China Automotive Systems Reports Income From Operations Increased by 38.7% in the Second Quarter of 2024

Core Viewpoint - China Automotive Systems, Inc. reported strong financial performance for the second quarter and first six months of 2024, with significant increases in net sales, gross profit, and income from operations, driven by a notable rise in Electric Power Steering (EPS) product sales [2][3][4]. Financial Performance - Second Quarter 2024 Highlights - Net sales increased by 15.4% year-over-year to $158.6 million from $137.4 million in Q2 2023 [2]. - Gross profit rose by 29.0% year-over-year to $29.3 million, with gross margin improving to 18.5% from 16.5% [2][6]. - Income from operations increased by 38.7% to $10.8 million from $7.8 million in Q2 2023 [2][8]. - Net income attributable to common shareholders was $7.1 million, with diluted earnings per share of $0.24 [2][10]. - First Six Months of 2024 Highlights - Net sales grew by 6.6% year-over-year to $298.0 million from $279.7 million [3][11]. - Gross profit increased by 20.4% to $53.4 million, with gross margin at 17.9% compared to 15.9% in the same period last year [3][11]. - Income from operations rose by 31.7% to $20.5 million from $15.5 million [3][11]. - Net income attributable to common shareholders was $15.4 million, with diluted earnings per share of $0.51 [3][12]. Product Performance - Sales of EPS products surged by 33.7% in Q2 2024, now accounting for one-third of total sales [4][5]. - Traditional steering products saw a 7.5% increase in sales year-over-year to $103.0 million [5]. Market Context - Overall automobile sales in China increased by 6.1% year-over-year in the first half of 2024, with passenger car sales up by 6.3% and commercial vehicle sales by 4.9% [4]. - Domestic car sales rose by 1.4%, while Chinese vehicle exports increased by 30.5% [4]. Shareholder Returns - A special cash dividend of $0.80 per common share was declared for shareholders of record on July 30, 2024 [3][4]. Balance Sheet and Cash Flow - As of June 30, 2024, cash and cash equivalents, along with pledged cash, totaled $148.4 million [3][13]. - The company maintained a strong balance sheet with working capital of $190.0 million and positive cash flow from operations in the first half of 2024 [4][13].