China Automotive Systems, Inc. (NASDAQ:CAAS)

WUHAN, China, Nov. 21, 2019 /PRNewswire/ -- China Automotive Systems, Inc. (CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its Henglong Brazil subsidiary has been nominated as a one of three CHASSIS finalist for South America's 2018 Best Supplier by Fiat Chrysler Automobiles N.V. (FCA).

CAAS started its operations in Brazil in 2012 through a joint venture with a local company. Over the years, CAAS has won contracts and grown its shipments to the region's largest OEM producer, FCA South America. In 2019, the sale of J436 series products through semi-knocked-down (SKD) kits is approaching 10,000 units per month. A new product under development to supply FCA's JEEP models will begin mass production starting in October 2020 with expected annual demand of 400,000 units, considering expected new demand plus the current volume.

In appreciation of CAAS' commitment and performance in the 2018 calendar year, FCA also nominated CAAS as a CHASSIS Supplier of the Year award finalist.

For the European market, CAAS' sample products have successfully passed FCA's Preliminary Design Review (PDR) evaluation for its Italian-made Fiat 520 eAWD PHEV model. Shipment of this new product to Europe is expected to start by the end of 2019.

Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "We are excited to see not only more and more global OEMs are recognizing our superior product quality and on-time delivery, but also our ten plus years relationship with FCA has blossomed into a broader scope partnership in many geographic markets. South America is a new growth market for us as its car ownerships are increasing and middle-class populations are expanding. In 2021 and beyond, we are targeting to sell 400,000 units of our steering products to Fiat and Jeep in the South American market annually. With our current production and new business, we have become the dominant supplier of mechanical steering gears to Fiat Chrysler in South America."

Third Quarter 2019 Financial Results

• Net sales were $100.5 million compared to $112.1 million in the third quarter of 2018;
• Net income attributable to parent company's common shareholders was $4.2 million, or diluted earnings per share of $0.13, compared to net income attributable to parent company's common shareholders of $0.4 million, or diluted earnings per share of $0.01 in the third quarter of 2018;
  

Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "Our sales reflected the continuing slow growth in the economy as China's gross domestic product grew by 6.0% in the quarter ended September 30th, the slowest quarterly growth rate since 1992.  In the automobile sector, the sales of Chinese-branded cars were down 13.2% year-on-year in the month of September and accounted for 18.5% of the total car sales. This market share represented a decline of 1.2% in market share compared with September 2018.  For the first nine months of 2019, total sales of Chinese-branded passenger cars were 18.5% lower than the same period in 2018. The sales of Chinese-branded SUVs declined by 8.0% year-on-year with a decrease of 2.6 percentage points in market share over the previous year. The sales of Chinese brand MPVs were down 10.5% year on year. As a leading supplier of steering products to Chinese-branded vehicles, our sales reflect the current market conditions. However, government stimulus measures including tax cuts and infrastructure investments, have started to improve the economy and if necessary, there may be more infrastructure spending to stabilize economic growth."

"In addition, we are positive about the prospects for our developmental projects. Our electric power steering ("EPS") joint venture with KYB (China) Investment Co., Ltd. will add more resources to quickly improve our products and market share.  Our new electric motor product development for power steering systems with Hyoseong Electric Co. Ltd. and our new recirculating-ball steering system development for a global client's autonomous vehicle development offer new avenues for future growth."

Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We continue to focus on building our financial strength to offer customers advanced products as well as develop new products to enhance our global presence. During the 3rd quarter, we purchased approximately 96,000 shares of common stock in the open market. We are committed to enhancing long-term shareholder value."

Business Outlook

Management has reiterated its revenue guidance for the full year 2019 to $430 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

 Second Quarter 2019 Financial Results

• Net sales decreased 15.9% to $105.7 million from $125.8 million in the second quarter of 2018;
• Net income attributable to parent company's common shareholders increased to $2.5 million or diluted earnings per share of $0.08, compared to net income attributable to parent company's common shareholders of $0.8 million, or diluted earnings per share of $0.03, in the second quarter of 2018.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in the second quarter of 2019 reflected the slowing economy in China and softer consumer spending. As a leading supplier of steering products to the Chinese automobile market, our sales are affected by the performance of the OEM market. Automobile production has been disrupted by a pre-buy of less expensive National V-compliant vehicles before the stricter National VI emission standards are nationally implemented. Chinese-branded passenger vehicle sales declined by 27.9% year-over-year in April 2019 followed by a decline in May 2019 of 28.1% year-over-year. We anticipate that our new product development with Hyoseong Electric Co. Ltd. to sell electric motors for electric power steering systems, and a new development program for a recirculating-ball steering system with a major client's autonomous vehicle development, will offer new growth opportunities for the future. We continue to build advanced steering products and broaden our product line to meet the needs of the marketplace and ensure our leadership position."

Business Outlook

Management revised its revenue guidance for the full year 2019 to $430 million from US$510 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, March 6, 2019 /PRNewswire/ -- China Automotive Systems, Inc. (CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced it has won a major exclusive supply contract from China's leading automaker Great Wall Motor Company Limited ("Great Wall").

Great Wall has announced its plan to launch a new independent flagship all-electric small vehicle  brand, the ORA. With the roll-out of new vehicle brand, Great Wall will upgrade the steering systems in its new models from traditional hydraulic power steering to electric power steering ("EPS"). CAAS' EPS products will be installed in Great Wall's model ORA R150 and total shipments are expected to reach 150,000 units in 2019.

Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "With annual sales consistently over one million units, Great Wall has been the undisputed champion of sports utility vehicles in China for years. Their move to small urban electric vehicles speaks volumes of the market opportunities. Being lighter weight with improved maneuverability on different road conditions, EPS is a natural fit for electric vehicles. Since the establishment of the joint venture with our Japanese partner KYB, the mass production of our EPS products has accelerated in late 2018. With this milestone contract, we are looking to regain growth momentum and solidify our market position in the EPS space."

WUHAN, China, Dec. 19, 2018 /PRNewswire/ -- China Automotive Systems, Inc. (CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced it has begun a development program for a new recirculating-ball steering ("RCB") steering system ("i-RCB Program") in tandem with Chrysler's Autonomous Vehicle product development.

Started in the fall of 2018, the i-RCB Program is currently in the Design Verification ("DV") test phase. The Company expects to begin mass production in August 2019 with annual sales of approximately 45,000 units. In addition to orders from Chrysler North America, the technology of i-RCB has significant other market opportunities in the Chinese domestic heavy-duty truck market.

Intelligent hybrid power steering combines traditional RCB with electric power steering ("EPS") to monitor or control basic functions such as steering speed, active returning, independent steering, and emergency steering. In addition, intelligent hybrid power steering provides extended functions such as lane monitoring with departure warning and crosswind compensation.

Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "Autonomous driving is already on the product roadmap of many US and Chinese auto makers. Steering is a critical component in the autonomous driving ecosystem as on-road execution is crucial for safety measures. Our nearly ten-year track record with Chrysler anchored us to be the trusted supplier choice for their promising new product in a key secular market trend. Domestically, we are having serious discussions with a few large OEMs in the commercial vehicle sector."

WUHAN, China, Dec. 7, 2018  /PRNewswire/ -- China Automotive Systems, Inc. (Nasdaq: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that its board of directors approved a share repurchase program of up to $5 million of its outstanding common shares periodically over the next 12 months. Repurchases will be made in open market transactions, at prevailing market prices not to exceed $4.00 per share, subject to applicable laws, regulations and approvals. The timing of the share repurchases will depend on a variety of factors, including market conditions. Members of the management team may make additional share purchases in addition to the Company repurchase.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We do not believe that our current stock price reflects our leadership position in the Chinese automotive power steering industry. Despite the challenging automotive market in China today, we continue to produce advanced hydraulic steering products and we have enhanced our position for the sale of electric power steering systems through our new joint venture with KYB (China) Investment Co., Ltd. ("KYB"), a wholly owned company of Japan KYB Co., Ltd. In addition, our growing sales to
tier-1 automobile manufacturers in the North and South American automotive markets provides a foundation for further future growth."

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "The Chinese auto and auto parts sectors remain as  key segments to China's industrial base providing the means for manufacturing, logistics, and transportation. We continue to invest in new products to gain market share."

Mr. Jie Li, chief financial officer of CAAS, commented, "Our stock's market capitalization is below our cash, cash equivalents and short-term investments, our liquid current assets, book value, and global peers' valuations based on a number of financial measurements. Our decision to repurchase share is a result of our strong balance sheet built up over a number of years and highlights our commitment to creating shareholder value."

In the first nine months of 2018, CAAS recorded revenue of $371.9 million with net income attributable to parent company's common shareholders of $5.5 million. As of September 30, 2018, CAAS' total cash and cash equivalents, pledged cash deposits and short-term investments were $144.1 million, total accounts receivable including notes receivable were $249.6 million, accounts payable were $196.6 million and short-term loans were $70.9 million. Total stockholders' equity was $309.5 million as of September 30, 2018. Net cash flow from operating activities was $9.0 million in the first nine months of 2018.

Third Quarter 2018 Financial Results

• Net sales were $112.1 million compared to $118.4 million in the third quarter of 2017;
• Net income attributable to parent company's common shareholders was $0.4 million, or diluted earnings per share of $0.01, compared to net income attributable to parent company's common shareholders of $5.1 million, or diluted earnings per share of $0.16, in the third quarter of 2017.

Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "Sales of our traditional hydraulic products continued to anchor our sales in the Chinese automotive market in the third quarter of 2018.  Our advanced hydraulic steering products remain the primary sales driver to Chrysler and Ford for use in the North American markets with sales rising by 22.2% in the third quarter of 2018 compared to the same quarter last year.  Sales of our steering columns also grew to help offset softness in the Chinese passenger vehicle and heavy-duty truck markets."  

"We continue to be optimistic about our electric power steering ("EPS") business as our new joint venture, Hubei Henglong KYB Automobile Electric Steering System Co., Ltd., with KYB (China) Investment Co., Ltd., will receive all the EPS business in China from both joint venture partners. Our new joint venture will enhance EPS research and development and production capabilities at CAAS's compound in Jingzhou City."  

Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We continue to focus on our financial strength and cash flow from operations to invest in new products and increase our market penetration."

Business Outlook

Management has reduced its revenue guidance for the full year 2018 to US$510 million from US$520.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, Aug. 20, 2018 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that the Special Committee of the Board of Directors (the "Board") has received a letter dated August 16, 2018 (the "Withdrawal Letter") from the Buyer withdrawing its non-binding "going-private" proposal (the "Proposal").

In a letter dated August 30, 2017 from Mr. Hanlin Chen, chairman of the Company, and his affiliates, including Wiselink Holdings Limited, a company controlled by Mr. Hanlin Chen, and Ms. Liping Xie, his wife (collectively, the "Chairman Parties"), and Chariot Company (Cayman) Limited ("NHPEA"), an affiliate of North Haven Private Equity Asia IV, L.P. (together with the Chairman Parties, the "Buyer"), the Buyer proposed to the Board an offer to acquire all outstanding shares of common stock of the Company not owned by the Buyer in a going-private transaction.

In the Withdrawal Letter, the Buyer stated that, considering recent market conditions, it has decided to withdraw the Proposal and is terminating any further discussion with the Company regarding the Proposal, with immediate effect.

Second Quarter 2018 Financial Results

• Net sales increased 6.9% to $125.8 million from $117.7 million in the second quarter of 2017.
• Net income attributable to parent company's common shareholders declined to $0.8 million, or diluted earnings per share of $0.03, compared to net income attributable to parent company's common shareholders of $8.9 million, or diluted earnings per share of $0.28, in the second quarter of 2017.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in the second quarter of 2018 reflect higher sales of our traditional steering products.  We continue to invest more resources to develop new generations of electric power steering ("EPS") products and other advanced steering products for future growth."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to enhance our financial resources while we build advanced steering products to offer a broader line of steering products to meet the changing requirements of our customers."

Business Outlook

Management reiterated its revenue guidance for the full year 2018 of US$520 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

First Quarter 2018 Financial Results

• Net sales increased 12.3% to $134.0 million from $119.3 million in the first quarter of 2017
• Net income attributable to parent company's common shareholders was $4.3 million, or diluted earnings per share of $0.14, compared to $5.7 million, or diluted earnings per share of $0.18 in the first quarter of 2017.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales continue to benefit from increased demand for our advanced products and exports. We are pleased to report that our sales to North America grew by 84.5% in the first quarter of 2018 compared with the same quarter last year. As we continue to invest in our electric power steering and other advanced steering technologies to position the Company for the future, our broad portfolio of steering products provides solutions to meet our customers' needs across all automotive segments."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to focus on building our financial strength to support our growing sales volume."

Business Outlook

Management has raised its revenue guidance for the full year 2018 to US$520 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Third Quarter 2017 Financial Results

• Net sales increased 25.2% to $118.4 million, compared to $94.6 million in the third quarter of 2016.
• Net income attributable to parent company's common shareholders was $5.1 million, or diluted earnings per share of $0.16, compared to net income attributable to parent company's common shareholders of $5.7 million, or diluted earnings per share of $0.18, in the third quarter of 2016.

Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "Sales of our traditional hydraulic products led our strong growth in the third quarter of 2017 as sales of Chinese passenger vehicles and heavy-duty trucks remain solid.  Additionally, our new advanced hydraulic steering products have been the primary driver of our robust sales to Chrysler and Ford for use in the North American markets with sales rising by 78.3% in the third quarter of 2017.  Our electric power steering ("EPS") business is stable and we remain optimistic about its future as we continue to develop more advanced products and production capabilities."

Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We continue to invest in our operations to ensure we have developed the right products and can efficiently build them to add value for our customers. In addition to capital investment, we have increased our investment in our joint venture fund to develop new automotive technologies.  We intend to further penetrate our key markets in China, North America and Brazil."

Business Outlook

Management has raised its revenue guidance for the full year 2017to US$495 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, Aug. 31, 2017 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ:   CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that the special committee (the "Special Committee") of its Board of Directors (the "Board") previously formed to evaluate and consider a preliminary non-binding proposal submitted by Mr. Hanlin Chen ("Mr. Chen") to the Board on May 14, 2017 (the "Original Proposal") has received a revised non-binding proposal letter (the "Revised Proposal"), dated August 30, 2017, from Mr. Chen and Chariot Company (Cayman) Limited (together with its affiliates, "NHPEA"), to acquire all of the outstanding shares of common stock of the Company not already beneficially owned by Mr. Chen, Wiselink Holdings Limited, a company controlled by Mr. Chen, and Ms. Liping Xie, his wife (collectively, the "Chairman Parties", and together with NHPEA, the "Buyer Group"), and their respective affiliates, for US$5.45 per share of common stock in cash. The Buyer Group and their affiliates currently beneficially own approximately 56.4% of the issued and outstanding shares of common stock of the Company on a fully diluted and as-converted basis. The Revised Proposal supersedes and replaces the Original Proposal in its entirety.  The Revised Proposal is expressly conditioned on approval by the Special Committee and is subject to a non-waivable condition requiring approval by a majority vote of the Company's unaffiliated stockholders. A copy of the Revised Proposal letter is attached to this press release.

The Special Committee is currently evaluating the Revised Proposal with the assistance of its financial and legal advisors.  The Company cautions the Company's stockholders and others considering trading in the Company's securities that no decisions have been made by the Special Committee or the Board with respect to the Revised Proposal. There can be no assurances that any definitive offer will be made, that any definitive agreement will be executed relating to the Revised Proposal or any other transaction, or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

WUHAN, China, Aug. 2, 2017 /PRNewswire/ --China Automotive Systems, Inc. (CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that the special committee (the "Special Committee") of the Company's board of directors (the "Board") has retained Houlihan Lokey Capital, Inc. as its financial advisor and Kirkland & Ellis as its U.S. legal counsel in connection with its review and evaluation of the previously-announced preliminary non-binding proposal letter (the "Proposal") that the Board received on May 14, 2017 from Mr. Hanlin Chen ("Mr. Chen"), the Chairman of the Board, proposing to acquire all of the outstanding shares of the common stock of the Company (the "Shares") not already owned by Mr. Chen in a possible "going private" transaction (the "Transaction"), for US$5.45 in cash per Share, as well as in connection with the Special Committee's review and evaluation of any other sale, merger, business combination or other corporate transaction, with Mr. Chen or any other party, and any other strategic alternatives.

The Company cautions its stockholders and others considering trading in the Company's securities that the Special Committee is continuing its evaluation of the Transaction and that, at this time, neither the Board nor the Special Committee has made any decision with respect to the Company's response to the Proposal. There can be no assurance that any definitive offer will be made by any person, that any agreement will be executed or that the Transaction or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to the Transaction or any other transaction, except as required under applicable law.

WUHAN, China, May 15, 2017 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ:  CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that its Board of Directors (the "Board") has received a preliminary non-binding proposal letter, dated May 14, 2017, from its Chairman, Mr. Hanlin Chen, to acquire all of the outstanding shares of common stock of the Company not already beneficially owned by Mr. Chen for US$5.45 per share of common stock in cash. Mr. Chen and his affiliates currently beneficially own approximately 56.4% of the issued and outstanding shares of common stock of the Company on a fully diluted and as-converted basis. The proposal is expressly conditioned on approval by a special committee of the Board comprised of independent directors and is subject to a non-waivable condition requiring approval by a majority vote of the Company's unaffiliated stockholders.

The Board has established a special committee of the Board (the "Special Committee"), consisting of Mr. Arthur Wong, Mr. Robert Tung and Mr. Guangxun Xu, to consider the proposal. The Special Committee is empowered to, and will be responsible for, among other things, investigating, evaluating, negotiating and making a recommendation to the Board with respect to the proposal. The Special Committee is also empowered to retain its own independent advisors to assist in the evaluation of the proposal and any alternative proposals.

The Company cautions that no decisions have been made by the Special Committee or the Board with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made by Mr. Chen or any other person, that any definitive agreement will be executed relating to the proposal or any other transaction, or that this or any other transaction will be approved or consummated.

First Quarter 2017 Financial Results

• Net sales were $119.3 million, up 2.1% from $116.9 million in the first quarter of 2016.
• Net income attributable to parent company's common shareholders was $5.7 million, or diluted earnings per share of $0.18, in the first quarter of 2017 and 2016

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We have maintained our sales and earnings during this transition period as we build our electric power steering ("EPS") capabilities.  We have added more production capacity and introduced additional models of EPS to position us for stronger growth in the future. Our growing portfolio of advanced steering products will build our sales by providing more solutions to meet our customers' needs."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to build our financial strength through strong cost controls, generating positive operational cash flow and improving our cost of invested capital." 

Business Outlook

Management reiterated its revenue guidance for the full year 2017 of US$485 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Fourth Quarter 2016 Financial Results

• Net sales were $149.6 million, up 24.6% from $120.1 million in the fourth quarter of 2015.
• Diluted earnings per share were $0.18 in the fourth quarter of 2016, compared to diluted earnings per share of $0.22 in the fourth quarter of 2015.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "After regaining growth in the third quarter, we are encouraged by the acceleration of top line growth as nearly all subsidiaries of CAAS received increased orders from OEM customers during the fourth quarter. Many of our top 10 OEM customers such as Great Wall, Geely, and Chang'an posted robust growth in 2016. In addition, our product mix change continues to drive our growth and Electric Power Steering (EPS) sales grew nearly 45%, accounting for 28% of our total revenue in 2016. Entering 2017, we believe that the auto replacement cycle with new models coming into the market and ongoing tax incentives for fuel-efficient vehicles will help continue to propel the growth of auto sales in China. As the largest steering system provider in China, we are well positioned to ride the growth and create shareholder value."

Mr. Jie Li, chief financial officer of CAAS, commented, "We took prudent measures to respond to product recalls as we recorded a charge to the cost of sales that affected our gross margin in the fourth quarter. However, we believe that this impact is short-lived. With the progress from our R&D program, especially the breakthrough in the key components for EPS systems, we expect our gross margin to recover in 2017."

Third Quarter 2016 Financial Results

• Net sales increased 4.2% to $94.6 million, compared to $90.8 million in the third quarter of 2015;
• Net income attributable to parent company's common shareholders was $5.7 million, or diluted earnings per share of $0.18, compared to net income attributable to parent company's common shareholders of $4.3 million, or diluted earnings per share of $0.13, in the third quarter of 2015.

Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "We are encouraged to see all of our subsidiaries' operations achieved growth in the third quarter of 2016 despite continuing lackluster growth in the Chinese economy. We continued to grow our electric power steering ("EPS") business which grew by 26.1% and represented 27.0% of net sales compared with 22.4% in the same period last year. We remain optimistic about our EPS business and continue to expand our product portfolio and production capabilities. Even our traditional hydraulic steering products reversed its declining trend and registered an increase."

"Internationally, our Brazilian assembly plant has completed its trials and begun commercial production to serve our Tier-1 customer in Brazil and Chinese OEMs operating in the region. We anticipate that our North American operations will continue to expand in the years ahead." Mr. Wu concluded.

Mr. Jie Li, the Chief Financial Officer of CAAS, commented, "We maintain a strong balance sheet while continuing to invest in our products and production capacity to position CAAS to further penetrate the Chinese auto market and international markets as well. From a financial reporting perspective, the significantly weakening Chinese currency RMB against the US dollars negatively affected our third quarter results by 6.4%, as we still generate a majority of our sales in Mainland China while we report in US dollar. As part of our commitment to building long-term shareholder value, we continued to repurchase shares. As of September 30, 2016, approximately $1 million has been used to repurchases of 260 thousand shares and $4 million of additional shares may yet be repurchased under our share repurchase program."

Business Outlook

Management has increased its revenue guidance for the full year 2016 to US$450 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Second Quarter 2016 Financial Results

• Net sales were $101.0 million, compared to $109.2 million in the second quarter of 2015;
  
• Net income attributable to parent company's common shareholders was $5.4 million, or diluted earnings per share of $0.17, compared to net income attributable to parent company's common shareholders of $7.7 million, or diluted earnings per share of $0.24, in the second quarter of 2015.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in the second quarter of 2016 continued to reflect the effect of currency volatility, slower economic growth in China and the trend in product mix toward electric power steering ("EPS") products. China's GDP growth in the second quarter of 2016 remained at 6.7%, representing the slowest growth since 2009. The stronger dollar versus the Chinese Renminbi contributed to the year-over-year topline decline, as the vast majority of our sales are in China but our financial results are reported in US dollars. We continue to participate in the growth of the EPS market in China and our EPS sales in the second quarter of 2016 represented 27.8% of total sales. We are investing more in our research and development to broaden our EPS product line and improve our technology to enhance sales growth."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to focus on maintaining our financial strength while we broaden our portfolio of advanced steering products and invest to improve our Chinese operations. As part of our growth strategy, we are leveraging our leadership in China to expand internationally in North America and with our Brazilian joint venture in our efforts to become a global supplier. As part of our commitment to building long-term shareholder value, we began repurchasing shares under our stock repurchase plan in the second quarter of 2016. As of June 30, 2016, approximately $0.5 million were used for repurchases of 115 thousand shares and there were $4.5 million may yet be purchased.

First Quarter 2016 Financial Results

• Net sales were $116.9 million, compared to $123.4 million in the first quarter of 2015;
• Net income attributable to parent company's common shareholders was $5.7 million, or diluted earnings per share of $0.18, compared to net income attributable to parent company's common shareholders of $8.5 million, or diluted earnings per share of $0.26 in the first quarter of 2015.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in the first quarter of 2016 continued to reflect the slower economic growth in China and changes in the product mix for steering. China's GDP growth in the first quarter of 2016 was 6.7%, lower than the 6.9% for the full year 2015, and the slowest growth since 2009. The stronger dollar against Chinese currency led to the year-over-year top line decline as we report our financial results in US dollars. Our product mix continued to follow the market trend toward electric power steering ("EPS") units. Our EPS sales in the first quarter of 2016 now accounted for 27.5% of total sales.  We are also investing more in our operations to support our EPS sales growth in the future."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to focus on building our financial strength. We are expanding our product portfolio, especially of EPS products, and improving our operations. We anticipate our stock repurchase plan will be implemented when the window opens in the middle of May. We remain committed to building long-term shareholder value." 

Business Outlook

Management reiterated its revenue guidance for the full year 2016 of US$450 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, April 22, 2016 /PRNewswire/ -- China Automotive Systems, Inc. (CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its main subsidiary, Hubei Henglong Automotive System Group Co., Ltd. ("Hubei Henglong"), has sold its 51% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd. ("Fujian Qiaolong") to Longyan Huanyu Emergency Equipment Technology Co., Ltd. ("Longyan Huanyu").

Terms of the transaction include a cash payment of RMB 20 million and the repayment of a RMB 34 million loan by Fujian Qiaolong to CAAS. Longyan Huanyu has pledged its 51% equity interest in Fujian Qiaolong as security for the repayment of the loan obligation.

In May 2014, CAAS entered into an agreement to acquire a 51.0% equity control position in Fujian Qiaolong for RMB 18.5 million (equivalent to approximately $3.0 million) in cash, along with a loan of RMB 30.0 million ($4.8 million) to Fujian Qiaolong at an annual interest rate of 8.5%.

Mr. Hanlin Chen, Chairman of China Automotive Systems, stated, "We believe we can better use these resources to accomplish our core strategic goals and to augment our ability to capitalize on our growth opportunities."

Fourth Quarter 2015 Financial Results

• Net sales were $120.1 million, compared to $135.3 million in the fourth quarter of 2014.
• Net income attributable to parent company's common shareholders was $6.9 million, or diluted earnings per share of $0.22, compared to net income attributable to parent company's common shareholders of $9.0 million, or diluted earnings per share of $0.28 in the fourth quarter of 2014.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in 2015 reflected the challenges of slower economic growth in China and changes in the demand for steering in 2015. The 6.9 percent GDP growth in 2015 was the slowest since 2009, resulting in anticipated employment reductions in several industries. This, combined with the effects of the volatility in the Chinese stock markets, drove consumer confidence lower and hindered new passenger car purchases, which recorded growth of only 7.3% for the 2015 year according to the Chinese Association of Automobile Manufacturers ("CAAM"). Additionally, CAAM has reported that commercial vehicle sales in China decreased by 9.0% in 2015."

"We reported lower sales of our traditional hydraulic power steering units, as the sales of electric power steering units ("EPS") accelerated. Sales of our own EPS units continued to climb in 2015 and we are making further investments in R&D and our operations to speed our changeover to emphasize EPS sales in the future. Several of our customers also delayed the launch of new passenger vehicle models in 2015 which also impacted our sales. We anticipate those new models will be introduced in 2016."

"Our Brazilian plant is now operating at commercial run rates allowing us to accept larger orders and penetrate deeper into the South American markets to serve global OEMs and Chinese operations in these markets as well as local companies. Our overseas sales increased as a percentage of total sales to 13.8% in 2015 compared with 12.5% in 2014. We continue to increase our sales to Fiat Chrysler North America and Ford in North America and additional foreign markets hold promise for the future."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to focus on maintaining a strong balance sheet with positive cash flow even as we invest to improve our operations and expand our product portfolio in a competitive market. In early January of 2016, our board of directors approved a stock repurchase plan as our stock is trading at a low valuation based on our analysis. We plan to proceed with stock repurchases as soon as the trading window opens in the middle of May. These actions demonstrate our determination to build long-term shareholder value."

Business Outlook

Management provided revenue guidance for the full year 2016 of US$450 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, Jan. 7, 2016 /PRNewswire/ -- China Automotive Systems, Inc. ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its board of directors approved a share repurchase program of up to $5 million of its outstanding common shares periodically over the next 12 months. Repurchases will be made in open market transactions, at prevailing market prices subject to applicable laws, regulations and approvals. The timing of the share repurchases will depend on a variety of factors, including market conditions.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "Chinese automotive industry experienced challenges in 2015. However, we do not believe that our current stock price reflects our leadership in the automotive power steering industry in China and our growing presence in global marketplace. Over the years, as an established tier-one supplier to domestic and global auto-makers, we have proven our capabilities to expand customer base, grow shipment, win awards, develop new products, and generate free cash flow."

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Since October last year, we are encouraged by a series of government policies to help revitalize the Chinese auto and auto parts sector. We see favorable momentum for us in China and abroad due to the substantial tax reduction for small car purchases and the significant depreciation of China's currency against the U.S. dollar. In addition, our facility in Brazil is entering into mass production in 2016 that enables us to secure large local contracts. With the recovery of our production utilization rate in China, we expect the improvement on our margins in the coming quarters."

Mr. Jie Li, chief financial officer of CAAS, commented, "Our stock is trading below our liquid current asset, book value, and global peers' valuations based on earnings, revenue and cash-flow. Our decision to buy back stocks aligns with our further improved balance sheet and our ongoing commitment to creating shareholder value."

In the first nine months, CAAS recorded revenue of $323.5 million and net income of $20.5 million. As of September 30, 2015, CAAS' total cash and cash equivalents, pledged cash deposits and short-term investments were $132.5 million, total accounts receivable including notes receivable were $273.9 million, accounts payable were $192.5 million and bank and government loans were $45.0 million. Total stockholders' equity was $305.9 million as of September 30, 2015, compared to $298.2 million as of December 31, 2014. Net cash flow from operating activities was $24.1 million, compared to $8.1 million for the first nine months in 2014. 

Third Quarter 2015 Financial Results

• Net sales were $90.8 million, compared to $101.7 million in the third quarter of 2014.
• Net income attributable to parent company's common shareholders was $4.3 million, or diluted earnings per share of $0.13, compared to net income attributable to parent company's common shareholders of $6.7 million, or diluted earnings per share of $0.24 in the third quarter of 2014.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "The third quarter was more challenging than usual for China's automobile sector due to the turbulence in the Chinese stock market, poor consumer confidence driven by the slowdown of the Chinese economy; and the depreciation of China's currency against the U.S. dollar. In September, passenger vehicle sales showed signs of recovery but the commercial vehicle market continued to suffer a decline. Fortunately, we were able to offset some of the impact of the market decline with 123% sales growth in our electronic power steering system (EPS) which accounted for 22.4% of our total sales in the third quarter. While we are encouraged by the growing adoption of EPS in China, our sales team is targeting many more OEMs with our EPS products. We expanded our production capacities in compliance with the US OEM standard, since we anticipate more contracts from the North American market in the foreseeable future. Our facility in Brazil is now undergoing final testing and we expect to enter into mass production in Brazil in 2016."

"In early October, the Chinese government announced an incentive plan that includes 50% purchase tax reductions that are intended to stimulate the passenger vehicle sector. We believe that this new policy will help revitalize the auto market in China after three consecutive weak quarters. As we are the main supplier to many OEMs in China, we are well positioned to benefit from this new policy," Mr. Wu concluded.

Mr. Jie Li, chief financial officer of CAAS, commented, "Due to our much improved operating cash flow, we continued to strengthen our balance sheet. More than half of our total receivables were represented by notes receivable and endorsed by large commercial banks at the end of third quarter, and we are confident about the full collection of our outstanding accounts receivable. As usual, we closely track our return on capital to maintain a solid return and increase shareholder value."

Business Outlook

Management has reiterated the revenue guidance for the full year 2015 to be even with 2014. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Second Quarter 2015 Financial Results

• Net sales were $109.2 million, compared to $115.5 million in the second quarter of 2014;
• Net income attributable to parent company's common shareholders was $7.7 million, or diluted earnings per share of $0.24, compared to net income attributable to parent company's common shareholders of $11.0 million, or diluted earnings per share of $0.39, in the second quarter of 2014.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased to report that sales were resilient in the face of headwinds in both the passenger and commercial vehicle markets in the second quarter of 2015. Our new products, especially electric power steering for the domestic market and steering products for North America, generated higher sales.

"Sales to North America accelerated by 15.2% compared to the same period last year. Our key customer, Chrysler, reported its 63rd consecutive month of year-over-year sales gains in June 2015. The Jeep� brand reported that June 2015 sales were the highest June sales in its history and it has achieved 21 consecutive months of year-over-year sale increases. The Jeep brand's sales grew by 25% in June and Wrangler's sales growth of 17% represented its best June sales ever. RAM� pickup truck sales increased by 1% in June, to its highest June sales in the last 11 years."

"We believe our strategy of focusing on new product development and penetration of foreign markets positions us to capture market share in multiple markets," Mr. Wu concluded.

Mr. Jie Li, chief financial officer of CAAS, commented, "We continued to generate positive cash flow from operations of over $9.6 million in the second quarter of 2015 to enhance our financial strength. We are maintaining our leadership position in China as we expand our presence in North and South American markets. Our investment in research and development has led to new products that maintain and increase our market positions in China as we expand in overseas markets."

Business Outlook

Management has revised its revenue guidance for the full year 2015 to be even with 2014 due to the China auto market slowdown. This target is based on the Company's current views on operating and market conditions, which are subject to change.

First Quarter 2015 Financial Results

• Net sales increased by 8.0% to a first-quarter record of $123.4 million, compared to $114.3 million in the first quarter of 2014.
• Net income attributable to parent company's common shareholders increased 25.6% to $8.5 million, or diluted earnings per share of $0.26, compared to net income attributable to parent company's common shareholders of $6.8 million, or diluted earnings per share of $0.24, in the first quarter of 2014.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased to report that we have again exceeded the $100 million sales mark in the first quarter of 2015 as we continued to capture market shares in China and our sales increased in North America. Domestic sales were led by a 150% increase in sales of our electric power steering ('EPS") products to approximately $25.0 million, representing 20.0% of our total sales in the 2015 first quarter. Our 8.0% sales growth exceeded the 3.9% sales growth of vehicles in China in the first quarter of 2015.

"Sales to North America increased by 9.5% year-over-year as our key customer Chrysler reported its 60th consecutive month of year-over-year sales gains. The Jeep� brand reported that March 2015 was its best sales month ever, with 23% growth compared to March 2014 sales, and Wrangler announced its best ever sales in the month of March. Jeep has reported 18 consecutive months of year-over-year sales gains.

"In addition, we are further expanding our global reach with the construction of our assembly facility in Brazil. Once it is operational later in 2015, we will be positioned to better serve vehicle manufacturers in the South American markets and capture market share. We also will be supplying the emerging operations of our current Chinese customers and a Tier 1 OEM in these additional markets," Mr. Wu concluded.

Mr. Jie Li, chief financial officer of CAAS, commented, "Positive cash flow was generated from operations and we maintained over $100 million in cash, cash equivalents and short-term investments in the first quarter of 2015. We are using our strong financial position to increase our research and development. We have expanded our electric power steering portfolio and are developing other new steering technologies to improve our growth in domestic and international markets. We are also positioning ourselves financially to improve our growth in the future."

Business Outlook

Management reiterates its revenue guidance of 10% year-over-year growth for the full year 2015. This target is based on the Company's current views on operating and market conditions, which are subject to change.

CHINA AUTOMOTIVE SYSTEMS, INC.

and

$50,000,000

Common Stock

by Selling Shareholders

We may offer from time to time shares of our common stock, preferred stock, debt securities, warrants, rights and units that include any of these securities. We will offer securities in amounts, at prices and on terms to be determined at the time of the offering. The aggregate initial offering price of the securities that we may offer under this prospectus will not exceed $150,000,000 (the “Company Offering”).

The selling shareholders who are identified on page 12 of this prospectus are offering common stock (the “Shares”) for resale (by themselves or their pledges, donees, assigns, transferees or other successors in interest) having an aggregate offering price not to exceed $50,000,000 (the “Selling Shareholder Offering”).

This prospectus describes the general manner in which our securities may be offered using this prospectus. Each time we offer and sell securities, we will provide you with a prospectus supplement that will contain specific information about the terms of that offering. Any prospectus supplement may also add, update or change information contained in this prospectus. You should carefully read this prospectus and any applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered hereby.

Fourth Quarter 2014 Financial Results

• Net sales increased by 4.7% to a record high of $135.3 million, compared to $129.2 million in the fourth quarter of 2013.
• Net income attributable to parent company's common shareholders was $9.0 million, or diluted earnings per share of $0.28, compared to net income attributable to parent company's common shareholders of $7.2 million, or diluted earnings per share of $0.26.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased to report record sales in 2014 as we further increased our leading market share of the Chinese steering market. In 2014, our 19.6% sales volume growth easily exceeded the 9.9% increase in passenger vehicles as reported by the China Association of Automobile Manufacturers ("CAAM"). Higher unit sales accounted for $49.4 million of our $51.6 million sales increase in 2014. The success of our self-developed electric power steering products, especially new models for mid-level passenger vehicles, helped propel sales growth. Our upgraded hydraulic steering products also found greater acceptance by customers. Our annual sales to Dongfeng Peugeot Citroen Automobile, Zhejiang Geely Holding Group and Shengyang Brilliance Jinbei Automobile, Co., Ltd. all increased in 2014. We especially enhanced our penetration of the multi-purpose vehicle ("MPV") market among joint-venture brands."

"Our sales to Fiat Chrysler North America continue to grow and our sales to Ford for its North American operations are progressing. Sales of our products in South America led us to begin to build an assembly plant in Brazil in 2014 to serve global OEMs, local branches of Chinese companies operating in South America and local automotive companies. We are financially stronger and better positioned to capture further market share in China and to penetrate deeper into foreign markets," Mr. Wu concluded.

Mr. Jie Li, chief financial officer of CAAS, commented, "We continued to generate strong cash flow from operations in 2014 through our growing sales in China and North America. Our financial strength provides flexibility to obtain the most advantageous financing to help grow our operations and achieve our global strategic objectives."

Business Outlook

Management's revenue growth rate target is 10% year-over-year growth for the fiscal year 2015. This target is based on the Company's current views on operating and market conditions, which are subject to change.

HUBEI PROVINCE, China, December 1, 2014 /PRNewswire/ -- China Automotive Systems, Inc. (Nasdaq: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that it has begun the construction of the first stage of a facility in Sao Paulo, Brazil for the assembly of its steering units for sale in South American markets.

CAAS began exporting to customers in Brazil in August 2012. This new facility in Brazil will assemble complete steering products from components exported by the Company in China. The initial capacity is 100,000 steering units and the facility can be expanded up to 700,000 units to meet growing demand. The investment in this first stage is expected to be approximately $3 million. Commercial operations are expected to begin in April 2015.

CAAS is currently exporting steering products to the Brazilian operations of China-based, Chery Auto and a global Tier-1 vehicle manufacturer, in addition to the aftermarket in Brazil.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We are building this facility to accommodate the growing interest in our steering products in the important South American markets. Chinese vehicle OEMs are setting up operations in the South American automotive markets. With this facility, we are positioned to supply these Chinese automakers as well as other vehicle manufacturers in these markets. We believe customers in South America are recognizing the value of our high-quality, advanced steering products to their vehicles. This facility will provide improved supply and service to strengthen our customer relationships. We look forward to further increasing our presence in South America and other global automotive markets. "

Third Quarter 2014 Financial Results

• Net sales increased by 11.9% to a third-quarter record high of $101.7 million, compared to $90.9 million in the third quarter of 2013.
• Net income attributable to parent company's common shareholders was $6.7 million, or diluted earnings per share of $0.24, compared to net income attributable to parent company's common shareholders of $8.6 million, or diluted earnings per share of $0.31.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased to report record high sales for any third quarter in the Company's history. Our 11.9% net sales growth far surpassed the 4.2% sales growth of the Chinese vehicle market in the third quarter as we continue to capture market share. Despite the slowdown in the vehicle market, a number of our major customers achieved significant growth. For example, Dongfeng Peugeot Citroen Automobile's sales climbed by 30% and SAIC-GM-Wuling sales increased by 14% for the nine months of 2014. We also captured market share as our research and development program continued to create advanced steering products such as our growing line of electric power steering (EPS) products and updated hydraulic steering products. Our advanced products are receiving strong acceptance from our customers, and they are leading our sales growth, especially our mid-sized EPS products."

"During the third quarter, we continued to grow market share in the North American market as we again expanded our relationship with Chrysler. We are now supplying to the RAM 4500 and 5500 truck models through a new multi-year agreement, in addition to the RAM 2500 and 3500 trucks. With these additional RAM models, we are now supplying re-circulating ball (RCB) steering gears to all heavy-duty trucks produced by Fiat Chrysler in North America. After winning Chrysler's 2013 Supplier of the Year Metallic award, this new agreement is further acknowledgement of the global quality and performance of our steering products to supply Tier 1 vehicle Original Equipment Manufacturers. We believe North America remains a growth market for us where we can continue to penetrate and increase market share," Mr. Wu concluded.

Mr. Jie Li, chief financial officer of CAAS, commented, "Our strong financial condition provides the resources to support our current growth and positions CAAS for sustainable future growth. We continue to enhance our research and development and augment our manufacturing efficiencies to control unit costs as our scale increases. Our acquisition of the remaining minority interests in Jingzhou Henglong and Shashi Jiulong will enhance our sales and earnings in the near term and give us greater control over their future operations."

Business Outlook

Management reiterated its revenue guidance of 15% year-over-year growth for the full year 2014. This target is based on the Company's current views on operating and market conditions, which are subject to change.

HUBEI PROVINCE, China, October 16, 2014 /PRNewswire/ -- China Automotive Systems, Inc. (Nasdaq: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, has increased its presence in the North American market through a new multi-year agreement to supply Fiat Chrysler Automobiles N.V.'s North American subsidiary, Chrysler Group LLC ("Fiat Chrysler"), steering gears for the 2015 RAM® 4500 and 5500 Chassis Cab trucks.

CAAS began working with Chrysler in 2008 by supplying steering gears to the award-winning Jeep® Wrangler. In 2012, CAAS expanded its relationship with Chrysler by supplying steering gears to the RAM 2500 and 3500 heavy-duty trucks.

The 2015 RAM 4500 Chassis Cab has a maximum payload of 8,920 pounds. The truck also offers a towing capacity of 24,640 pounds. The 2015 RAM 5500 truck has a maximum payload of 11,790 pounds and features a maximum towing capacity of 29,600 pounds. CAAS now supplies the re-circulating ball (RCB) steering gears for all heavy-duty trucks produced by Fiat Chrysler in North America.

CAAS also provides other steering products such as hydraulic rack and pinion steering, manual steering, steering columns, steering hoses, and China's first domestically designed and produced electric power steering systems, to other global automotive manufacturing companies.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "By supplying our steering gears to the RAM 4500 and 5500 Chassis Cab models in the North American market, we have further demonstrated the global quality, strength, durability and performance of our steering products. CAAS won the 2013 Supplier of the Year Metallic award from Chrysler, recognizing our contribution to their success. Our expanding relationship with Fiat Chrysler acknowledges the value of our products to our customers. We look forward to further increasing our presence in the global automotive markets."

Second Quarter 2014 Financial Results

• Net sales increased by 18.0% to a second-quarter record of $115.5 million, compared to $97.9 million in the second quarter of 2013
• Adjusted diluted EPS was $0.16 vs $0.18 in prior year.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are pleased to report that sales grew by 18.0% in the second quarter of 2014 compared with the second quarter of 2013. Sales set a new second-quarter record as they exceeded the $100 million mark for the first time. We continued to capture market share in the growing passenger vehicle market in China, especially with our joint venture brand customers, and sales continued to grow in the North American market."

"Sales to North America increased by 10.2% compared to the same period last year. Our key customer, Chrysler, reported its 51^st consecutive month of year-over-year sales gains in June 2014. The Jeep� brand reported that June 2014's sales were the highest June sales in its history. Jeep's 28% sales growth in June was the highest rate among all of Chrysler's segments in June 2014. RAM� pickup truck sales increased by 12% in June, its highest June sales in the last 10 years."

"We remain confident that we have the range of high-quality steering products, and the ability to quickly create new steering models such as our expanding line of electric power steering, to further improve our leading market share in China."

Mr. Jie Li, chief financial officer of CAAS, commented, "We generated positive cash flow from operations as we sold more units in China and North America. With our strong financial condition, CAAS announced its first-ever cash dividend of US$0.18 per share in the second quarter of 2014 and it was paid in July. We continue to strengthen our financial resources to support the expansion of our operations and introduce new products to increase our growth. We are updating established products and expanding our portfolio of new technology products, especially our electric power steering offerings, to improve our growth opportunities. We have increased our operating expenses more slowly than sales in the second quarter to control costs. We continue to focus our product development and operations to further penetrate China and North America, the two largest vehicle markets in the world."

Business Outlook

Management reiterates its revenue guidance of 15% year-over-year growth for the full year 2014. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, August 11, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, announced today that it has entered into a Stock Exchange Agreement to acquire the remaining 20.0% minority interest in Jingzhou Henglong Automotive Parts Co., Ltd. ("Jingzhou Henglong"), and the remaining 19.0% minority interest in Shashi Jiulong Power Steering Gear Co., Ltd. ("Shashi Jiulong"), from Jiulong Machinery Electricity Manufacturing Co., Ltd. ("Jiulong Machinery Electricity").

The Company will issue a total of 4,078,000 new common shares of CAAS stock to Jiulong Machinery Electricity as consideration for the acquisition of the minority interests. The Company will issue 3,260,000 new shares in exchange for the 20% equity interest in Jingzhou Henglong, and 818,000 new shares for the 19% equity interest in Shashi Jiulong. The shares will be issued in a private placement transaction that is exempt from registration with the U.S. Securities and Exchange Commission.

The aggregate purchase price of the acquisition will be equivalent to approximately US$ 35.2 million based on the closing price of CAAS stock of $8.62 on the Nasdaq Stock Market on August 8, 2014. The net income of the two subsidiaries totaled $27.8 million in 2013.

Hubei Henglong Automotive System Group Co., Ltd. ("Henglong Group"), a wholly owned subsidiary of CAAS, currently owns the other 80.0% and 81.0% equity interests in Jingzhou Henglong and Shashi Jiulong, respectively. The Company expects to complete these acquisitions in the third quarter of 2014. Upon completion of these acquisitions, Jingzhou Henglong and Shashi Jiulong will become wholly owned subsidiaries of the Henglong Group.

Jingzhou Henglong was founded in 1997, and it is mainly engaged in the production of rack and pinion power steering gear for cars and light-duty vehicles. Founded in 1993, Shashi Jiulong is mainly engaged in the production of integral power steering gear for heavy-duty vehicles.

Hanlin Chen, Chairman of China Automotive Systems, commented, "We are pleased to consolidate the remaining shares of two of our key subsidiaries and take full ownership. Their operations and financial results are important to the success of CAAS. With full ownership, we will benefit from having greater control over the operations and future growth of each business. We will also immediately consolidate higher net profits, which will be accretive to our net earnings per share."

WUHAN, China, June 23, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, announced today that it has received cash of RMB 40 million ($6.4 million) in June 2014 and expects to receive cash of approximately RMB 12 million ($1.9 million) in July 2014 from the Jingzhou Land Reserve Center, a local PRC government bureau. The receipt of this cash is for the sale of the Company's idle land use rights in Jingzhou City, Hubei Province.

This land rights sale resulted in an approximate gain of $5.0 million in net income for the second quarter ending June 30, 2014. The gain is the difference between the selling price and the net book value of the related land use rights, after taxes and minority shareholder interest. This transaction completes the Company's sale of idle land use rights in Jingzhou City, Hubei Province.

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Please see our full report here.

WUHAN, China, May 27, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that the Board of Directors has declared a special cash dividend of US$0.18 per common share, which represents a total payment to shareholders of approximately US$5 million. The special cash dividend is payable on or about July 28, 2014 to shareholders of record as of the close of business on Thursday, June 26, 2014.

China Automotive Systems' Board of Directors approved the special cash dividend after reviewing the Company's recent financial performance, current financial condition and expected cash requirements and cash flows. Each cash dividend per common share will be treated for tax purposes as return of capital to shareholders. Such dividends will not be reported as taxable income to the recipients, but will instead generally be treated as a reduction in the shareholder's basis in the stock.

Mr. Hanlin Chen, chairman of CAAS, stated, "We are pleased to issue our first cash dividend to reward our shareholders for their support and confidence. The special dividend provides the flexibility for us to use our cash resources and future cash flows to support our growing operations while enhancing returns to our shareholders. Our cash dividend demonstrates our strong financial condition and our confidence in our future."

WUHAN, China, May 19, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, announced today that it has entered into an agreement to acquire a 51.0% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd. ("Fujian Qiaolong").

Fujian Qiaolong was founded in 1993 and currently produces special emergency vehicles (emergency power source vehicles, heavy flow drainage vehicles, emergency drainage vehicles, etc.) and civil service vehicles (vending vehicles, garbage trucks, medical waste transportation vehicles, etc). Located in Longyan, Fujian Province, almost 200 people including more than 20 technical personnel are employed at Fujian Qiaolong, which has production capacity to modify approximately 4,000 special services vehicles annually. Fujian Qiaolong Special Purpose Vehicle Co. had no affiliation with CAAS prior to the acquisition.

For the 2013 year, Fujian Qiaolong had revenues of approximately RMB 41.6 million with net earnings of about RMB 6.5 million. Registered capital is approximately RMB 20 million with assets totaling RMB 67.5 million as of the end of 2013. The total purchase price is approximately $3.0 million in cash. Upon completion of the acquisition, CAAS will further provide a loan of RMB 30.0 million ($4.8 million) to Fujian Qiaolong at an annual interest rate of 8.5% to further its expansion. The detailed terms of the loan will be negotiated separately. No other terms of the acquisition were disclosed.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "Special service vehicles are a growing segment within the commercial vehicle market, as China continues to move towards greater urbanization. Being the largest power steering producer in China, we have developed relationships with many OEMs and components suppliers over the last two decades. In the past few years, due to our strong cash flows and solid balance sheet, we began researching acquisition opportunities. During our 8-months due diligence, we were impressed with Qiaolong's best-in-class product offerings and ongoing strong growth prospects. Similar to CAAS, Qiaolong is a company with strong product specialization and a long-standing track record. We look forward to developing new growth opportunities as we expand our operations and create greater value for our shareholders."

WUHAN, China, May 19, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, announced today that it has entered into an agreement to acquire a 51.0% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd. ("Fujian Qiaolong").

Fujian Qiaolong was founded in 1993 and currently produces special emergency vehicles (emergency power source vehicles, heavy flow drainage vehicles, emergency drainage vehicles, etc.) and civil service vehicles (vending vehicles, garbage trucks, medical waste transportation vehicles, etc). Located in Longyan, Fujian Province, almost 200 people including more than 20 technical personnel are employed at Fujian Qiaolong, which has production capacity to modify approximately 4,000 special services vehicles annually. Fujian Qiaolong Special Purpose Vehicle Co. had no affiliation with CAAS prior to the acquisition.

For the 2013 year, Fujian Qiaolong had revenues of approximately RMB 41.6 million with net earnings of about RMB 6.5 million. Registered capital is approximately RMB 20 million with assets totaling RMB 67.5 million as of the end of 2013. The total purchase price is approximately $3.0 million in cash. Upon completion of the acquisition, CAAS will further provide a loan of RMB 30.0 million ($4.8 million) to Fujian Qiaolong at an annual interest rate of 8.5% to further its expansion. The detailed terms of the loan will be negotiated separately. No other terms of the acquisition were disclosed.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "Special service vehicles are a growing segment within the commercial vehicle market, as China continues to move towards greater urbanization. Being the largest power steering producer in China, we have developed relationships with many OEMs and components suppliers over the last two decades. In the past few years, due to our strong cash flows and solid balance sheet, we began researching acquisition opportunities. During our 8-months due diligence, we were impressed with Qiaolong's best-in-class product offerings and ongoing strong growth prospects. Similar to CAAS, Qiaolong is a company with strong product specialization and a long-standing track record. We look forward to developing new growth opportunities as we expand our operations and create greater value for our shareholders."

WUHAN, China, April 3, 2014 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, had on March 28, 2014 entered into a settlement agreement with plaintiffs in a purported securities class action filed on October 25, 2011 in the United States District Court for the Southern District of New York.

The settlement agreement includes a dismissal of all claims by the plaintiffs against the Company and its current and former officers and directors, with no admission of any wrongdoing or liability. The settlement is not material to the Company's consolidated financial statements.

Fourth Quarter 2013 Financial Results

• Net sales increased by 27.3% to a fourth-quarter record high of $129.2 million, compared to $101.5 million in the fourth quarter of 2012.
• Diluted earnings per share were $0.26 in the fourth quarter of 2013, compared to diluted earnings per share of $0.18 in the fourth quarter of 2012.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "We are excited to close 2013 on a high note, as we have set new records for both quarterly and annual sales. Our market share continues to expand as our sales growth far exceeded the 13.9% overall sales growth of the auto industry in China in 2013. Our leading position as an independent power steering system provider in China has been further strengthened as many of our large customers experienced significant growth in their businesses. We continued to strengthen our relationship with one of our major customers, Dongfeng Auto Group Co., Ltd., and further increased our sales to another customer, Peugeot Citroen. Our business with North American customers has continued to grow as we have increased shipments to Chrysler N.A. We are optimistic about our business in North America as the performance of our products gain recognition and our pricing gives us clear advantage."

Mr. Jie Li, chief financial officer of CAAS, commented, "Our financial position is the best in our corporate history. With our growing sales in both China and North America, we generated strong positive cash flow in 2013 and our financial flexibility is further strengthened."

Business Outlook

Management's revenue growth rate target is 15% year-over-year growth for the full year 2014. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Third Quarter 2013 Financial Results

• Net sales increased by 24.2% to a third-quarter record high of $90.9 million, compared to $73.2 million in the third quarter of 2012.
• Net income attributable to parent company's common shareholders was $8.6 million, or diluted earnings per share of $0.31, compared to net income attributable to parent company's common shareholders of $3.4 million, or diluted earnings per share of $0.12.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Following our record net sales for any first and second quarter in our history, we again achieved our highest net sales for any third quarter as well in 2013. We continued to capture market share as our sales growth in the third quarter accelerated to 24.2% compared to the third quarter of 2012. Our sales growth far outpaced the total Chinese vehicle sales growth of 13.6% during the third quarter compared to the third quarter of 2012. Many of our large customers experienced significant growth in the third quarter, such as Great Wall, which posted a 42% increase in its SUV sales compared to the third quarter of 2012. Sales by Brilliance rose by 29% and Dongfeng Peugeot Citroen Automobile's sales climbed by 18%. In July, one of our top 10 customers,Dongfeng Peugeot Citroen, increased its production capacity to 750,000 vehicles as a new assembly plant began operation. In terms of exports, our shipments to North America continued to grow and we are especially encouraged by our customer Chrysler's 42 consecutive months of sales increases in North America. We continue to view North America as one of our future growth drivers, as we believe that our product performance and track record will eventually be recognized by other Original Equipment Manufacturers ("OEMs") in that market."

"We continue to invest in research and development to propel our growth in Electric Power Steering ("EPS") products and introduce new production techniques for cost-effective manufacturing. This strategy positions CAAS to continue to be the market leader in China as well as expand its global footprint. With our increasing sales into North America and our recent win of Chrysler's 2013 Supplier of the Year Metallic award, we are also upgrading our product quality in the Chinese domestic market to strengthen our long-term relationship with our local customers. With over 60 OEM customers, we are well-positioned to benefit from the continuing growth of the automotive market in China and abroad."

Mr. Jie Li, chief financial officer of CAAS, commented, "We continue to strengthen our financial position as we believe a strong financial position supports long-term sustainable growth. The sale of the idle land use rights enables us to generate more cash into our books. We have achieved record quarterly growth in the first, second and third quarters of 2013 without incurring long-term debt as we generated positive earnings and solid cash flow from operations. With the high cash inflows during the quarter, we accordingly increased research and development funding to accelerate the development of EPS products for future growth in sales and market share as well as expanding our leadership inChina. From a long-term perspective, we aim to maintain R&D budget at 4% of our annual revenue."

Business Outlook

Management raised its revenue guidance to 20% from 15% year-over-year growth in the full year 2013 as the Company is determined to increase its market share and further expand its leading market position. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, Sept. 11, 2013 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that, on August 30, 2013, the Court of Chancery of the State of Delaware dismissed each of the shareholder plaintiffs' derivative claims with prejudice and without leave to amend, in a suit against the Company and its board of directors.  

The Company is being represented by the international law firm of Winston & Strawn LLP. The Company's lead attorney on the case,Neal Marder of Winston and Strawn, commented that, "this court's decision fully vindicated the Company, its board and audit committee by determining that the plaintiffs in the case failed to properly state any claim for violation of any fiduciary duties.

Second Quarter 2013 Financial Results

• Net sales increased by 21.8% to a second-quarter record of $97.9 million, compared to $80.4 million in the second quarter of 2012.
• Diluted earnings per share of $0.18, compared to $0.29 in the second quarter 2012.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Following our record revenue for any first quarter in our history, we achieved our highest net sales ever for any second quarter as well. We realized sales growth in both passenger and commercial vehicles in the second quarter of 2013. In the first half of 2013, we captured a larger market share as our sales grew by 21.0%. This increase has surpassed the growth rate of vehicle sales in China, which was 12.3%, as reported by the China Association of Automobile Manufacturers (CAAM). Many customers experienced significant growth in the first half of 2013 such as Geely with a 19% rise in vehicles sold, sales volume increased 40% at Great Wall and Dongfeng Peugeot Citroen Automobile's sales climbed by 32.7% compared with the 2012 six-month period. In July, Dongfang Peugeot Citroen began production at its third assembly plant as capacity grew to 750,000 vehicles from 450,000 units. Exports to North America continue to be a key growth-generator and we recently received Chrysler's 2013 Supplier of the Year Metallic award as an acknowledgement of the high quality and world-class performance of our products, as well as our valued contribution to Chrysler Group's success. The growth of our exports to North America remains steady, and we expect the Chinese economy to maintain stable growth in the second half of 2013. As the market leader in the Chinese steering market, we are well-positioned to benefit from increased sales of domestic vehicles, and we have a growing number of Sino-foreign joint ventures as our customers."

Mr. Jie Li, chief financial officer of CAAS, commented, "Our cash position remains at a historical-high with no long-term debt. We continue to generate positive earnings and cash flow from operations to support our growth. We are using our enhanced financial strength to expand our research and development program to introduce advanced products to promote our leadership in the domestic market and build our brand in China as well as in international markets."

Business Outlook

Management increased its revenue guidance to 15% year-over-year growth in the full year 2013 as the Company is determined to take market share to further expand its leading market position. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, June 13, 2013 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that, on May 31, 2013, the U.S. District Court for the Southern District of New York declined to certify a class of investors in a securities fraud class action suit against the Company. Due to this denial, depositions in this case have been postponed or canceled, and the case will proceed only on behalf of the individual named plaintiffs and not as a class action.

The Company is being represented by the international law firm of Winston & Straw LLP and it continues to contest the plaintiffs' individual allegations, which the Company believes to be meritless

First Quarter 2013 Results

• Net sales increased by 20.1% to a first-quarter record of $97.2 million, compared to $80.9 million in the first quarter of 2012.
• Reported EPS of $0.21, compared to a loss of $0.03 for the same quarter of 2012.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, "In the first quarter of 2013, we achieved record net sales for any first quarter in our history and increased our market share as our sales growth rate reached 20.1%, compared to the 13.2% growth rate of the China automotive market for such period as reported by the China Association of Automobile Manufacturers (CAAM). We sold more high-quality steering systems to our large Chinese customer base in China, including to our new Sino-foreign joint venture customer, SAIC-GM-Wuling ("SGMW"), who has entered into a significant purchase agreement with us recently, and we shipped more of our advanced electric power steering systems to domestic customers. Our leading market share in China increased as our close relationships with many local OEMs resulted in our becoming their preferred supplier for safety-related steering systems. Our first quarter sales were also lifted by strong exports to an OEM customer in North America. With our product portfolio, we have positioned ourselves to benefit from the vehicle growth in the world's two largest automotive markets, China and the United States."

Mr. Jie Li, chief financial officer of CAAS, commented, "Our cash and cash equivalents reached an all-time high of $90.4 million at March 31, 2013, and we believe we will continue to generate cash internally over time. We will use our financial strength to create advanced products to sustain our market leadership in China and create a growing presence in international markets." 

Business Outlook

Management reiterates its revenue guidance of 10% year-over-year growth in the full year 2013. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, May 2, 2013 /PRNewswire-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that its subsidiary, Jingzhou Henglong Automotive Parts Co., Ltd., has entered into a multi-year agreement to supply the SAIC-GM-Wuling ("SGMW") joint venture with its high-quality rack and pinion power steering systems.

China Automotive Systems has commenced shipments, and the steering units are intended to be primarily installed in SGMW's Wuling Hongguang brand, which is the best selling multi-purpose vehicle ("MPV") in China. Based on current order rates, total steering systems to be shipped by the Company to SGMW could approximate 350,000 units for the 2013 year.  No other terms of the agreement were disclosed.  

GM reported record sales at SGMW of over 1.4 million total vehicles in 2012, representing a 12.4% year-over-year sales volume increase. The SGMW joint venture was founded in 2002 and it consists of two Chinese domestic partners, SAIC Motor Corporation Limited and Liuzhou Wuling Motors Co Limited, and one foreign partner, General Motors ("GM China"). SGMW is one of the leading designers and manufacturers of minivans, pick-up trucks and MPVs as well as one of the important participants in passenger cars in China.

"As the dominant leader in steering products for the Chinese OEM local brands, this major contract win marks another key milestone in the execution of our strategy to diversify our customer base and penetrate into the Sino-foreign joint venture vehicle manufacturing segment. SGMC joins FAW Volkswagen and Dongfeng Peugot Citroen as our customers in this sector, which provides additional verification of our superior research and development program, stringent quality control and world-class production capability," commented Mr. Hanlin Chen , Chairman of China Automotive Systems.

"According to the China Association of Automobile Manufacturers, sales of MPV vehicles climbed by 50% to over 300,000 units in the first quarter of 2013. We are capturing more market share in one of the fastest growing vehicle segments in China and we are pleased to be supporting SGMW's robust growth," Mr. Chen concluded.

Fourth Quarter 2012 Results

• Net sales increased by 7.5% to $101.5 million, compared to $94.4 million in the fourth quarter of 2011.
• Net income attributable to parent company's common shareholders was $5.1 million, or diluted earnings per share of $0.18, compared to the net income attributable to parent company's common shareholders of $6.0 million, or diluted earnings per share of $0.19, in the fourth quarter of 2011.

Mr. Qizhou Wu, chief executive officer of CAAS, commented: "The overall Chinese automotive market showed slight improvement during 2012 although the growth was not steady, because the sales of passenger vehicles grew while the sales of commercial vehicles generally decreased in 2012. We maintained our market leadership through an increase in sales volume. Our exports toNorth America significantly contributed to our growth in 2012. We will continue to expand our international operations in the future. We also expect that the demand of the local Chinese market will continue to rise based on recent market performance." 

Mr. Jie Li, chief financial officer, commented, "We have continued to generate positive cash flow and redeemed all our convertible notes in 2012 prior to their maturity date to enhance our financial flexibility. We will use our financial strength to support our growth locally and internationally, as we continue to launch new advanced products through innovations in our research and development activities. CAAS is well positioned to be a major participant in any future automotive market rebound in China, as we will continue to develop new advanced products and increase our global presence through international sales." 

Business Outlook

Management's revenue guidance is for 10% year-over-year growth for the full year 2013. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Third Quarter 2012 Highlights

• Net sales increased by 3.2% to $73.2 million, compared to $70.9 million in the third quarter of 2011.
• Diluted earnings per share from continuing operations was $0.12, compared to diluted earnings per share from continuing operations of $0.09 in the third quarter of 2011.

Mr. Qizhou Wu, chief executive officer of CAAS, commented: "We are pleased to continue to generate growth even though we are affected by both the slowdown in passenger vehicle sales and the continuing decrease in commercial vehicle sales. However, we have noticed a gradual recovery in demand for passenger vehicles following the incentive policy announced by the PRC central government in May 2012 to assist the sales of low-emission cars and fuel-efficient cars. With new leadership in the PRC central government, we believe the number of infrastructure projects in China will increase and China's real estate market may rebound. As we are the leader in power steering systems in China, we are leveraging our growing expertise first in North America and soon in Brazil and other emerging markets. Many of these emerging markets are dominated by imports of foreign products and we believe we can effectively compete against these products in the markets."

Mr. Jie Li, chief financial officer of CAAS, added, "Our financial standing remains solid, as we generated positive cashflow from operations in the third quarter. Further, by redeeming our convertible notes early, we have achieved greater financial strength and flexibility to support our research and development efforts and growth programs to build our brand and enhance shareholder value."

Business Outlook

Management's revenue guidance is for annual revenues to be even with those for the year 2011. This target is based on the Company's current views on operating and market conditions, which are subject to change.

WUHAN, China, August 28, 2012 /PRNewswire-Asia-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that its board of directors approved a share repurchase program of up to $5 million of its outstanding common shares periodically over the next 12 months. Repurchases will be made in open market transactions, at prevailing market prices subject to applicable laws, regulations and approvals. The timing of the share repurchases will depend on a variety of factors, including market conditions.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We do not believe that our current stock price reflects our leadership in the automotive steering industry in China, the world's largest automotive market, or our ability to generate free cash flow and build shareholder value through efficient operations and an expanding customer base. As the largest provider of steering products in China, we have advanced our technology to global standards and we are now a tier 1 exporter into North America and we established have a joint venture to penetrate the expanding South American automotive market."

WUHAN, China, August 28, 2012 /PRNewswire-Asia-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that its board of directors approved a share repurchase program of up to $5 million of its outstanding common shares periodically over the next 12 months. Repurchases will be made in open market transactions, at prevailing market prices subject to applicable laws, regulations and approvals. The timing of the share repurchases will depend on a variety of factors, including market conditions.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We do not believe that our current stock price reflects our leadership in the automotive steering industry in China, the world's largest automotive market, or our ability to generate free cash flow and build shareholder value through efficient operations and an expanding customer base. As the largest provider of steering products inChina, we have advanced our technology to global standards and we are now a tier 1 exporter into North America and we established have a joint venture to penetrate the expanding South American automotive market."

Second Quarter 2012 Highlights

• Net sales rose 2.8% to $80.4 million, compared with $78.2 million in the second quarter of 2011.
• Diluted earnings per share from continuing operations were $0.21, compared with diluted earnings per share from continuing operations of $0.13 in the second quarter of 2011.

Mr. Qizhou Wu, chief executive officer of CAAS, commented: "The passenger vehicle sector inChina is gradually reaching its cyclical bottom. We are encouraged by the stability in both unit sales volume and raw material costs. We continue to increase our market share in both the passenger and commercial vehicle markets in China. Our specialty focus and our ability to develop advanced products with consistently high quality validate our technology and production prowess as a global tier one supplier for safety-related automotive components. With the help of our superior engineering team, we have further penetrated the North America market by beginning to supply another award-winning brand, Dodge Ram� trucks. We streamlined our operations by divesting our pump business as we quickly embrace emerging technologies to further position CAAS as the market leader in China. In the context of a difficult global market environment, we strive to expand our market share and to enhance our brand equity."

Mr. Jie Li, chief financial officer of CAAS, added, "While we aggressively expanded our R&D program to develop new products to address global market trends, our rigorous cost control measures showed results in many areas. Through our improved accounts receivable management, we continue to generate solid cash flow. We also successfully redeemed our convertible notes before their maturity dates, which provides more financial flexibility to leverage our balance sheet to create shareholder value."

Business Outlook

Due to a significant slacking of demand for automotive vehicles in the People's Republic of China, management has lowered its guidance and now expects annual revenues to be even with that of year 2011. This target is based on the Companys current views on operating and market conditions, which are subject to change.

WUHAN, China, May 29, 2012 /PRNewswire-Asia-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that on May 25, 2012 it redeemed all of its outstanding senior convertible notes. The negotiated total redemption price was US$32.4 million, which includes all principal, accrued and unpaid interest and the make-whole amounts as of the date of redemption.

The five-year senior convertible notes were issued in February 2008 with an original total principal amount of $35 million, a scheduled maturity date of February 15, 2013 and a conversion price per share of $7.0822. In April 2009, the Company redeemed $5 million of the principal amount of the convertible notes. On March 1, 2011, upon the conversion of $6.4 million of the principal amount of the convertible notes, 907,708 common shares were issued at a conversion price of $7.0822 per share. The remaining total principal amount of the senior convertible notes was US$23.6 million. As a result of the redemption of the senior convertible notes, the total share count on a fully diluted basis will be reduced by approximately 3.3 million shares.

As at March 31, 2012, all the components of the senior convertible notes on the Company's condensed unaudited consolidated balance sheets totaled at $36.7 million, including $23.6 million of convertible notes payable, $4.4 million of compound derivative liabilities, $8.3 million of accrued make-whole redemption interest expense and $0.4 million of accrued and unpaid coupon interest. As of that same date, CAAS reported cash and equivalents of US$79.9 million. For 2011, net cash flow from operating activities was US$34.1 million and capital expenditures approximated US$14.9 million. For the first quarter of 2012, net cash flow from operating activities was US$8.5 million and capital expenditures approximated US$2.0 million.

Mr. Jie Li, chief financial officer, commented, "CAAS used the funds from the senior convertible notes to build its operations and make itself a stronger competitor in the global steering market. The Company has been generating strong cash flows, and decided to redeemed the notes before their maturity date. CAAS will continue to utilize its improved balance sheet and strong free-cash-flow generation to create long-term shareholder value."

WUHAN, China, May 23, 2012 /PRNewswire-Asia-FirstCall/ -- China Automotive Systems, Inc. ("CAAS" or the "Company") (NASDAQ: CAAS), a leading power steering components and systems supplier in China, today announced that its wholly owned subsidiary, Great Genesis Holdings Limited ("Great Genesis"), has entered into a definitive agreement ("Agreement") to sell its equity interest in Zhejiang Henglong & Vie Pump-Manu Co., Ltd. ("Zhejiang"), to the Zhejiang Vie Group ("Vie Group"), Great Genesis's joint venture partner in Zhejiang. This transaction is subject to local regulatory authority approval.

Founded in 2002, Zhejiang, which designs, manufactures and markets power steering pumps, is located in Zhuji City, Zhejiang Province. According to the Agreement, Great Genesis will sell its 51% stake in Zhejiang to Vie Group for RMB52 million, which represents a 24% premium as compared to the May 20, 2012 estimated net book value of approximately RMB42 million. According to unaudited accounting information, Zhejiang's net sales for the first quarter of 2012 declined by approximately 25%, as compared to the same fiscal quarter of 2011, mainly due to lower sales volume. Zhejiang generated approximately $34,000 in net income during three-month period ended March 31, 2012.

Mr. Hanlin Chen, chairman of CAAS's board of directors, commented, "With the sale of the Zhejiang pump business we are a more focused company, with our core business in power steering gears and new technologies such as our electric power steering systems. We wish Zhejiang well, as we better align CAAS's businesses for the future."

First Quarter Highlights

• Net sales were $84.5 million, compared to $91.0 million in the first quarter of 2011.
• Non-GAAP net income attributable to the parent company's common shareholders was $3.8 million or $0.12diluted earnings per share, versus non-GAAP net income of $6.9 million, or $0.22 diluted earnings per share in the first quarter of 2011.

Mr. Qizhou Wu, chief executive officer of CAAS, commented: "During the first quarter, the PRC domestic passenger vehicle brands sold approximately 712,000 units, a year over year decline of 15%. On the commercial vehicle front, PRC truck sales continued to experience double-digit percentage declines due to fewer infrastructure projects and the slowed real estate market. As the largest supplier to many large domestic OEMs, we took hits from both sectors. While we are waiting for conditions to improve in the PRC, we are rapidly expanding our sales in North Americaand planning for expansions in emerging markets. Our shipments to North America, mainly to Chrysler, rose 86% from same period of 2011. We also recently announced our joint venture inBrazil, another large market currently dominated by European steering producers. Our financial standing remains solid, as we generated strong cash-flow in the first quarter."

Business Outlook

Management's revenue guidance is for 5% year over year growth for the full year 2012. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Fourth Quarter 2011 Results

• Net sales were $99.5 million, compared with $100.5 million in the fourth quarter of 2010.
• Net income attributable to parent company's common shareholders was $6.0 million, compared with $10.6 million in the fourth quarter of 2010, with diluted earnings per share of $0.19, compared with diluted earnings per share of $0.22 in the fourth quarter of 2010.

Mr. Qizhou Wu, chief executive officer of the Company, commented: "2011 was a challenging year for the Chinese auto industry. However, we held our ground by increasing domestic penetration in Dongfeng PSA and growing our export business with Chrysler North America. Our new products, especially electric power steering ("EPS"), grew in unit volume and commanded higher prices. On the strategic partnership front, we added two key joint ventures with Shanghai Auto-IVECO Hongyan in early 2012 and Beijing Auto, which will significantly lift our presence in these large organizations and pave the way for broader cooperation in the future. In addition, we will form a joint venture outside of China and establish a foothold in another large and rapidly growing market, Brazil."

Business Outlook

Management's revenue guidance is for 10% year-over-year growth for the 2012 year. This target is based on the Company's current views on operating and market conditions, which are subject to change.

"We are cautiously optimistic about 2012 despite the uncertainty in the Chinese domestic market. The PRC government's recent policy on government vehicle purchases can be a positive catalyst to home-grown brands, as the annual vehicle spending by government entities is a sizeable percentage of the PRC market. And, many of these qualified models are already using CAAS steering systems. However, we will continue to diversify the customer base and leverage our brand recognition to increase penetration into existing customers. Our success with Chrysler Dodge RAM will open many doors for us globally. We will continue to focus on exercising financial discipline and generating free cash flow. We remain confident that CAAS will continue to grow long-term shareholder value," Mr. Wu concluded.

On February 15, 2008, the Company issued $35,000,000 of Convertible Notes to Lehman Brothers Commercial Corporation Asia Limited, “LBCCA”, and YA Global Investments, L.P., “YA Global”, maturing in 5 years. According to the terms of the Senior Convertible Notes (as described in Note 13), Convertible Notes may be required to be repaid in cash on or prior to their maturity. For example, Convertible Note holders are entitled to require the Company to redeem all or any portion of the Convertible Notes in cash, if the Weighted Average Price (WAP) for twenty (20) consecutive trading days is less than $3.187 at any time following February 15, 2009, the “WAP Default,” by delivering written redemption notice to the Company within five (5) business days after the receipt of the Company’s notice of the WAP Default.

As a result of the worldwide financial turmoil in 2008 and the first half of 2009, the Company’s stock’s WAP for twenty (20) consecutive trading days ended on March 16, 2009 was below $3.187. On March 17, 2009, the Company delivered two WAP Default notices to the Convertible Note holders. On March 27, 2009, the Company received a letter dated March 26, 2009 from YA Global, one of the Convertible Note holders, electing to require the Company to redeem all the three Convertible Notes it held in the total principal amount of $5,000,000, together with interest, late charges, if any, and the Other Make Whole Amount as defined in Section 5(d) of the Convertible Notes. After negotiation, on April 15, 2009, the Company paid YA Global $5,041,667 for the total principal amount ($5,000,000), together with interest and late charges, if any. YA Global has waived its entitlement to the Other Make Whole Amount.

The Company’s ability to redeem the Convertible Notes and meet its payment obligations depends on its cash position and its ability to refinance or generate significant cash flow, which is subject to general economic, financial and competition factors and other factors beyond the Company’s control. The Company cannot assure you that it has sufficient funds available or will be able to obtain sufficient funds to meet its payment obligations under the Convertible Notes, and the Company’s redemption of the Convertible Notes would result in an adverse effect on its liquidity and capital resources, business, results of operations or financial condition.

Third Quarter 2011 Results

Fourth Quarter Results: 

• Record net sales grew 20% to $100.5 million in the fourth quarter of 2010 as compared to $83.8 millionin the same quarter of 2009.
• Net income was $12.3 million in the fourth quarter of 2010, or diluted earnings per share of $0.22, compared to a loss of $24.2 million, or $0.89 loss per share in the same quarter of 2009.

Management provides revenue guidance of 15% year-over-year growth for the 2011 year. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Rodman and Renshaw on CAAS                  6/10/2011

CAAS: Terminating Coverage

Terminating Coverage: Effective immediately, we are terminating coverage on China Automotive Systems Inc. (Nasdaq: CAAS) to better allocate resources within our coverage universe. Our last rating for CAAS was Under Review / Speculative Risk. Investors should not rely on our previously published financial projections.

Financial Statements To Be Restated

CAAS announced that it expects to restate its previously released financial statements for FY09 and the first three quarterly filings of FY10 due to non-cash gains and losses in relation to its accounting for convertible notes issued in Feb 2008. According to ASC 815, CAAS is required to record the conversion feature of the notes as derivative liabilities valued at fair value, therefore the change in fair value of this conversion feature should be reflected in CAAS’ income statement. The company estimates an adjustment of a loss of $43 MM for FY09 and a gain of $19 MM for FY10. However final determination has not yet been made, and this adjustment is subject to changes.

NASDAQ Letter

CAAS also received a notification letter from the NASDAQ on March 17, 2011 indicating that the Company was not in compliance with the continued listing requirements under NASDAQ Listing Rule 5250(c)(1), which requires the timely filing of SEC periodic reports. CAAS had 60 calendar days, or until May 16, 2011, to submit a plan to NASDAQ to regain compliance with the NASDAQ Listing Rules. On May 13, 2011, CAAS provided a plan to the exchange, and on May 17, 2011, the company received an additional letter from NASDAQ indicating its non-compliance status and requiring the company to provide an update to the plan by May 31, 2011. The company believes it will be able to file the required reports / forms by the end of June 2011.

Company Description

Headquartered in Hubei Province, China Automotive Systems, Inc. (CAAS) is a leading supplier of power steering components and systems to the Chinese automotive industry. With more than a decade of manufacturing experience, the company’s product offerings include power and manual steering systems for both passenger and commercial vehicles. The company’s sales and distribution network covers all of China, including all major automotive vehicle producing regions.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

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Member FINRA.
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HUBEI PROVINCE, China, May 19, 2011 /PRNewswire-Asia/ -- China Automotive Systems, Inc. (Nasdaq: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that on May 16, 2011, as expected, it received an additional notification letter (the "May 16th Notification Letter") from the Nasdaq Stock Market ("Nasdaq") indicating that the Company was not in compliance with the continued listing requirements under Nasdaq Listing Rule 5250(c)(1), which requires the timely filing of SEC periodic reports, due to the delayed filing of CAAS's quarterly report on Form 10-Q for the three-month period ended March 31, 2011 (the "2011 Form 10-Q"). This letter follows the notification letter received by CAAS on March 17, 2011 (the "Initial Notification Letter") in response to the delayed filing of CAAS's annual report on Form 10-K for the year ended December 31, 2010 (the "2010 Form 10-K"). As with the first letter, the May 16th Notification Letter has no immediate effect on the listing or trading of CAAS's shares on Nasdaq.

As disclosed in a Form 8-K filed by the Company with the Securities and Exchange Commission on March 17, 2011, CAAS expects to restate its previously issued financial statements for fiscal year 2009 and the first three quarters of fiscal year 2010 to reflect non-cash gains or losses related to the accounting treatment for the Company's convertible notes issued on February 15, 2008 based on the guidance outlined in Accounting Standard Codification (ASC) 815.  Due to this restatement, the Company has not yet been able to file the 2010 Form 10-K and the 2011 Form 10-Q, which has prompted Nasdaq to issue the Initial Notification Letter and the May 16th Notification Letter. The Initial Notification Letter required CAAS to submit to Nasdaq a plan for regaining compliance with the Nasdaq Listing Rules.  In response, CAAS provided its plan for regaining compliance on May 13, 2011.  The May 16th Notification Letter requires CAAS to file an update to this plan by May 31, 2011.

CAAS believes that it will be able to file its amended annual report on Form 10-K for the year ended December 31, 2009 (which will include restated comparative financial statements for 2008) and amended quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2010 (which will include restated comparative financial statements for the respective periods of 2009) as well as the 2010 Form 10-K and the 2011 Form 10-Q before the end of June 2011.  The Company expects that the filing of these forms will allow it to regain compliance with the Nasdaq Listing Rules.

Preliminary Fourth Quarter Results:

• Record net sales grew 20% to $100.5 million in the fourth quarter of 2010 from $83.8 million in the same quarter of 2009.
• Income from operations grew 113% to $12.3 million for the fourth quarter of 2010 from $5.8 million in the 2009 fourth quarter. The increase in income from operations resulted from a combination of higher gross profit, reduced general and administrative expenses, and lower depreciation and selling expenses. Operating margin climbed to 12.2% in the fourth quarter of 2010 from 6.9% in the fourth quarter of 2009.

"We have made solid progress in addressing the previously announced errors in the accounting treatment for the Company's convertible notes as reported in a press release on March 17, 2011. We continue to expect to complete the restatements of our audited 2009 financial statements and our unaudited interim financial statements for the first three quarters of 2010 during the second quarter of 2011. The audit for 2010 and the restatements for 2009 and 2010 are still in progress. Upon completion of the restatement, we will file our 2010 Form 10-K, as well as our amended 2009 Form 10-K and amended Forms 10-Q for the first three quarters of 2010. The accounting issues are non-cash in nature and do not affect the Company's operations," Mr. Chen concluded

Rodman and Renshaw on CAAS                                       3/23/2011

CAAS: Taking Our Rating Under Review

Financial Statements To Be Restated: CAAS announced that it expects to restate its previously released financial statements for FY09 and the first three quarterly filings of FY10 due to some non-cash gains and losses in relation to its accounting for convertible notes issued in Feb 2008. According to ASC 815, CAAS is required to record the conversion feature of the notes as derivative liabilities valued at fair value, therefore the change in fair value of this conversion feature should be reflected in CAAS’ income statement. The company estimates an adjustment of a loss of $43 MM for FY09 and a gain of $19 MM for FY10. However final conclusion has not yet been made, and this adjustment is subject to changes.

Rating Under Review: Following this development we are changing our rating on CAAS from market Outperform to Under Review. In line with this we are removing our financial projections for the company. The company identified this accounting error when the recently appointed PwC was undertaking its annual audit for FY10. CAAS expects that the review will be completed during the second quarter of 2011. We will revisit our financial projections and rating once management finishes the audit and restatement process and files its 10-K/10-Q forms with SEC.

NASDAQ Letter CAAS also received a notification letter from the NASDAQ on March 17, 2011 indicating that the Company was not in compliance with the continued listing requirements under NASDAQ Listing Rule 5250(c)(1), which requires the timely filing of SEC periodic reports. The notification letter from NASDAQ has no immediate effect on the listing or trading of CAAS' shares on the NASDAQ Stock Market. CAAS has 60 calendar days, or until May 16, 2011, to submit a plan to NASDAQ to regain compliance with the NASDAQ Listing Rules. If NASDAQ accepts the Company's plan of compliance, NASDAQ may grant an extension of up to 180 calendar days from the due date of the annual report on Form 10K, or until September 16, 2011, to regain compliance.

Company Description Headquartered in Hubei Province, China Automotive Systems, Inc. (CAAS) is a leading supplier of power steering components and systems to the Chinese automotive industry. With more than a decade of manufacturing experience, the company’s product offerings include power and manual steering systems for both passenger and commercial vehicles. The company’s sales and distribution network covers all of China, including all major automotive vehicle producing regions.


Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

As previously disclosed in the Form 8-K filed on February 21, 2008, China Automotive Systems, Inc. issued convertible notes to two institutional investors with an aggregate principal amount of $35,000,000 in a transaction exempt from registration pursuant to Section 4(2) of the Securities Act. On April 15, 2009, the Company redeemed from one of the investors convertible notes for an aggregate principal amount of $5,000,000.

On March 1, 2011, an investor converted $6,428,571 principal amount of the convertible notes at a conversion price of $7.0822 per share, and the Company issued 907,708 shares of its common stock to the investor. No additional consideration was paid for the conversion of the convertible notes into common stock.

Rodman and Renshaw on CAAS                      1/31/2011

CAAS: 4Q10 Preview; Lowering Price Target to $17.00 

Faster Growth in Passenger V Should Boost 4Q10 for CAAS: During 4Q10, total sales volume of passenger vehicles grew by 42.3% from 4Q09, reaching 3.9 MM units, outpacing the 17.9% y-o-y growth and 1.1 MM units in volume for commercial vehicles. We believe this trend could help CAAS to potentially deliver a top-line number that may be better than we previously projected, given that more than 60% of CAAS’ FY09 revenue came from steering products for passenger vehicles.

2011 Volume Growth Should be Driven By Capacity Ramp: CAAS has gradually added capacity in its existing facility and will continue to expand in 2011, with the plan to reach 4 MM units/yr, a 25%~30% increase from current level.

Expect Exports & Electric Power Steering to Pick Up: Management expects EPS product shipment volume to triple in 2011 from 40,000 units shipped in 2010. Exports to Chrysler (Private, Not Rated) should also grow substantially. The two segments together should fuel the top-line growth for 2011 and potentially help CAAS to outperform the overall auto market.

But Margin Pressure Remains: Given the competitive nature of this business, and the volatility in steel and aluminum prices, CAAS should still face some level of margin pressure in 2011. In our view, this environment should largely benefit bigger parts suppliers who have the capacity and flexibility to ramp up production quickly to meet the demand. We believe mid-sized suppliers like CAAS should also have an opportunity to gain market share through moderate price cuts. On raw material side, a lower production level of steel may push steel price up for the year, therefore further squeezing some margins. We expect a slightly lower gross margin of 23% in 2011, primarily driven by a margin decline in traditional power steering products but somewhat offset by a growing portion of higher margin products like EPS and exports.

4Q10 Preview: For 4Q10, we now expect revenue, net income, and diluted EPS of $95.5 MM, $8.0 MM, and $0.26, respectively. Going into 2011, our estimates are $412.7 MM, $36.2 MM, and $1.17.

Lowering Price Target: We are lowering our price target on CAAS from $23.00 to $17.00. We had been assigning the company a higher multiple earlier to reflect margin stability in the business. However, it appears that volatility in raw material costs and higher revenue contribution from lower margin offerings may keep margins under pressure. We also believe our new price target on CAAS is a better reflection of industry averages. Currently CAAS is trading at ~11.5x and ~11.2x to our FY10 and FY11 EPS estimates. At our price target of $17.00 the company will trade at ~14.9x and ~14.2x to our FY10 and FY11 earnings estimate, compared to ~20.0x and ~16.2x for China listed peer companies and ~23.6x and ~16.3x for US listed companies. Though we expect the company to continue commanding valuation multiples at the high end of the range given its market position and product mix, we believe any further multiple expansion will only come on margin improvements. We maintain our Market Outperform rating.


Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Global Hunter on CAAS

China Automotive Systems Inc. (Accumulate)
CAAS: Q3 in line. Share decline provides better entry point; Upgrading to Accumulate.

Upgrading from Neutral to Accumulate following the recent price drop. We continue to like the fundamentals of the company given its leading market position, strong customer base and R&D capabilities. We believe it will maintain an industry leading position, continue to penetrate domestic market, and expand into international market. Its healthy balance sheet should be sufficient to support its organic growth in the next 1-2 years. As shares have dropped 20% since August and 40% from its 52-week high in January, they are now trading at 12.7x our FY11 EPS, which we view as a more attractive entry point. As such, we are upgrading our rating from Neutral to Accumulate, and reset our price to $18.50, or 15x our FY11 estimate

Third Quarter 2010 Results

• Net sales increased 17.7% year-over-year to $76.1 million, compared to $64.7 million for the same quarter 2009.
• Net income attributable to common shareholders was $8.2 million for the third quarter of 2010, or $0.26 per diluted share, compared with $8.6 million, or $0.28 per diluted share in the same quarter in 2009.

Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems commented, "We are very pleased with the strong sales results posted for the 2010 third quarter, as the summer season is our slowest sales period compared to other quarters. We continue to operate at a high capacity utilization rate and have invested over $24 million in the first nine months of 2010 to make sure we can meet future demand, especially for our new, more advanced products."

Business Outlook

Management raises revenue guidance to 30% growth for the 2010 fiscal year. This target is based on the Company's current views on operating and market conditions, which are subject to change. The Company will periodically update this guidance.

Rodman & Renshaw on CAAS

Overview: CAAS announced its 3Q10 revenue, net income and EPS of $76.1 MM, $8.2 MM and $0.26, beating our expectations of $74.2 MM, $6.3 MM, and $0.21, respectively. This compares to street consensus estimates of $76.2 MM, $6.7 MM, and $0.22, respectively (from FactSet). The Y-o-Y top-line growth of 17.7% was primarily due to continued demand for both passenger vehicles and commercial vehicles in China. Net income was $8.2 MM, representing 10.8% net margin. 

China’s Auto Sector Remains Robust: China’s auto market has been growing rapidly so far this year. According to CAAM’ statistics, during the first 9 months of 2010, total production and sales volume for Passenger Vehicles reached 9.88 MM and 9.90 MM units, growing by 38.07% and 36.68% Y-o-Y. This compares to production and sales of 3.20 MM and 3.24 MM units for Commercial Vehicles, which grew by 30.35% and 33.85% from the same period in 2009. We believe the overall auto market should continue growing at a healthy to moderate pace in the near-term future. 

Margin Pressure To Be Addressed: Going forward into 4Q10 and FY11, management indicated that with rising competition and an upward trend in raw material cost, CAAS may have limited chances to pass on higher material cost to customers. However, management expects to relieve some of the margin pressure in FY11 by taking a series of initiatives including (1) expanding production in Electric Power Steering products, which have a higher ASP and margin, (2) pressuring upstream suppliers for better terms, (3) aggressively penetrating into overseas market, and (4) launching more higher margin products. 

Growth For FY11: Per the earnings call, we believe the top-line growth should be driven by (1) capacity for Electric Power Steering; shipment for EPS products has been growing dramatically from January’s ~1,000 units/month to September’s ~8,000 units/month. Management expects EPS’ revenue contribution to grow even faster in FY11. (2) Export market should play a larger role in the top-line growth for FY11 compared to FY10. (3) Beijing Henglong JV is expected to start production by the year end 2011. (4) Exploring Western China market including catering to current customers’ expansion in those geographies and developing new customers who have market shares in the West. 

Guidance & Estimates: CAAS raised revenue guidance to ~30% Y-o-Y growth for FY10. We are modeling for revenue, net income and diluted EPS of $90.3 MM, $8.1 MM, and $0.26, respectively for 4Q10. This implies full year 2010 estimates of $335.7 MM, $35.1 MM, and $1.14. For FY11, our projections are maintained at $396.9 MM, $38.4 MM, and $1.24, respectively. 

Valuation: Currently CAAS is trading at ~14x and ~13x to our FY10 and FY11 EPS estimates. At our price target of $23.00 the company will trade at ~20.1x and ~18.6x to our FY10 and FY11 earnings estimate, compared to ~22x and ~18x for China listed peer companies and ~20x and ~15x for US listed companies.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Rodman & RenShaw Lowering Margin Expectations and Price Target,

2Q10 Results: CAAS today announced its 2Q10 earnings results with revenue and net income of $85.1 MM and $8.5 MM, with a diluted EPS of $0.28. This compares to our expectations of $77.6 MM, $8.0 MM, and $0.27, respectively. 

Top-Line Growth Remains Healthy: In 2Q10, CAAS grew its top-line by 36.2% Y-o-Y from $62.5 MM in 2Q09 to $85.1MM, aided by volume growth in China’s passenger vehicles and commercial vehicles. Steering parts for passenger vehicles continues to contribute the majority of the revenue, accounting for ~74% of total sales, while steering components for commercial vehicles contributed the rest ~26%. 

Auto Sales To Grow At A Slower Pace In 2H10: From January to July 2010, China’s total automobile production volume and sales volume reached 9.7 MM units and 8.2 MM units, implying a Y-o-Y growth of 39.4% and 28.6%, respectively. Industry average inventory days outstanding has been trending up since early this year, we believe this is signaling a slower sales growth for 2H10. 

 Margin Pressure To Continue: Gross margin of 23.3% in 2Q10 came in lower than our estimate of 27.5%. The lower gross margin was mainly driven by a ~4% Y-o-Y decline in ASP. We expect margin pressure to remain for the rest of the year and going forward into FY11 with total production volume, inventory levels and rising competition being the key variables. 

Electric Power Steering To Ramp Beyond FY11: During the earnings conference call, management stated that Electric Power Steering (EPS), which carries a higher gross margin, should materially improve the overall gross margin from FY12 since currently the order size of EPS is relatively small, only generating ~$0.8 MM in revenue during 2Q10. Management expects a meaningful ramp in EPS shipment beginning in FY12. 

Top Line Guidance Reaffirmed: Management reaffirmed its full year FY10 revenue guidance of ~25% top-line growth. We continue to believe that this top-line guidance may prove conservative given that management has a history of beating consensus on the top-line. 

Lowering Margin Expectations: We are now estimating gross margins to come in between 23% and 24% over the next few quarters. This results in our net income estimates for FY10 and FY11 to drop from $35.9 MM to $32.9 MM and $42.1 MM to $37.8 MM respectively. Similarly, our EPS projections for FY10 and FY11 drop from $1.19 to $1.08 and $1.38 to $1.22 respectively. 

 Valuation: Lowering PT To $23.00 

We are lowering our price target on CAAS from $30.00 to $23.00 driven by our lowered margin and earnings estimates. Currently CAAS is trading at ~17.4x and ~15.4x to our FY10 and FY11 EPS estimates.

2010 Second Quarter Results

• Net sales increased 36.2% year-over-year to a quarterly record of $85.1 million, compared with $62.5 million in the 2009 second quarter.
• Net income attributable to common shareholders was $8.5 million for the second quarter, or $0.28 per diluted share, compared with $6.1 million, or $0.21 per diluted share in the same quarter in 2009.

Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems commented, "We are very pleased to report our strong quarterly sales as we continue to set new records and expand our market share. Our customer base now consists of over 50 customers in a very diversified portfolio. As our product quality has been maintained at a high level and more OEMs recognize our safety track record, we see our penetration into existing and new customers increasing. On the export front, we are ramping up production for Chrysler as the US auto market is on a recovery track. We remain optimistic on the overall outlook for 2010, as the Chinese government's new subsidy policy continues to propel economy and fuel-efficient car sales."

Business Outlook:

Management maintains revenue guidance of 25% year-over-year growth for the 2010 fiscal year. This target is based on the Company's current views on operating and market conditions, which are subject to change. The Company will periodically update this guidance.

The Company adjusted upward its previously issued revenue guidance for 2009. The Company now expects its revenue to increase by more than 20% for the year 2009. This target is based on the Company's current contracts from existing customers, which are subject to change

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

Guidance Report

The Company reaffirms it 2009 guidance of 10 to 15 % revenue growth. We believe that the stimulus will continue to generate growth in the Chinese market and it has been reported that the Chinese Association of Automobile Manufacturers (CAAM) has increased its growth outlook for vehicle sales from 5% to 8.7% for the 2009 year.

Full Year Fiscal 2009 Guidance Ending December

Guidance Report:

"We believe the worst of the economic crisis in China is now behind us. In January 2009, China overtook the United States to become the world's largest automotive market. We anticipate that the stimulus packages in China will continue to generate greater economic activity, resulting in further growth in the domestic automotive market of 2009."

Full Year Fiscal 2009 Guidance Ending December

Source: PR Newswire (March 26, 2009)