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China Automotive (CAAS)
:CAAS
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China Automotive Systems
(NASDAQ:CAAS)
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Rating:69Neutral
Price Target:
$4.50
▲(10.29% Upside)
China Automotive Systems' strong revenue growth and undervalued P/E ratio are significant positives, indicating potential for future appreciation. However, challenges in cash flow management and slightly bearish technical indicators temper the outlook. The balanced sentiment from the earnings call supports a cautiously optimistic view.
Positive Factors
Revenue Growth
Consistent revenue growth, particularly in electric power steering systems, indicates strong market demand and effective product strategy.
International Expansion
Expanding sales in Brazil and North America demonstrates successful penetration into international markets, enhancing global footprint.
Product Innovation
New product launches in power steering technology strengthen competitive edge and support long-term growth in the automotive sector.
Negative Factors
Decreased Profit Margin
A decrease in gross profit margin due to tariffs and product mix shifts could pressure profitability, affecting long-term financial health.
Cash Flow Challenges
Negative free cash flow indicates challenges in liquidity management, potentially limiting investment in growth and innovation.
Regulatory Complexities
Relocation for cost reduction could introduce regulatory hurdles, impacting operational flexibility and strategic execution.
China Automotive Systems (CAAS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$130.34M
Dividend YieldN/A
Average Volume (3M)46.14K
Price to Earnings (P/E)3.9
Beta (1Y)0.57
Revenue Growth16.72%
EPS Growth5.35%
CountryUS
Employees4,370
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.32
Shares Outstanding30,170,702
10 Day Avg. Volume24,916
30 Day Avg. Volume46,142
Financial Highlights & Ratios
PEG Ratio-0.20
Price to Book (P/B)0.35
Price to Sales (P/S)0.19
P/FCF Ratio-3.57
Enterprise Value/Market Cap0.70
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit0.80
Enterprise Value/Ebitda1.34
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
China Automotive Systems Business Overview & Revenue Model
Company DescriptionChina Automotive Systems (CAAS) is a leading automotive components manufacturer based in China, specializing in the production of power steering systems and other automotive accessories. The company operates primarily in the automotive sector, providing advanced technologies that enhance vehicle performance and safety. CAAS is dedicated to innovation and quality, offering a range of products including hydraulic and electronic power steering systems, which are crucial for modern vehicles. The company serves both domestic and international markets, catering to a diverse customer base that includes major automakers.
How the Company Makes MoneyChina Automotive Systems generates revenue primarily through the sale of its automotive components, particularly power steering systems, to original equipment manufacturers (OEMs) and aftermarket customers. The company has established significant partnerships with leading car manufacturers, which provide a steady stream of orders for its products. Additionally, CAAS benefits from a growing demand for energy-efficient and advanced automotive technologies, allowing it to expand its market reach. The company also pursues strategic collaborations and joint ventures to enhance its product offerings and enter new markets, further contributing to its earnings.
China Automotive Systems Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlights significant revenue growth, especially in the EPS segment and international markets, alongside strategic moves like new product launches. However, challenges such as decreased gross profit margin and increased tax expenses present concerns. The overall sentiment is balanced with positive growth tempered by operational challenges.Q2-2025 Updates
Positive Updates
Revenue Growth
Sales increased by 11.1% year-over-year to $176.2 million in Q2 2025, with significant growth in electric power steering systems (EPS), which rose by 31.1% year-over-year.
EPS Product Success
Electric power steering systems now account for 41.2% of total sales, up from 35.1% in the previous year, indicating a successful shift towards higher technology products.
Expansion in Brazil and North America
Brazilian sales increased by 49.4% year-over-year, accounting for 10.1% of total sales, while North American sales rose by 14.9%, driven by demand from Stellantis.
Net Cash Increase
Net cash provided by operating activities rose by almost $40 million year-over-year to $49.1 million for the first 6 months of 2025.
New Product Launch
The second-generation IRCB is now in mass production in China, setting a new record in the power steering industry for ramp-up to mass production.
Negative Updates
Decreased Gross Profit Margin
Gross profit margin decreased to 17.3% in Q2 2025 from 18.5% in Q2 2024, mainly due to increased tariffs and a shift to lower-margin products.
Increased Income Tax Expense
Income tax expense increased to $4 million from $2.1 million in the same quarter of the previous year due to higher pre-tax income and a higher effective tax rate.
Lower Other Income
Other income decreased to $1.1 million in Q2 2025 from $1.7 million in Q2 2024.
Potential Regulatory Challenges
The move to the Cayman Islands is aimed at reducing costs and gaining business flexibility, but it might involve regulatory and operational complexities.
Company Guidance
In the second quarter of 2025, China Automotive Systems reported a strong financial performance with sales increasing by 11.1% year-over-year to $176.2 million, driven by a significant 31.1% rise in electric power steering systems (EPS) sales. The company's gross profit grew by 4.2% to $30.5 million, although the gross profit margin slightly decreased to 17.3% due to changes in product mix and increased tariffs. Operating expenses were well managed, with a notable decrease in general and administrative expenses by $2 million, which contributed to a 20.2% rise in income from operations. Net income attributable to shareholders increased to $7.6 million, translating to earnings per share of $0.25. The company also highlighted robust growth in international markets, with North and South American sales accounting for 27.5% of total sales, thanks to increased demand in Brazil and North America. Looking forward, management has raised the full fiscal year 2025 revenue guidance to $720 million, reflecting optimism based on current market conditions and strategic investments in R&D, particularly in EV-related products.China Automotive Systems Financial Statement Overview
Summary
China Automotive Systems shows strong revenue growth and stable gross margins, indicating effective operational management. The balance sheet is solid with manageable leverage, though further debt reduction would be beneficial. Cash flow management remains a challenge, with negative free cash flow impacting liquidity. Overall, the company is on a positive trajectory but needs to focus on improving cash flow generation.Income Statement
China Automotive Systems has shown consistent revenue growth, with a TTM revenue growth rate of 2.6% and a strong annual growth trend. The gross profit margin remains stable around 16.7%, indicating effective cost management. However, the net profit margin has slightly decreased to 4.2% in the TTM, reflecting some pressure on profitability. Overall, the company demonstrates solid revenue growth and stable margins, but there is room for improvement in net profitability.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.45 in the TTM, indicating a manageable level of leverage. Return on equity is at 8.1%, showing decent profitability relative to shareholder equity. The equity ratio is stable, suggesting a balanced capital structure. While the company maintains a healthy balance sheet, further reduction in debt could enhance financial stability.70
Positive
Cash Flow
Operating cash flow has improved significantly in the TTM, but free cash flow remains negative, posing a concern for liquidity. The free cash flow to net income ratio is negative, indicating challenges in converting earnings into free cash flow. Despite improvements in operating cash flow, the company needs to address its free cash flow deficit to strengthen its cash position.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 696.27M | 650.93M | 576.35M | 529.55M | 497.99M | 417.64M |
| Gross Profit | 114.94M | 109.18M | 103.75M | 83.39M | 72.08M | 55.34M |
| EBITDA | 68.60M | 66.17M | 68.18M | 49.66M | 36.95M | 11.45M |
| Net Income | 29.32M | 29.98M | 37.66M | 21.18M | 11.05M | -4.98M |
Balance Sheet | ||||||
| Total Assets | 843.72M | 850.58M | 766.44M | 714.35M | 716.76M | 707.56M |
| Cash, Cash Equivalents and Short-Term Investments | 102.19M | 84.52M | 125.74M | 134.08M | 133.45M | 107.39M |
| Total Debt | 156.42M | 168.52M | 142.51M | 46.68M | 129.74M | 44.51M |
| Total Liabilities | 432.84M | 460.79M | 398.02M | 386.94M | 379.32M | 387.64M |
| Stockholders Equity | 366.38M | 349.57M | 344.46M | 311.65M | 321.03M | 303.22M |
Cash Flow | ||||||
| Free Cash Flow | -2.94M | -34.68M | -1.77M | 27.54M | 18.37M | 40.86M |
| Operating Cash Flow | 49.73M | 9.78M | 19.91M | 48.02M | 28.27M | 57.43M |
| Investing Cash Flow | -60.00M | -77.93M | -28.64M | -32.74M | 2.96M | -23.76M |
| Financing Cash Flow | 357.00K | 17.36M | 6.80M | -1.58M | -3.12M | -19.83M |
China Automotive Systems Technical Analysis
Positive
4.08
Price Trends
4.24
Positive
4.32
Positive
4.23
Positive
Market Momentum
0.03
Negative
55.73
Neutral
61.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAAS, the sentiment is Positive. The current price of 4.08 is below the 20-day moving average (MA) of 4.19, below the 50-day MA of 4.24, and below the 200-day MA of 4.23, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 55.73 is Neutral, neither overbought nor oversold. The STOCH value of 61.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAAS.
China Automotive Systems Risk Analysis
China Automotive Systems disclosed 48 risk factors in its most recent earnings report. China Automotive Systems reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
China Automotive Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $130.34M | 3.89 | 9.19% | ― | 16.72% | 5.35% | |
65 Neutral | $838.17M | 12.40 | 10.49% | 3.25% | 23.96% | 11.01% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $105.43M | -1.07 | -75.54% | ― | -19.11% | 73.51% | |
49 Neutral | $75.51M | -1.50 | ― | ― | 3.21% | -6985.88% | |
48 Neutral | $56.20M | -0.94 | -31.07% | ― | -23.26% | -259.03% | |
45 Neutral | $161.66M | -5.00 | -12.26% | ― | -4.91% | -331.53% |
* Consumer Cyclical Sector Average
CAAS
China Automotive Systems
4.32
0.36
9.09%
CVGI
Commercial Vehicle Group
1.53
-0.58
-27.49%
KNDI
Kandi Technologies
0.88
-0.04
-4.35%
SMP
Standard Motor Products
38.10
8.61
29.20%
SRI
Stoneridge
5.77
-0.30
-4.94%
LIDR
AEye Inc
2.34
1.21
107.08%
China Automotive Systems Corporate Events
China Automotive Systems Reports Strong Q3 2025 Growth and Strategic Developments
Nov 12, 2025
On November 12, 2025, China Automotive Systems announced a 77.8% growth in earnings per share for the third quarter of 2025, alongside a 17.7% increase in net sales year-over-year. The company has seen significant growth in international sales, particularly in North America and Brazil, and has transitioned to more technology-focused steering products, enhancing its market position as a tier-1 supplier to global OEMs. The company’s strategic re-domiciliation to the Cayman Islands is expected to provide cost savings and flexibility, further enhancing shareholder value.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.