China Automotive Systems Q4 2024 Earnings Call Transcript

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March 28, 2025
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Executive

Dollars or $1.25 per share for 2023. Net cash provided by operating activities was $9,800,000 for 2024. Cash paid to acquire property, plant, equipment and land use was $43,700,000 partly offset by $20,500,000 cash received from property, plant and equipment sales. Total cash and equivalents, plant cash and short term investments were $129,400,000 or approximately $4.29 per share at year end 2024. A special cash dividend of $0.8 per common share or approximately $22,400,000 was paid in late August twenty twenty four to reward our shareholders.

Executive

This cash dividend was paid from internal funds and cash flow. This reflects our unwavering confidence for sustainable sales growth and our ability to generate positive cash flow. We've also implemented the share buyback program of up to $5,000,000 of our outstanding common shares in the open market at market prices not to exceed $5.5 per share through 11/15/2025. We celebrated our twentieth anniversary of our Nasdaq listing in 2024. From a small domestic manufacturer, we have established a global presence, especially with Tier one companies in North America, South America, Europe, India and Asia.

Executive

Since 2024 net sales have grown from $58,200,000 to $650,900,000 in 2024. We look forward to the further growth of our company's sales and operations of our traditional steering products continue to contribute to our sales and profits even as we further expand our EPS portfolio and we build our advanced driver systems technologies with our Sensia AB operations. We have positioned our company to benefit from two ongoing technology transitions, from internal combustion engines to electric powertrain and from human driving to autonomous driving. Now let me review the financial results in the fourth quarter of twenty twenty four. In the fourth quarter of twenty twenty four, net sales increased by 18.6% to $188,700,000 compared to $159,200,000 in the same quarter of twenty twenty three.

Executive

The net sales increase is mainly due to a change in the product mix and a higher demand for passenger automobile and commercial vehicles in the fourth quarter of twenty twenty four compared to the fourth quarter of twenty twenty three. Gross profit was $29,500,000 in the fourth quarter of twenty twenty four compared to $34,700,000 in the fourth quarter of twenty twenty three. Gross margin in the fourth quarter of twenty twenty four was 15.6% compared to 21.8% in the fourth quarter of twenty twenty three, primarily due to a change in product mix. Selling expenses were $4,800,000 in the fourth quarter of twenty twenty four compared with $4,600,000 in the fourth quarter of twenty twenty three. Selling expenses represented 2.5% of net sales in the fourth quarter of twenty twenty four compared to 2.9% in the fourth quarter of twenty twenty three.

Executive

General and administrative expenses, G and A, were $9,700,000 in the fourth quarter of twenty twenty four compared to $9,400,000 in the same period in 2023. The G and A expenses represented 5.1% of net sales in the fourth quarter of twenty twenty four compared to 5.9% of net sales in the fourth quarter of twenty twenty three. Research and development expenses, R and D, were $7,800,000 compared with $9,300,000 in the fourth quarter of twenty twenty three. R and D expenses represented 4.1% of net sales in the fourth quarter of twenty twenty four compared to 5.9 in the fourth quarter of twenty twenty three, mainly due to a decrease in miscellaneous development expenses. Operating income was $8,700,000 in the fourth quarter of twenty twenty four compared to $13,600,000 in the fourth quarter of twenty twenty three.

Executive

Lower gross profit in twenty twenty four fourth quarter compared with the same period last year was the main cause of this decline. Interest expense was $1,100,000 in the fourth quarter of twenty twenty four compared with $300,000 in the fourth quarter of twenty twenty three. Financial income was $800,000 in the fourth quarter of twenty twenty four compared with $1,000,000 in the fourth quarter of twenty twenty three. Income before income tax expenses and equity and earnings of a consolidated company was $8,800,000 in the fourth quarter of twenty twenty four compared to $15,000,000 in the fourth quarter of twenty twenty three. Net income benefit was $2,000,000 in the fourth quarter of twenty twenty four compared to income tax expense of $2,100,000 in the fourth quarter of twenty twenty three.

Executive

Net income attributable to parent company's common shareholders was $9,100,000 in the fourth quarter of twenty twenty four compared to net income attributable to parent company's common shareholders of $10,900,000 in the fourth quarter of twenty twenty three. Diluted income per share was $0.3 in the fourth quarter of 'twenty four compared to diluted income per share of $0.36 in the fourth quarter of twenty twenty three. The average weighted number of diluted common shares outstanding was 30,180,947 compared to 732,185,000 in the fourth quarter of twenty twenty three. Now, let me review the results for fiscal year 2024. Net sales increased by 12.9% to $650,900,000 in 2024 compared to $576,400,000 in 2023.

Executive

This increase was mainly due to higher sales of passenger leaf holes in China as total sales of the company's EPS systems increased by 29.9% year over year and sales of the headlong subsidiary Skibri Systems to the Chinese passenger vehicle market increased by 20% year over year. Brazil had long debt sales due by 5.7% year over year to $51,000,000 This growth partially offset the sales reduction by North American customers in 2024. EPS sales represented 38.9% of total revenue in 2024 compared to 33.8% in 2023. Gross profit in 2024 increased by 5.2% year over year to $109,200,000 compared to $103,800,000 in 2023. The gross margin was 16.8% compared with 18% in 2023, mainly due to a change in our product mix and lower average selling prices for the year ended 12/31/2024.

Executive

Net gain on other sales in 2024 was $4,300,000 compared to $5,800,000 in 2023, mainly due to lower material sales in 2024. Selling expenses rose by 14.4% year over year to $17,900,000 in 2024 from $15,600,000 in 2023, mainly due to an increase in marketing and office expenses. Selling expenses represented 2.7% of net sales in 2024 and 2023. G and A expenses increased by $8,700,000 year over year to $27,700,000 in 2024 compared to twenty five point five million dollars by year in 2023. G and A expenses represented 4.3% of net sales in 2024 compared to 4.4% of net sales in 2023.

Executive

This expense increase was mainly due to higher office property and other taxes and maintenance and repair expenses. R and D expenses were $27,600,000 in 2024 compared to $29,200,000 in 2023. Lower R and D expenses reflect less investment in traditional product upgrades and the full annuities research expenses. R and D expenses were 4.2% of net sales in 2024 compared to 5.1% of net sales in 2023. Operating income increased by 2.6% to $40,300,000 in 2024 compared to thirty nine point two million dollars in 2023.

Executive

The increase in operating income was mainly due to a 5.2% increase in gross profit combined with the change in R and D expenses. Interest expense was $1,800,000 in 2024 compared to $1,000,000 in 2023, primarily due to an increase in bank loans in 2024 compared with 2023. Net financial expense was $90,000 in 2024 compared to financial income of $4,700,000 for 2023. The decrease in financial income of $4,800,000 was primarily due to higher foreign exchange gains in 2023. Income before income tax expenses and equity and earnings of affiliated companies was $44,100,000 in 2024 compared with $48,200,000 in 2023.

Executive

The change is primarily due to lower operating income in 2024. Income tax expense was $5,900,000 in 2024 compared to $5,100,000 in 2023. This increase is mainly due to a valuation allowance reversal and a one time income tax expense settlement for subsidiaries in The PRP and The U. S. This year.

Executive

Net income attributable to Parrot common shareholders was $30,000,000 in 2024 compared to 37,700,000.0 in 2023. Diluted net income per share was $0.99 in 2024 compared to $1.25 in 2023. The weighted average number of diluted common shares up in was 30,184,513 in 2024 compared with 30,189,421 in 2023. Now, we'll provide some balance sheet and other financial highlights. As of 12/31/2024, total cash, cash equivalents, pledged class and short term investments were $129,400,000 Total accounts receivable including notes receivable were $343,500,000 Accounts payable including notes payable were $292,800,000 and short term bank loans were $72,600,000 Total parent company stockholders' equity was $349,600,000 as of 12/31/2024 compared to $344,500,000 as of 12/31/2023.

Executive

Net cash flow from operating activities was $9,800,000 in 2024. Cash paid to acquire property plant and equipment and land use price was $43,700,000 in 2024 and cash received from the sale of property plant and equipment was $20,500,000 The business outlook. Management provided revenue guidance for the full year 2025 of $700,000,000 This target is based on the company's current views on operating market conditions, which are subject to change. With that operator, we'll be ready to begin the Q and A.

Operator

Thank you very much. At this time, we'll be opening the floor for questions. Thank you. Your first question is coming from Jonathan Mieves, who is a private investor. Jonathan, your line is live.

Operator

Jonathan, can you hear us?

Analyst

Yes, I can hear you. I can hear you. Sorry. Can you guys hear me?

Executive

Yes.

Executive

We can hear you.

Analyst

Okay. My question is for the 2025 year, the projection is for sales to grow by $50,000,000 What areas will generate this growth?

Executive

2025, right?

Analyst

Yes.

Executive

Okay. So majority of our sales increase in our production will be contributed from the EPS sales, our electric power steering products. That breaks down to a number of new products, CEPS, TP EPS and REPS product. And on the volume, we're expecting 30% year over year increase in 2025. In terms of total volume, we're looking at in terms of volume unit volume increase, we're looking at another 400,000 units increase in 2025.

Executive

That we're looking at, that will contribute to significant revenue growth we are reporting right now.

Operator

Okay. Jonathan, do you have any more questions?

Analyst

No. That was it. Thank you.

Operator

Okay. Thank you very much. Just a reminder that if there are any remaining questions, you can jump into the queue by pressing star one on your phone keypad. Just wait a moment to see if anyone jumps into the queue. I'm not seeing any further questions.

Operator

Okay. We don't appear to have anyone else in the queue.

Analysts
    • Executive
    • Analyst
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Key Takeaways

  • As of December 31, 2024, the company held $129.4 million in cash, cash equivalents and short-term investments (≈$4.29 per share) and generated $9.8 million of net cash from operations.
  • The board approved a $0.80 per share special cash dividend (≈$22.4 million) in August 2024 and launched a share buyback program of up to $5 million of common shares through November 2025.
  • Full-year 2024 net sales grew 12.9% to $650.9 million, led by a 29.9% jump in electric power steering (EPS) sales, which now represent 38.9% of total revenue.
  • In Q4 2024, net sales rose 18.6% year-over-year to $188.7 million, although gross margin narrowed to 15.6% from 21.8% due to product-mix shifts.
  • Management forecasts $700 million in revenue for 2025, driven by a 30% increase in EPS unit volume (≈400,000 units) and continued expansion of advanced driver assistance systems.
  • The company is strategically positioned to benefit from two industry transitions—internal combustion to electric powertrains and human to autonomous driving—with investments in its Sensia AB operations.
A.I. generated. May contain errors.
Earnings Conference Call
China Automotive Systems Q4 2024
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