Ankündigung • Apr 24
China Automotive Systems, Inc. Provides Revenue Guidance for the Fiscal Year 2026 China Automotive Systems, Inc. provided revenue guidance for the fiscal year 2026. For the year, the company expects revenue guidance for the fiscal year 2026 is $810.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Reported Earnings • Apr 22
Full year 2025 earnings released: EPS: US$1.42 (vs US$0.99 in FY 2024) Full year 2025 results: EPS: US$1.42 (up from US$0.99 in FY 2024). Revenue: US$765.7m (up 18% from FY 2024). Net income: US$42.8m (up 43% from FY 2024). Profit margin: 5.6% (up from 4.6% in FY 2024). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 9% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Ankündigung • Apr 13
China Automotive Systems, Inc. to Report Q4, 2025 Results on Apr 22, 2026 China Automotive Systems, Inc. announced that they will report Q4, 2025 results at 9:30 AM, US Eastern Standard Time on Apr 22, 2026 Reported Earnings • Nov 14
Third quarter 2025 earnings released: EPS: US$0.32 (vs US$0.18 in 3Q 2024) Third quarter 2025 results: EPS: US$0.32 (up from US$0.18 in 3Q 2024). Revenue: US$193.2m (up 18% from 3Q 2024). Net income: US$9.67m (up 76% from 3Q 2024). Profit margin: 5.0% (up from 3.4% in 3Q 2024). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 9% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Ankündigung • Nov 13
China Automotive Systems, Inc. Raises Revenue Guidance for the Full Fiscal Year 2025 China Automotive Systems, Inc. raised revenue guidance for the full fiscal year 2025. For the year, the company raised revenue guidance to $730.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Ankündigung • Sep 18
China Automotive Systems, Inc. Files Form 15 China Automotive Systems, Inc. has announced that it has filed a Form 15 with the Securities and Exchange Commission to voluntarily deregister its Common Stock under the Securities Exchange Act of 1934, as amended. The par value of the company's Common Stock was $0. 0001 per share. Reported Earnings • Aug 14
Second quarter 2025 earnings released: EPS: US$0.25 (vs US$0.24 in 2Q 2024) Second quarter 2025 results: EPS: US$0.25 (up from US$0.24 in 2Q 2024). Revenue: US$176.2m (up 11% from 2Q 2024). Net income: US$7.63m (up 6.8% from 2Q 2024). Profit margin: 4.3% (down from 4.5% in 2Q 2024). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 15% per year but the company’s share price has only increased by 6% per year, which means it is significantly lagging earnings growth. Ankündigung • Aug 14
China Automotive Systems, Inc. Raises Earnings Guidance for the Full Fiscal Year 2025 China Automotive Systems, Inc. raised earnings guidance for the full fiscal year 2025. For the year, the Management has raised revenue guidance for the full fiscal year 2025 to $720.0 million. Ankündigung • Jul 29
China Automotive Systems, Inc. to Report Q2, 2025 Results on Aug 13, 2025 China Automotive Systems, Inc. announced that they will report Q2, 2025 results Pre-Market on Aug 13, 2025 Ankündigung • Jul 09
China Automotive Systems Begins Mass Production of First iRCB Compatible L2+ Assisted Driving Systems for China Market China Automotive Systems, Inc. announced that its L2+ standard electro-hydraulic steering system, a power steering system used in heavy-duty vehicles that utilizes both hydraulic power and electronic controls to assist with steering, has entered mass production in China. Following the iRCB's outstanding performance and cost-efficiency demonstrated in the first month of mass production, new orders in July were placed by customers setting a new record in the power steering industry for the ramp up to mass production. The second-generation iRCB (intelligent electro-hydraulic circulating ball power steering) developed by the Company's subsidiary, Shashi Jiulong, has officially entered mass production in China. Since the project was launched in September 2024, it took only 8 months to complete the entire process for design, verification and mass production, demonstrating CAAS' efficiency in collaboration with its customers. As China's first iRCB compatible with L2+assisted driving, this system utilizes cutting-edge electro-hydraulic control technology to achieve internationally leading benchmarks in steering accuracy and response speed. By optimizing energy consumption, it is projected to reduce operational costs by nearly RMB 36,000 per vehicle annually, delivering substantial economic value to users. Ankündigung • Jun 26
China Automotive Systems, Inc. Appoints Tao Liu as Director China Automotive Systems, Inc. in its AGM held on June 25, 2025 appointed Tao Liu as Director. Reported Earnings • May 15
First quarter 2025 earnings released: EPS: US$0.24 (vs US$0.27 in 1Q 2024) First quarter 2025 results: EPS: US$0.24 (down from US$0.27 in 1Q 2024). Revenue: US$167.1m (up 20% from 1Q 2024). Net income: US$7.12m (down 14% from 1Q 2024). Profit margin: 4.3% (down from 5.9% in 1Q 2024). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 26% per year but the company’s share price has only increased by 11% per year, which means it is significantly lagging earnings growth. Ankündigung • May 15
China Automotive Systems, Inc. Reiterates Revenue Guidance for the Full Fiscal Year 2025 China Automotive Systems, Inc. reiterated revenue guidance for the full 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. Ankündigung • May 14
China Automotive Systems, Inc., Annual General Meeting, Jun 25, 2025 China Automotive Systems, Inc., Annual General Meeting, Jun 25, 2025, at 09:00 China Standard Time. Location: second floor meeting room, henglong group, no. 88 jingsha avenue, hubei province, jingzhou China Ankündigung • May 06
China Automotive Systems, Inc. to Report Q1, 2025 Results on May 14, 2025 China Automotive Systems, Inc. announced that they will report Q1, 2025 results Pre-Market on May 14, 2025 Valuation Update With 7 Day Price Move • Apr 04
Investor sentiment deteriorates as stock falls 21% After last week's 21% share price decline to US$4.14, the stock trades at a trailing P/E ratio of 4.2x. Average trailing P/E is 14x in the Auto Components industry in the US. Total returns to shareholders of 68% over the past three years. Reported Earnings • Mar 28
Full year 2024 earnings released: EPS: US$0.99 (vs US$1.25 in FY 2023) Full year 2024 results: EPS: US$0.99 (down from US$1.25 in FY 2023). Revenue: US$650.9m (up 13% from FY 2023). Net income: US$30.0m (down 20% from FY 2023). Profit margin: 4.6% (down from 6.5% in FY 2023). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 35% per year but the company’s share price has only increased by 17% per year, which means it is significantly lagging earnings growth. Ankündigung • Mar 28
China Automotive Systems, Inc. Provides Revenue Guidance for the Fiscal Year 2025 China Automotive Systems, Inc. provided revenue guidance for the fiscal year 2025. Management provided 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. Ankündigung • Mar 19
China Automotive Systems, Inc. to Report Q4, 2024 Results on Mar 28, 2025 China Automotive Systems, Inc. announced that they will report Q4, 2024 results Pre-Market on Mar 28, 2025 Ankündigung • Jan 24
China Automotive Systems, Inc. Announces New Driver Assist Products in Mass Production China Automotive Systems, Inc. announced that the R-EPS steering product developed for Nanjing Iveco has entered mass production after successfully passing the Production Part Approval Process ("PPAP") assessment. The R-EPS steering gears feature an electric motor with control unit, and a ball nut and belt drive reduction system, compared with hydraulic pressure, to provide steering assist. R-EPS is lighter with improved efficiency creating increased mileage and range. R-EPS architecture is capable of performing autonomous driving functions such as Automatic Parking, Lane Keep Assist (LKA) and Lane Follow Assist (LFA). R-EPS is compatible with medium- and heavy-duty passenger vehicles and light commercial vehicles. The success of the R-EPS project is a further testament to CAAS' superior engineering and technology development by incorporating artificial intelligence. With the growing trend of embracing artificial intelligence in the automotive industry, CAAS accelerated the research and development of innovative electric products, focusing on improved material science and manufacturing processes. All R-EPS products endured intense performance testing to ensure stability and durability. Ankündigung • Nov 19
China Automotive Systems, Inc. (NasdaqCM:CAAS) announces an Equity Buyback for $5 million worth of its shares. China Automotive Systems, Inc. (NasdaqCM:CAAS) announces a share repurchase program. Under the program, the company will repurchase up to $5 million worth of its shares. The shares will be repurchased at a price not exceeding $5.5 per share. The repurchase program will be valid till November 15, 2025. Reported Earnings • Nov 15
Third quarter 2024 earnings released: EPS: US$0.18 (vs US$0.31 in 3Q 2023) Third quarter 2024 results: EPS: US$0.18 (down from US$0.31 in 3Q 2023). Revenue: US$164.2m (up 19% from 3Q 2023). Net income: US$5.50m (down 42% from 3Q 2023). Profit margin: 3.4% (down from 6.9% in 3Q 2023). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 48% per year but the company’s share price has only increased by 4% per year, which means it is significantly lagging earnings growth. Ankündigung • Nov 13
China Automotive Systems, Inc. Raises Revenue Guidance for the Full Year 2024 China Automotive Systems, Inc. raised revenue guidance for the full year 2024. The company has raised its revenue guidance for the full year 2024 to $630.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Ankündigung • Nov 04
China Automotive Systems, Inc. to Report Q3, 2024 Results on Nov 13, 2024 China Automotive Systems, Inc. announced that they will report Q3, 2024 results Pre-Market on Nov 13, 2024 Valuation Update With 7 Day Price Move • Sep 30
Investor sentiment improves as stock rises 23% After last week's 23% share price gain to US$4.60, the stock trades at a trailing P/E ratio of 3.9x. Average trailing P/E is 19x in the Auto Components industry in the US. Total returns to shareholders of 73% over the past three years. Reported Earnings • Aug 14
Second quarter 2024 earnings released: EPS: US$0.24 (vs US$0.35 in 2Q 2023) Second quarter 2024 results: EPS: US$0.24 (down from US$0.35 in 2Q 2023). Revenue: US$158.6m (up 15% from 2Q 2023). Net income: US$7.14m (down 32% from 2Q 2023). Profit margin: 4.5% (down from 7.6% in 2Q 2023). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 58% per year but the company’s share price has remained flat, which means it is significantly lagging earnings. Ankündigung • Aug 13
China Automotive Systems, Inc. Reiterates Revenue Guidance for the Full Year 2024 China Automotive Systems, Inc. reiterated revenue guidance for the full year 2024. The company has reiterated its revenue guidance for the full year 2024 of $605.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Ankündigung • Aug 09
China Automotive Systems, Inc., Annual General Meeting, Sep 24, 2024 China Automotive Systems, Inc., Annual General Meeting, Sep 24, 2024, at 09:00 China Standard Time. Location: second floor, meeting room, d8 henglong building, optics valley software, park, no. 1 guanshan firs, wuhan China Valuation Update With 7 Day Price Move • Aug 02
Investor sentiment deteriorates as stock falls 20% After last week's 20% share price decline to US$3.69, the stock trades at a trailing P/E ratio of 2.8x. Average trailing P/E is 19x in the Auto Components industry in the US. Total returns to shareholders of 8.6% over the past three years. Ankündigung • Aug 02
China Automotive Systems, Inc. to Report Q2, 2024 Results on Aug 13, 2024 China Automotive Systems, Inc. announced that they will report Q2, 2024 results Pre-Market on Aug 13, 2024 Ankündigung • Jul 21
China Automotive Systems Announces Special Cash Dividend, Payable on or About August 22, 2024 China Automotive Systems, Inc. announced that the Board of Directors has declared a special cash dividend of $0.80 per common share. The special cash dividend is payable on or about August 22, 2024 to shareholders of record as of the close of business on Tuesday, July 30, 2024. The aggregate amount of the special dividend payment will be approximately $25 million. The Board of Directors approved the special cash dividend after reviewing the Company´s recent financial performance, current financial condition, expected cash requirements for business expansion and future free cash-flow generation. Valuation Update With 7 Day Price Move • Jul 19
Investor sentiment improves as stock rises 17% After last week's 17% share price gain to US$4.12, the stock trades at a trailing P/E ratio of 3.2x. Average trailing P/E is 19x in the Auto Components industry in the US. Total loss to shareholders of 2.6% over the past three years. Reported Earnings • May 15
First quarter 2024 earnings released: EPS: US$0.27 (vs US$0.23 in 1Q 2023) First quarter 2024 results: EPS: US$0.27 (up from US$0.23 in 1Q 2023). Revenue: US$139.4m (down 2.0% from 1Q 2023). Net income: US$8.27m (up 21% from 1Q 2023). Profit margin: 5.9% (up from 4.8% in 1Q 2023). The increase in margin was driven by lower expenses. Over the last 3 years on average, earnings per share has increased by 71% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. Ankündigung • May 09
China Automotive Systems, Inc. to Report Q1, 2024 Results on May 14, 2024 China Automotive Systems, Inc. announced that they will report Q1, 2024 results Pre-Market on May 14, 2024 Reported Earnings • Mar 28
Full year 2023 earnings released: EPS: US$1.25 (vs US$0.69 in FY 2022) Full year 2023 results: EPS: US$1.25 (up from US$0.69 in FY 2022). Revenue: US$576.4m (up 8.8% from FY 2022). Net income: US$37.7m (up 78% from FY 2022). Profit margin: 6.5% (up from 4.0% in FY 2022). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 83% per year but the company’s share price has fallen by 13% per year, which means it is significantly lagging earnings. Ankündigung • Mar 28
China Automotive Systems, Inc. Provides Revenue Guidance for the Fiscal Year 2024 China Automotive Systems, Inc. provided revenue guidance for the fiscal year 2024. For the period, the company expects revenue to be $605.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Ankündigung • Mar 16
China Automotive Systems, Inc. to Report Q4, 2023 Results on Mar 28, 2024 China Automotive Systems, Inc. announced that they will report Q4, 2023 results Pre-Market on Mar 28, 2024 Valuation Update With 7 Day Price Move • Jan 22
Investor sentiment improves as stock rises 17% After last week's 17% share price gain to US$3.70, the stock trades at a trailing P/E ratio of 3.6x. Average trailing P/E is 17x in the Auto Components industry in the US. Total loss to shareholders of 45% over the past three years. Reported Earnings • Nov 15
Third quarter 2023 earnings released: EPS: US$0.31 (vs US$0.24 in 3Q 2022) Third quarter 2023 results: EPS: US$0.31 (up from US$0.24 in 3Q 2022). Revenue: US$137.5m (flat on 3Q 2022). Net income: US$9.49m (up 27% from 3Q 2022). Profit margin: 6.9% (up from 5.4% in 3Q 2022). Over the last 3 years on average, earnings per share has increased by 90% per year but the company’s share price has remained flat, which means it is significantly lagging earnings. Ankündigung • Nov 11
China Automotive Systems, Inc. Reiterates Revenue Guidance for the Year 2023 China Automotive Systems, Inc. reiterated revenue guidance for the year 2023. The company reiterates its revenue guidance of $560 million for the full year 2023. This target is based on the company's current views on operating and market conditions, which are subject to change. Ankündigung • Nov 04
China Automotive Systems, Inc. to Report Q3, 2023 Results on Nov 10, 2023 China Automotive Systems, Inc. announced that they will report Q3, 2023 results Pre-Market on Nov 10, 2023 New Risk • Oct 25
New minor risk - Market cap size The company's market capitalization is less than US$100m. Market cap: US$99.0m This is considered a minor risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. This is currently the only risk that has been identified for the company. Reported Earnings • Aug 13
Second quarter 2023 earnings released: EPS: US$0.35 (vs US$0.31 in 2Q 2022) Second quarter 2023 results: EPS: US$0.35 (up from US$0.31 in 2Q 2022). Revenue: US$137.4m (up 8.1% from 2Q 2022). Net income: US$10.5m (up 11% from 2Q 2022). Profit margin: 7.6% (up from 7.4% in 2Q 2022). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 96% per year but the company’s share price has only increased by 20% per year, which means it is significantly lagging earnings growth. Ankündigung • Aug 12
China Automotive Systems, Inc. Reiterates Revenue Guidance for the Full Year 2023 China Automotive Systems, Inc. reiterated revenue guidance for the full year 2023. The company reiterated revenue guidance for the full fiscal year 2023 of $560.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change. Ankündigung • Aug 04
China Automotive Systems, Inc. to Report Q2, 2023 Results on Aug 11, 2023 China Automotive Systems, Inc. announced that they will report Q2, 2023 results Pre-Market on Aug 11, 2023 Ankündigung • Jul 15
China Automotive Systems, Inc., Annual General Meeting, Aug 30, 2023 China Automotive Systems, Inc., Annual General Meeting, Aug 30, 2023, at 09:00 China Standard Time. Location: the Second Floor Meeting Room, D8 Henglong Building Optics Valley Software Park, No. 1 Guanshan First Avenue Wuhan City Hebei Province China Agenda: To elect five directors of the Company, to hold office until the 2024 annual meeting of stockholders and until their successors are elected and qualified; to approve an advisory (non-binding) proposal concerning the Company’s named executive officer compensation program; to approve an advisory (non-binding) vote concerning the frequency of holding future advisory votes on executive compensation; and to transact such other business as may properly come before the meeting or any adjournments or postponements thereof. Ankündigung • May 13
China Automotive Systems, Inc. Reiterates Revenue Guidance for the Year 2023 China Automotive Systems, Inc. reiterated revenue guidance for the year 2023. The company reiterated revenue guidance for the full fiscal year 2023 of $560.0 million. Reported Earnings • May 12
First quarter 2023 earnings: EPS exceeds analyst expectations First quarter 2023 results: EPS: US$0.23 (up from US$0.002 loss in 1Q 2022). Revenue: US$142.2m (up 4.3% from 1Q 2022). Net income: US$6.82m (up US$6.88m from 1Q 2022). Profit margin: 4.8% (up from 0% in 1Q 2022). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 92%. Revenue is forecast to grow 5.8% p.a. on average during the next 2 years, compared to a 15% growth forecast for the Auto Components industry in the US. Over the last 3 years on average, earnings per share has increased by 85% per year but the company’s share price has only increased by 36% per year, which means it is significantly lagging earnings growth. Ankündigung • May 06
China Automotive Systems, Inc. to Report Q1, 2023 Results on May 12, 2023 China Automotive Systems, Inc. announced that they will report Q1, 2023 results at 9:30 AM, US Eastern Standard Time on May 12, 2023 Buying Opportunity • May 03
Now 27% undervalued after recent price drop Over the last 90 days, the stock is down 46%. The fair value is estimated to be US$6.33, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 11% over the last 3 years. Earnings per share has grown by 63%. Revenue is forecast to grow by 12% in 2 years. Earnings is forecast to decline by 8.3% in the next 2 years. Valuation Update With 7 Day Price Move • May 01
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to US$5.30, the stock trades at a forward P/E ratio of 11x. Average forward P/E is 16x in the Auto Components industry in the US. Total returns to shareholders of 198% over the past three years. Buying Opportunity • Apr 06
Now 23% undervalued after recent price drop Over the last 90 days, the stock is down 15%. The fair value is estimated to be US$6.35, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 11% over the last 3 years. Earnings per share has grown by 63%. Revenue is forecast to grow by 12% in 2 years. Earnings is forecast to decline by 8.3% in the next 2 years. Valuation Update With 7 Day Price Move • Apr 06
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to US$5.08, the stock trades at a forward P/E ratio of 11x. Average forward P/E is 16x in the Auto Components industry in the US. Total returns to shareholders of 197% over the past three years. Reported Earnings • Mar 31
Full year 2022 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2022 results: EPS: US$0.69 (up from US$0.36 in FY 2021). Revenue: US$529.6m (up 6.3% from FY 2021). Net income: US$21.2m (up 92% from FY 2021). Profit margin: 4.0% (up from 2.2% in FY 2021). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 1.8%. Earnings per share (EPS) exceeded analyst estimates by 11%. Over the last 3 years on average, earnings per share has increased by 63% per year but the company’s share price has only increased by 46% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Mar 13
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to US$6.15, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 15x in the Auto Components industry in the US. Total returns to shareholders of 266% over the past three years. Buying Opportunity • Feb 06
Now 24% undervalued Over the last 90 days, the stock is up 96%. The fair value is estimated to be US$10.54, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 10% over the last 3 years. Earnings per share has grown by 49%. Revenue is forecast to grow by 6.0% in a year. Earnings is forecast to decline by 29% in the next year. Valuation Update With 7 Day Price Move • Jan 25
Investor sentiment improves as stock rises 15% After last week's 15% share price gain to US$7.47, the stock trades at a forward P/E ratio of 14x. Average forward P/E is 13x in the Auto Components industry in the US. Total returns to shareholders of 168% over the past three years. Valuation Update With 7 Day Price Move • Dec 06
Investor sentiment improved over the past week After last week's 27% share price gain to US$7.86, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 13x in the Auto Components industry in the US. Total returns to shareholders of 102% over the past three years. Valuation Update With 7 Day Price Move • Nov 21
Investor sentiment improved over the past week After last week's 25% share price gain to US$5.62, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 12x in the Auto Components industry in the US. Total returns to shareholders of 78% over the past three years. Price Target Changed • Nov 16
Price target increased to US$7.00 Up from US$6.00, the current price target is provided by 1 analyst. New target price is 68% above last closing price of US$4.16. Stock is up 6.1% over the past year. The company is forecast to post earnings per share of US$0.62 for next year compared to US$0.36 last year. Board Change • Nov 16
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 2 experienced directors. 3 highly experienced directors. Independent Director Tong Kooi Teo was the last director to join the board, commencing their role in 2019. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Reported Earnings • Nov 16
Third quarter 2022 earnings: EPS and revenues exceed analyst expectations Third quarter 2022 results: EPS: US$0.29 (up from US$0.01 loss in 3Q 2021). Revenue: US$137.2m (up 27% from 3Q 2021). Net income: US$8.90m (up US$9.22m from 3Q 2021). Profit margin: 6.5% (up from net loss in 3Q 2021). The move to profitability was driven by higher revenue. Revenue exceeded analyst estimates by 14%. Earnings per share (EPS) also surpassed analyst estimates significantly. Revenue is forecast to grow 3.3% p.a. on average during the next 2 years, compared to a 12% growth forecast for the Auto Components industry in the US. Over the last 3 years on average, earnings per share has increased by 53% per year but the company’s share price has only increased by 9% per year, which means it is significantly lagging earnings growth. Seeking Alpha • Sep 26
China Automotive Systems: 3 Factors Undergird Our Bullish Rating Summary
Three factors undergird our bullish rating of the maker of parts and systems for the automotive industry.
China Automotive reported a healthy second quarter spurring higher trading volume and spurring the share price significantly higher.
This remains a high risk investment because a lot depends on economic and political issues but insiders owning over 50% is reason to make the future a good drive.
China Automotive Systems, Inc (CAAS) regained its bullish backing after the share price languished in the $2.60 range since December '21. Two years ago, we were enthusiastic about China Automotive for those with a high-risk tolerance; we are again bullish today. Three factors undergird our strong buy rating. But first, the backstory.
The Company
China Automotive Systems, Inc designs, manufactures and markets primarily to OEMs. Products include rack and pinion power steering gears for cars and light and heavy-duty vehicles; power steering parts for light-duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronic and hydraulic power steering systems and parts. China Automotive sells automotive parts in North America and Brazil, motors, integrated electromechanical systems, and polymer materials. The company was incorporated in 1999 and is headquartered in Jingzhou, the People's Republic of China.
Customers (CSIMarket)
The Industry
China remains under lockdown threats longer than any other Big Power. The hardnosed response to minimal outbreaks contributed to worldwide supply chain problems and global economic slowdowns China, Russia, America, and Europe are forecast to slow from 6.1% growth last year to 3.2% in 2022. Car production in China tumbled during most months in 2021, exacerbated by the chip shortage. December was strong. The production has been spotty throughout 2022. In August, China's stocks finished at four-months lows. The Yuan hit 28-months lows. This chart shows China's car production:
Car Production (Trading Economics)
Three Signs of Recovery
Our first factor for liking China Automotive as a potential investment opportunity is the return to the workplace in China giving their consumers money in their pockets to spend again. There has been some recovery in late 2022 in China's economy. Lockdowns are sporadic. By August '22, China's jobless rate is the lowest in 7 months. Retail sales are up the most and numbers are beating forecasts. China's consumers might start buying cars again after they return to work and trade with the U.S. is recovering.
Moreover, despite the political tensions, the Office of the U.S. Trade Representative reminds us, "China is currently our largest goods trading partner… The U.S. goods trade deficit with China was +$310B in 2020." Fitch Ratings reports that Chinese automakers are receiving government stimulus packages to up the production of vehicles and parts and the crisis in chip shortages is easing.
Fitch's takeaway from all the signs is that vehicle and parts production and sales might improve Y/Y beginning with data coming out in the Fall. It appears as the Chinese government is ready to resume favorable treatment of its auto industry which spurred a 34.2% growth in 2009.
The second factor brightening our outlook is the upward bound movement of CAAS shares. They are up 12.17% for the year. Short interest is 0.52%. Trading volume has taken a healthy bounce:
Trading Volume Spurts (FinanceCharts.com)
Strong financials reported for the Q2 '22 earnings report last August is the third contributing factor to our bullish rating. Reported revenue for the quarter was +5.5% Y/Y. The next report date is November 11, '22, when, in our opinion, the earnings per share will be around five cents compared to -0.01 in Q3 '21.
We expect the average price target to top $5.50 over the next 12 months if political and public health issues no longer disrupt economic activity; that is more than a 30% increase from the current share price. The PE is 9.45 since the recent runup in the share price; it was over 12 on September 21 and as high as 19 during the year. 54% of the shares are reportedly held by insiders; that is a big amount but not unusual for Chinese companies.
Quant & Factor Ratings (Seeking Alpha)
China Automotive Systems has a small debt-to-equity ratio of 14.6%, down from 20.6% over five years. Its debt is $48.5M and its equity is $329.7M. The debt is covered by operating cash flow. Cash and investments totaled $112.4M; receivables top $203M.
Debt is no problem with the company being highly liquid. Management announced in April '22 the approval for the repurchase of up to $5M of outstanding shares through April '23 up to $4 per share. 200K were repurchased by the time of the Q2 earnings report release. Meanwhile, the company cut real estate holdings by 5.4% because of underperformance. Gross margin popped to ~18% from 13.1% because higher margin products sold more this past quarter. Valuation Update With 7 Day Price Move • Sep 02
Investor sentiment improved over the past week After last week's 23% share price gain to US$4.26, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 12x in the Auto Components industry in the US. Total returns to shareholders of 135% over the past three years. Major Estimate Revision • Aug 19
Consensus EPS estimates increase by 700% The consensus outlook for earnings per share (EPS) in 2022 has improved. 2022 revenue forecast increased from US$492.8m to US$515.6m. EPS estimate increased from US$0.05 to US$0.40 per share. Net income forecast to shrink 22% next year vs 40% growth forecast for Auto Components industry in the US . Consensus price target of US$6.00 unchanged from last update. Share price rose 14% to US$3.50 over the past week. Board Change • Aug 16
Insufficient new directors No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 2 experienced directors. 3 highly experienced directors. Independent Director Tong Kooi Teo was the last director to join the board, commencing their role in 2019. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Price Target Changed • Apr 27
Price target increased to US$7.00 Up from US$6.00, the current price target is provided by 1 analyst. New target price is 152% above last closing price of US$2.78. Stock is down 39% over the past year. The company is forecast to post earnings per share of US$0.33 for next year compared to US$0.36 last year. Major Estimate Revision • Apr 06
Consensus EPS estimates fall by 30% The consensus outlook for earnings per share (EPS) in 2022 has deteriorated. 2022 revenue forecast decreased from US$525.7m to US$509.5m. EPS estimate also fell from US$0.47 per share to US$0.33 per share. Net income forecast to shrink 7.1% next year vs 26% growth forecast for Auto Components industry in the US . Consensus price target of US$7.00 unchanged from last update. Share price fell 4.4% to US$3.05 over the past week. Reported Earnings • Mar 31
Full year 2021 earnings: EPS and revenues exceed analyst expectations Full year 2021 results: EPS: US$0.36 (up from US$0.16 loss in FY 2020). Revenue: US$498.0m (up 19% from FY 2020). Net income: US$11.1m (up US$16.0m from FY 2020). Profit margin: 2.2% (up from net loss in FY 2020). The move to profitability was driven by higher revenue. Revenue exceeded analyst estimates by 2.6%. Earnings per share (EPS) also surpassed analyst estimates by 38%. Over the next year, revenue is forecast to grow 5.6%, compared to a 511% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has increased by 15% per year but the company’s share price has fallen by 2% per year, which means it is significantly lagging earnings. Valuation Update With 7 Day Price Move • Mar 16
Investor sentiment improved over the past week After last week's 17% share price gain to US$2.88, the stock trades at a forward P/E ratio of 7x. Average forward P/E is 10x in the Auto Components industry in the US. Total loss to shareholders of 26% over the past three years. Valuation Update With 7 Day Price Move • Nov 30
Investor sentiment deteriorated over the past week After last week's 15% share price decline to US$3.16, the stock trades at a forward P/E ratio of 8x. Average forward P/E is 13x in the Auto Components industry in the US. Total returns to shareholders of 32% over the past three years. Reported Earnings • Nov 13
Third quarter 2021 earnings released: US$0.01 loss per share (vs US$0.076 profit in 3Q 2020) The company reported a poor third quarter result with weaker earnings, revenues and control over costs. Third quarter 2021 results: Revenue: US$108.2m (down 5.4% from 3Q 2020). Net loss: US$317.0k (down 113% from profit in 3Q 2020). Over the last 3 years on average, earnings per share has increased by 70% per year but the company’s share price has only increased by 24% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Nov 12
Investor sentiment improved over the past week After last week's 16% share price gain to US$4.21, the stock trades at a forward P/E ratio of 11x. Average forward P/E is 13x in the Auto Components industry in the US. Total returns to shareholders of 101% over the past three years. Valuation Update With 7 Day Price Move • Aug 19
Investor sentiment deteriorated over the past week After last week's 17% share price decline to US$3.45, the stock trades at a forward P/E ratio of 9x. Average forward P/E is 13x in the Auto Components industry in the US. Total loss to shareholders of 15% over the past three years. Reported Earnings • Aug 13
Second quarter 2021 earnings released: EPS US$0.10 (vs US$0.13 loss in 2Q 2020) The company reported a strong second quarter result with improved earnings, revenues and profit margins. Second quarter 2021 results: Revenue: US$120.6m (up 45% from 2Q 2020). Net income: US$3.20m (up US$7.30m from 2Q 2020). Profit margin: 2.7% (up from net loss in 2Q 2020). The move to profitability was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 94% per year but the company’s share price has only increased by 2% per year, which means it is significantly lagging earnings growth. Reported Earnings • May 13
First quarter 2021 earnings released: EPS US$0.10 (vs US$0.001 in 1Q 2020) The company reported a strong first quarter result with improved earnings, revenues and profit margins. First quarter 2021 results: Revenue: US$130.3m (up 77% from 1Q 2020). Net income: US$3.21m (up US$3.16m from 1Q 2020). Profit margin: 2.5% (up from 0.1% in 1Q 2020). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 94% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Reported Earnings • Apr 02
Full year 2020 earnings released: US$0.16 loss per share (vs US$0.32 profit in FY 2019) The company reported a poor full year result with weaker earnings, revenues and control over costs. Full year 2020 results: Revenue: US$417.6m (down 3.2% from FY 2019). Net loss: US$4.98m (down 150% from profit in FY 2019). Over the last 3 years on average, earnings per share has increased by 96% per year but the company’s share price has only increased by 8% per year, which means it is significantly lagging earnings growth.