly, then, we're not talking about DaimlerChrysler (NYSE:DCX), Volvo (NASDAQ:VOLVY), or even TataMotors (NYSE:TTM) here. China Yuchai's story has oodles of sex appeal (a heavy-industry company in a huge, rapidly industrializing economy), but also carries considerable risk. I can't honestly tell you what next year's numbers will look like, when or if you'll get your dividends, and/or whether various parties might work to leave today's shareholders utterly hosed, with minimal recourse.

So while it's true that the stock "looks cheap," it's equally true that this isn't anything like a Chinese version of Cummins (NYSE:CMI) just yet. I won't rule out that improvement (in performance, investor sentiment, or both) could lead to robust gains here, but for now, China Yuchai is only an opportunity for the truly risk-tolerant out there.

Further Foolishness on diesel doozies:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).