Stock to Track – China Automotive Systems, Inc. (NASDAQ:CAAS)

China Automotive Systems, Inc. (NASDAQ:CAAS) moved with change of -0.96% to $4.64 with the total traded volume of 27589 shares in current session versus to an average volume of 32.61K. The stock was down in the 5 days activity -0.73%. The one month performance of stock was high 6.11%. CAAS shares are below -3.50% for the quarter and driving a -11.34% over the course of the past year and is now down -2.29% since this point in 2018.  Right now CAAS beta is 2.11. The average volatility for the week and month was at 2.46% and 3.45% respectively.

China Automotive Systems, Inc. (NASDAQ:CAAS), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the fourth quarter and the audited results for the fiscal year ended December 31, 2017.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, “Our growth in 2017 was led by higher sales of our new advanced hydraulic products into the North American market and higher sales of hydraulic products for the commercial vehicle market in China. Our sales to North America grew by 51.4% and accounted for 16.9% of total sales in 2017. Truck sales in China grew by 16.9% in China, led by record sales of 1.1 million units of heavy-duty trucks. With our large and broad line of steering products, we are well positioned to take advantage of growth opportunities in a number of automotive segments.”

Mr. Jie Li, chief financial officer of CAAS, commented, “We remain focused on increasing our financial strength. We generated $50.2 million in cash flow from operations in 2017.”

Fourth Quarter of 2017

In the fourth quarter of 2017, net sales were $143.7 million compared to $149.6 million in the same quarter of 2016.  The net sales decrease was mainly due to the exceptionally strong Chinese auto market in the fourth quarter of 2016 and the production for new products targeting the Company’s North American customers reaching its full capacity.

Gross profit was $16.5 million in the fourth quarter of 2017, compared to $21.8 million in the fourth quarter of 2016. The decrease in gross profit was primarily due to the decrease in net sales and change of product mix.

Gain on other sales was $1.7 million, compared to $1.8 million in the fourth quarter of 2016.

Selling expenses were $6.8 million in the fourth quarter of 2017, compared to $4.9 million in the fourth quarter of 2016. The increase was primarily due to higher transportation expenses and increased marketing expenses that were related to increased revenue. Selling expenses represented 4.7% of net sales in the fourth quarter of 2017 compared to 3.3% in the fourth quarter of 2016.

Loss from operations was $4.0 million in the fourth quarter of 2017, compared to income from operations of $5.0 million in the same quarter of 2016. The loss was mainly due to lower gross profit and higher investment in R&D and selling expenses.

Interest expense was $0.6 million in the fourth quarter of 2017, compared to interest expense of $0.1 million in the fourth quarter of 2016 due to higher average loans outstanding.

Net financial income was $0.2 million in the fourth quarter of 2017, which was consistent with the same quarter of 2016.

Net loss attributable to parent company’s common shareholders was $39.0 million in the fourth quarter of 2017 primarily due to the one-time accrued tax of $35.7 million mandated by the recent U.S. tax reform and accrued withholding tax of $4.0 million related to the planned dividend distribution from PRC subsidiaries in order to fulfil the payment of a one-time accrued tax.  In the fourth quarter of 2016 net income attributable to parent company’s common shareholders was $5.8 million. Diluted loss per share was $1.23 in the fourth quarter of 2017, compared to diluted income per share of $0.18 in the fourth quarter of 2016.

The weighted average number of diluted common shares outstanding was 31,646,897 in the fourth quarter of 2017, compared to 31,711,888 in the fourth quarter of 2016.

Fiscal Year 2017

Annual net sales were $499.1 million in 2017, an 8.0% increase compared to $462.1 million in 2016. The overall increase was mainly due to higher sales of advanced legacy hydraulic products offset by the sales of electric power steering systems (EPS) sales which decreased by 6.6% in 2017.  EPS sales represented 24.2% of total revenue in 2017.

Gross profit in 2017 was $84.6 million, compared to $80.9 million in 2016. The increase in gross profit was primarily due to the increase in net sales.

Gain on other sales mainly consisted of the net amount retained from the sales of materials, property, plant and equipment and scraps. For the year ended December 31, 2017, gain on other sales amounted to $7.6 million, compared to $3.8 million in 2016. The increase in gain on other sales was primarily due to the disposal of a building and higher scrap volume in 2017.

Selling expenses were $19.9 million in 2017, compared to $17.2 million in 2016, which was mainly due to higher transportation and marketing expenses during the year. Selling expenses represented 4.0% in 2017, compared to 3.7% of net sales in 2016.

G&A expenses were $19.5 million in 2017, compared to $16.8 million in 2016. The increase was primarily due to higher personnel costs and allowance for doubtful accounts. G&A expenses represented 3.9% of net sales in 2017 compared to 3.6% of net sales in 2016.

Operating income was $19.3 million in 2017, compared to $23.0 million in 2016. The decrease was primarily due to higher operating expenses in 2017.

Interest expense was $1.8 million in 2017, compared to interest expense of $0.7 million in 2016 due primarily to an increase in loans outstanding and higher interest rates.

Net financial income was $2.2 million in 2017, compared to net financial income of $1.4 million in 2016 due primarily to an increase in interest income.

Income before income tax expenses and equity in earnings of affiliated companies was $20.4 million for 2017, compared to $24.9 million for 2016. This decline was mainly due to lower income from operations and higher interest expense.

Net loss attributable to parent company’s common shareholders was $19.3 million in 2017, compared to net income attributable to parent company’s common shareholders of $22.5 million in 2016. Diluted loss per share was $0.61 in 2017, compared to diluted income per share of $0.70 in 2016.

The weighted average number of diluted common shares outstanding was 31,646,897 in 2017, compared to 31,957,052 in 2016.

Balance Sheet

As of December 31, 2017, total cash and cash equivalents, pledged cash and short-term investments were $125.7 million, total accounts receivable including notes receivable were $294.1 million, accounts payable were $240.2 million and bank and government loans were $73. million. Total parent company stockholders’ equity was $299.4 million as of December 31, 2017, compared to $305.9 million as of December 31, 2016. Net cash flow from operating activities was $50.2 million in 2017.

Business Outlook

Management has provided revenue guidance for the full year 2018 of $510 million. This target is based on the Company’s current views on operating and market conditions, which are subject to change.

Shares of China Automotive Systems, Inc. have been recently spotted trading -21.27% off of the 52-week high price. On the other end, company shares have been noted 8.02% away from the low price over the last 52-weeks. 52 week range of the stock remained $ 4.30 – 5.90. Switching over to some distances from popular moving averages, we see that the stock has been recorded 0.75% away from the 50 day moving average and -5.94% away from the 200 day moving average. Moving closer, we can see that shares have been trading -0.79% off of the 20-day moving average.

 

Albert Cuevas

Albert Cuevas also covers the business news across all market sectors for website. He also has an enormous knowledge of stock market. He holds an MBA degree from University of Florida. Albert has more than 10 years of experience in writing financial and market news. He previously worked at a number of companies in different role including web developer, software engineer and product manager. He also covers Business news section for our site. Address: 1036 Stroop Hill Road, ELMER, New Jersey Email: Albert@newscontrol.info

Leave a Reply

Your email address will not be published. Required fields are marked *