On August 13, 2024, China Automotive Systems Inc (CAAS, Financial) released its 8-K filing detailing its unaudited financial results for the second quarter and first six months ended June 30, 2024. China Automotive Systems Inc is a leading supplier of power steering systems and components to China's automotive industry, offering a wide range of products including rack and pinion power steering, integral power steering, electronic power steering, and manual steering systems.
Second Quarter 2024 Highlights
China Automotive Systems Inc (CAAS, Financial) reported a 15.4% year-over-year increase in net sales, reaching $158.6 million in Q2 2024 compared to $137.4 million in Q2 2023. The growth was driven by a significant 33.7% increase in sales of Electric Power Steering (EPS) products, which now account for 35.1% of total net sales.
Gross profit for the quarter grew by 29.0% year-over-year to $29.3 million, with gross margin improving to 18.5% from 16.5% in the same period last year. This improvement was attributed to changes in the product mix and enhanced cost management.
Income Statement Analysis
Income from operations rose by 38.7% to $10.8 million in Q2 2024, up from $7.8 million in Q2 2023. However, net income attributable to parent company’s common shareholders decreased to $7.1 million from $10.5 million in the same quarter last year, primarily due to foreign exchange volatility and increased income tax expenses.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $158.6 million | $137.4 million |
| Gross Profit | $29.3 million | $22.7 million |
| Income from Operations | $10.8 million | $7.8 million |
| Net Income Attributable to Shareholders | $7.1 million | $10.5 million |
| Diluted EPS | $0.24 | $0.35 |
First Six Months of 2024 Highlights
For the first six months of 2024, net sales increased by 6.6% year-over-year to $298.0 million, driven by higher sales of EPS systems. Gross profit for the period rose by 20.4% to $53.4 million, with a gross margin of 17.9% compared to 15.9% in the first half of 2023. Income from operations increased by 31.7% to $20.5 million.
Net income attributable to parent company’s common shareholders for the first six months was $15.4 million, down from $17.3 million in the same period last year. Diluted earnings per share were $0.51, compared to $0.57 in the first half of 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, China Automotive Systems Inc (CAAS, Financial) reported total cash and cash equivalents, and pledged cash of $148.4 million. Total accounts receivable were $288.1 million, and total accounts payable were $254.0 million. The company maintained a strong balance sheet with total parent company stockholders' equity of $362.9 million.
Management Commentary
"We are pleased to report strong top line growth and accelerating margin expansion. Sales growth was led by an increase of 33.7% in sales of Electric Power Steering (EPS) products in the second quarter of 2024, which now accounts for one-third of our total sales," said Mr. Qizhou Wu, Chief Executive Officer of CAAS.
"We maintained a strong balance sheet with cash and cash equivalents plus pledged cash of $148.4 million, working capital of $190.0 million and positive cash flow from operations in the first six months of 2024," commented Mr. Jie Li, Chief Financial Officer of CAAS.
Business Outlook
Management has reiterated its revenue guidance for the full year 2024 of $605.0 million, based on the company's current views on operating and market conditions.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from China Automotive Systems Inc for further details.
