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August 12, 2021

Chinese steering supplier returns to profit

A healthy recovery after losses a year ago during the Covid pandemic.

By Graeme Roberts

China Automotive Systems, the Chinese power steering components and systems supplier, said second quarter 2021 sales rose 45% year on year to US$120.6m from $83.2m in Q2 2020.

Gross profit soared 102.6% to $15.8m while gross margin was 13.1% compared with 9.4%.

Operating profit was was $0.1m compared to a $5.2m loss.

Net income was $3.2m versus the $4.1m loss a year ago at the height of the Covid pandemic.

First half sales grew 60.1% to $250.9m, gross profit increased 87.4% to $35.6m, gross margin was 14.2%, from 12.1%, and operating profit of $4.3m compared with a loss of $4.2m in the first six months of 2020.

Net income was $6.4m versus the $4.1m loss in H1 2020.

CEO Qizhou Wu said: “Our second quarter 2021 sales continued to achieve robust growth of 45% with sales of our advanced hydraulic products rising by 43.9% in the Chinese passenger vehicle market, our electric power steering product sales grew by 49.7% and sales into North America were 179.8% higher.

“Our operations in Brazil also experienced sales growth in the second quarter of 2021, with expected sales growth of approximately 200% for the full year.

“According to the China Association of Automobile Manufacturers, volume in China rose by 25.6% in the first half as passenger vehicle sales grew 27% and commercial vehicle sales increased by 20.9%. For the first six months of 2021, our sales increased by 60.1%, far surpassing the growth in the Chinese market.”

Outlook

The supplier raised revenue guidance for the full year to $495m from $485m.

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