This AI Stock Has it All (Growth, Value, Momentum)

When investors think about Chinese industrial stocks, they usually think: Old economy, declining demand, and structural headwinds. 

Today’s featured stock spent years living inside that box … a profitable but stagnant diesel engine manufacturer tied closely to China’s commercial vehicle market.

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What’s changed is that China Yuchai appears to have found a new growth catalyst, and the income statement is starting to reflect it. Read on and see why this stock is scoring an A according to our Zen Ratings system, and how it’s one of the few AI names offering value, growth, and momentum.

Ready for the stock? 

It’s China Yuchai International (NYSE: CYD). Here’s everything you need to know about it…

What China Yuchai Actually Does

CYD stock is best known as one of China’s largest producers of diesel and natural gas engines, primarily used in trucks, buses, construction equipment, marine applications, and power generation. Its engines are widely used across China and exported internationally through OEM partners.

For years, that business faced a simple problem: electrification. As China pushed aggressively into electric buses and trucks, investors questioned how much runway remained for internal combustion engines ... and the stock was priced accordingly.

The Growth Question Has Been Answered

In 2025, China Yuchai delivered a sharp turnaround that suggests the growth narrative is no longer theoretical.

In the most recent half-year report, revenue jumped 34% year over year, while earnings surged nearly 66%, already exceeding full-year profits from 2024 with one half still to go. Unit engine sales rose nearly 30%, and growth was broad-based across multiple engine categories.

The most important development, however, is where demand is coming from.

China Yuchai is increasingly supplying engines for backup power generation, particularly for data centers. As China rapidly builds AI-driven computing infrastructure, reliable backup power has become critical … and diesel and gas generators remain the default solution for redundancy.

In other words, while EV adoption pressures engines inside vehicles, AI infrastructure is quietly creating demand for engines outside them.

A Business That’s More Diversified Than It Looks

This isn’t just an AI story. China Yuchai is also benefiting from:

• Stabilizing demand in traditional truck and bus markets
• Export growth, with engines used in vehicles shipped outside China
• Industrial and marine applications that remain difficult to electrify
• A strong balance sheet, with over $1 billion in cash and relatively modest debt

That diversification matters. It reduces dependence on any single end market and helps explain why growth has accelerated across nearly all engine segments rather than one narrow niche.

Valuation Still Looks Reasonable

The stock has rallied massively to new all time highs, but valuation still looks defensible given the earnings reset.

That’s why CYD is one of the few names scoring a B for both its Value and Momentum Component Grades. Our Momentum factor weighs stock performance relative to sub-sector peers, share turnover, volume-weighted momentum, and more.

Learn how our Momentum Grade helps investors identify stocks on an upward trajectory.

See how CYD scores on its other Component Grades here.

CYD also scores a B in the Growth department, too … so it’s one of the few AI related names offering a mix of value, growth, and momentum. 

More importantly, earnings are approaching levels last seen during China Yuchai’s prior peak years … suggesting this isn’t just a short-term bounce, but a return to normalized profitability.

Bottom Line

China Yuchai spent years as a “cheap but stuck” stock. Today, it looks more like a cyclical industrial name with a genuine growth engine, benefiting from AI infrastructure build-out, exports, and end markets that aren’t easily electrified.

It’s still exposed to China risk and policy uncertainty … but the business itself is stronger, more diversified, and more relevant than the market has historically given it credit for.

Sometimes, the most interesting AI plays don’t look like tech stocks at all.

Click here to add CYD to your watchlist.

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