Posted on 06/18/2013 6:56:27 PM PDT by TexGrill
A major investor of China Yuchai International Ltd. CYD +0.50%, a Singapore holding company for a Chinese diesel engine manufacturer, is proposing the company increase its stake in the manufacturer, among other changes.
Investment firm Shah Capital Management is expected to release a 13D filing on its proposal as soon as Tuesday evening, said Shah Capital President Himanshu Shah.
In a letter to China Yuchai’s chairman and a director sent on June 13, Raleigh, N.C.-based Shah Capital, which owns about 6.2% of China Yuchai and is one of its largest shareholders, urged the company to increase its stake in its main operating subsidiary, divest stakes in two underperforming companies and hire an investment bank to dual-list the company on the Hong Kong Stock Exchange. Currently shares trade on the New York Stock Exchange.
China Yuchai, through its China-based subsidiary Guangxi Yuchai Machinery Company Ltd., manufactures, assembles and sells diesel engines for construction equipment, trucks, buses and cars in China and overseas markets. It also produces diesel power generators, mostly used in the construction and mining industries.
“China Yuchai is a No. 1 company in terms of research and development, distribution, market share….the balance sheet is rock solid,” Shah said. “But that is not reflected at all in the valuation in the marketplace today.”
Shah said he thinks shares should be worth more than $50 even though it is trading around $18.
(Excerpt) Read more at blogs.wsj.com ...
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