China Automotive Systems Reports Income From Operations Increased by 20.2% in the Second Quarter of 2025

WUHAN, China, Aug. 13, 2025 /PRNewswire/ --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 second quarter and six months ended June 30, 2025.

Second Quarter 2025 Highlights

• Net sales rose 11.1% year-over-year to $176.2 million from $158.6 million in the second quarter of 2024.
• Sales in Brazil grew 49.4% year-over-year, representing 10.1% of total net sales.
• Gross profit increased by 4.2% year-over-year to $30.5 million from $29.3 million in the second quarter of 2024; gross profit margin was 17.3% in the second quarter of 2025.
• Income from operations increased by 20.2% year-over-year to $13.0 million, from income from operations of $10.8 million in the second quarter of 2024.
• Net income attributable to parent company's common shareholders increased 6.8% to $7.6 million from $7.1 million, in the second quarter of 2024.
• Diluted earnings per share attributable to parent company's common shareholders was $0.25 compared with $0.24 in the second quarter of 2024.

First Six Months of 2025 Highlights

• Net sales grew by 15.2% year-over-year to $343.3 million, compared to $298.0 million in the first six months of 2024.
• Gross profit increased by 10.8% year-over-year to $59.1 million, compared to $53.4 million in the first six months of 2024; gross profit margin was 17.2% in the first six months of 2025.
• Income from operations rose by 5.7% year-over-year to $21.6 million compared to income from operations of $20.5 million in the first six months of 2024.
• Net income attributable to parent company's common shareholders decreased to $14.7 million from $15.4 million in the first six months of 2024.
• Diluted earnings per share attributable to parent company's common shareholders was $0.49 compared with $0.51 in the first six months of 2024.
• Cash, cash equivalents and short-term investments were $135.3 million, or approximately $4.48 per share, as of June 30, 2025.

Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "We continued to grow our sales, gross profit, net profit and cashflow in the second quarter of 2025. Sales of our traditional steering products remained steady while sales of our Electric Power Steering ("EPS") products grew by 31.1% year over year in the second quarter of 2025. EPS sales have continuously increased and now represent 41.4% percent of our product sales in the second quarter of 2025."

"We continue to transition to more technology-focused advanced steering products. In the second quarter of 2025, based on our iRCB's (intelligent electro-hydraulic circulating ball power steering) performance and cost-efficiency, new orders in July 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. By optimizing energy consumption, iRCB products are projected to reduce vehicle operational costs creating substantial economic value."

"The high quality and high performance of our steering products have allowed us to become the tier-1 supplier 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 second 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 US$100 million, will start mass production by 2027 and power multiple new models. Our North and South American sales also grew in the second quarter of 2025, and we expect to enhance our organizational structure to capture more future international market opportunities."

Mr. Jie Li, Chief Financial Officer of CAAS, commented, "Maintaining a strong balance sheet and financial resources are among our highest priorities. Cash, cash equivalents and short-term investments were $135.3 million, working capital was $170.9 million, with net cash provided by operating activities of $49.1 million in the first six months of 2025. Our capital expenditures were $18.5 million in the first half of 2025 as we continue to invest in our future."

Second Quarter of 2025

Net sales increased by 11.1% year-over-year to $176.2 million, compared to $158.6 million in the second quarter of 2024. Net sales of traditional steering products and parts increased slightly year-over-year to $103.3 million in the second quarter of 2025. Net sales of EPS products rose 31.1% year-over-year to $72.9 million from $55.6 million for the same period in 2024. EPS product sales grew to 41.4% of the total net sales for the second quarter of 2025, compared to 35.1% for the same period in 2024. Our subsidiary, Jiulong's sales of commercial vehicle steering systems rose by 25.6% to $23.5 million, compared with $18.7 million for the second quarter of 2024. Sales to North American customers increased by 11.8% to $30.0 million, compared to $26.8 million in the second quarter of 2024. North American sales increased primarily due to improved demand by one customer. Sales in Brazil were 49.4% higher in the second quarter of 2025 to $17.9 million from $12.0 million in the second quarter of 2024.

Gross profit grew by 4.2% year-over-year to $30.5 million from $29.3 million in the second quarter of 2024. Gross profit margin decreased to 17.3% in the second quarter of 2025 from 18.5% in the second quarter of 2024. The decrease in gross profit margin was mainly due to an increase in tariffs and the product mix change from increased sales portion of relatively lower-margin products.

Gain on other sales was $0.5 million in the second quarter of 2025, compared to $1.7 million in the second quarter of 2024.

Selling expenses at $4.5 million in the second quarter of 2025 were consistent with the second quarter of 2024. Selling expenses represented 2.6% of net sales in the second quarter of 2025, compared to 2.9% in the second quarter of 2024.

General and administrative expenses ("G&A expenses") decreased to $5.4 million, compared to $7.4 million in the second quarter of 2024, primarily due to decreased business taxes and surcharges. G&A expenses represented 3.1% of net sales in the second quarter of 2025, compared to 4.7% of net sales in the second quarter of 2024.

Research and development expenses ("R&D expenses") were stable at $8.1 million in the second quarter of each year. R&D expenses represented 4.6% of net sales in the second quarter of 2025, compared to 5.2% in the second quarter of 2024. Research and development programs include but are 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 $1.1 million for the second quarter of 2025, compared to $1.7 million for the three months ended June 30, 2024.

Income from operations rose 20.2% to $13.0 million in the second quarter of 2025, from $10.8 million in the second quarter of 2024. The increase was primarily due to higher sales.

Interest expense was $0.3 million in the second quarter of 2025, compared to $0.2 million in the second quarter of 2024.

Net financial income was $1.3 million in the second quarter of 2025, compared to net financial expense of $0.7 million in the second quarter of 2024. The increase in net financial income was primarily due to an increase in the foreign exchange gain due to the foreign exchange volatility.

Income before income tax expenses and equity in earnings of affiliated companies was $15.1 million in the second quarter of 2025, compared to income before income tax expenses and equity in earnings of affiliated companies of $11.7 million in the second 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 second quarter of 2025 compared with income in last year's same quarter.

Income tax expense was $4.0 million in the second quarter of 2025, compared to $2.1 million for the second quarter of 2024. The increase in income tax expense was primarily due to a higher income before income tax expenses and a higher expected annual effective tax rate in 2025 based on the latest annual forecast as compared to 2024.

Net income attributable to parent company's common shareholders was $7.6 million in the second quarter of 2025, compared to net income attributable to parent company's common shareholders of $7.1 million in the second quarter of 2024. Diluted earnings per share was $0.25 in the second quarter of 2025, compared to $0.24 per share in the second quarter of 2024.

The weighted average number of diluted common shares outstanding was 30,170,702 in the second quarter of 2025, compared to 30,185,702 in the second quarter of 2024.

First Six Months of 2025

Net sales increased by 15.2% year-over-year to $343.3 million in the first six months of 2025, compared to $298.0 million in the first six months of 2024 primarily due to increased sales of EPS systems. Six-month gross profit increased by 10.8% year-over-year to $59.1 million from $53.4 million in the corresponding period last year. Six-month gross profit margin was 17.2% compared with 17.9% in the first six months of 2024. Gain on other sales was $1.6 million in the first six months of 2025, compared to $2.2 million in the corresponding period last year. Income from operations increased by 5.7% year-over-year to $21.6 million in the first six months of 2025 from $20.5 million in the first six months of 2024.

Net income attributable to parent company's common shareholders was $14.7 million in the first six months of 2025, compared to net income attributable to parent company's common shareholders of $15.4 million in the corresponding period in 2024. Diluted earnings per share in the first six months of 2025 were $0.49, compared to diluted earnings per share of $0.51 in the first six months of 2024.

Balance Sheet

Cash, cash equivalents and short-term investments were $135.3 million, or approximately $4.48 per share, as of June 30, 2025. Net working capital was $170.9 million. Total accounts receivable including notes receivable were $294.2 million, accounts payable including notes payable were $269.6 million and short-term loans were $71.9 million. Total parent company stockholders' equity was $366.4 million as of June 30, 2025, compared to $349.6 million as of December 31, 2024.

Business Outlook

Management has raised revenue guidance for the full fiscal year 2025 to $720.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Conference Call
Management will conduct a conference call on August 13th, 2025 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 489385:

Toll Free: 888-506-0062

International: 973-528-0011

China Toll Free: 86 400 120 3199

A replay of the call will be available on the Company's website in the investor relations section.

About China Automotive Systems, Inc.

Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through its sixteen Sino-foreign joint ventures and wholly owned subsidiaries. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 8 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Stellantis N.V. and Ford Motor Company in North America. For more information, please visit: .

Forward-Looking Statements

This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2025, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict, and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could result in delays in the shipment of products to our customers, increase costs and reduce revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.

For further information, please contact:

Jie Li
Chief Financial Officer
China Automotive Systems, Inc.

Kevin Theiss
Awaken Advisors
+1-212-510-8922

-Tables Follow –

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income

(In thousands of USD, except share and per share amounts)

Three Months Ended June 30,

2025

2024

Net product sales ($8,522 and $13,550 sold to related parties for the three months ended June
30, 2025 and 2024)

$

176,245

$

158,608

Cost of products sold ($7,771 and $7,689 purchased from related parties for the three months
ended June 30, 2025 and 2024)

145,698

129,306

Gross profit

30,547

29,302

Gain on other sales

455

1,720

Less: Operating expenses

Selling expenses

4,514

4,614

General and administrative expenses

5,412

7,418

Research and development expenses

8,092

8,184

Total operating expenses

18,018

20,216

Income from operations

12,984

10,806

Other income, net

1,060

1,735

Interest expense

(292)

(183)

Financial income/(expense), net

1,327

(690)

Income before income tax expenses and equity in earnings of affiliated companies

15,079

11,668

Less: Income taxes

4,049

2,108

Add: Equity in losses of affiliated companies

(658)

(805)

Net income

10,372

8,755

Less: Net income attributable to non-controlling interests

2,747

1,608

Accretion to redemption value of redeemable non-controlling interests

—

(7)

Net income attributable to parent company's common shareholders

$

7,625

$

7,140

Comprehensive income:

Net income

$

10,372

$

8,755

Other comprehensive income:

Foreign currency translation gain/(loss), net of tax

1,342

(2,846)

Comprehensive income

11,714

5,909

Less: Comprehensive income attributable to non-controlling interests

2,887

1,431

Accretion to redemption value of redeemable non-controlling interests

—

(7)

Comprehensive income attributable to parent company

$

8,827

$

4,471

Net income attributable to parent company's common shareholders per share -

Basic

$

0.25

$

0.24

Diluted

$

0.25

$

0.24

Weighted average number of common shares outstanding -

Basic

30,170,702

30,185,702

Diluted

30,170,702

30,185,702

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income

(In thousands of USD, except share and per share amounts)

Six Months Ended June 30,

2025

2024

Net product sales ($20,015 and $24,910 sold to related parties for the six months ended June 30,
2025 and 2024)

$

343,339

$

298,002

Cost of products sold ($15,546 and $14,657 purchased from related parties for the six months
ended June 30, 2025 and 2024)

284,207

244,631

Gross profit

59,132

53,371

Gain on other sales

1,606

2,234

Less: Operating expenses

Selling expenses

9,332

8,687

General and administrative expenses

12,977

12,965

Research and development expenses

16,805

13,496

Total operating expenses

39,114

35,148

Income from operations

21,624

20,457

Other income, net

3,001

4,138

Interest expense

(775)

(441)

Financial income/(expense), net

3,305

(702)

Income before income tax expenses and equity in earnings of affiliated companies

27,155

23,452

Less: Income taxes

6,986

3,851

Add: Equity in losses of affiliated companies

(1,342)

(1,582)

Net income

18,827

18,019

Less: Net income attributable to non-controlling interests

4,080

2,597

Accretion to redemption value of redeemable non-controlling interests

—

(15)

Net income attributable to parent company's common shareholders

$

14,747

$

15,407

Comprehensive income:

Net income

$

18,827

$

18,019

Other comprehensive income:

Foreign currency translation gain/(loss), net of tax

2,262

(3,194)

Comprehensive income

21,089

14,825

Less: Comprehensive income attributable to non-controlling interests

4,283

2,372

Accretion to redemption value of redeemable non-controlling interests

—

(15)

Comprehensive income attributable to parent company

$

16,806

$

12,438

Net income attributable to parent company's common shareholders per share -

Basic

$

0.49

$

0.51

Diluted

$

0.49

$

0.51

Weighted average number of common shares outstanding -

Basic

30,170,702

30,185,702

Diluted

30,170,702

30,185,702

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Balance Sheets
(In thousands of USD unless otherwise indicated)

June 30, 2025

December 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

$

102,194

$

56,961

Pledged cash

36,774

44,863

Accounts and notes receivable, net - unrelated parties

279,144

329,275

Accounts and notes receivable, net - related parties

15,064

14,224

Inventories

116,518

112,558

Other current assets

50,271

44,757

Total current assets

599,965

602,638

Non-current assets:

Property, plant and equipment, net

114,705

103,820

Land use rights, net

9,235

8,835

Long-term investments

61,876

64,332

Other non-current assets

57,935

70,954

Total assets

$

843,716

$

850,579

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term loans

$

71,946

$

72,566

Accounts and notes payable-unrelated parties

257,418

281,065

Accounts and notes payable-related parties

12,186

11,743

Accrued expenses and other payables

60,002

59,238

Other current liabilities

27,477

31,870

Total current liabilities

429,029

456,482

Long-term liabilities:

Other non-current liabilities

3,809

4,308

Total liabilities

$

432,838

$

460,790

Commitments and Contingencies

Stockholders' equity:

Common stock, $0.0001 par value – Authorized – 80,000,000 shares; Issued – 32,338,302 and
32,338,302 shares as of June 30, 2025 and December 31, 2024, respectively

$

3

$

3

Additional paid-in capital

69,656

69,656

Retained earnings-

Appropriated

13,668

12,180

Unappropriated

303,532

290,273

Accumulated other comprehensive income

(12,721)

(14,780)

Treasury stock –2,167,600 and 2,167,600 shares as of June 30, 2025 and December 31, 2024,
respectively

(7,763)

(7,763)

Total parent company stockholders' equity

366,375

349,569

Non-controlling interests

44,503

40,220

Total stockholders' equity

410,878

389,789

Total liabilities and stockholders' equity

$

843,716

$

850,579

China Automotive Systems, Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Cash Flows

(In thousands of USD unless otherwise indicated)

Six months Ended June 30,

2025

2024

Cash flows from operating activities:

Net income

$

18,827

$

18,019

Adjustments to reconcile net income from operations to net cash provided by operating activities:

Depreciation and amortization

8,267

9,868

(Reversal)/addition of credit losses

(159)

9

Equity in losses of affiliated companies

1,342

1,582

Impairment loss on property, plant and equipment

657

—

Loss on disposal of property, plant and equipment

580

773

(Increase)/decrease in:

Accounts and notes receivable

50,982

(20,451)

Inventories

(3,491)

4,271

Other current assets

(1,077)

3,654

Increase/(decrease) in:

Accounts and notes payable

(24,349)

1,994

Accrued expenses and other payables

2,238

1,134

Long-term taxes payable

—

(7,025)

Other current liabilities

(4,735)

(4,697)

Net cash provided by operating activities

49,082

9,131

Cash flows from investing activities:

Cash received from disposal of property, plant and equipment sales

522

607

Payments to acquire property, plant and equipment (including $2,193 and $2,839 paid to related
parties for the six months ended June 30, 2025 and 2024, respectively)

(18,484)

(10,016)

Payments to acquire intangible assets

(67)

(332)

Investment under the equity method

(1,112)

—

Purchase of short-term investments

(23,096)

(40,054)

Proceeds from maturities of short-term investments

29,570

20,626

Cash received from long-term investments

2,368

937

Net cash used in investing activities

(10,299)

(28,232)

Cash flows from financing activities:

Proceeds from bank loans

52,829

47,054

Repayments of bank loans

(53,890)

(48,384)

Dividends paid to the common shareholders

(1,773)

—

Cash received from capital contributions of a non-controlling interest

—

15,504

Net cash (used in)/provided by financing activities

(2,834)

14,174

Effects of exchange rate on cash, cash equivalents and pledged cash

1,195

(1,882)

Net increase/(decrease) in cash, cash equivalents and pledged cash

37,144

(6,809)

Cash, cash equivalents and pledged cash at beginning of the period

101,824

155,194

Cash, cash equivalents and pledged cash at end of the period

$

138,968

$

148,385