China Automotive Systems, Inc. (CAAS) reported significant financial results for the third quarter and the first nine months of 2024, reflecting both growth in sales and challenges in profitability. For the three months ended September 30, 2024, net product sales reached $164.2 million, a 19.4% increase from $137.5 million in the same period of 2023. This growth was driven by a notable rise in sales of electric power steering (EPS) systems, which surged 43.5% to $65.6 million, accounting for 39.9% of total sales.

Despite the increase in sales, the company experienced a decline in net income for the third quarter, which fell to $8.1 million from $11.2 million a year earlier, marking a decrease of 28.2%. Net income attributable to the parent company’s common shareholders also decreased significantly, from $9.5 million in Q3 2023 to $5.5 million in Q3 2024. The gross margin for the quarter decreased to 16.0% from 18.0% in the prior year, attributed to a change in product mix and increased costs.

For the nine months ended September 30, 2024, net product sales totaled $462.2 million, up 10.8% from $417.2 million in the same period of 2023. However, net income for the nine-month period decreased to $26.1 million from $30.6 million, a decline of 14.7%. The company reported a gross profit of $79.7 million for the nine months, compared to $69.1 million in the previous year.

The cost of products sold increased significantly, reflecting higher sales volumes and costs associated with production. For the third quarter, the cost of products sold rose to $137.9 million, up 22.2% from $112.8 million in Q3 2023. For the nine-month period, costs increased to $382.5 million from $348.1 million.

In terms of cash flow, the company reported net cash provided by operating activities of $16.5 million for the nine months ended September 30, 2024, an increase from $10.7 million in the same period of 2023. However, net cash used in investing activities rose sharply to $51.3 million from $25.6 million, indicating increased capital expenditures.

As of September 30, 2024, the company had total assets of $829.0 million and total liabilities of $439.8 million, resulting in total stockholders’ equity of $388.6 million. The company declared a special cash dividend of $0.8 per common share in July 2024, totaling $24.1 million, with a portion already paid and the remainder expected to be paid by year-end.

Overall, while China Automotive Systems, Inc. demonstrated strong sales growth, particularly in EPS systems, it faced challenges in profitability and increased costs, impacting its net income and margins.