A.[Reserved] B.Capitalization and Indebtedness Not applicable C.Reasons for the Offer and Use of Proceeds Not applicable D.Risk Factors Summary of Risk Factors Our business is subject to a number of risks and uncertainties, including those described in Item 3.D. of this Annual Report. If any of those risks are realized, our business, financial condition and results of operations could be materially and adversely affected. Set forth below is a summary list of the key risks to our business: Risks Related to Our Business and Industry •The diesel engine business in China is significantly influenced by the performance of the Chinese and the global economy. Adverse economic developments in China or in the global economy could have a material adverse effect on our financial condition, results of operations, business or prospects. •The diesel engine business in China is dependent in large part on relevant government policies. As a result, our financial condition, results of operations, business and prospects could be adversely affected by changes in government policies in China. •We depend on and expect to continue to depend on our largest customers for a significant percentage of our sales. •Competition from other diesel engine manufacturers may adversely affect our financial condition, results of operations, business or prospects. •We engage in transactions with related parties from time to time. Such transactions present possible conflicts of interest and could have a material and adverse effect on our business, financial condition and results of operations. •China’s vehicle and machinery industries are increasing their momentum to new energy applications. This may lead to a decrease in demand for our engines, affecting our business volume and profitability. •If we are not able to continually improve our existing engine products and develop new engine products or successfully enter into other markets, we may become less competitive, and our financial condition, results of operations, business and prospects will be adversely affected. •We may be unable to obtain sufficient financing to fund our capital requirements, which could limit our growth potential. •We are subject to risks associated with our joint ventures and strategic alliances. •Our financial condition, results of operations, business or prospects may be adversely affected to the extent we are unable to continue our sales and investment growth. •We are dependent on our suppliers, some of whom are our single source suppliers for the components they supply. •Our business could be adversely affected by the disruption of supply or shortage of raw materials and components. 4 Table of Contents •We could be exposed to the impact of interest rates and foreign currency movements with respect to our future borrowings and business. •If prices of energy, raw materials or components increase, it may adversely affect our profitability or cause us to suffer operating losses. •The adoption of more stringent emission standards may adversely affect our results of operations and financial condition. •We are subject to risks associated with being subject to trade controls laws and regulations. •We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity risks and data leakage risks. Any failure to comply with the various applicable laws and regulations related to data security and cybersecurity could lead to liabilities, penalties or other regulatory actions, which could have a material and adverse effect on our business, financial condition and results of operations. •Risks from incorporation of artificial intelligence technologies into our products, manufacturing processes and business operations, as well as potential challenges associated with the implementation of such technologies could adversely affect our operations, reputation and competitive position. •We may be subject to risks related to the PRC authorities’ investigatory actions against and the alleged misconduct of certain former directors and senior management personnel of us and our subsidiaries. Risks related to Corporate Structure •Our financial condition, results of operations, business and prospects may be adversely affected if we are unable to implement the Reorganization Agreement and the Cooperation Agreement. •Our controlling shareholder’s interests may differ from those of our other shareholders. •We have in the past experienced and may in the future experience disagreements and difficulties with the shareholders in Yuchai. •We may face risks associated with our subsidiary being a standalone public company. General Risk Factors •Escalating geopolitical tensions and regional conflicts may materially and adversely affect our business, results of operations, and financial condition. •International trade policies and regulations dynamics may adversely affect our business. •Changes in and uncertainties relating to political or social conditions, government policies or regulations in China could have a material and adverse effect on our business and results of operations. •Changes in tax laws or tax rulings could negatively impact our income tax provision and net income. •Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us. •We are a holding company and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments. Regulations in China regarding currency conversion could limit our ability to obtain sufficient foreign currency to satisfy our foreign currency requirements or to pay dividends to shareholders. •PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of our offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business. •Securities offerings that we may conduct in the future may be subject to the approval, filing or other administration requirements of the China Securities Regulatory Commission, or the CSRC, the Cyberspace Administration of China, or the CAC, or other PRC governmental authorities, and we cannot assure you that we will be able to obtain such approval, satisfy such requirements or complete such filings. •United States regulators may be limited in their ability to conduct investigations or inspections of our operations in China. 5 Table of Contents Risks Related to Our Business and Industry The diesel engine business in China is significantly influenced by the performance of the Chinese and the global economy. Adverse economic developments in China or in the global economy could have a material adverse effect on our financial condition, results of operations, business or prospects. Our operations and performance are significantly influenced by economic factors in China such as GDP growth, industrial output, consumer spending and trade dynamics. These factors influence not only the demand for our products in various sectors, but also our cost of production, supply chain resilience and strategic investment capability. The interconnectivity of the global economy amplifies these risks. Economic events and trends in major markets like the United States and Europe, as well as emerging economies in the Asia-Pacific region, can impact the economic and industrial conditions in China. Fluctuations in the global economy can lead to volatility in the price of raw materials and energy. Trade tensions, geopolitical instability, and evolving regulatory or environmental policies in these markets can disrupt supply chains, shift consumer preferences, and create ripple effects on global trade flows and economic activities, ultimately influencing demand for our products sold both in China and overseas. The performance of the Chinese economy affects, to a significant degree, our financial condition, results of operations, business and prospects. Adverse changes in the Chinese and global economy, such as slowing GDP growth, reduced industrial output, or declining customer confidence, could increase costs associated with product development, decrease the availability of potential sources of financing, raise financing costs, and increase our exposure to material losses from our investments. Any of these outcomes could have a material adverse impact on our financial condition and operating results. The diesel engine business in China is significantly influenced by government policies. As a result, our financial condition, results of operations, business and prospects could be adversely affected by changes in government policies in China. Government policies significantly influence various aspects of our business and our industry, including productions, emission regulations, subsidies, and market demand. Government policies in China regarding emissions standards and fuel efficiency requirements directly impact the design, production, and sale of engines, as well as market demand for new energy products. These policies serve as the framework within which we operate, and directly influence our strategies and activities across various aspects of our business. Changes in these policies could adversely affect our financial condition, results of operations, business, or prospects. In recent years, the Chinese government has prioritized energy conservation and carbon reduction, exemplified by its commitment to achieving peak carbon emissions by 2030 and carbon neutrality by 2060. This has led to the introduction of policies that de-emphasize traditional engines, such as diesel engines, and encourage increased use of cleaner energy alternatives. Such changes have adversely impacted our financial condition and market position. Compliance with stringent emission and fuel efficiency standards requires significant investment in advanced technologies to optimize engine performance while minimizing environmental impacts. Government policies influence market demand by shaping economic conditions, infrastructure development, and investment in transportation sectors. For instance, policies promoting construction of highways, railways, and ports can drive demand for heavy-duty vehicles powered by engines, while subsidies or incentives for agricultural machinery can boost our sales in the agricultural sector. The government incentive schemes have, directly or indirectly, contributed to our overall engine sales in the past. However, government policies are subject to change, and we cannot guarantee our continuous compliance with or benefit from the government policies. We depend on and expect to continue to depend on our largest customers for a significant percentage of our sales. Sales to our top five customers accounted for 35.5% of our total revenue in 2025. Although we consider our relationship with our top customers to be good, the loss of one or more of our top customers, whether singly or combined together, would have a material adverse effect on our financial condition, results of operations, business or prospects. Our dependency on purchases made by our top customers exposes us to risks associated with their liquidity, market position, and purchasing decisions. Any adverse changes in their financial stability, market position, or purchasing patterns could adversely impact our sales volume and revenue. We cannot assure you that our top customers will be able to continue purchasing the same volume of products from us, purchase products at the same price, or fulfil all payment obligations, failing of which would reduce our overall sales volume and adversely affect our revenue or collections. In addition, fluctuations in the economic environment or industry-specific challenges may lead to reduced demand from these major customers, further intensifying the risks. 6 Table of Contents Our top customer is a leading automobile manufacturer group in China. In 2025, sales to our top customer as a group accounted for 17.1% of our total revenue, of which 8.7% was attributable to a single entity within the group. Although we believe that the companies within our top customer’s group generally make independent purchasing decisions based on end-user preferences, we cannot assure you that manufacturers associated with our top customer will not preferentially purchase engines manufactured by companies within their own group or from our competitors over those manufactured by us. Competition from other diesel engine manufacturers may adversely affect our financial condition, results of operations, business or prospects. The diesel engine industry in China is highly competitive, with several factors contributing to this competitive landscape: •improvement in competitors’ products; •increased production capacity of competitors; •increased utilization of idle capacity by competitors; •price competition; •increased emphasis on new energy power systems; and •consolidations in the diesel engine industry. The diesel engine industry in China is characterized by intense competition among a few dominant domestic players and established international joint ventures. Leading manufacturers possess significant economies of scale, vertically integrated supply chains, and extensive distribution networks. While these factors exert persistent downward pressure on market pricing, competition is also driven by a range of additional factors, including product quality and performance, brand recognition and reputation, marketing and promotional strategies, pricing practices and discounting, and the ability to provide timely and comprehensive after-sales service and technical support. As we and our competitors compete for market share, actions taken by us or our competitors or competitive pressures in the market could adversely impact our revenues, margins and overall profitability. An increase in competition as a result of these various factors, operating singly or together, may adversely affect our financial condition, results of operations, business or prospects as a result of lower gross margins, higher fixed costs or decreasing market share. Our long-term business prospects will depend largely upon our ability to develop and introduce new and improved products in response to market demands at competitive prices. Our competitors in the diesel engine markets may be able to introduce new or improved products that are more favorably received by customers. Competition in the end-user markets could also lead to technological improvements and advances that render our current products obsolete earlier than expected, in which case we may have to depreciate or impair our production equipment more rapidly than planned. Failure to introduce or delays in the introduction of new or improved products at competitive prices could have a material adverse effect on our financial condition, results of operations, business or prospects. In certain markets and product categories, our competitors include our customers and their affiliates. In 2025, our sales to our top five customers accounted for 35.5% of our total revenue, with our top customer being a leading automobile manufacturer group in China that also competes with us. Any consolidations or alliances in our industry may result in higher competition for us from the resulting larger companies. Concentration within our industry, or other potential moves by our competitors, could improve their competitive position and market share and may exert further pricing pressure on us. Any consolidation or alliances in our industry involving our key suppliers or customers may adversely affect our existing relationships and arrangements with them. The loss of one or more of our key suppliers or customers due to consolidation in our industry or otherwise could have a material adverse effect on our business, financial condition and results of operations. We engage in transactions with related parties from time to time. Such transactions present possible conflicts of interest and could have a material and adverse effect on our business, financial condition and results of operations. We have entered and may in the future enter into transactions with related parties. Transactions with related parties present potential for conflicts of interest, as the interests of related parties may not align with the interests of our shareholders. We cannot assure you that our transactions with related parties were or will be entered into on terms as favorable to us as comparable transactions that we could enter with unaffiliated third parties. These transactions, individually or in the aggregate, may have a material and adverse effect on our business, financial condition and results of operations or may result in litigation. 7 Table of Contents China’s vehicle and machinery industries are increasing their momentum to new energy applications. This may lead to a decrease in demand for our engines, affecting our business volume and profitability. China has set targets to reduce carbon emissions and enhance energy efficiency, which has led to increased support for the development and adoption of electric vehicles (“EVs”), hybrid vehicles, and other alternative energy technologies such as hydrogen powered and fuel cell solutions (collectively referred to as new energy vehicles, “NEVs,” and new energy power systems). According to the New Energy Vehicle Industry Development Plan (2021 - 2035), China aims for NEVs to account for 20% of total vehicle sales by 2025 and for the country to become a global leader in NEV technology by 2035. A series of policies and measures have been implemented to achieve these targets, including subsidies for NEV purchases, tax incentives, and investment in charging infrastructure. Beyond the automotive sector, China is also accelerating the green transition in off-road machinery, including construction and agricultural equipment. In 2026, China has transitioned into its 15th Five-Year-Plan. The 15th Five-Year-Plan, covering 2026 to 2030, prioritizes “New Quality Productive Forces” and a mandatory green and low-carbon transition, and sets a binding target to reduce carbon emission per unit of GDP by 17% by 2030. These developments underscore the importance of strategic alignment with China’s evolving power systems landscape by accelerating our research and development into new energy technologies and hydrogen power systems for on- and off-road applications. The foregoing policies require us to effectively adapt to these regulatory changes, while managing competitive pressures and shifting market preferences. Given that internal combustion engines account for the majority of our sales volume, failure to effectively respond to these trends could adversely impact our market position, financial performance, and long-term prospects in China’s vehicle and off-road machinery industries. If the market for new energy solutions develops more quickly than we expect, or in directions we do not anticipate, additional competition resulting from these developments could reduce demand for our products, which could adversely affect our business, financial condition, results of operations and prospects. For information on Yuchai’s new energy products, see “Item 4. Information on the Company – B. Business Overview – Products and Key Product Development — Yuchai – New Energy Products.” If we are not able to continually improve our existing engine products and develop new engine products or successfully enter into other markets, we may become less competitive, and our financial condition, results of operations, business and prospects will be adversely affected. Given the highly competitive nature and ongoing evolution of the diesel engine industry in China, we will have to continually improve our existing engine products, develop new products and enter into new markets in order to remain competitive. Our long-term business prospects largely depend upon our ability to develop and introduce new or improved products at competitive prices and enter into new local and overseas markets. These future products, including alternate fuels combustion engines, may utilize different technologies and require market expertise beyond our current scope. We have dedicated substantial resources to improving our product technology, ensuring their competitiveness in the market. Yuchai offers a portfolio of diesel, natural gas and alternate fuels combustion engines, along with the development of new energy powertrain systems and environmentally friendly hybrid engines. There is no assurance that our efforts will be successful, or that our new products will be attractive to customers. Research and development efforts may not yield successful outcomes, and our products may not meet all customer needs or gain market acceptance. Additionally, competitors may develop technology more quickly or profitably than us. Failure to yield successful technologies and products could adversely affect our business, financial condition, and results of operations. The technological requirements to comply with National VI and Tier-4 emission standards, and our commitment to preparing for more stringent or advanced technological requirements in the future, have required us to deploy significant resources on improving major engine components, systems and aftertreatment systems which has led to increased costs. The high cost of rare metal supply has resulted in a more expensive exhaust aftertreatment system. If such cost increase cannot be entirely transferred to our customers and the original equipment manufacturers, it could adversely affect our margins and profitability. The development of a sustainable market for natural gas and alternative fuel combustion engines and new energy power systems in China may be affected by many factors, some of which are beyond our control, including: •shifts in government policies, emission standards, or subsidies for alternative energy technologies; •the emergence of newer, more competitive technologies and products; •the prices and availability of oil and natural gas and other alternative energy in the future; •the successful development of natural gas and alternate fuels refueling infrastructure; •the successful development of new energy powertrain and control systems; and •fluctuations in consumer and industrial demand for natural gas and alternative fuel vehicles. 8 Table of Contents Rapidly changing markets, technology, emerging industry standards and frequent introduction of new products characterize our business. The introduction of new products embodying new technologies, including new manufacturing processes, and the emergence of new industry standards may render our planned product offerings obsolete, less competitive or less marketable. The process of developing our planned products is complex and requires significant continuing investments, development efforts and third-party commitments. Our failure to develop new technologies and products and the obsolescence of existing technologies could adversely affect our business, financial condition and operating results. Our success will depend, in part, on our ability to continue to enhance our existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. We may be unable to obtain sufficient financing to fund our capital requirements, which could limit our growth potential. The expansion of our existing operations and the development of our new energy business and products require significant capital investment. The scale of our future investments may require us to obtain additional funding, including through additional borrowings and by accessing the equity and debt capital markets. Without adequate funding, we could face critical challenges in developing the necessary technological and operational capabilities, which could hinder our ability to compete effectively in the rapidly evolving market. To bridge the gap, we may need to seek additional funding through loans, equity investments, or strategic partnerships. Securing such financing is subject to various uncertainties, including our operational results, financial condition, cash flow, and broader economic, political, and market conditions in China. Our ability to obtain external financing is further influenced by factors such as China’s policies on foreign currency borrowings and the state of both domestic and international capital markets. The PBOC frequently adjusts the loan prime rate in response to macroeconomic conditions; such changes are beyond our control and difficult to predict. Changes in interest rates and market liquidity conditions could have an adverse impact on our earnings, cash flows and ability to secure financing, potentially affecting our business, financial condition, results of operations and prospects. A shortage of liquidity in the banking system or any other factor that results in our inability to access capital may further exacerbate these challenges. The success of our investments in our new energy business and product development depends on our ability to accurately align the timing and direction of these investments to meet market demand. To position ourselves and fast track market penetration of our products, we may seek to expand our existing customer base and invest in additional sales and distribution channels. These objectives may require significant additional investments and potentially require additional external funding. There can be no assurance that we will be able to obtain such external funding on commercially attractive terms, in a timely manner or at all. Relying on external funding sources introduces risks such as increased financial leverage, dilution of ownership, or dependency on third-party investors. These factors could impact our financial stability and operational flexibility. We are subject to risks associated with our joint ventures and strategic alliances. We have entered into joint ventures and strategic alliances with various third parties to further our business purpose, and we may do so in the future from time to time. The success of these endeavors depends on a variety of factors, including market conditions, the regulatory environment, technological advancements, and the performance of our business partners. We cannot guarantee that our joint ventures or strategic alliances will be successful, profitable, or achieve their intended objectives. If these joint ventures or strategic alliances fail to perform as expected, our financial condition, results of operations, and business prospects could be materially affected. These joint ventures and strategic alliances could subject us to a number of risks, including risks associated with sharing propriety information and non-performance by third parties, among others. For details of our strategic alliances, see “Item 4. Information on the Company — B. Business Overview — Joint Ventures and Strategic Alliances.” There can be no assurance that our joint ventures or strategic alliances will be or will continue to be successful or profitable. We have recognized impairment losses in the past related to our investments in the joint ventures and may incur such losses again in the future due to market dynamics, underperformance of the joint ventures, or other external factors beyond our control. We review our investments in these joint ventures on an ongoing basis and may take such action as is deemed strategically appropriate including but not limited to divestment, restructuring, or changes in shareholding. Such actions could result in additional costs, write-downs, or other financial impacts. Furthermore, disagreements with partners over strategic direction, operational decisions, or financial commitments could disrupt operations or lead to the dissolution of partnerships, which could adversely affect our business and financial performance. Joint ventures and strategic alliances often involve shared control, which may limit our ability to unilaterally make decisions or implement changes. This could delay responses to market opportunities or challenges, putting us at a competitive disadvantage. The financial and operational risks associated with these partnerships are inherent, and we may not always be able to mitigate such risks effectively. 9 Table of Contents Our financial condition, results of operations, business or prospects may be adversely affected to the extent we are unable to continue our sales and investment growth. In 2024, our engine sales increased by 13.7% to 356,586 units, compared to 313,493 units in 2023. In 2025, our engine sales further increased by 29.4% to 461,309 units, compared to 356,586 units in 2024. While these increases reflect strong growth in recent periods, such growth may not be sustained in future periods, we cannot assure that we will be able to maintain or increase engine sales in the future. Our financial condition, results of operations, business or prospects are subject to sales growth of our original equipment manufacturers (“OEMs”) and fluctuations in demand from end users in the downstream industries we serve. Maintaining or increasing sales in line with our expanded production capacity may present challenges. Our future growth is also influenced by factors beyond our control We also cannot assure you that we will be able to effectively manage any future growth, including: •securing necessary supplies, including the availability of raw materials and components, particularly in a volatile supply chain environment; •hiring, training and retaining skilled production workers and management personnel; •manufacturing and delivering products for increased orders in a timely manner; •maintaining quality standards and competitive pricing; •controlling costs; and •obtaining adequate funding on commercially reasonable terms for future expansion and investments. Furthermore, we have acquired in the past, and may acquire in the future, equity interests in engine parts suppliers and related business. If we are unable to effectively manage or assimilate these acquisitions, our financial condition, results of operations, business or prospects could be adversely affected. We are dependent on our suppliers, some of whom are our single source suppliers, for the components they supply. Our engines contain parts or components that we purchase from external suppliers, and some of these suppliers serve as our single source for the relevant components. This dependency presents a significant risk, as any disruption in the supply chain, whether due to logistical issues, financial instability, or other unforeseen circumstances, could lead to delays or halts in our manufacturing activities. Such disruptions could adversely impact our ability to deliver orders and meet customer demands, potentially resulting in contractual defaults, lost revenue and increased costs. We generally do not enter into long-term agreements with our suppliers in order to maintain flexibility in our own procurement and sourcing processes. There can be no assurance that we would be able to successfully secure alternative suppliers or the necessary parts and components to meet our requirements on a timely basis, on acceptable terms or at all. Our dependence on single-source suppliers could lead to quality control challenges, higher costs and limited adoption of new technologies. The financial stability of these suppliers is also crucial, as their financial distress could significantly disrupt our supply chain. Additionally, changes in business conditions, force majeure, governmental changes and other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis or at all. Any of the foregoing could materially and adversely affect our business, results of operations, financial condition and prospects. Our business could be adversely affected by the disruption of supply or shortage of raw materials and components. We may experience a sustained interruption in the supply or shortage of commodities, raw materials and other inputs used by us and our suppliers in our and their businesses and products, such as steel and semiconductor chips, which could adversely affect our future profitability or our ability to timely execute our business plan. For instance, the global semiconductor chip supply shortage in 2021 had wide-ranging effects across multiple industries, particularly the automotive industry. Similarly, supply chain disruptions caused by global health crises led to delayed deliveries and even order cancellations, which adversely affected our engine sales volumes and revenues. Disruptions in global supply chains or logistics, including those arising from regional conflicts, could also materially increase the cost of materials, components, and production overhead, and limit their availability. Any supply interruptions or shortage could materially and negatively impact our business, prospects, financial condition and operating results. 10 Table of Contents We could be exposed to the impact of interest rates and foreign currency movements with respect to our future borrowings and business. We may use borrowings from time to time to supplement our working capital requirements and to fund our continued business expansion plans. A portion of our borrowings may be structured on a floating rate basis and denominated in US dollar, Singapore dollar or Renminbi. Changes in prevailing market interest rates could increase the cost of our borrowing and make it more difficult to obtain financing necessary to meet our working capital and on favorable terms. Any fluctuations in interest rates, or fluctuations in exchange rates between the Renminbi or Singapore dollar and US dollar, may increase our funding costs or the availability of funding. This could affect our financial condition, results of operations, business or prospects. Our financial condition, results of operations, business or prospects could also be adversely affected by a devaluation of the Renminbi. The value of the Renminbi is subject to changes in monetary policy in China and to international economic and political developments. Since we may not be able to hedge effectively against Renminbi or Singapore dollar fluctuations, future movements in the exchange rate of the Renminbi, the Singapore dollar and other currencies could have an adverse effect on our business, financial condition and results of operations. If prices of energy, raw materials or components increase, it may adversely affect our profitability or cause us to suffer operating losses. Our manufacturing processes and production activities are dependent on energy, raw materials, and various components, the prices of which are subject to significant volatility due to factors beyond our control, depending on market conditions and fluctuations in global demand. Rising prices of key components and key raw materials, as well as increases in energy prices (e.g., electricity, natural gas, and oil), could significantly elevate our production costs. Our ability to mitigate these risks by passing a portion of the increased costs onto consumers has been and in the future may be limited by, among other things, competitive pressures, contractual obligations, and customer resistance. In cases where we are unable to fully absorb or pass on rising costs, our profit margins would be compressed, potentially leading to reduced profitability or even operating losses. We are subject to increasingly stringent policies and regulations related to the environment, climate change, and employee health and safety. Our operations and products must comply with national and local laws and regulations in China governing noise, air quality, soil contamination, wastewater discharge, and the treatment and disposal of hazardous and non-hazardous waste materials, employee health and safety, climate change and environmental protection. These regulations impose environmental taxes and fines for pollution and may require the closure of non-compliant facilities or the cessation of activities causing environmental damage. These laws and regulations may impose numerous obligations that are applicable to our operations, including acquisition of relevant permits or other approvals and imposition of significant liabilities for pollution or accidents arising from our operations. Regulatory authorities in China have steadily tightened mandatory standards for both on-road and off-road transportation to achieve environmental and climate objectives. For instance, the implementation of National VI and Tier-4 emission standards has required us to increase research and development expenditures to meet these evolving criteria. Furthermore, enhanced energy efficiency and resource consumption standard, intended to address climate and resource concerns are being implemented in the markets where our powertrains or vehicles with our powertrains are sold. There can be no assurance that Yuchai will be able to comply with future emission standards, climate-related mandates, or safety requirements, or that stricter regulations will not result in a material adverse effect on our business, financial condition and results of operations. Non-compliance with these regulations would result in significant financial and reputational risks. Therefore, our ability to align with and proactively respond to government policies is fundamental to our continued success and sustainability in the dynamic powertrain market in China. Various jurisdictions are adopting or considering new laws and regulations that expand mandatory disclosure, reporting and diligence requirements with respect to environmental, social and governance (“ESG”) matters. The ESG and sustainability landscape and expectations of investors, customers, employees and other stakeholders in this area continue to evolve due to new regulations and geopolitical developments. Compliance with these new rules along with any other anticipated ESG reporting rules may result in additional costs and operational complexities. Moreover, investors, lenders and other stakeholders (including those in support of or in opposition to ESG principles) may have a negative view of us to the extent we are perceived to have not responded appropriately to their ESG concerns or take positions that are contrary to their views or expectations. Failure to comply with present or future ESG regulations or to meet stakeholder expectations could harm our reputation, business and financial condition. 11 Table of Contents The adoption of more stringent emission standards may adversely affect our results of operations and financial condition. The manufacture of our engines is subject to regulations by the Ministry of Ecology and Environment of the People's Republic of China (“MEE”) and other authorities in China. Regulations in China have been steadily tightened for both on-road and off-road transportation in recent years, requiring compliance with stringent standards, including the mandatory implementation of National VI and Tier-4 emission standards. National VI and Tier-4 emission standards have adopted the latest internal combustion engine manufacturing technologies in China that Yuchai had developed and built up anew. These emission standards impose a series of emission tests, not only in the manufacturing processes but also ongoing emission tests on the road after engine installation. Our engines involve technically complex manufacturing processes and require a supply of highly specialized component parts. For some products and component parts, we may also rely on a single source of supply. The combination of these factors means that supply is never guaranteed. If we or our third-party suppliers fail to comply fully with regulations, there could be a product recall or other shutdown or disruption of our production activities. There is no assurance that we will not experience supply interruptions in the future. The implementation of new standards may also reduce the supply or increase the price of components for certain of our existing engine models which could be sold for the export markets. The failure or malfunctioning of the exhaust aftertreatment system would also trigger the engine monitoring system to shut down or reduce engine loading to idling speed, which may cause disruption of transportation or service of the vehicles, potentially inducing damages and leading to higher costs of warranty. Yuchai’s performance may be affected by any unexpected failure in these systems. Any of these issues could materially and adversely affect our business, results of operations, financial condition, and prospects. We are subject to risks associated with being subject to trade control laws and regulations. Yuchai may, from time to time, procure production equipment from overseas suppliers which could expose us to regulatory scrutiny, export control restrictions, or licensing requirements, particularly imposed by U.S. or European authorities. Failure to comply with these laws and regulations, whether due to oversight, misinterpretation, or changes in regulatory requirements, could result in significant penalties, fines or restrictions on our ability to import or use critical equipment. Additionally, geopolitical tensions or shifts in trade policies could further complicate our procurement processes, leading to delays, increased costs, or the inability to acquire necessary technology. Such disruptions could adversely affect our production capabilities, operational efficiency, and overall business performance. In October 2022, Yuchai was placed on the Unverified List (“UVL”), which is a supplement to the Export Administration Regulations (“EAR”), promulgated by the Bureau of Industry and Security (“BIS”), in the Department of Commerce (the “U.S. Department of Commerce”). Entities are added to the UVL where the BIS is unable to verify the legitimacy and reliability relating to the end use or end users of items subject to the EAR because an end-use check, such as a pre-license check or a post-shipment verification cannot be completed satisfactorily for reasons outside the U.S. Government’s control. Yuchai was removed from the UVL in December 2022. We cannot guarantee that we or Yuchai or any of our other subsidiaries will not be included to the UVL or the BIS’ Entity List or Denied Persons List in the future. If we or any of our subsidiaries are placed on one of BIS’ lists in the future, we could face reputational harm, supply disruptions, restrictions or difficulties in dealing with business partners or obtaining banking facilities, or additional compliance requirements or costs, which could have significantly adverse impact on our business and results of operations. Outbreaks of communicable diseases may materially and adversely affect our business, financial condition and results of operations. We face risks related to health epidemics or outbreaks of communicable diseases. In general, our business has in the past been and, in the future, could be adversely affected by the outbreak of other communicable diseases. Such communicable diseases could result in a widespread health crisis that could adversely affect general commercial activity and the economies and financial markets of many countries, as well as our business, financial condition or results of operations. Beginning in late 2019 and early 2020, the COVID-19 pandemic resulted in temporary closure of many manufacturing facilities and factories across China and the world, and our industry and many others experienced increased supply lead time, supply disruption and limited transport and shipment options from and to affected regions. Although the COVID-19 restrictions have been lifted, the lingering effects of the COVID-19 pandemic may continue to influence the economy and our business, and an outbreak of COVID-19 or other communicable diseases could occur again. Outbreaks of communicable diseases have led to, and in the future could lead to our factory closures, workforce shortages, supply chain disruptions, transportation disruptions or similar consequences. The duration of such business disruptions and their resulting financial and operational impacts cannot be predicted or reasonably estimated. 12 Table of Contents Our insurance coverage may not be adequate to cover risks related to our production and other operations. The amount of our insurance coverage for our buildings and equipment is at cost, which could be less than the replacement value. Similarly, the insurance coverage for our inventory is at book value, which could be less than the replacement value. In accordance with what we believe is customary practice among industrial equipment manufacturers in China, we insure our properties, equipment and inventories. The amount of insurance coverage for our facilities and inventory aligns with Chinese market practice but may expose us to risks in the event of a major accident where our insurance recovery may be inadequate. We also carry public liability insurance to cover claims in respect of bodily injury and property damage to any third party arising from accidents on our property or relating to our operations. Furthermore, we maintain credit insurance to mitigate the risk of loss arising from the non-payment of trade receivables by certain customers. However, such coverage is subject to policy limits and exclusions, and there can be no assurance that our credit insurance will sufficiently protect us against significant customer defaults or a systemic downturn in the credit environment. We do not carry business interruption insurance as such coverage is not customary in China. Losses incurred or payments required to be made by us which are not fully insured could have a material adverse effect on our financial condition. Increases in labor costs and enforcement of stricter labor laws and regulations in China may adversely affect our business and our profitability. The average wage level in China, where most of our employees are located, has increased in recent years, and China-based manufacturing operations no longer have the cost competitive advantages that they had in the past. We expect that our labor costs, including wages and employee benefits, will continue to increase in the future in absolute terms and relative to the costs of operating in other countries and regions where labor costs are lower. Unless we are able to pass on these increased labor costs to those who pay for our services, our profitability and results of operations may be materially and adversely affected. In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and limitation with respect to utilization of labor dispatching, labor protection and labor condition and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law and its implementation rules, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employee’s probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the PRC Labor Contract Law and its implementation rules may limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations. We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity risks and data leakage risks. Any failure to comply with the various applicable laws and regulations related to data security and cybersecurity could lead to liabilities, penalties or other regulatory actions, which could have a material and adverse effect on our business, financial condition and results of operations. We are dependent on information technology systems and infrastructure to support our operations, manage data and conduct business activities. This dependence exposes us to certain risks, including cybersecurity threats and data leakage. We cannot be certain that advances in criminal capabilities such as cyberattacks, malware or exploitation of vulnerabilities in our or third-party systems, will not compromise or breach the technology protecting our systems or the systems and networks of third parties that access and store sensitive information about us, our customers or suppliers. Cyber threats like phishing and trojans could intrude into our or a third party’s network to steal data or to seek sensitive information about us or our customers or suppliers. Any intrusion into our or such third party’s network that results in any breach of security could cause damage to our reputation and adversely impact our business and financial results. A significant failure in security measures could have a material adverse effect on our business, reputation, results of operations and financial condition. Although we seek to implement measures to protect sensitive and confidential client data, there can be no assurance that we would be able to prevent breaches of security. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls and procedures and the cybersecurity risk management program, will be effective in protecting our systems and information. See also “Item 16K. Cybersecurity.” 13 Table of Contents As a significant part of our business and operations is conducted in China, we are subject to the PRC laws, rules and regulations, including those related to data security and cybersecurity. PRC regulators have intensified their focus on regulating data security and data protection, reflecting the growing importance of these areas in the digital economy. China has introduced a series of stringent laws and regulations, including the Cyber Security Law, the Data Security Law, and the Personal Information Protection Law (PIPL), which impose comprehensive requirements on data collection, storage, processing, transmission, and cross-border transfers. These regulatory frameworks mandate that companies implement robust data protection measures, conduct risk assessments and ensure compliance with data classification and grading standards. Additionally, businesses are required to report security incidents, obtain necessary approvals for data exports, and adhere to strict guidelines for handling sensitive and personal information. The evolving nature of these regulations means that compliance requirements are subject to change, and we must continuously monitor and adapt to new rules and enforcement practices. We believe that our existing practices are compliant with applicable requirements imposed under the foregoing laws, rules and regulations, including the regulations or policies that have been issued by the CAC, in all material respects. However, we cannot preclude the possibility that new laws, regulations or rules promulgated in the future will impose additional compliance requirements on us, will subject us to the cybersecurity or national security review in relation to our operations, or will require us to change our business practices or incur additional operating expenses, which may have material and negative impacts on our business, financial condition and prospects and the value of our securities. If it is determined in the future that any additional procedures, including the cybersecurity review under the Cybersecurity Review Measures and national security review under the Network Data Security Regulations, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. CAC and/or other PRC regulation and oversight of cybersecurity, data protection and other technology-related matters that the PRC government deems to relate to national security could impact our ability to conduct, or the timing of, our future offerings. In addition, given the current regulatory environment in the PRC, there remains uncertainty regarding the interpretation and enforcement of PRC laws, including the foregoing relevant laws and regulations issued by the CAC, which can change quickly and with little advance notice. See “— General Risk Factors — Changes in and uncertainties relating to political or social conditions, government policies or regulations in China could have a material and adverse effect on our business and results of operations” for more details. Risks from incorporation of artificial intelligence technologies into our products, manufacturing processes and business operations, as well as potential challenges associated with the implementation of such technologies could adversely affect our operations, reputation and competitive position. We use, and expect to continue to use, artificial intelligence and machine learning technologies (collectively, “AI”) in our business operations, including in our manufacturing, research and development, product development, supply chain management and quality assurance processes and in our digital operational infrastructure. The use of AI in our operations and products carries inherent risks. AI systems may produce outputs that are inaccurate, incomplete, inappropriate or biased, including recommendations, predictive analytics, diagnostic conclusions, or control decisions. Errors in AI-generated outputs that are incorporated into our products, manufacturing decisions or customer service systems could result in product liability claims, customer dissatisfaction, reputational harm, or regulatory action. The use of AI in connected vehicle and smart machinery applications may also raise questions of product safety and regulatory compliance, particularly as PRC and international regulatory frameworks governing AI in transportation and industrial applications continue to evolve. Our use of AI may expose us to risks of data leakage, cybersecurity incidents and unauthorized access to confidential business information, customer data, technical know-how and other proprietary information. AI systems are typically trained and operated using large volumes of data, and any breach or unauthorized access to the data used in our AI systems could have consequences that extend beyond conventional cybersecurity incidents. In addition, the use of third-party AI tools or platforms in our operations creates a risk that confidential business information, technical data or personal data may be inadvertently disclosed to third-party AI service providers or exposed through such providers’ systems. Any such incident could result in legal liability, regulatory penalties, loss of intellectual property, and reputational harm. The regulatory environment governing AI is dynamic and rapidly evolving in China and globally. Compliance with existing and future AI regulations may require significant resources and could require us to modify our products, platforms or operational processes. There can be no assurance that our current practices will remain compliant with applicable AI regulations as they evolve, or that regulatory action will not be taken against us in respect of our AI activities. 14 Table of Contents We may not be able to adequately protect our intellectual property rights, and any failure to protect our intellectual property rights could adversely affect our revenues and competitive position. Yuchai’s intellectual property portfolio comprises invention patents, utility model patents, design patents, proprietary technology know-how, software copyrights and capitalized development costs. Notwithstanding our anti-counterfeiting procedures and third-party enforcement services, we may be unable to prevent the unauthorized copying or use of our proprietary technologies. Our patents may be held invalid or unenforceable by competent authorities or courts, and competitors may be able to design around our patents or independently develop comparable technologies or products without infringing our intellectual property rights. GY is the registered owner of the “Yuchai” trademarks in China, which are the principal trademarks under which Yuchai conducts its business. Yuchai uses these trademarks pursuant to a license agreement with GY. In the event of any dispute with GY regarding the terms of the license agreement or GY’s ownership or maintenance of the trademarks, Yuchai’s right to use the “Yuchai” trademarks could be challenged, curtailed or terminated. Any such challenge or termination could have a material adverse effect on our business, financial condition and results of operations. Monitoring the unauthorized use of our proprietary technology is inherently difficult and costly. We may be required to resort to litigation to enforce or defend our intellectual property rights, to protect our trade secrets, or to determine the enforceability, scope and validity of our proprietary rights or those of third parties. Any such litigation, whether or not resolved in our favor, could result in substantial costs, diversion of management time and resources, and harm to our reputation. An adverse determination in any such proceeding could impair our ability to compete effectively and could have a material adverse effect on our business, financial condition and results of operations. Our business depends substantially on the continuing efforts of our key employees and qualified personnel. We are highly dependent on our executive officers and senior management, as well as our research and development and sales and marketing personnel. Recruiting and retaining qualified personnel is critical to our success. The loss of the services of our executive officers or other key employees could impede our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop and commercialize products and services. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel. The failure to attract, integrate, train, motivate and retain these personnel could adversely affect our business, financial condition or results of operations. We and our subsidiaries have implemented and may implement equity incentive plans to attract, retain, and motivate management and employees, which could have a dilutive effect on your investment in us and our interests in our subsidiaries. We have adopted an equity incentive plan to attract and retain eligible directors, officers and employees of our Company. Pursuant to the 2025 Equity Incentive Plan adopted in May 2025, the maximum aggregate number of 1,800,000 shares may be issued, in whole or in part, from authorized and unissued shares, treasury shares (subject to applicable laws), or shares purchased on the open market. The issuance of these stock-based awards may dilute an investment in our shares. Our stock price may also face incremental downward pressure if plan participants sell more shares into the market. See “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” Certain of our subsidiaries have also adopted, or may in the future adopt, their own equity incentive plans to attract, retain, and motivate their management and key personnel. The implementation and operation of these subsidiary equity incentive plans could dilute our ownership interest in the relevant subsidiaries as equity awards are granted by the subsidiaries over time. Our interest in our subsidiaries could be diluted by the implementation and operation of any equity incentive plans by these subsidiaries. Any shares reserved under any such subsidiary plan, if and when issued, could reduce our ownership interest in that subsidiary. The issuance of these shares by a subsidiary of ours could cause our share of the earnings of the affected subsidiary to be reduced, which could adversely impact our results of operations. 15 Table of Contents We may be subject to risks related to the PRC authorities’ investigatory actions against and the alleged misconduct of certain former directors and senior management personnel of us and our subsidiaries. In July and October 2025, we were informed that Ms. Qin Xiaohong (“Qin Xiaohong”), then Chief Accountant of Yuchai, and Mr. Wu Qiwei (“Wu Qiwei”), then Director of CYI and then Director and President of Yuchai, were under detention and investigation by PRC authorities. Qin Xiaohong’s position as Yuchai’s Chief Accountant was terminated by Yuchai’s Board of Directors in August 2025. Wu Qiwei resigned as a Director and the President of Yuchai and as a Director of CYI in October and November 2025. As of the date of this Annual Report, the investigations of Qin Xiaohong and Wu Qiwei are on-going. In addition, it has been reported that in July 2025 the former deputy party secretary and chairman of the board of directors of GY, Mr. Yan Ping (“Yan Ping”), was subject to disciplinary review and investigation by the Discipline Inspection Commission of Guangxi Zhuang Autonomous Region’s Communist Party Committee and the Supervisory Commission of Guangxi Zhuang Autonomous Region (the “Disciplinary Authorities”) on suspicion of serious disciplinary and legal violations. Subsequently in February 2026, based on the announcement made by the Disciplinary Authorities, Yan Ping’s case was transferred to the procuratorate for review and prosecution in accordance with the PRC laws. Yan Ping was a former Director of CYI and former Chairman of Yuchai, and he retired from these positions in 2021. We have limited knowledge of the status or scope of the on-going investigations against these individuals by PRC authorities and cannot predict the determinations and conclusions that the relevant authorities will reach. The business and affairs of Yuchai continue to be led by Mr. Li Hanyang, the Chairman of Yuchai’s Board of Directors and daily business operations continue to proceed uninterrupted. While we conduct training and maintain corporate governance policies and procedures designed to detect and prevent misconduct by our directors, senior management and employees, we cannot assure you that we will be able to prevent or detect instances of alleged personal misconduct in a timely fashion or at all. If we fail to prevent or detect such actions, our reputation may be harmed, and our business, financial condition and results of operations could be adversely affected. While we maintain a succession planning program across key management roles, leadership transitions resulting from any unexpected departure of key personnel could create institutional knowledge gaps and may disrupt the execution of our strategic priorities. Any failure to successfully implement or optimize these succession protocols could result in disruptions to leadership continuity and the destabilization of our relationships with key suppliers and customers. The market price of our common stock may be volatile. There continues to be volatility in the market price of our common stock. See “Item 9. The Offer and Listing.” The market price could fluctuate substantially in the future in response to a number of factors, including: •changes in general economic conditions, escalation or continuation of trade tensions, heightened policy uncertainty especially regarding trade, financial market disruptions amid global financing conditions, and heightened geopolitical tensions globally and regionally, and the resulting volatility in market sentiment; •market expectations, speculation and uncertainties regarding the potential listing of our subsidiary; •our operating results whether audited or unaudited; •the public’s reaction to our press releases and announcements and our filings with the SEC; •changes in financial estimates or recommendations by stock market analysts regarding us, our competitors or other companies that investors may deem comparable; •operating and stock price performance of our competitors or other companies that investors may deem comparable; •political, economic, and social conditions in China; •any negative perceptions about corporate governance or accounting practices at listed companies with significant operations in China; •China’s initiatives to develop energy saving and new energy power systems, which may lead to a decrease in demand for our diesel engines that affects our market share and profitability; •future sales or repurchases of our common stock in the public market, or the perception that such sales or repurchase could occur; or •the announcements by us or our competitors of a significant acquisition, divestment, corporate exercise or change of management. Any of the above factors either individually or together may result in market fluctuations which may materially affect our stock price. 16 Table of Contents We have previously identified material weaknesses in our internal control over financial reporting and cannot assure you that material weaknesses will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in material misstatements in our financial statements which could require us to restate financial statements in the future, or cause us not to be able to provide timely financial information, which may cause investors to lose confidence in our reported financial information and have a negative effect on our stock price. We reported material weaknesses in our internal control over financial reporting as of December 31, 2005 to 2011, and our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective for that period. Since the year ended December 31, 2012, we have not identified any material weaknesses in our internal control over financial reporting. Our management concluded that our disclosure controls and procedures and our internal control over financial reporting were effective for the financial years ended December 31, 2012 to 2025. See “Item 15. Controls and Procedures.” Our independent registered public accounting firm has expressed an unqualified opinion on the effectiveness of our internal control over financial reporting for the financial years ended December 31, 2012 to 2025. We cannot assure you that material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Any failure to maintain or improve existing controls or implement new controls could result in material weaknesses or significant deficiencies and cause us to fail to meet our periodic reporting obligations, which in turn could cause our shares to be delisted or suspended from trading on the New York Stock Exchange, or NYSE. In addition, any such failure could result in material misstatements in our financial statements and require us to restate our financial statements and adversely affect the results of annual management evaluations regarding the effectiveness of our internal control over financial reporting. Any of the foregoing could cause investors to lose confidence in our reported financial information, leading to a decline in our share price. As an exempted company incorporated under Bermuda law, our operations may be subject to economic substance requirements. The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the “Economic Substance Act” and the “Economic Substance Regulations”, respectively) became operative on December 31, 2018. The Economic Substance Act applies to every registered entity in Bermuda that engages in a relevant activity and requires that every such entity shall maintain a substantial economic presence in Bermuda. Relevant activities for the purposes of the Economic Substance Act include, among other things, conducting business as a holding entity, which may include a pure equity holding entity. The Economic Substance Regulations provide that minimum economic substance requirements shall apply in relation to an entity if the entity is a pure equity holding entity, which is an entity which as its primary function acquires and holds shares or an equitable interest in other entities, performs no commercial activity and which (a) holds the majority of the voting rights in another entity; (b) is a shareholder, member or partner in another entity and has the right to appoint or remove a majority of the board of directors, managers or equivalent of that other entity; or (c) is a shareholder, member or partner in another entity and controls alone, under an agreement with others, a majority of the voting rights in that other entity. The minimum economic substance requirements include (a) compliance with applicable corporate governance requirements set forth in, among others, the Bermuda Companies Act 1981 including keeping records of account, books and papers and financial statements; and (b) submission of an annual economic substance declaration form. However, the economic substance requirements do not apply to an entity which is a tax resident of a jurisdiction outside of Bermuda, provided that the jurisdiction is not in the EU list of non-cooperative jurisdictions for tax purposes. If we fail to comply with our obligations under the Bermuda Economic Substance Act or any similar law applicable to us in any other jurisdictions, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials in related jurisdictions and may be struck from the register of companies in Bermuda or such other jurisdiction. Any of these actions could have a material adverse effect on our business, financial condition and results of operations. In 2020, our Board of Directors, having considered the Bermuda economic substance legislation as well as the Company’s presence and substance in Singapore through our Singapore Branch office, approved for the Company to establish its tax residency in Singapore. The Company has been a tax resident in Singapore for Singapore income tax purposes since 2020. Our Singapore tax residency status is to be self-assessed on a yearly basis if our management control is exercised in Singapore for the preceding calendar year. If the Company is not a tax resident of a jurisdiction outside of Bermuda (other than a jurisdiction which is on the EU list of non-cooperative jurisdictions for tax purposes), we may be subject to economic substance requirements under Bermuda’s Economic Substance Act, Economic Substance Regulations and/or any new economic substance regulations adopted in Bermuda. We may be subject to penalties if the Company or any of its subsidiaries fail to comply with the applicable economic substance laws in Bermuda or any other jurisdiction. 17 Table of Contents We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to U.S. Holders. A non-United States corporation is considered a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (1) at least 75% of its gross income is passive income or (2) at least 50% of the total value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. For this purpose, the total value of our assets generally will be determined by reference to the market price of our shares. We believe that our shares should not be treated as stock of a PFIC for United States federal income tax purposes for the taxable year that ended on December 31, 2025. However, there is no guarantee that the United States Internal Revenue Service will not take a contrary position or that our shares will not be treated as stock of a PFIC for any future taxable year. Our PFIC status will be affected by, among other things, the market value of our shares and the assets and operations of our Company and subsidiaries. If we were to be treated as a PFIC for any taxable year during which a U.S. Holder (defined below) holds our shares, certain adverse United States federal income tax consequences could apply to the U.S. Holder. See “Item 10. Additional Information — C. Taxation — United States Federal Income Taxation — PFIC Rules.” The HLGE Group’s hotel ownership and management business may be adversely affected by risks inherent in the hotel industry. The HLGE Group operates Copthorne Hotel Cameron Highlands (“CHCH”), a hotel in Cameron Highlands, Malaysia. As of February 27, 2026, we had a 49.1% shareholding interest in HLGE, a company listed on the Main Board of the Singapore Exchange Securities Trading Limited (the “Singapore Exchange”). See “Item 5. Operating and Financial Review and Prospects — Business Expansion and Diversification Plan” for further information on our investment in HLGE. The HLGE Group’s financial performance is dependent on the performance of the hotel it operates. The HLGE Group’s hotel ownership and management business is exposed to risks which are inherent in and/or common to the hotel industry and which may adversely affect the HLGE Group’s financial performance, including the following: •fluctuations in occupancy rates; •changes to the international, regional and local economic climate and market conditions (including but not limited to changes to regional and local populations, changes in travel patterns and preferences, and oversupply of or reduced demand for hotel rooms that may result in reduced occupancy levels and performance for the hotels it operates); •changes to the political, economic, legal or social environments of the countries in which the HLGE Group operates (including developments with respect to inflation or deflation, interest rates, currency fluctuations, governmental policies, real estate laws and regulations, taxation, fuel costs, expropriation, including the impact of the current global financial crisis); •increased threat of terrorism, terrorist events, airline strikes, hostilities between countries, effects of climate change or increased risk of natural disasters or viral epidemics that may affect travel patterns and reduce the number of travelers and tourists; •changes in laws and governmental regulations (including those relating to the operation of hotels, preparation and sale of food and beverages, occupational health and safety working conditions and laws and regulations governing its relationship with employees); •competition from other international, regional and independent hotel companies, some of which may have greater name recognition and financial resources than the HLGE Group (including competition in relation to hotel room rates, convenience, services or amenities offered); •losses arising out of damage to CHCH, where such losses may not be covered by the insurance policies maintained by the HLGE Group; •increases in operating costs, labor costs (including the impact of unionization), workers’ compensation and health-care related costs, utility costs, insurance and unanticipated costs such as acts of nature and their consequences; •fluctuations in foreign currencies arising from the HLGE Group’s various currency exposures; •dependence on leisure travel and tourism; and •adverse effects of a downturn in the hospitality industry, including the impact due to communicable diseases. The above factors may materially affect the performance of CHCH and the profitability and financial condition of the HLGE Group. There can be no assurance that we will not suffer any losses arising from our investment in HLGE. 18 Table of Contents Risks related to Corporate Structure Our financial condition, results of operations, business and prospects may be adversely affected if we are unable to implement the Reorganization Agreement and the Cooperation Agreement. We own 76.4% of the outstanding shares of Yuchai, and one of our primary sources of cash flow continues to be our share of the dividends, if any, paid by Yuchai and investment earnings thereon. As a result of the agreement reached with Yuchai and its related parties pursuant to the July 2003 Agreement, we discontinued legal and arbitration proceedings initiated by us in May 2003 relating to difficulties with respect to our investment in Yuchai. In furtherance of the terms of the July 2003 Agreement, we, Yuchai and Coomber Investments Limited, or Coomber, entered into the Reorganization Agreement in April 2005, as amended in December 2005 and November 2006, and agreed on a restructuring plan intended to be beneficial to our shareholders. Coomber is wholly owned by Goldman Industrial Limited which in turn is a wholly-owned subsidiary of GY which in turn is a majority-owned subsidiary of the State-owned Assets Supervision and Administration Commission of the People’s Government of Guangxi Zhuang Autonomous Region. The Reorganization Agreement provides for the implementation of corporate governance guidelines approved by the directors and shareholders of Yuchai in November 2002 and outlines steps for the adoption of corporate governance practices at Yuchai conforming to international custom and practice. The Reorganization Agreement was scheduled to terminate on June 30, 2007. On June 30, 2007, we, along with Yuchai, Coomber and GY, entered into the Cooperation Agreement. The Cooperation Agreement amends certain terms of the Reorganization Agreement and, as so amended, incorporates the terms of the Reorganization Agreement. The Reorganization Agreement, as amended, and the Cooperation Agreement continue to be in force and effect. Pursuant to the amendments to the Reorganization Agreement, the Company agreed that the restructuring and spin-off of Yuchai would not be effected, and, recognizing the understandings that have been reached between the Company and GY to jointly undertake efforts to expand the business of Yuchai, the Company will not seek to recover the anti-dilution fee of US$20 million that was due from Yuchai. For more information on these agreements see “Item 4. Information on the Company — A. History and Development of the Company.” No assurance can be given as to when the business expansion requirements relating to Yuchai as contemplated by the Reorganization Agreement and the Cooperation Agreement will be fully implemented, or that implementation of the Reorganization Agreement and the Cooperation Agreement will effectively resolve all of the difficulties faced by us with respect to our investment in Yuchai. In addition, the Reorganization Agreement as amended by the Cooperation Agreement contemplates the continued implementation of our business expansion and diversification plan adopted in February 2005. The Cooperation Agreement provides that the parties will explore new business opportunities and ventures with a view to diversifying and expanding the assets, business divisions, sources of revenue and operations of Yuchai. Subsequently, we acquired strategic stakes in HLGE and Thakral Corporation Ltd, or TCL (which we have since fully divested). In addition, Yuchai has entered into various joint ventures and strategic alliances with various third parties to further our business purpose. For more details, see “ — We are subject to risks associated with our joint ventures and strategic alliances.” Nonetheless, no assurance can be given that we will be able to successfully expand and diversify our business. We may also not be able to continue to identify suitable acquisition opportunities, secure funding to consummate such acquisitions or successfully integrate such acquired businesses within our operations. Any failure to implement the terms of the Reorganization Agreement and Cooperation Agreement, including our continued expansion and diversification, could have a material adverse effect on our financial condition, results of operations, business or prospects. Additionally, although the Cooperation Agreement amends certain provisions of the Reorganization Agreement and also acknowledges the understandings that have been reached between us and GY to jointly undertake efforts to expand and diversify the business of Yuchai, no assurance can be given that we will be able to successfully implement those efforts or as to when the transactions contemplated therein will be consummated. 19 Table of Contents Our controlling shareholder’s interests may differ from those of our other shareholders. As of February 27, 2026, our controlling shareholder, Hong Leong Asia Ltd., or Hong Leong Asia, indirectly owns 18,270,965 or 48.70% of the outstanding shares of our common stock, as well as a special share that entitles it to elect a majority of our directors. Hong Leong Asia controls us through its wholly-owned subsidiary, Hong Leong (China) Limited, or Hong Leong China, and through HL Technology Systems Pte Ltd, or HL Technology, a wholly-owned subsidiary of Hong Leong China. HL Technology owns 25.38% of the outstanding shares of our common stock and has, since August 2002, been the registered holder of the special share. Hong Leong Asia also owns, through another wholly-owned subsidiary, Well Summit Investments Limited, 23.32% of the outstanding shares of our common stock as of February 27, 2026. Hong Leong Asia is a member of the Hong Leong Investment Holdings Pte. Ltd., or Hong Leong Investment group of companies. Prior to August 2002, we were controlled by Diesel Machinery (BVI) Limited, or Diesel Machinery, which, until its dissolution, was a holding company controlled by Hong Leong China and was the prior owner of the special share. Through HL Technology’s stock ownership and the rights accorded to the Special Share under our Bye-Laws and various agreements among shareholders, Hong Leong Asia is able to effectively approve and effect most corporate transactions. See “Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions — Shareholders Agreement.” In addition, our shareholders do not have cumulative voting rights. There can be no assurance that Hong Leong Asia’s actions will be in the best interests of our other shareholders. See also “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.” We may experience a change of control as a result of sale or disposal of shares of our common stock by our controlling shareholders. As described above, HL Technology, a subsidiary of Hong Leong Asia, owns 9,520,251 shares of our common stock, as well as the special share. If HL Technology reduces its shareholding to less than 7,290,000 shares of our common stock, our Bye-Laws provide that the special share held by HL Technology will cease to carry any rights, and Hong Leong Asia may as a result cease to have control over us. See “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders — The Special Share.” If HL Technology sells or disposes of the special share or reduces its shareholding to less than 7,290,000 shares of our common stock, we cannot determine what control arrangements will arise as a result of such sale or disposal (including changes in our management arising therefrom), or assess what effect those control arrangements may have, if any, on our financial condition, results of operations, business, prospects or share price. In addition, certain of our financing arrangements have covenants requiring Hong Leong Asia to retain ownership of the special share and that we remain a principal subsidiary (as defined in such arrangements) of Hong Leong Asia. A breach of that covenant may require us to pay all outstanding amounts under those financing arrangements. There can be no assurance that we will be able to pay such amounts or obtain alternate financing. We have in the past experienced and may in the future experience disagreements and difficulties with the shareholders in Yuchai. Although we own 76.4% of the outstanding shares of Yuchai, and believe we have proper legal ownership of our investment and a controlling financial interest in Yuchai, in the event there is a dispute with Yuchai’s shareholders regarding our investment in Yuchai, we may have to rely on law for remedies. We have in the past experienced problems from time to time in obtaining assistance and cooperation of Yuchai’s shareholders in the daily management and operation of Yuchai. We have in the past also experienced problems from time to time in obtaining the assistance and cooperation of the GY Group in dealing with various matters, including the implementation of corporate governance procedures, the payment of dividends, the holding of Yuchai board meetings and the resolution of employee-related matters. Examples of these problems are described elsewhere in this Annual Report. The July 2003 Agreement, the Reorganization Agreement and the Cooperation Agreement are intended to resolve certain issues relating to our share ownership in Yuchai and the continued corporate governance and other difficulties which we have had with respect to Yuchai. As part of the terms of the Reorganization Agreement, Yuchai agreed that it would seek the requisite shareholder approval prior to entering into any material transactions (including any agreements or arrangements with parties related to Yuchai or any of its shareholders) and that it would comply with its governance requirements. Yuchai also acknowledged and affirmed the Company’s continued rights as majority shareholder to direct the management and policies of Yuchai through Yuchai’s Board of Directors. Yuchai’s Articles of Association have been amended and such amended Articles of Association as approved by the Guangxi Department of Commerce on December 2, 2009, entitle the Company to elect nine of Yuchai’s thirteen directors, thereby reaffirming the Company’s right to effect all major decisions relating to Yuchai. While Yuchai has affirmed the Company’s continued rights as Yuchai’s majority shareholder and authority to direct the management and policies of Yuchai, no assurance can be given that disagreements and difficulties with Yuchai’s management and/or Yuchai’s Chinese shareholders will not recur, including in relation to the implementation of the Reorganization Agreement and the Cooperation Agreement, corporate governance matters or related party transactions. Such disagreements and difficulties could ultimately have a material adverse impact on our consolidated financial position, results of operations and cash flows. 20 Table of Contents We may face risks associated with our subsidiary being a standalone public company. In January 2026, Guangxi Yuchai Marine and Genset Power Co., Ltd. (“MGP”), an indirect subsidiary of our Company, filed an application with The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange” or “HKEX”) in connection with a proposed listing (the “Potential Listing”) of MGP’s shares on the Main Board of the Hong Kong Stock Exchange. The Potential Listing is subject to review and approval by the HKEX and other relevant regulatory authorities and market conditions. There is no assurance as to whether or when the Potential Listing will take place. Any potential listing of MGP or our other subsidiary would be subject to numerous uncertainties, including internal approvals, market conditions, regulatory requirements, and the approval of relevant authorities and exchanges in the applicable jurisdiction. While the Potential Listing will reduce our interest in MGP, we expect to remain an indirect controlling shareholder of MGP after completion of the Potential Listing. We may from time to time make strategic decisions that we believe are in the best interests of our business and shareholders as a whole, which may create conflicts of interest with MGP’s other shareholders. We may not be able to resolve all potential misalignments in interests and the existence of such misalignments may affect our results of operations as a whole. There can be no assurance that a potential separate listing of a subsidiary would enhance our shareholder value. Market conditions, investor demand, valuation considerations, and the performance of the subsidiary following any listing could materially affect the perceived benefits of such transaction. If a listing is completed and the market performance of the subsidiary’s shares is weaker than expected, it could adversely affect investor perception of our Group and our overall valuation. General Risk Factors Geopolitical tensions and regional conflicts may materially and adversely affect our business, results of operations, and financial condition. Heightened geopolitical instability, including the conflict in the Middle East, and resulting disruptions in supply chains and logistics networks, could materially increase the cost of materials and components, raise production overhead, and adversely affect our profitability and results of operations. Disruptions to key shipping routes, energy supplies and global trade flows could lead to delays in the procurement and transportation of critical inputs, increase freight and insurance costs, and create volatility in commodity and energy prices. Geopolitical escalation could trigger broader economic sanctions, capital market restrictions, or forced business interruptions affecting companies with substantial PRC operations, including us. Any such escalation could also lead to reduced investor confidence in securities issued by companies such as ours, which are NYSE-listed with significant assets in and revenues from China. Prolonged or escalating geopolitical tensions could further strain global supply chains and reduce market stability, which may negatively affect our production planning, operating costs and overall financial performance. We cannot predict the likelihood, timing or extent of any such escalation or its consequences for our business. International trade policies and regulations dynamics may adversely affect our business. Our operations expose us to the risk that increased trade protectionism will adversely affect our business. In the United States, there is significant uncertainty about the future relationship between the United States and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs. Any increased trade barriers or restrictions on trade, especially trade with China, could depress economic activities and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations. Political tensions between the U.S. and China have escalated due to, among other things, tariff policies, trade disputes, sanctions imposed by the U.S. on certain officials of the Hong Kong Special Administrative Region and the central government of the PRC, U.S. export restrictions regarding China, restrictions on U.S. investments in designated “Communist Chinese Military Companies,” and the executive orders issued by U.S. President Donald J. Trump that seek to prohibit certain transactions certain companies. In addition, the PRC government has enacted countermeasures legislation. Rising political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and prospects. Furthermore, there have been media reports on deliberations within the U.S. government regarding potentially limiting or restricting companies with operations in the PRC from accessing U.S. capital markets. If any such deliberations were to materialize, the resulting legislation may have a material and adverse impact on the stock performance of issuers with operations in the PRC listing in the U.S. It is unclear if this proposed legislation would be enacted. 21 Table of Contents The U.S. government has imposed (in certain cases, subject to deferral) significant tariffs on imports from certain jurisdictions including China, and other jurisdictions have responded, with retaliatory punitive actions, including tariffs on U.S. imports. Historically, tariffs and trade disputes have led to increased political tensions, between the U.S. and China, as well as between other countries. Political tensions as a result of trade policies could reduce trade volume, cross-border investment, technological exchange, and other economic activities between major economies, resulting in a material adverse effect on global economic conditions and the stability of global financial and stock markets. Moreover, the heightened geopolitical uncertainty and potential for further escalation may discourage investments in securities issued by China-based issuers and companies such as ours with significant operations in China, which in turn could affect the global macroeconomic environment. Any such geopolitical developments could materially and adversely affect the price of our ordinary shares. Changes in and uncertainties relating to political or social conditions, government policies or regulations in China could have a material and adverse effect on our business and results of operations. Substantially all of our assets are located in China, and substantially all of our revenue is derived from our operations in China. Accordingly, our results of operations, financial condition and prospects are influenced by economic, political and legal developments in China. The PRC government exercises significant control over China’s economy through strategically allocating resources, setting monetary policy and providing preferential treatment to particular industries or companies. While the PRC economy has experienced significant growth over the past decades, that growth has been uneven across different regions and between economic sectors and may not continue. Any adverse changes in economic conditions, policies, laws or regulations in China could have a material adverse effect on our business and operating results, lead to reduction in demand for our products and adversely affect our competitive position, result in a material change in our operations, significantly limit or hinder our ability to offer securities to investors or cause the value of our securities to decline or become worthless. As a significant part of our business is conducted in China, our business is subject to PRC laws, rules and regulations, which can change quickly and with little advance notice. See “— Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us” for more details. We face uncertainties in terms of enforcement of PRC laws, regulations and rules, which may lead to difficulties in complying with applicable regulatory requirements and availing legal protections available to us. These uncertainties could materially and adversely affect our ability to enforce the contracts we have entered and our business and results of operations, including any rights under the Reorganization Agreement and Cooperation Agreement. The PRC government can exercise influence over the conduct of business in China as the government deems appropriate, including to further regulatory, political and/or social goals. Furthermore, the PRC government may choose to exert close oversight over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies. See also “— Securities offerings that we may conduct in the future may be subject to the approval, filing or other administration requirements of the China Securities Regulatory Commission, or the CSRC, the Cyberspace Administration of China, or the CAC, or other PRC governmental authorities, and we cannot assure you that we will be able to obtain such approval, satisfy such requirements or complete such filings” for more details. Any such influence oversight or discretion could adversely affect our business, financial condition and results of operations and the value of our securities, including those that we may offer for sale in the future, or significantly limit or completely hinder our ability to offer securities to investors and cause the value of our securities to significantly decline or become worthless. Changes in tax laws or tax rulings could negatively impact our income tax provision and net income. Changes in tax laws or tax rulings, or changes in interpretations of existing tax laws, could affect our income tax provision and net income. There is a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth by the Organisation for Economic Co-operation and Development (the “OECD”) and unilateral measures being implemented by various countries due to a historic lack of consensus on these global initiatives. As an example, the OECD has put forth two proposals – Pillar One and Pillar Two – that revise the existing profit allocation and nexus rules (profit allocation based on location of sales versus physical presence) and ensure a minimal level of taxation, respectively. Model rules were published by the OECD to implement the Pillar Two rules and commentary to the Pillar Two model rules were also released. The model rules and commentary allow the OECD’s Inclusive Framework members to begin implementing the Pillar Two rules. These changes, when enacted by various countries in which we do business, may increase our taxes in these countries. The Pillar Two rules have been implemented, or are in the process of being implemented, in a number of jurisdictions in which we conduct business including Singapore but not in China. We are subject to Pillar Two rules, however, the ultimate impact of any such changes on our tax obligations is uncertain. 22 Table of Contents In addition, the Trump administration has proposed a number of changes to the U.S. tax system and adopted tax legislation that, among other things, made permanent certain provisions of the 2017 Tax Cuts and Jobs Act, such as the limitations on the deductibility of business interest expense, while the standard corporate tax rate of 21% remained unchanged. The effect of these tax laws on our operations and tax liabilities is unclear and could be material. As these and other tax laws and related regulations change, we are unable to predict which, U.S. tax reform proposals will be enacted into law, and what effects any enacted legislation might have on our tax liabilities. The Trump administration has also indicated that the United States may impose retaliatory measures with respect to jurisdictions that have, or are likely to, put in place tax rules that are extraterritorial or disproportionately affect American companies. The likelihood of these changes being enacted or implemented is unclear. We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative impact on us, our suppliers or our consumers, including as a result of related uncertainty, these changes may materially and adversely impact our business, financial condition, results of operations and cash flow. Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us. The PRC legal system is a civil law system based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings. In addition, the PRC legal system is based in part on government policies and internal rules, some of which may not be published on a timely basis. As a result, there can also be no assurance that we would promptly become aware of a violation of a policy or rule, if such decision is not published publicly or promptly notified to us. In addition, any failure by us to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations. Our investment in China, is subject to PRC regulations. The PRC Foreign Investment Law, or the FIL, effective on January 1, 2020, is the legal foundation governing us, a foreign investment enterprise. The FIL grants pre-establishment national treatment to foreign-invested entities, or FIEs, except for those FIEs that operate in industries specified as either “restricted” or “prohibited” from foreign investment in a “negative list”. The FIL provides that FIEs operating in “restricted” industries will require market entry clearance and other approvals from relevant government authorities. There are ongoing uncertainties in how these relevant regulations are implemented. These uncertainties may impact our corporate governance practices and increase compliance costs. In addition, the FIL imposes information reporting requirements on foreign investors and foreign invested enterprises. The Measures for the Security Review of Foreign Investment, which took effect on January 18, 2021, regulates foreign investments which may raise “national defense and security” or “national security” concerns. Under these measures, a filing may be required for investments in military-related areas, or for investments in certain key sectors that result in obtaining actual control over the target enterprise, such as critical agricultural products, energy and resources, major equipment manufacturing, critical infrastructure, critical transport services, critical cultural products and services, critical information technology and internet products and services, critical financial services, key technology sectors and other critical sector; and if a foreign investment will or may affect national security, the relevant party shall file with the standing working office established at the National Development and Reform Commission (“NDRC”) (with NDRC and MOFCOM taking the lead) for the decision of whether to conduct security review. In the future, if we pursue growth through acquisitions that fall within the scope of these measures, the required security review process could be time consuming, and may delay or inhibit our ability to complete such transactions. As the interpretation of what constitutes "national security" remains broad and evolving, any determination that our business operations or future activities are subject to this security review could result in increased regulatory burdens and materially affect our business operations and activities in China. We are a holding company and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments. Regulations in China regarding currency conversion could limit our ability to obtain sufficient foreign currency to satisfy our foreign currency requirements or to pay dividends to shareholders. We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. Our principal source of cash flow has historically been the dividends, if any, paid to us by Yuchai, as described under “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources.” As a result, our ability to pay dividends, if any, to our shareholders and to satisfy any financial obligations that we may have from time to time depends on the ability of our subsidiaries to generate profits available for distribution to us. The ability of a subsidiary to make these distributions is subject to, among other factors, the law of its jurisdiction of incorporation which regulates the payment of dividends. 23 Table of Contents The PRC government regulates the conversion of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. Substantially all of our revenues and operating expenses are generated by our Chinese operating subsidiaries, and are denominated in Renminbi, while a portion of our indebtedness is, or in the future may be, denominated in US dollar and other foreign currencies. Under the existing PRC foreign exchange regulations, without prior approval of SAFE, cash generated from the operations of our subsidiaries in China could be used to pay dividends to us, while approval from or registration with appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, our Chinese subsidiaries would need to obtain SAFE approval or complete a registration procedure if in the future they desire to use cash generated from their operations to pay off debt in a currency other than Renminbi owed to entities outside China or make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system further limits the ability of our Chinese subsidiaries from obtaining sufficient foreign currencies to satisfy their foreign currency demands, they may not be able to pay dividends in foreign currencies to their shareholders, including us. We cannot predict the effect of future changes in Renminbi and foreign currency regulations on our business, financial condition and results of operations. PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of our offshore offerings to make loans or additional capital contributions to our PRC subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business. Any funds we transfer to our Chinese operating companies, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on FIEs in China, capital contributions to our Chinese operating companies are subject to registration with the State Administration for Market Regulation, or the SAMR or its local counterpart and registration with a local bank authorized by SAFE. In addition, (i) any foreign loan procured by our Chinese operating companies is required to be registered with SAFE or its local branches and (ii) any of our Chinese operating companies may not procure loans which exceed the difference between its total investment amount and registered capital or, as an alternative, they may only procure loans subject to the calculation approach and limitation as provided by the People’s Bank of China. On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015 and was amended on December 30, 2019 and on March 23, 2023. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs, which, subject to certain restrictions, allows FIEs to settle their foreign exchange capital at their discretion. Then the SAFE issued Circular on the Policies for Reforming and Standardizing Management of Foreign Exchange Settlement under the Capital Account effective on June 9, 2016, to further allow enterprises to convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis. On October 23, 2019, SAFE further softened the capital fund policy by issuing the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-Border Trade and Investment to allow non-investment FIEs to use their capital funds to make equity investments in China. On December 4, 2023, SAFE issued the Circular on Further Deepening Reform to Promote Cross-Border Trade and Investment Facilitation, or the 2023 Circular 28. Under the 2023 Circular 28, capital account asset realization accounts have been adjusted to capital account settlement accounts. Proceeds from equity transfers paid in foreign currency by domestic entities, as well as foreign exchange funds raised through overseas listings by domestic enterprises, can be directly deposited into capital account settlement accounts, with the funds in such accounts eligible for self-determined conversion and use. On September 12, 2025, SAFE issued the Circular on Matters Concerning Deepening the Reform of Foreign Exchange Management for Cross-border Investment and Financing, or 2025 Circular 43, which took effect on the same date. 2025 Circular 43 streamlines cross-border investment administration by eliminating registration requirements for preliminary expenses and domestic reinvestment, expands external debt quotas for high-tech enterprises, and optimizes capital account income usage by narrowing the negative list. Yuchai, as an FIE, is permitted to use its capital income from registered capital, foreign debt and overseas listing based on the current rules. However, such rules will be subject to further changes and there can be no assurance that the current flexibility could continue to apply to Yuchai, and violations of these circulars could result in severe monetary or other penalties. 24 Table of Contents Securities offerings that we may conduct in the future may be subject to the approval, filing or other administration requirements of the China Securities Regulatory Commission, or the CSRC, the Cyberspace Administration of China, or the CAC, or other PRC governmental authorities, and we cannot assure you that we will be able to obtain such approval, satisfy such requirements or complete such filings. As a significant part of our business is conducted in China, we are subject to various PRC laws, rules and regulations. Such laws, rules and regulations may affect our ability to conduct securities offerings in the future. In February 2023, the CSRC promulgated the Trial Measures for Overseas Listing, and five related guidelines, or the Guidelines for Overseas Listing, which became effective on March 31, 2023. Under the Trial Measures for Overseas Listing, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill certain filing procedures with and report certain information to the CSRC. The Trial Measures for Overseas Listing provide that if an issuer meets both of the following criteria, the overseas offering and listing of securities conducted by such issuer shall be determined as an indirect overseas offering and listing by a PRC domestic enterprise and therefore subject to the filing and reporting requirements as required thereunder: (i) any of the operating revenue, total profits, total assets, or net assets of the PRC domestic enterprise(s) of the issuer in the most recent fiscal year accounts for more than 50% of the corresponding item in the issuer’s audited consolidated financial statements for the same period; and (ii) the main parts of the issuer’s operation activities are conducted in mainland China, or the principal operation premises are located in mainland China, or the majority of senior management personnel in charge of its business operation and management are PRC citizens or have habitual residences located in mainland China. The Trial Measures for Overseas Listing further stipulate that the determination as to whether a PRC domestic company is indirectly offering and listing securities in an overseas market shall be made on a substance-over-form basis. According to one of the Guidelines for Overseas Listing, where an issuer does not fall within the scope of the Trial Measures for Overseas Listing, but the risk factors disclosed in the submitted listing application documents to the relevant overseas market regulations are mainly related to mainland China, the principle of substance-over-form should be followed, and a determination may be made that the issuer falls within the scope which is subject to the filing requirements under the Trial Measures for Overseas Listing. The CSRC has clarified that PRC domestic companies that have already been listed overseas on or before the effective date of the Trial Measures for Overseas Listing can be deemed to be existing issuers, or the Existing Issuers. Existing Issuers are not required to complete the filling procedures required by the Trial Measures for Overseas Listing in connection with their past overseas offerings and listings, and instead would be required to file with the CSRC in connection with any future overseas financing activities that they conduct. Furthermore, in case any of the following major issues occurs after the overseas offering and listing, the issuer is also required to report the specific information to the CSRC within three working days of the occurrence and the announcement of the relevant issues: (1) change of control; (2) the foreign securities regulatory body or the relevant competent authority has taken such measures as investigation and punishment; (3) change of listing status or listing board; (4) voluntary of compulsory termination of listing. Where there is any material change in the major business and operation of the issuer after overseas offering and listing, and such change does not fall within the scope of filing, the issuer shall, within three working days of the occurrence of such change, submit a special report and a legal opinion issued by a domestic law firm to the CSRC to explain the relevant situation. In February 2023, the CSRC and certain other PRC regulatory authorities also promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Administrative Provisions, which came into effect on March 31, 2023. Pursuant to the Confidentiality and Archives Administrative Provisions, a PRC domestic enterprise that seeks overseas offering and listing, whether directly or indirectly through an overseas listed entity, must strictly abide by applicable PRC laws and regulations, including by enhancing legal awareness in relation to keeping state secrets and strengthening its archives administration, instituting a sound confidentiality and archives administration system, and taking necessary measures to fulfill confidentiality and archives administration obligations. Where a PRC domestic company, either directly or through its overseas listed entity, publicly discloses or provides to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, it must first obtain approval from competent authorities according to law, and make certain filings with the secrecy administrative department at the same level. In the event that such documents and materials, if leaked, would be detrimental to national security or public interest, the PRC domestic company must strictly complete the relevant procedures as stipulated by applicable national regulations. Where a PRC domestic company, after completing the relevant procedures, provides to securities companies, securities service providers or other entities with any documents and materials that contain state secrets or working secrets of government agencies, or any other documents and materials that would be detrimental to national security or public interest if leaked, a non-disclosure agreement must be signed between the provider and receiver of such information according to the relevant PRC laws and regulations, which must specify, among others, the obligations and liabilities on confidentiality held by such securities companies and securities service providers. Specifically, when a PRC domestic company provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers or overseas regulators and individuals, it must complete the due procedures in compliance with applicable national regulations. 25 Table of Contents There are substantial uncertainties as to the implementation and interpretation of the Trial Measures for Overseas Listing and the Confidentiality and Archives Administrative Provisions, and how they will affect any securities offerings that we may choose to conduct in the future, and it is still uncertain how PRC governmental authorities will regulate overseas listings in general going forward of companies that have significant operations in the PRC. As a significant portion of our operations are currently based in the PRC, it is likely that future securities offerings or potential other listing that we may choose to conduct will be subject to the foregoing rules and requirements. If we (i) do not receive or maintain any required approvals or record-filing, (ii) inadvertently conclude that approvals or record-filing are not required, or (iii) if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring us to obtain their approvals, filings, registrations or other kinds of authorizations for any of our future offerings or future capital raisings, we may be unable to conduct such future securities offerings on schedule, in a timely manner or at all in a timely manner, or at all. Any failure regarding such approval and/or filing requirements may cause the value of our securities to significantly decline or be worthless. PRC regulators have been increasingly focused on regulation in areas of data security and data protection and the PRC regulatory requirements regarding cybersecurity are evolving. The CAC and other PRC regulators have promulgated various rules, regulations and measures regarding data collection, processing, use and security. For more information, see “— Risks Related to Our Business and Industry — We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity risks and data leakage risks. Any failure to comply with the various applicable laws and regulations related to data security and cybersecurity could lead to liabilities, penalties or other regulatory actions, which could have a material and adverse effect on our business, financial condition and results of operations.” If PRC oversight on cybersecurity and data protection regulations leads us to become subject to regulatory inspection or review or require us to take any specific actions, it could cause us to delay, suspend, and terminate securities offerings or capital raisings that we may choose to conduct in the future. United States regulators may be limited in their ability to conduct investigations or inspections of our operations in China. U.S. public companies that have or had a substantial portion of their operations in China, have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. As we have substantial operations within China, the increased regulatory scrutiny focus on U.S.-listed companies with operations in China could add uncertainties to our business operations, share price and reputation. The SEC, the Department of Justice and other U.S. authorities may have difficulties in bringing and enforcing actions against public companies incorporated in, or with substantial operations in, China, or their respective directors and officers who are based in China. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation in China. China’s securities law that became effective in March 2020 provides, among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of China. Furthermore, in February 2023, the CSRC and several other Chinese authorities promulgated the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, which provide that where an overseas securities regulator and a competent overseas authority requests to inspect, investigate or collect evidence from a Chinese domestic company concerning overseas offering and listing, or to inspect, investigate, or collect evidence from domestic Chinese securities companies and securities service providers that undertake relevant businesses for such Chinese domestic companies, such inspection, investigation and evidence collection will be conducted under a cross-border regulatory cooperation mechanism, and the CSRC or other competent Chinese authorities will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanisms. Chinese domestic companies, securities companies and securities service providers must first obtain approval from the CSRC or other competent Chinese authorities before cooperating with the inspection and investigation by the overseas securities regulator or competent overseas authority, or providing documents and materials requested in such inspection and investigation. Accordingly, without governmental approval in China, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of China. 26 Table of Contents If it is determined that the Public Company Accounting Oversight Board is unable to inspect or investigate our auditor completely, our ordinary shares may be prohibited from being traded on a national exchange. The delisting of our ordinary shares, or the threat of being delisted, may materially and adversely affect the value of your investment. Under the Holding Foreign Companies Accountable Act, or the HFCAA, which was enacted in December 2020, the SEC shall prohibit securities of any foreign company from being listed on a U.S. securities exchange or traded “over-the-counter” if a company retains a foreign accounting firm that cannot be inspected by the Public Company Accounting Oversight Board, or PCAOB, for three consecutive years, beginning in 2021. The HFCAA includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB, is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. Under the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which was enacted in December 2022, our securities may be prohibited from trading on the NYSE if our auditor is located in a foreign jurisdiction and the PCAOB determines that it is unable to inspect or investigate it completely for three consecutive years because of a position taken by an authority in the foreign jurisdiction, which could ultimately result in our shares being delisted. The AHFCAA amended the HFCAA by requesting the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China, because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Our independent registered public accounting firm that issues the audit reports included in our annual reports filed with the SEC, as an auditor of companies whose shares are publicly traded in the United States, is registered with the PCAOB. As a PCAOB registered firm, our auditor is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with relevant U.S. laws and professional standards. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol gives the PCAOB independent discretion to select any issuer audits for inspection or investigation and the ability to transfer information to the SEC. On December 15, 2022, the PCAOB announced that it was able to secure full access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB Board vacated its previous determinations that the PCAOB was unable to fully inspect or investigate registered public accounting firms headquartered in mainland China and Hong Kong. On December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditor. As it was originally enacted, the HFCAA applied only if the PCAOB’s inability to inspect or investigate was due to a position taken by an authority in the foreign jurisdiction where the relevant public accounting firm is located. As a result of the Consolidated Appropriations Act, 2023, the HFCAA also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to a position taken by an authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is located. Whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors, all of which are out of our control. There can be no assurance that we or our auditor will be able to comply with requirements imposed or possible new regulations adopted by U.S. regulators in the future. The market prices of our shares could be adversely affected as a result of possible negative impacts of the HFCAA and other similar rules and regulations. It remains unclear what further actions the SEC, the PCAOB or NYSE may take to address these issues and what impact those actions may have on companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange, like us. Legislative and regulatory actions and proceedings and new rules resulting from these efforts to increase U.S. regulatory access to audit information could create uncertainty for investors or increase the risk of our securities being delisted and prohibited from trading on a U.S. stock exchange, and the market price of our shares could be adversely affected. 27 Table of Contents