China Automotive Systems Reports 77.8% EPS Growth in the Third Quarter of 2025 and Raises Full Year Guidance

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 third quarter and nine months ended September 30, 2025.Third Quarter 2025 HighlightsNet sales rose 17.7% year-over-year to $193.2 million from $164.2 million in the third quarter of 2024. Net sales in North America climbed 77.3% and sales in Brazil grew 30.5% higher year-over-year. Gross profit increased by 26.6% year-over-year to $33.4 million from $26.4 million in the third quarter of 2024; gross profit margin was 17.3% in the third quarter of 2025 compared with 16.0% in last year's third quarter. Income from operations increased by 25.3% year-over-year to $13.9 million. Net income attributable to parent company's common shareholders increased 75.6% to $9.7 million from $5.5 million in the third quarter of 2024. Diluted earnings per share attributable to parent company's common shareholders increased by 77.8% to $0.32 compared with $0.18 in the third quarter of 2024.First Nine Months of 2025 HighlightsNet sales grew by 16.1% year-over-year to $536.5 million, compared to $462.2 million in the first nine months of 2024. Gross profit increased by 16.0% year-over-year to $92.5 million, compared to $79.7 million in the first nine months of 2024; gross profit margin was 17.2% in the first nine months of 2025 and 2024. Income from operations rose by 12.6% year-over-year to $35.5 million compared to $31.6 million in the first nine months of 2024. Net income attributable to parent company's common shareholders increased to $24.4 million from $20.9 million in the first nine months of 2024. Diluted earnings per share attributable to parent company's common shareholders rose by 17.4% to $0.81 compared with $0.69 in the first nine months of 2024. Cash, cash equivalents and short-term investments were $167.3 million, or approximately $5.54 per share, as of September 30, 2025.Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "We continued to grow our sales, gross profit, net profit and cash flow in the third quarter of 2025. We had increased sales across the board in the third quarter and first nine months of the 2025 period, except for sales to Chery Auto, which demonstrated the strength and breadth of our product portfolio.""We continued to transition to more technology-focused advanced steering products. In the third quarter of 2025, based on our iRCB's (intelligent electro-hydraulic circulating ball power steering), performance and cost-efficiency, new orders in July, 2025 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 and has begun mass production in China. By optimizing energy consumption, iRCB products are projected to reduce vehicle operational costs creating substantial economic value for customers.""The high quality and high performance of our steering products have allowed us to become a tier-1 supplier of advanced steering systems to large global OEM customers in North America, Europe, Asia and South America. International sales have become our growth engine as we continue to expand our customer base and enhance our sales and profits. In the third quarter of 2025, we won our first R-EPS product order from a large, well-known European automaker. This order, with annual sales expected to exceed $100 million, will start mass production by 2027 and power multiple new models. Subsequent to the third quarter of 2025, we launched our active rear-wheel steering which adds to our ADAS capabilities.""During the third quarter of 2025, we re-domiciled CAAS to be a Cayman Islands company. Shares continue to be listed under the trading symbol 'CAAS'. We believe this move will provide cost savings and added flexibility to enhance shareholder value over the long term."Mr. Jie Li, Chief Financial Officer of CAAS, commented, "Maintaining a strong balance sheet and financial resources are our highest priorities. Our North and South American sales grew in the third quarter of 2025, and we expect to enhance our organizational structure to capture more future international market opportunities. Cash, cash equivalents and short-term investments were $167.3 million and net working capital was $173.4 million."Third Quarter of 2025Net sales increased by 17.7% year-over-year to $193.2 million, compared to $164.2 million in the third quarter of 2024. CAAS's subsidiary, Henglong, continued to increase net sales by 7.7% year-over-year to $88.8 million in the large market for Chinese passenger vehicles. The Jiulong subsidiary's sales to the domestic commercial vehicle steering market rose by 44.4% to $24.9 million, compared with $17.2 million for the third quarter of 2024. International sales of CAAS steering systems were robust. Sales to North American customers increased by 77.3% to $33.1 million, compared to $18.7 million in the third quarter of 2024. North American sales increased primarily due to improved demand by one customer. Sales in Brazil were 30.5% higher in the third quarter of 2025 to $18.6 million from $14.3 million in the third quarter of 2024.Gross profit grew by 26.6% year-over-year to $33.4 million from $26.4 million in the third quarter of 2024. Gross profit margin increased to 17.3% in the third quarter of 2025, consistent with the second quarter of 2025, but up from 16.0% in the third quarter of 2024. The increase in gross profit margin was mainly due to a change in product mix with greater sales of relatively higher-margin products.Gain on other sales was $1.8 million in the third quarter of 2025, compared to $0.6 million in the third quarter of 2024. The increase in gain on other sales was mainly due to higher sales of materials.Selling expenses increased to $6.3 million in the third quarter of 2025, compared to $4.4 million in the third quarter of 2024, primarily due to an increase in salaries and wages, and a rise in marketing expenses. Selling expenses represented 3.3% of net sales in the third quarter of 2025, compared to 2.7% in the third quarter of 2024.General and administrative expenses ("G&A expenses") decreased to $4.4 million, compared to $5.1 million in the third quarter of 2024, primarily due to decreased consulting fees and office expenses. G&A expenses represented 2.3% of net sales in the third quarter of 2025, compared to 3.1% of net sales in the third quarter of 2024.Research and development expenses ("R&D expenses") increased to $10.4 million, compared to $6.4 million in the third quarter of 2024, primarily due to an increase in R&D activities. R&D expenses represented 5.4% of net sales in the third quarter of 2025, compared to 3.9% in the third quarter of 2024. Research and development programs include but were not limited to electric power and hydraulic steering systems, automotive intelligence and software technologies, automobile electronics, high polymer materials, and manufacturing technologies.Other income was $1.3 million for the third quarter of 2025 which was stable with $1.3 million for the three months ended September 30, 2024.Income from operations rose 25.3% to $13.9 million in the third quarter of 2025, from $11.1 million in the third quarter of 2024. The increase was primarily due to higher sales and gross profit.Interest expense was $0.5 million in the third quarter of 2025, compared to $0.3 million in the third quarter of 2024.Net financial income was $0.1 million in the third quarter of 2025, compared to net financial expense of $0.2 million in the third quarter of 2024. The increase in net financial income was primarily due to an increase in the foreign exchange gain due to foreign exchange volatility.Income before income tax expenses and equity in earnings of affiliated companies was $14.9 million in the third quarter of 2025, compared to income before income tax expenses and equity in earnings of affiliated companies of $11.9 million in the third quarter of 2024. The change in income before income tax expenses and equity in earnings of affiliated companies was mainly due to higher income from operations in the third quarter of 2025 compared with income in last year's same quarter.Income tax expense was $3.2 million in the third quarter of 2025, compared to $4.0 million for the third quarter of 2024. The decrease in income tax expense was primarily due to a one-time income tax expense settlement for the subsidiaries in the PRC in last year's same quarter.Net income attributable to parent company's common shareholders was $9.7 million in the third quarter of 2025, compared to net income attributable to parent company's common shareholders of $5.5 million in the third quarter of 2024. Diluted earnings per share was $0.32 in the third quarter of 2025, compared to $0.18 per share in the third quarter of 2024.The weighted average number of diluted common shares outstanding was 30,170,702 in the third quarter of 2025, compared to 30,185,702 in the third quarter of 2024.Nine Months of 2025 Net sales increased by 16.1% year-over-year to $536.5 million in the first nine months of 2025, compared to $462.2 million in the nine months of 2024 primarily due to increased sales volume. Nine-month's gross profit increased by 16.0% year-over-year to $92.5 million from $79.7 million in the corresponding period last year. Nine-month gross profit margin was 17.2%, which was stable with the 17.2% in the first nine months of 2024. The gain on other sales was $3.4 million in the first nine months of 2025, compared to $2.8 million in the corresponding period last year. Income from operations increased by 12.6% year-over-year to $35.5 million in the first nine months of 2025 from $31.6 million in the first nine months of 2024.Net income attributable to parent company's common shareholders was $24.4 million in the first nine months of 2025, compared to net income attributable to parent company's common shareholders of $20.9 million in the corresponding period in 2024. Diluted earnings per share in the first nine months of 2025 were $0.81, compared to diluted earnings per share of $0.69 in the first nine months of 2024.Balance SheetCash, cash equivalents and short-term investments were $167.3 million, or approximately $5.54 per share, as of September 30, 2025. Net working capital was $173.4 million. Total accounts receivable including notes receivable were $298.2 million, accounts payable including notes payable were $316.3 million, and short-term loans were $81.2 million. Total parent company stockholders' equity was $378.8 million as of September 30, 2025, compared to $349.6 million as of December 31, 2024.Business OutlookManagement has raised revenue guidance for the full fiscal year 2025 to $730.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

China Automotive Systems Reports 77.8% EPS Growth in the Third Quarter of 2025 and Raises Full Year Guidance

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