WUHAN, China, Aug. 13, 2026 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the first six months ended June 30, 2026.
First Six Months of 2026 Highlights
-- Net sales grew by 20.1% year-over-year to a record $412.5 million,
compared to $343.3 million in the first six months of 2025.
-- Gross profit increased by 49.7% year-over-year to $88.5 million, compared
to $59.1 million in the first six months of 2025; gross profit margin
increased to 21.5% in the first six months of 2026.
-- Income from operations rose by 100.4% year-over-year to $43.3 million
compared to income from operations of $21.6 million in the first six
months of 2025.
-- Net income attributable to parent company's common shareholders increased
by 98.8% to $29.3 million from $14.7 million in the first six months of
2025.
-- Diluted earnings per share attributable to parent company's common
shareholders increased by 98.0% to $0.97 compared with $0.49 in the first
six months of 2025.
-- Cash, cash equivalents and pledged cash were $155.6 million, or
approximately $5.16 per share, as of June 30, 2026.
Mr. Qizhou Wu, Chief Executive Officer of CAAS, commented, "Our profit growth accelerated in the first half of 2026 with strong net sales in an overall sluggish economy in China. We had growth across the board in our major operating units, except for our Brazilian subsidiary, with three operations achieving net sales growth exceeding 40% in the first six months of 2026. Net sales of our electric power steering ("EPS") products grew by 32.2% year-over-year and now represent 46.8% of total net sales in the first half of 2026. Our Henglong KYB subsidiary, which is mainly engaged in providing passenger EPS products, has grown into the second largest contributor to net sales. In addition to the growth in our passenger vehicle steering systems, our net sales of commercial vehicle steering systems continued to improve with an even stronger sales growth of over 40% year-over-year in the first half of 2026."
"Our growth contrasts with Chinese automotive vehicle performance as data from the China Association of Automotive Manufacturers ("CAAM") disclosed that vehicle production and sales fell 4.0% and 4.1% year-on-year, respectively, in the first half of 2026. Passenger vehicle sales fell by approximately 6.0% in the first half of 2026. Retail sales of ICE vehicles fell while NEV sales reached 49.6% of all new-vehicle sales and battery EVs represented approximately 67% of total NEV sales. Higher fuel costs and a reduction in EV subsidies in China impacted vehicle demand."
"Our investment into research and development increased by 23.6% as we accelerate our transition into higher technology products. A growing number of our steering products are capable of autonomous driving functions such as automatic parking, lane keep assist ("LKA") and lane follow assist ("LFA") as well as rear-wheel active steering. These features are driving higher demand, presenting stronger growth opportunities for the future."
"International sales continue to grow as our customer base has expanded and more vehicle models are now powered by our products. After over 30 years' relentless pursuit for high quality, advanced technologies and superior value, we have become a tier-1 supplier to large global OEM customers in North America, Europe, Asia and South America. In late 2025, we won a contract for our C-EPS (column-assist electric power steering) for a new vehicle platform from a leading South American-based automotive manufacturer. This contract highlights the first large-scale entry of our EPS systems into the South American automotive supply chain. Planned annual sales volume is over 300,000 units with mass production expected in early 2028. This contract partially resulted from the successful launch of similar C-EPS products for the European markets."
"Subsequently, in 2026, the first batch of EPS steering was shipped to a global automaker's European division. This particular EPS steering model is featured in two new European vehicle models with more vehicles targeted. Annual sales volume is expected to reach approximately 300,000 units."
"This project achieved a number of strict technical and quality innovations, including new testing methods, software upgrades, a state-of-the-art production line powered by eight modern manufacturing technologies including seamless integration of manufacturing execution system ("MES") with automated guided vehicles ("AGV"), computer vision Poka-Yoke, and 100% autonomous robotic inspection."
"In 2026, we announced a new 2026-2030 'Strategic Plan' committing to a new growth trajectory. The main pillars are focused on deepening local presence in global markets, and developing additional cutting-edge steering technologies, new product markets, and "zero-defect" quality with platform-based, lean, automated manufacturing systems. We believe this strategy will lead to increased volume among large vehicle OEMs and capture greater market share in the global automotive marketplace."
Mr. Jie Li, Chief Financial Officer of CAAS, commented, "We continue to focus on maintaining our financial strength buoyed by net cash provided by operating activities of $47.8 million in the first half of 2026. Cash, cash equivalents and pledged cash were $155.6 million, and working capital was nearly $249.8 million. We grew our free cashflow to $14.3 million. Our capital investments in property, plant and equipment were $30.4 million in the first half of 2026 as we continue to invest in our future."
First Six Months of 2026
Net sales increased by 20.1% year-over-year to $412.5 million, compared to $343.3 million in the first half of 2025. The net sales increase was mainly due to higher sales of electric power steering and the appreciation of the RMB against the USD. Net sales of traditional steering products and parts increased 11.2% year-over-year to $219.6 million in the first half of 2026. Net sales of EPS products rose 32.2% year-over-year to $192.9 million from $145.9 million for the same period in 2025. EPS product sales grew to 46.8% of the total net sales for the first half of 2026, compared to 42.5% for the same period in 2025. Net sales in our Henglong subsidiary, the largest contributor to sales, rose by 25.3% to $205.7 million, compared with $164.2 million for the first half of 2025. Sales to North American customers increased by 3.5% to $59.2 million, compared to $57.2 million in the first half of 2025, primarily due to higher demand for passenger vehicle products by one customer. Sales in Brazil declined by 5.1% in the first half of 2026 to $32.6 million from $34.4 million in the first half of 2025. Jiulong's net sales to the Chinese commercial vehicle market increased 42.9% year-over-year to $61.7 million and our Wuhu subsidiary's net sales to Chery Automotive Co., Ltd. rose by 40.3% year-over-year to $22.7 million in the first half of 2026.
Gross profit grew by 49.7% year-over-year to $88.5 million from $59.1 million in the first half of 2025. Gross profit margin increased to 21.5% in the first half of 2026 from 17.2% in the first half of 2025. The increase in gross profit was mainly due to product volume gains and greater sales of relatively higher-margin products.
Net gain on other sales increased to $2.1 million in the first half of 2026, compared to $1.6 million in the first half of 2025.
Selling expenses grew by 28.0% to $11.9 million in the first six months of 2026 compared with $9.3 million in the same period last year. Higher selling expenses were a result of the sales and volume gains achieved in the first half of 2026. Selling expenses represented 2.9% of net sales in the first half of 2026 compared with 2.7% in the first half of 2025.
General and administrative expenses ("G&A expenses") increased by 12.6% to $14.6 million, compared to $13.0 million in the first half of 2025 primarily due to higher office expenses. G&A expenses represented 3.5% of net sales in the first six months of 2026, compared to 3.8% of net sales in the same period in 2025.
Research and development expenses ("R&D expenses") increased by 23.6% to $20.8 million in the first six months of 2026, compared with $16.8 million in the first half of 2025. R&D expenses represented 5.0% of net sales, compared to 4.9% in the first six months of 2025. Research and development programs include upgrades to enhance the performance and quality of current products, customizing products for specific customers, as well as further developing EPS and hydraulic steering systems, automotive intelligence and software technologies, automobile electronics, high-polymer materials, and manufacturing technologies.
Other income, net was $6.9 million in the first half of 2026, compared to $3.0 million in the same period last year. The increase was mainly due to the decrease in the loss on disposal of property, plant and equipment.
Income from operations climbed 100.4% to $43.3 million in the first six months of 2026 from $21.6 million in the first six months of 2025. This gain reflected greater sales, higher gross profit and margins, and effective cost controls.
Interest expense was stable at $0.8 million in the first half of 2026 and 2025.
Net financial expense was $2.9 million in the first half of 2026, compared to net financial income of $3.3 million in the first half in 2025. This change in net financial income was primarily due to foreign exchange volatility.
Income before income tax expenses and equity in earnings of affiliated companies increased by 71.3% to $46.5 million in the first half of 2026, compared to $27.2 million in the same period in 2025. The change in income before income tax expenses and equity in earnings of affiliated companies was mainly due to higher income from operations and higher other income, net in the first half of 2026.
Income tax expense was $9.9 million in the first half of 2026, compared to $7.0 million in the first half of 2025. The increase in income tax expense was primarily due to a higher income before income tax expenses in the first half of 2026. The effective tax rate was 21.3% in the first six months of 2026, compared with 25.7% in the same period last year.
Net income attributable to parent company's common shareholders increased by 98.8% to $29.3 million in the first six months of 2026, compared to net income attributable to parent company's common shareholders of $14.7 million in the first half of 2025. Diluted earnings per share were $0.97 in the first half of 2026, compared to $0.49 per share in the same period in 2025.
The weighted average number of diluted common shares outstanding was 30,170,702 in each of the 2026 and 2025 six-month periods.
Balance Sheet
Cash and cash equivalents and pledged cash were $155.6 million, or approximately $5.16 per share, as of June 30, 2026. Net working capital was $249.8 million. Total accounts receivable including notes receivable were $362.4 million, accounts payable including notes payable were $361.5 million and short-term loans were $75.0 million. Total parent company stockholders' equity was $443.8 million as of June 30, 2026, compared to $401.3 million as of December 31, 2025. Net cash provided by operating activities was $47.8 million with payments to acquire property, plant and equipment of $30.4 million.
Business Outlook
Management has raised revenue guidance for the fiscal year 2026 to $850.0 million. This target is based on the Company's current views on operating and market conditions, which are subject to change.
Conference Call
Management will conduct a conference call on August 13(th) , 2026 at 8:00 A.M. EDT/8:00 P.M. Beijing Time to discuss these results. A question-and-answer session will follow management's presentation. To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call with pin 763912:
Toll Free: 888-506-0062
International: 973-528-0011
China Toll Free: 86 400 120 3199
A replay of the call will be available on the Company's website in the investor relations section.
About China Automotive Systems, Inc.
Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through its sixteen Sino-foreign joint ventures and wholly-owned subsidiaries. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 8 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Stellantis N.V. and Ford Motor Company in North America. For more information, please visit: https://www.caasauto.com.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 20-F as filed with the Securities and Exchange Commission on April 22, 2026, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict, and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
jieli@chl.com.cn
Kevin Theiss
Awaken Advisors
+1-212-510-8922
Kevin@awakenlab.com
-Tables Follow --
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Statements of Operations
and Comprehensive Income
(In thousands of USD, except share and per share amounts)
Six Months Ended June 30,
-----------------------------
2026 2025
--------------- ------------
Net product sales ($19,170 and $20,015
sold to related parties for the six
months ended June 30, 2026 and 2025) $ 412,465 $ 343,339
Cost of products sold ($14,724 and
$15,546 purchased from related parties
for the six months ended June 30, 2026
and 2025) 323,956 284,207
----------- -----------
Gross profit 88,509 59,132
----------- -----------
Net gain on other sales 2,149 1,606
----------- -----------
Less: Operating expenses
Selling expenses 11,946 9,332
General and administrative expenses 14,612 12,977
Research and development expenses 20,772 16,805
----------- -----------
Total operating expenses 47,330 39,114
----------- -----------
Income from operations 43,328 21,624
Other income, net 6,938 3,001
Interest expense (821) (775)
Financial (expense)/income, net (2,917) 3,305
----------- -----------
Income before income tax expenses and
equity in earnings of affiliated
companies 46,528 27,155
Less: Income taxes 9,911 6,986
Add: Equity in losses of affiliated
companies (2,885) (1,342)
----------- -----------
Net income 33,732 18,827
Less: Net income attributable to
non-controlling interests 4,408 4,080
----------- -----------
Net income attributable to parent
company's common shareholders $ 29,324 $ 14,747
=========== ===========
Comprehensive income:
Net income $ 33,732 $ 18,827
Other comprehensive income:
Foreign currency translation gain, net of
tax 14,891 2,262
----------- -----------
Comprehensive income 48,623 21,089
Less: Comprehensive income attributable
to non-controlling interests 6,171 4,283
----------- -----------
Comprehensive income attributable to
parent company $ 42,452 $ 16,806
=========== ===========
Net income attributable to parent
company's common shareholders per share
-
Basic $ 0.97 $ 0.49
=========== ===========
Diluted $ 0.97 $ 0.49
=========== ===========
Weighted average number of common shares
outstanding -
Basic 30,170,702 30,170,702
=========== ===========
Diluted 30,170,702 30,170,702
=========== ===========
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Balance Sheets
(In thousands of USD unless otherwise indicated)
June 30, 2026 December 31, 2025
--------------- -------------------
ASSETS
Current assets:
Cash and cash equivalents $ 98,411 $ 142,001
Pledged cash 57,158 52,280
Accounts and notes receivable, net -
unrelated parties 337,587 346,038
Accounts and notes receivable, net -
related parties 24,818 15,741
Inventories 139,710 124,418
Other current assets 148,902 57,707
----------- ---------------
Total current assets 806,586 738,185
Non-current assets:
Property, plant and equipment, net 157,802 133,548
Land use rights, net 14,475 11,656
Long-term investments 61,520 65,515
Other non-current assets 36,723 52,794
----------- ---------------
Total assets $ 1,077,106 $ 1,001,698
=========== ===============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term loans $ 74,994 $ 81,341
Accounts and notes payable-unrelated
parties 347,452 334,304
Accounts and notes payable-related
parties 14,079 16,033
Accrued expenses and other payables 86,977 76,138
Other current liabilities 33,314 33,625
----------- ---------------
Total current liabilities 556,816 541,441
Long-term liabilities:
Other non-current liabilities 23,197 9,555
----------- ---------------
Total liabilities $ 580,013 $ 550,996
----------- ---------------
Stockholders' equity:
Ordinary share, $0.001 par value --
Authorized -- 50,000,000 shares;
Issued -- 32,338,302 and 32,338,302
shares as of June 30, 2026 and
December 31, 2025, respectively $ 32 $ 32
Additional paid-in capital 70,505 70,505
Retained earnings-
Appropriated 15,809 13,827
Unappropriated 358,806 331,464
Accumulated other comprehensive
income 6,402 (6,726)
Treasury stock --2,167,600 and
2,167,600 shares as of June 30,
2026 and December 31, 2025,
respectively (7,763) (7,763)
----------- ---------------
Total parent company
stockholders' equity 443,791 401,339
Non-controlling interests 53,302 49,363
----------- ---------------
Total stockholders' equity 497,093 450,702
----------- ---------------
Total liabilities and
stockholders' equity $ 1,077,106 $ 1,001,698
=========== ===============
China Automotive Systems, Inc. and Subsidiaries
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands of USD unless otherwise indicated)
Six months Ended June 30,
-------------------------------
2026 2025
--------------- ------------
Cash flows from operating activities:
Net income $ 33,732 $ 18,827
Adjustments to reconcile net income
from operations to net cash provided
by operating activities:
Depreciation and amortization 7,845 8,267
(Reversal) of credit losses (65) (159)
Deferred income taxes 911 --
Equity in losses of affiliated
companies 2,885 1,342
Impairment loss on disposal of
property, plant and equipment -- 657
(Gain)/loss on disposal of property,
plant and equipment (987) 580
(Increase)/decrease in:
Accounts and notes receivable 10,896 50,982
Inventories (11,178) (3,491)
Other current assets (3,153) (1,077)
Increase/(decrease) in:
Accounts and notes payable (14) (24,349)
Accrued expenses and other payables 8,305 2,238
Other current liabilities (1,370) (4,735)
----------- -----------
Net cash provided by operating
activities 47,807 49,082
----------- -----------
Cash flows from investing activities:
Cash received from disposal of
property, plant and equipment sales 1,055 522
Cash paid to acquire property, plant
and equipment and land use right
(including $6,659 and $2,193 paid to
related parties for the years ended
June 30, 2026 and 2025, respectively) (30,425) (18,484)
Government subsidy received for
purchase of Property, plant and
equipment 5,851 --
Payments to acquire intangible assets (3,126) (67)
Investments under the equity method -- (1,112)
Purchase of short-term investments (88,024) (23,096)
Proceeds from maturities of short-term
investments 22,069 29,570
Cash received from long-term
investments 3,101 2,368
----------- -----------
Net cash used in investing activities (89,499) (10,299)
----------- -----------
Cash flows from financing activities:
Proceeds from bank loans 28,727 52,829
Repayments of bank loans (28,632) (53,890)
Dividends paid to the non-controlling
interests (93) --
Dividends paid to the common
shareholders -- (1,773)
----------- -----------
Net cash provided by/(used in)
financing activities 2 (2,834)
----------- -----------
Effects of exchange rate on cash, cash
equivalents and pledged cash 2,978 1,195
Net decrease/increase in cash, cash
equivalents and pledged cash (38,712) 37,144
Cash, cash equivalents and pledged cash
at beginning of the period 194,281 101,824
----------- -----------
Cash, cash equivalents and pledged cash
at end of the period $ 155,569 $ 138,968
=========== ===========
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SOURCE China Automotive Systems