China Automotive Systems Reports Income From Operations Increased by 20.2% in the Second Quarter of 2025
Rhea-AI Summary
China Automotive Systems (NASDAQ: CAAS) reported strong Q2 2025 financial results with significant growth across key metrics. Net sales increased 11.1% year-over-year to $176.2 million, driven by a 31.1% growth in Electric Power Steering (EPS) sales which now represent 41.4% of total product sales.
The company achieved notable international expansion, including a 49.4% sales growth in Brazil and an 11.8% increase in North American sales. A significant milestone was winning their first R-EPS product order from a major European automaker, expected to generate over $100 million in annual sales starting 2027.
Income from operations rose 20.2% to $13.0 million, with net income attributable to shareholders increasing 6.8% to $7.6 million. Management has raised full-year 2025 revenue guidance to $720.0 million.
Positive
- EPS product sales surged 31.1% YoY, now representing 41.4% of total sales
- Secured first R-EPS order from European automaker worth over $100M annually
- Brazil sales grew 49.4% YoY, North American sales up 11.8%
- Strong cash position of $135.3M with $49.1M operating cash flow in H1
- Income from operations increased 20.2% YoY
- Management raised full-year revenue guidance to $720.0M
Negative
- Gross profit margin decreased to 17.3% from 18.5% YoY due to higher tariffs
- H1 2025 net income declined to $14.7M from $15.4M in H1 2024
- Higher income tax expense due to increased effective tax rate
- Short-term loans increased to $71.9M
News Market Reaction
On the day this news was published, CAAS declined 0.73%, reflecting a mild negative market reaction. This price movement removed approximately $910K from the company's valuation, bringing the market cap to $124M at that time.
Data tracked by StockTitan Argus on the day of publication.
Second Quarter 2025 Highlights
- Net sales rose
11.1% year-over-year to$176.2 million $158.6 million - Sales in
Brazil grew49.4% year-over-year, representing10.1% of total net sales. - Gross profit increased by
4.2% year-over-year to$30.5 million $29.3 million 17.3% in the second quarter of 2025. - Income from operations increased by
20.2% year-over-year to$13.0 million $10.8 million - Net income attributable to parent company's common shareholders increased
6.8% to$7.6 million $7.1 million - Diluted earnings per share attributable to parent company's common shareholders was
$0.25 $0.24
First Six Months of 2025 Highlights
- Net sales grew by
15.2% year-over-year to$343.3 million $298.0 million - Gross profit increased by
10.8% year-over-year to$59.1 million $53.4 million 17.2% in the first six months of 2025. - Income from operations rose by
5.7% year-over-year to$21.6 million $20.5 million - Net income attributable to parent company's common shareholders decreased to
$14.7 million $15.4 million - Diluted earnings per share attributable to parent company's common shareholders was
$0.49 $0.51 - Cash, cash equivalents and short-term investments were
$135.3 million $4.48
Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "We continued to grow our sales, gross profit, net profit and cashflow in the second quarter of 2025. Sales of our traditional steering products remained steady while sales of our Electric Power Steering ("EPS") products grew by
"We continue to transition to more technology-focused advanced steering products. In the second quarter of 2025, based on our iRCB's (intelligent electro-hydraulic circulating ball power steering) performance and cost-efficiency, new orders in July were at a record setting pace in the power steering industry for the ramp up to mass production. Our second-generation iRCB is compatible with L2+assisted driving. By optimizing energy consumption, iRCB products are projected to reduce vehicle operational costs creating substantial economic value."
"The high quality and high performance of our steering products have allowed us to become the tier-1 supplier to large global OEM customers in
Mr. Jie Li, Chief Financial Officer of CAAS, commented, "Maintaining a strong balance sheet and financial resources are among our highest priorities. Cash, cash equivalents and short-term investments were
Second Quarter of 2025
Net sales increased by
Gross profit grew by
Gain on other sales was
Selling expenses at
General and administrative expenses ("G&A expenses") decreased to
Research and development expenses ("R&D expenses") were stable at
Other income was
Income from operations rose
Interest expense was
Net financial income was
Income before income tax expenses and equity in earnings of affiliated companies was
Income tax expense was
Net income attributable to parent company's common shareholders was
The weighted average number of diluted common shares outstanding was 30,170,702 in the second quarter of 2025, compared to 30,185,702 in the second quarter of 2024.
First Six Months of 2025
Net sales increased by
Net income attributable to parent company's common shareholders was
Balance Sheet
Cash, cash equivalents and short-term investments were
Business Outlook
Management has raised revenue guidance for the full fiscal year 2025 to
Conference Call
Management will conduct a conference call on August 13th, 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 489385:
Toll Free: 888-506-0062
International: 973-528-0011
China Toll Free: 86 400 120 3199
A replay of the call will be available on the Company's website in the investor relations section.
About China Automotive Systems, Inc.
Based in
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 result in delays in the shipment of products to our customers, increase costs and reduce 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.
jieli@chl.com.cn
Kevin Theiss
Awaken Advisors
+1-212-510-8922
Kevin@awakenlab.com
-Tables Follow –
China Automotive Systems, Inc. and Subsidiaries Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (In thousands of USD, except share and per share amounts) | ||||||
Three Months Ended June 30, | ||||||
2025 | 2024 | |||||
Net product sales ( | $ | 176,245 | $ | 158,608 | ||
Cost of products sold ( | 145,698 | 129,306 | ||||
Gross profit | 30,547 | 29,302 | ||||
Gain on other sales | 455 | 1,720 | ||||
Less: Operating expenses | ||||||
Selling expenses | 4,514 | 4,614 | ||||
General and administrative expenses | 5,412 | 7,418 | ||||
Research and development expenses | 8,092 | 8,184 | ||||
Total operating expenses | 18,018 | 20,216 | ||||
Income from operations | 12,984 | 10,806 | ||||
Other income, net | 1,060 | 1,735 | ||||
Interest expense | (292) | (183) | ||||
Financial income/(expense), net | 1,327 | (690) | ||||
Income before income tax expenses and equity in earnings of affiliated companies | 15,079 | 11,668 | ||||
Less: Income taxes | 4,049 | 2,108 | ||||
Add: Equity in losses of affiliated companies | (658) | (805) | ||||
Net income | 10,372 | 8,755 | ||||
Less: Net income attributable to non-controlling interests | 2,747 | 1,608 | ||||
Accretion to redemption value of redeemable non-controlling interests | — | (7) | ||||
Net income attributable to parent company's common shareholders | $ | 7,625 | $ | 7,140 | ||
Comprehensive income: | ||||||
Net income | $ | 10,372 | $ | 8,755 | ||
Other comprehensive income: | ||||||
Foreign currency translation gain/(loss), net of tax | 1,342 | (2,846) | ||||
Comprehensive income | 11,714 | 5,909 | ||||
Less: Comprehensive income attributable to non-controlling interests | 2,887 | 1,431 | ||||
Accretion to redemption value of redeemable non-controlling interests | — | (7) | ||||
Comprehensive income attributable to parent company | $ | 8,827 | $ | 4,471 | ||
Net income attributable to parent company's common shareholders per share - | ||||||
Basic | $ | 0.25 | $ | 0.24 | ||
Diluted | $ | 0.25 | $ | 0.24 | ||
Weighted average number of common shares outstanding - | ||||||
Basic | 30,170,702 | 30,185,702 | ||||
Diluted | 30,170,702 | 30,185,702 | ||||
China Automotive Systems, Inc. and Subsidiaries Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (In thousands of USD, except share and per share amounts) | ||||||
Six Months Ended June 30, | ||||||
2025 | 2024 | |||||
Net product sales ( | $ | 343,339 | $ | 298,002 | ||
Cost of products sold ( | 284,207 | 244,631 | ||||
Gross profit | 59,132 | 53,371 | ||||
Gain on other sales | 1,606 | 2,234 | ||||
Less: Operating expenses | ||||||
Selling expenses | 9,332 | 8,687 | ||||
General and administrative expenses | 12,977 | 12,965 | ||||
Research and development expenses | 16,805 | 13,496 | ||||
Total operating expenses | 39,114 | 35,148 | ||||
Income from operations | 21,624 | 20,457 | ||||
Other income, net | 3,001 | 4,138 | ||||
Interest expense | (775) | (441) | ||||
Financial income/(expense), net | 3,305 | (702) | ||||
Income before income tax expenses and equity in earnings of affiliated companies | 27,155 | 23,452 | ||||
Less: Income taxes | 6,986 | 3,851 | ||||
Add: Equity in losses of affiliated companies | (1,342) | (1,582) | ||||
Net income | 18,827 | 18,019 | ||||
Less: Net income attributable to non-controlling interests | 4,080 | 2,597 | ||||
Accretion to redemption value of redeemable non-controlling interests | — | (15) | ||||
Net income attributable to parent company's common shareholders | $ | 14,747 | $ | 15,407 | ||
Comprehensive income: | ||||||
Net income | $ | 18,827 | $ | 18,019 | ||
Other comprehensive income: | ||||||
Foreign currency translation gain/(loss), net of tax | 2,262 | (3,194) | ||||
Comprehensive income | 21,089 | 14,825 | ||||
Less: Comprehensive income attributable to non-controlling interests | 4,283 | 2,372 | ||||
Accretion to redemption value of redeemable non-controlling interests | — | (15) | ||||
Comprehensive income attributable to parent company | $ | 16,806 | $ | 12,438 | ||
Net income attributable to parent company's common shareholders per share - | ||||||
Basic | $ | 0.49 | $ | 0.51 | ||
Diluted | $ | 0.49 | $ | 0.51 | ||
Weighted average number of common shares outstanding - | ||||||
Basic | 30,170,702 | 30,185,702 | ||||
Diluted | 30,170,702 | 30,185,702 | ||||
China Automotive Systems, Inc. and Subsidiaries Condensed Unaudited Consolidated Balance Sheets | ||||||
June 30, 2025 | December 31, 2024 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 102,194 | $ | 56,961 | ||
Pledged cash | 36,774 | 44,863 | ||||
Accounts and notes receivable, net - unrelated parties | 279,144 | 329,275 | ||||
Accounts and notes receivable, net - related parties | 15,064 | 14,224 | ||||
Inventories | 116,518 | 112,558 | ||||
Other current assets | 50,271 | 44,757 | ||||
Total current assets | 599,965 | 602,638 | ||||
Non-current assets: | ||||||
Property, plant and equipment, net | 114,705 | 103,820 | ||||
Land use rights, net | 9,235 | 8,835 | ||||
Long-term investments | 61,876 | 64,332 | ||||
Other non-current assets | 57,935 | 70,954 | ||||
Total assets | $ | 843,716 | $ | 850,579 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Short-term loans | $ | 71,946 | $ | 72,566 | ||
Accounts and notes payable-unrelated parties | 257,418 | 281,065 | ||||
Accounts and notes payable-related parties | 12,186 | 11,743 | ||||
Accrued expenses and other payables | 60,002 | 59,238 | ||||
Other current liabilities | 27,477 | 31,870 | ||||
Total current liabilities | 429,029 | 456,482 | ||||
Long-term liabilities: | ||||||
Other non-current liabilities | 3,809 | 4,308 | ||||
Total liabilities | $ | 432,838 | $ | 460,790 | ||
Commitments and Contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, | $ | 3 | $ | 3 | ||
Additional paid-in capital | 69,656 | 69,656 | ||||
Retained earnings- | ||||||
Appropriated | 13,668 | 12,180 | ||||
Unappropriated | 303,532 | 290,273 | ||||
Accumulated other comprehensive income | (12,721) | (14,780) | ||||
Treasury stock –2,167,600 and 2,167,600 shares as of June 30, 2025 and December 31, 2024, | (7,763) | (7,763) | ||||
Total parent company stockholders' equity | 366,375 | 349,569 | ||||
Non-controlling interests | 44,503 | 40,220 | ||||
Total stockholders' equity | 410,878 | 389,789 | ||||
Total liabilities and stockholders' equity | $ | 843,716 | $ | 850,579 | ||
China Automotive Systems, Inc. and Subsidiaries Condensed Unaudited Consolidated Statements of Cash Flows (In thousands of USD unless otherwise indicated) | ||||||
Six months Ended June 30, | ||||||
2025 | 2024 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 18,827 | $ | 18,019 | ||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||
Depreciation and amortization | 8,267 | 9,868 | ||||
(Reversal)/addition of credit losses | (159) | 9 | ||||
Equity in losses of affiliated companies | 1,342 | 1,582 | ||||
Impairment loss on property, plant and equipment | 657 | — | ||||
Loss on disposal of property, plant and equipment | 580 | 773 | ||||
(Increase)/decrease in: | ||||||
Accounts and notes receivable | 50,982 | (20,451) | ||||
Inventories | (3,491) | 4,271 | ||||
Other current assets | (1,077) | 3,654 | ||||
Increase/(decrease) in: | ||||||
Accounts and notes payable | (24,349) | 1,994 | ||||
Accrued expenses and other payables | 2,238 | 1,134 | ||||
Long-term taxes payable | — | (7,025) | ||||
Other current liabilities | (4,735) | (4,697) | ||||
Net cash provided by operating activities | 49,082 | 9,131 | ||||
Cash flows from investing activities: | ||||||
Cash received from disposal of property, plant and equipment sales | 522 | 607 | ||||
Payments to acquire property, plant and equipment (including | (18,484) | (10,016) | ||||
Payments to acquire intangible assets | (67) | (332) | ||||
Investment under the equity method | (1,112) | — | ||||
Purchase of short-term investments | (23,096) | (40,054) | ||||
Proceeds from maturities of short-term investments | 29,570 | 20,626 | ||||
Cash received from long-term investments | 2,368 | 937 | ||||
Net cash used in investing activities | (10,299) | (28,232) | ||||
Cash flows from financing activities: | ||||||
Proceeds from bank loans | 52,829 | 47,054 | ||||
Repayments of bank loans | (53,890) | (48,384) | ||||
Dividends paid to the common shareholders | (1,773) | — | ||||
Cash received from capital contributions of a non-controlling interest | — | 15,504 | ||||
Net cash (used in)/provided by financing activities | (2,834) | 14,174 | ||||
Effects of exchange rate on cash, cash equivalents and pledged cash | 1,195 | (1,882) | ||||
Net increase/(decrease) in cash, cash equivalents and pledged cash | 37,144 | (6,809) | ||||
Cash, cash equivalents and pledged cash at beginning of the period | 101,824 | 155,194 | ||||
Cash, cash equivalents and pledged cash at end of the period | $ | 138,968 | $ | 148,385 | ||
View original content:https://www.prnewswire.com/news-releases/china-automotive-systems-reports-income-from-operations-increased-by-20-2-in-the-second-quarter-of-2025--302528445.html
SOURCE China Automotive Systems, Inc.
FAQ
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