Power steering components and systems supplier China Automotive Systems (CAAS) on Thursday said second quarter 2012 gross profit increased 13.0% year on year to US$15.6m while gross margin rose to 19.4% from 17.7% and operating margin was 10.7% compared with 9.2%.

Opearting earnings per share rose to $0.21 from $0.13. Sales rose 2.8% to $80.4m.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

However, first half sales slipped to $161.3m, from $164.6m in the first six months of 2011. Gross profit also fell to $31.0m, from $32.5m and gross margin was down to 19.2% from 19.7%. Operating margin was 9.2%, compared with 11.0% and earnings fell to $0.31 from $0.38.

CAAS CEO Qizhou Wu said: “The passenger vehicle sector in China is gradually reaching its cyclical bottom. We are encouraged by the stability in both unit sales volume and raw material costs. We continue to increase our market share in both the passenger and commercial vehicle markets in China.”

He added that the supplier had “streamlined” its operations by selling its pump business.

See Also:

CFO Jie Li added, “While we aggressively expanded our R&D programme to develop new products to address global market trends, our rigorous cost control measures showed results in many areas. Through our improved accounts receivable management, we continue to generate solid cash flow.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The supplier said the second quarter sales increase was due mainly to higher volume including exports to North America, higher sales to Chinese OEMs resulting from lower oil prices and government subsidies for low-emission and fuel-efficient domestic cars since May 2012, and the appreciation of the yuan against the US.

Outlook

CAAS said it had lowered its guidance for full year 2012 “due to a significant slacking of demand for automotive vehicles in the [PRC]” and now expects sales to be flat versus 2011.