- Net sales increased by 19.9% year-over-year to $167.1 million in Q1 2025.
- EPS product sales surged by 54.0%, accounting for 43.7% of total sales.
- Operating cash flow improved by 73.1% to $18.1 million.
China Automotive Systems, Inc. (CAAS, Financial), a key player in power steering components and systems, reported a notable 19.9% increase in net sales year-over-year for the first quarter of 2025, reaching $167.1 million. The significant growth can be attributed to a strategic focus on electric power steering (EPS) products, which showcased a remarkable 54.0% increase in sales, now contributing to 43.7% of the company's total sales.
Despite this growth in revenue, income from operations experienced a decline of 10.5% to $8.6 million, largely due to a 41.3% rise in operating expenses. This increase in expenses was partly driven by heightened investments in research and development, as well as a one-time severance cost, reflecting the company's commitment to future growth and innovation.
Financially, CAAS maintains a robust position with $89.9 million in cash and equivalents. Additionally, operating cash flow witnessed a substantial increase, up 73.1% to $18.1 million. However, the diluted earnings per share saw a decrease to $0.24 from $0.27 in the corresponding period of 2024.
Geographically, the results presented mixed outcomes, with the Brazilian operations showing a vigorous growth of 30.2%, while sales in Hubei Henglong declined by 10.3%, impacted by reduced demand from Stellantis. Management remains optimistic, reiterating its full-year revenue guidance of $700.0 million, indicating confidence in the continued expansion despite the observed margin pressures.
