China Automotive Systems Reports Record Earnings Per Share and Net Sales in 2025

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 fourth quarter and the audited results for the fiscal year ended December 31, 2025.Fourth Quarter 2025 HighlightsNet sales increased by 21.4% year-over-year to $229.2 million Gross profit increased by 79.8% to $53.0 million from $29.5 million. Gross margin of 23.1% compared to 15.6% in the fourth quarter of 2024 Operating income grew 108.0% to $18.1 million, compared with $8.7 million in the fourth quarter of 2024 Net income attributable to parent company's common shareholders was $18.4 million, or diluted net income per share of $0.61, compared to net income of $9.1 million, or diluted net income per share of $0.30 in the fourth quarter of 2024.Fiscal Year 2025 HighlightsNet sales increased by 17.6% to an annual record of $765.7 million compared to $650.9 million in 2024; Net sales of EPS product grew by 25.5% Gross profit increased by 33.2% to $145.5 million compared to $109.2 million in 2024. Gross margin increased to 19.0%, compared with 16.8% in 2024 Operating income increased by 33.2% to $53.6 million from $40.3 million in 2024 Diluted net income per share increased by 43.4% to a record $1.42 in 2025 compared to $0.99 in 2024 Total cash and cash equivalents, pledged cash, short-term investments and long-term time deposit were $256.7 million at year end Net cash flow provided by operating activities was $111.6 million in 2025, compared with $9.8 million in 2024 Capex was $37.2 million, compared with $43.7 million in 2024.Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "The 2025 year was marked by higher sales growth, improved profitability, strengthened finances, higher cash flow from operations and organizational changes. Our traditional hydraulic steering products grew by 12.6% in 2025 as our more advanced electric power steering ("EPS") grew by 25.5%. Domestically, our steering product sales benefitted as Chinese branded vehicles continued to experience higher sales and capture more market share.""Our strategy of selling a broad portfolio of steering products into multiple markets resulted in a range of sales growth both domestically and internationally. In our major market segments, we achieved higher sales in all except for sales to Chery Auto. Our operations in Brazil reported stronger sales growth and demand in North America improved. The high quality and performance enhancements of our steering products provide the impetus to be a tier-1 supplier to large global OEM customers in North America, Europe, Asia and South America.""Improved profitability reflected the ongoing success of our transition to higher technology-focused steering products and improved manufacturing activities. In 2025, our Jingzhou Henglong subsidiary won its first R-EPS product order from a large, well-known European automobile producer. Also, Shashi Jiulong's L2+ standard electro-hydraulic steering system entered mass production in 2025. This system utilizes cutting-edge electro-hydraulic control technology; a power steering system used in heavy-duty vehicles that utilizes both hydraulic power and electronic controls to assist with steering. The Company also launched its active rear-wheel steering using its ball screw and nut mechanisms to provide the ability to adapt steering strategies to different vehicle speeds, boosting our ADAS capabilities. Another subsidiary, Hyoseong (Wuhan) Motion Mechatronics System Co. Ltd., finalized its new 115–platform steering motor production line, to support the CAAS eRCB commercial vehicle program. Our Hubei Henglong subsidiary entered into a strategic cooperation with KYB-UMW Sdn Bhd in Malaysia to develop a regional manufacturing and supply system for ASEAN markets. In 2025, our subsidiary, Shashi Jiulong Power Steering Gears Co., Ltd ("Shashi Jiulong"), won customer awards and accolades from two major vehicle OEM customers, Beiqi Foton Motor, and Shaanxi Automobile Heavy Truck.""In September 2025, we announced the completion of our merger to redomicile the Company as a Cayman Islands company. We believe this action will pave the way for CAAS to better position itself as a global company as this move enables us to shift resources and focus more on operations, product development and global sales. Part of our changes will include reporting sales and operational results on a six-month reporting cycle."Mr. Jie Li, Chief Financial Officer of CAAS, commented, "Our record sales and net profits generated much higher cash flow from operations and free cash flow in 2025. Cash and cash equivalents, pledged cash and short-term investments and long-term time deposit rose to $256.7 million at year end with net cash approaching $169.7 million. We look forward to reaping the savings, greater flexibility and benefits of our redomiciliation."Fourth Quarter of 2025In the fourth quarter of 2025, net sales increased by 21.4% to $229.2 million compared to $188.7 million in the same quarter of 2024. The net sales increase was mainly due to a change in the product mix and higher demand for passenger automobiles and commercial vehicles in the fourth quarter of 2025 compared to the fourth quarter of 2024. Additionally, export sales increased during the fourth quarter of 2025.Gross profit increased by 79.8% to $53.0 million from $29.5 million in the fourth quarter of 2024. Gross margin in the fourth quarter of 2025 rose to 23.1% compared to 15.6% in the fourth quarter of 2024, primarily due to changes in product mix.Selling expenses were $5.0 million in the fourth quarter of 2025, compared with $4.8 million in the fourth quarter of 2024. Selling expenses represented 2.2% of net sales in the fourth quarter of 2025, compared to 2.5% in the fourth quarter of 2024.General and administrative expenses ("G&A expenses") were $12.2 million in the fourth quarter of 2025, compared to $9.7 million in the same period in 2024. G&A expenses represented 5.3% of net sales in the fourth quarter of 2025, compared to 5.1% of net sales in the fourth quarter of 2024.Research and development expenses ("R&D expenses") were $17.8 million compared with $7.8 million in the fourth quarter of 2024. R&D expenses represented 7.8% of net sales in the fourth quarter of 2025, compared to 4.1% in the fourth quarter of 2024.Operating income was $18.1 million in the fourth quarter of 2025 compared to $8.7 million in the fourth quarter of 2024. Higher gross profit compared with the same period last year was the main driver.Interest expense was $0.5 million in the fourth quarter of 2025 compared with $1.1 million in the fourth quarter of 2024.Financial expense was $1.1 million in the fourth quarter of 2025 compared with financial income of $0.8 million in the fourth quarter of 2024.Income before income tax expenses and equity in earnings of affiliated companies increased by 121.0% to $19.4 million in the fourth quarter of 2025 compared to $8.8 million in the fourth quarter of 2024.Income tax expense was $1.4 million in the fourth quarter of 2025, compared to income tax benefit of $2.0 million in the fourth quarter of 2024.Net income attributable to parent company's common shareholders increased by 103.2% to $18.4 million in the fourth quarter of 2025 compared to net income attributable to parent company's common shareholders of $9.1 million in the fourth quarter of 2024. Diluted income per share was $0.61 in the fourth quarter of 2025, compared to diluted income per share of $0.30 in the fourth quarter of 2024.The weighted average number of diluted common shares outstanding was 30,170,702 compared to 30,180,947 in the fourth quarter of 2024.Fiscal Year 2025Net sales increased by 17.6% to an annual record of $765.7 million in 2025, compared to $650.9 million in 2024. This increase was mainly due to higher sales and production of passenger vehicles in China, increased vehicle export sales, and commercial vehicle sales in China increasing by approximately 10.9% year-over-year in 2025. Total sales of the Company's EPS systems increased by 25.5% year-over-year and sales of the traditional steering products increased by 12.6% year-over-year. Henglong's sales of passenger vehicle steering systems rose by 12.1% year-over-year to $365.3 million in 2025. Jiulong's sales of commercial vehicle steering systems increased by 28.9% year-over-year to $92.3 million. Brazil Henglong's net sales grew by 34.7% year-over-year to $68.7 million in 2025. Net sales to North American customers rose by 15.3% year-over-year in 2025 to $121.6 million. EPS sales represented 41.5% of total revenue in 2025 compared to 38.9% in 2024.Gross profit in 2025 increased by 33.2% year-over-year to $145.5 million compared to $109.2 million in 2024. The gross margin was 19.0% compared with 16.8% in 2024 mainly due to a change in product mix.Net gain on other sales in 2025 was $3.6 million compared to $4.3 million in 2024.Selling expenses rose by 15.9% year-over-year to $20.7 million in 2025 from $17.9 million in 2024, mainly due to an increase in marketing and office expenses offsetting lower other expenses. Selling expenses continued to represent 2.7% of net sales in 2025 and 2024.G&A expenses increased by 7.0% year-over-year to $29.7 million in 2025, compared to $27.7 million in 2024. G&A expenses represented 3.9% of net sales in 2025, compared to 4.3% of net sales in 2024. This expense increase was mainly due to higher personnel and other expenses.R&D expenses increased by 63.0% year-over-year to $45.1 million in 2025, compared to $27.6 million in 2024. Higher R&D expenses reflected increased personnel expenses due to an acceleration in R&D activities including more investment in traditional product upgrades, advancing EPS technologies and miscellaneous research expenses. R&D expenses were 5.9% of net sales in 2025, compared to 4.2% of net sales in 2024.Operating income increased by 33.2% year-over-year to $53.6 million in 2025, compared to $40.3 million in 2024. The increase in operating income was mainly due to higher sales and gross profit.Interest expense was $1.7 million in 2025, compared to $1.8 million in 2024.Net financial income was $2.4 million in 2025, compared to net financial expense of $0.09 million in 2024. This increase in financial income of $2.4 million was primarily due to an increase in foreign exchange gains due to foreign exchange volatility.Income before income tax expenses and equity in earnings of affiliated companies increased by 39.1% year-over-year to $61.4 million in 2025 compared with $44.1 million in 2024. The change was primarily due to higher operating income in 2025.Income tax expense was $11.6 million in 2025 compared to $5.9 million in 2024. This increase was mainly due to higher income before income tax expenses and equity in earnings of affiliated companies, and the effective tax rate in 2025.Net income attributable to parent company's common shareholders was a record $42.8 million in 2025 compared to $30.0 million in 2024. Diluted net income per share increased by 43.4% to $1.42 in 2025 compared to $0.99 in 2024.The weighted average number of diluted common shares outstanding was 30,170,702 in 2025 compared with 30,184,513 in 2024.Balance SheetAs of December 31, 2025, total cash and cash equivalents, pledged cash, short-term investments and long-term time deposit were $256.7 million. Total accounts receivable including notes receivable were $361.8 million. Accounts payable including notes payable were $350.3 million. Short-term bank loans were $81.3 million and long-term loans were $5.7 million. Total parent company stockholders' equity was $401.3 million as of December 31, 2025 compared to $349.6 million as of December 31, 2024. Net cash flow from operating activities was $111.3 million in 2025 compared to $9.8 million in 2024. Cash paid to acquire property, plant and equipment and land use rights was $37.2 million in 2025 compared to $43.7 million in 2024.Business OutlookManagement provides revenue guidance for the fiscal year 2026 of $810.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.Conference CallManagement will conduct a conference call on April 22, 2026 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 861648:Phone Number: +1-888-506-0062 (North America)Phone Number: +1-973-528-0011 (International)Mainland China Toll Free: +86-400-120-3199A replay of the call will be available on the Company's website under the investor relations section.

China Automotive Systems Reports Record Earnings Per Share and Net Sales in 2025

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