Hong Leong Asia (H22.SI) saw its stock price plummet by 3.97% in Tuesday's trading session, following news of executive detentions at its subsidiary, China Yuchai International Limited (CYD). The sharp decline reflects investor concerns over the unexpected development in one of Hong Leong Asia's key operating units.

China Yuchai International announced on Monday that two high-ranking executives of its main operating subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), have been detained by Chinese authorities. Wu Qiwei, a Company Director and President of Yuchai, and Qin Xiaohong, former Chief Accountant of Yuchai, are the executives in question. The company stated that the reasons for the detentions and any related charges have not yet been verified, adding an element of uncertainty to the situation.

Despite the executive detentions, Yuchai assured that its business operations continue under the leadership of Li Hanyang, Chairman of Yuchai's Board of Directors. Vice President Chen Hai is stepping in to assist with presidential duties in Wu's absence. However, the market reaction suggests that investors remain cautious about potential implications for Hong Leong Asia's operations and financials, given Yuchai's significant role in the group's portfolio. Yuchai, a major player in China's engine market, sold 356,586 engines in 2024, highlighting its importance to Hong Leong Asia's overall performance.