China Automotive Systems Reports 12.9% Revenue Increase to Annual Record

-  Electric Power Steering ("EPS") Sales Increased by 29.9% in 2024 -

WUHAN, China, March 28, 2025 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the fourth quarter and the audited results for the fiscal year ended December 31, 2024.

Fourth Quarter 2024 Highlights

• Net sales increased by 18.6% year-over-year to $188.7 million
• Gross profit was $29.5 million from $34.7 million.  Gross margin of 15.6% compared to 21.8% in the fourth quarter of 2023
• Operating income was $8.7 million, compared with $13.6 million in the fourth quarter of 2023
• Net income attributable to parent company's common shareholders was $9.1 million, or diluted net income per share of $0.30, compared to net income of $10.9 million, or diluted net income per share of $0.36 in the fourth quarter of 2023.

Fiscal Year 2024 Highlights

• Net sales increased by 12.9% to an annual record of $650.9 million compared to $576.4 million in 2023
• Gross profit increased by 5.2% to $109.2 million compared to $103.8 million in 2023. Gross margin was 16.8% compared with 18.0% in 2023
• Operating income increased by 2.6% to $40.3 million from $39.2 million in 2023
• Diluted net income per share was $0.99 in 2024 compared to $1.25 in 2023
• Total cash and cash equivalents, pledged cash and short-term investments were $129.4 million at year end
• Net cash flow provided by operating activities was $9.8 million in 2024.

Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "We had a solid year in 2024 with record annual revenue, continued profitable operations, positive cash flow from operations, provided a special cash dividend to reward shareholders and initiated a share repurchase program."

"Despite modest economic growth in China, our traditional hydraulic steering products continued to grow in 2024 even as our more advanced electric power steering ("EPS") achieved stronger growth of 29.9%.  EPS products comprised 38.9% of total sales in 2024, up from 33.8% a year ago."

"Selling into multiple markets, we experienced a range of growth both domestically and internationally.  Our operations in Brazil reported modest growth while demand from North American weakened. Domestically, our steering product sales into the Chinese passenger vehicle market continued healthy.  Domestic steering product sales growth into the commercial vehicle market remains sluggish due to lower commercial vehicle sales in 2024."

"We ended the 2024 year strongly as our highest quarterly revenues were in the fourth quarter. For 2024, our subsidiary, Jingzhou Henglong Auto Parts Manufacturing Co., Ltd. ("Jinzhou Henglong") reported 2024 annual production and sales volume exceeded 5.0 million units, representing an 18.5% year-over-year growth.  We also announced in early 2025 that Jingzhou Henglong achieved a production and sales increase of 35% year-over-year in the fourth quarter of 2024, and reached a new single monthly record high sales and production in December 2024 of more than 620,000 units, a 46.7% year-over-year increase.  In addition, our subsidiary, Shashi Jiulong Power Steering Gears Co., Ltd ("Shashi Jiulong"), won customer awards and accolades from two major vehicle OEM customers, Beiqi Foton Motor Co., Ltd. and Shaanxi Automobile Heavy Truck. We remain encouraged as China has initiated a number of economic incentives to bolster economic growth and improve the automobile industry prospects," Mr. Wu concluded.

Mr. Jie Li, Chief Financial Officer of CAAS, commented, "We remain in a strong financial position even after spending over $22.4 million in cash dividends, or $0.80 per share in cash, as well as spending money on share repurchases. Our total cash and cash equivalents, pledged cash and short-term investments reached $129.4 million at year end, or approximately $4.29 per share. Our current ratio was 1.3 on December 31, 2024.  We continue to have the resources to support our future growth."

Fourth Quarter of 2024

In the fourth quarter of 2024, net sales increased by 18.6% to $188.7 million compared to $159.2 million in the same quarter of 2023.  The net sales increase was mainly due to a change in the product mix and higher demand for passenger automobiles and commercial vehicles in the fourth quarter of 2024 compared to the fourth quarter of 2023. 

Gross profit was $29.5 million in the fourth quarter of 2024, compared to $34.7 million in the fourth quarter of 2023.  Gross margin in the fourth quarter of 2024 was 15.6% compared to 21.8% in the fourth quarter of 2023, primarily due to a change in product mix.

Selling expenses were $4.8 million in the fourth quarter of 2024, compared with $4.6 million in the fourth quarter of 2023. Selling expenses represented 2.5% of net sales in the fourth quarter of 2024, compared to 2.9% in the fourth quarter of 2023.

General and administrative expenses ("G&A expenses") were $9.7 million in the fourth quarter of 2024, compared to $9.4 million in the same period in 2023.  G&A expenses represented 5.1% of net sales in the fourth quarter of 2024, compared to 5.9% of net sales in the fourth quarter of 2023.

Research and development expenses ("R&D expenses") were $7.8 million compared with $9.3 million in the fourth quarter of 2023.  R&D expenses represented 4.1% of net sales in the fourth quarter of 2024, compared to 5.9% in the fourth quarter of 2023, mainly due to a decrease in miscellaneous development expenses.  

Operating income was $8.7 million in the fourth quarter of 2024, compared to $13.6 million in the fourth quarter of 2023.  Lower gross profit in the 2024 fourth quarter compared with the same period last year was the main cause.

Interest expense was $1.1 million in the fourth quarter of 2024 compared with $0.3 million in the fourth quarter of 2023.

Financial income was $0.8 million in the fourth quarter of 2024 compared with $1.0 million in the fourth quarter of 2023.

Income before income tax expenses and equity in earnings of affiliated companies was $8.8 million in the fourth quarter of 2023 compared to $15.0 million in the fourth quarter of 2023.

Income tax benefit was $2.0 million in the fourth quarter of 2024, compared to income tax expense of $2.1 million in the fourth quarter of 2023.  

Net income attributable to parent company's common shareholders was $9.1 million in the fourth quarter of 2024 compared to net income attributable to parent company's common shareholders of $10.9 million in the fourth quarter of 2023. Diluted income per share was $0.30 in the fourth quarter of 2024, compared to diluted income per share of $0.36 in the fourth quarter of 2023.

The weighted average number of diluted common shares outstanding was 30,180,947 compared to 30,185,702 in the fourth quarter of 2023.

Fiscal Year 2024

Net sales increased by 12.9% to $650.9 million in 2024, compared to $576.4 million in 2023. This increase was mainly due to higher sales of passenger vehicles in China, as total sales of the Company's EPS systems increased by 29.9% year-over-year and sales of the Henglong subsidiary's steering systems to the Chinese passenger vehicle market increased by 20.0% year-over-year.  Brazil Henglong's net sales grew by 5.7% year-over-year to $51.0 million in 2024. This growth partially offset a sales reduction by North American customers in 2024. EPS sales represented 38.9% of total revenue in 2024 compared to 33.8% in 2023. 

Gross profit in 2024 increased by 5.2% year-over-year to $109.2 million, compared to $103.8 million in 2023. The gross margin was 16.8% compared with 18.0% in 2023 mainly due to a change in our product mix and lower average selling prices for the year ended December 31, 2024. 

Net gain on other sales in 2023 was $4.3 million compared to $5.8 million in 2023 mainly due to lower material sales in 2024.

Selling expenses rose by 14.4% year-over-year to $17.9 million in 2024 from $15.6 million in 2023, mainly due to an increase in marketing and office expenses. Selling expenses represented 2.7% of net sales in 2024 and 2023.

G&A expenses increased by 8.7% year-over-year to $27.7 million in 2024, compared to $25.5 million in 2023. G&A expenses represented 4.3% of net sales in 2024, compared to 4.4% of net sales in 2023.  This expense increase was mainly due to higher office, property and other taxes and maintenance and repair expense.

R&D expenses were $27.6 million in 2024, compared to $29.2 million in 2023. Lower R&D expenses reflect less investment in traditional product upgrades and miscellaneous research expenses. R&D expenses were 4.2% of net sales in 2024, compared to 5.1% of net sales in 2023.

Operating income increased by 2.6% to $40.3 million in 2023, compared to $39.2 million in 2023. The increase in operating income was mainly due to a 5.2% increase in gross profit combined with a change in R&D expenses.  

Interest expense was $1.8 million in 2024, compared to $1.0 million in 2023, primarily due to an increase in bank loans in 2024 compared with 2023.  

Net financial expense was $0.09 million in 2024, compared to financial income of $4.7 million for 2023. This decrease in financial income of $4.8 million was primarily due to higher foreign exchange gains in 2023.

Income before income tax expenses and equity in earnings of affiliated companies was $44.1 million in 2024 compared with $48.2 million in 2023. The change was primarily due to lower operating income in 2024.  

Income tax expense was $5.9 million in 2024 compared to $5.1 million in 2023. This increase was mainly due to a valuation allowance reversal, and a one-time income tax expense settlement for subsidiaries in the PRC and the U.S. this year.

Net income attributable to parent company's common shareholders was $30.0 million in 2024 compared to $37.7 million in 2023.  Diluted net income per share was $0.99 in 2024 compared to $1.25 in 2023.

The weighted average number of diluted common shares outstanding was 30,184,513 in 2024 compared with 30,189,421 in 2023.

Balance Sheet

As of December 31, 2024 total cash and cash equivalents, pledged cash and short-term investments were $129.4 million. Total accounts receivable including notes receivable were $343.5 million. Accounts payable including notes payable were $292.8 million and short-term bank loans were $72.6 million. Total parent company stockholders' equity was $349.6 million as of December 31, 2024 compared to $344.5 million as of December 31, 2023. Net cash flow from operating activities was $9.8 million in 2024. Cash paid to acquire property, plant and equipment and land use rights was $43.7 million in 2024 and cash received from property, plant and equipment sales was $20.5 million.

Business Outlook

Management provides revenue guidance for the fiscal year 2025 of $700.0 million.  This target is based on the Company's current views on operating and market conditions, which are subject to change.

Conference Call

Management will conduct a conference call on March 28, 2025 at 8:00 A.M. EDT/8:00 P.M. Beijing Time to discuss these results. A question and answer session will follow management's presentation.  To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call with pin 826041:

Phone Number: +1-888-506-0062 (North America)
Phone Number: +1-973-528-0011 (International)
Mainland China Toll Free: +86-400-120-3199

A replay of the call will be available on the Company's website under the investor relations section.

About China Automotive Systems, Inc.

Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through its sixteen Sino-foreign joint ventures and wholly owned subsidiaries. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 8 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Stellantis N.V. and Ford Motor Company in North America. For more information, please visit: http://www.caasauto.com. 

Forward-Looking Statements

This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2025, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict, and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.

For further information, please contact:

Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: [email protected] 

Kevin Theiss
Investor Relations
+1-212-510-8922
Email: [email protected] 

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SOURCE China Automotive Systems, Inc.