January 28, 2021

Systems

– Reached monthly run rate of 70,000 steering units shipped to leading Chinese OEMs and North America aftermarket –

– New steering product and production line are ready for autonomous driving trucks and buses –

WUHAN, China, Dec. 3, 2020 /PRNewswire/ — China Automotive Systems, Inc. (Nasdaq: CAAS) (“CAAS” or the “Company”), a leading power steering components and systems supplier in China, today announced that it shipped approximately 70,000 commercial vehicle steering systems to leading Chinese truck OEM producers and the North America aftermarket in the month of November.

As Chinese industrial production accelerated its recovery after the pandemic, the leading Chinese truck producers such as Beiqi Foton, Shaanxi Auto, SinoTruck, FAW and Dongfeng Motor have significantly increased their orders to CAAS in recent months. In the month of November, total shipments of commercial vehicle steering systems has reached a Company monthly historical high, and the monthly sales run rate of 70,000 units is expected to continue into the first quarter of 2021.

In addition, a brand-new assembly line for intelligent RCB steering systems (“iRCB”) for commercial vehicles has been installed and is currently undergoing testing. Specifically designed for autonomous-driven commercial vehicles, CAAS’ proprietary commercial vehicle iRCB systems feature electric motor assisted power steering to provide maximum assistance in parking, and in lane keeping at highway speeds. While the Company plans to officially launch the product in 2021, more than 10 major domestic OEMs have already expressed strong interest in this product. This new product is expected to be produced on this new dedicated production line.

Mr. Qizhou Wu, chief executive officer of CAAS, commented, “To keep up with the surging demand from the robust growth momentum in the Chinese commercial vehicle market, our steering production lines are running at nearly full capacity with two shifts. Our new assembly line will arrive at the right moment to help strengthen our production capacity for our next generation product. We are very excited to be part of the upcoming autonomous driving supplier ecosystem. Being the first home-grown steering producer for the Chinese commercial vehicle market, we have extended our 20-year industry leadership by adding to our domestic market share in 2020 even as we also increased penetration of the international markets. As Chinese commercial vehicles are among the most competitive offerings in the world, we believe that we are well positioned for future growth.”

About China Automotive Systems, Inc.

Based in Hubei Province, the People’s Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through ten Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 6 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton

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Hyundai Motor plans to introduce its own electric car platform and battery charging systems, as the South Korean group seeks to gain a stronger toehold in vehicles powered by clean energies.

The plan, announced on Wednesday, comes after Hyundai said in October it would recall 77,000 of its Kona electric vehicles due to problems with battery cells. Since summer last year, there have been about a dozen more Kona fires, which prompted investigations into their cause.

Hyundai and its affiliate Kia Motor said the EV platform would help cut costs and expand the brands’ EV line-ups. The automotive group has said it would unveil 23 new EV models over the next five years as it aims to sell 1m EVs a year by 2025.

The company said the platform would also help it cut the number of required EV components by 60 per cent and increase the driving range of these vehicles by more than 20 per cent to about 500km on a single charge. EVs made on the new platform will also be able to charge up to 80 per cent capacity in 18 minutes, Hyundai said.

“It is a significant move to strengthen its EV competitiveness. The EV-only platform will help them lower EV prices and shorten charging time,” said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics and Trade.

Hyundai is following rivals such as Volkswagen and General Motors which are producing EVs on dedicated platforms — the bottom structural framework of a car — in order to scale up production.

Carmakers around the world are investing billions of dollars in improving their battery technology to improve safety and cut EV prices. In September, industry leader Tesla announced a plan to halve the cost of its EV batteries and produce more of them in-house in an effort to lower vehicle prices to about $25,000 each.

Hyundai, which has for years been criticised for being slow to pursue new technologies, last year announced a $35bn investment plan to shift away from traditional car manufacturing and into new sectors including EVs, hydrogen fuel cells and driverless cars over the next five years. It aims to spend nearly $9bn on its electrification push by 2025.

Hyundai declined to give the investment figure for the new platform and charging technologies but Mr Lee estimated that they would cost the group between $500m and $1bn.

Hyundai’s new Ioniq 5 EVs and some other Kia models will be made using the new platform, initially in South Korean plants. The automotive group chose LG Chem in May to provide batteries for the EVs built on the new platform.

Video: Why success in electric car making is no easy ride

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What happened

Shares of China Automotive Systems (NASDAQ:CAAS), a leading supplier of power-steering components and systems within the Chinese automotive industry, are down over 10% Tuesday morning after a whirlwind couple of days. Here’s some context around the price movement and what it means for investors.

So what

China Automotive Systems’ decline Tuesday, likely driven by a strong analyst downgrade, needs additional context, including its recent surge higher. On Monday, the auto company announced it had shipped over 120,000 steering units for electric-vehicle (EV) models so far in 2020 and that it could surpass 140,000 units by the end of the year. Management is now targeting over 200,000 sales of steering units for 2021. Jie Li, chief financial officer of CAAS, said in a press release: “Our portfolio of EPS products has the potential to become a major growth channel over the next few years as we further capture market share in the burgeoning market for Chinese electric vehicles.”

Man plugging charger into electric vehicle.

Image source: Getty Images.

Those comments and projections helped boost the stock price higher, and it’s easy to imagine some investors simply taking profits today.

CAAS Chart

CAAS data by YCharts

Now what

Another driving force behind China Automotive Systems’ decline Tuesday is likely Greenridge Global analyst, William Gregozeski. He reversed his previous Buy recommendation to Sell while leaving his $4 price target unchanged, essentially suggesting the only thing that changed was the massive spike in share price. Gregozeski noted to investors he expected a “collapse back down to a more normalized valuation.”

There is certainly reason to be optimistic about electric vehicles and especially China’s growth over the past few years in the category. However, Monday also brought news that Kandi Technologies –another Chinese electric-vehicle producer — had allegedly made “fake sales” to undisclosed affiliates of the company. There’s no reason to think China Auto Systems has done anything wrong. But take a rapid surge in its stock price due to projections with a grain of salt and perhaps wait for a normalization of its stock price.

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During Q3, China Automotive Systems (NASDAQ: CAAS) brought in sales totaling $114.42 million. However, earnings decreased 76.14%, resulting in a loss of $1.44 million. In Q2, China Automotive Systems brought in $83.18 million in sales but lost $6.03 million in earnings.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in China Automotive Systems’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q3, China Automotive Systems posted an ROCE of -0.0%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company’s recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows China Automotive Systems is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In China Automotive Systems’s case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q3 Earnings Recap

China Automotive Systems reported Q3 earnings per share at $0.08/share, which beat analyst predictions of $0.01/share.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Investors in China Automotive Systems, Inc. CAAS need to pay close attention to the stock based on moves in the options market lately. That is because the Dec 18, 2020 $5.00 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for China Automotive Systems shares, but what is the fundamental picture for the company? Currently, China Automotive Systems is a Zacks Rank #4 (Sell) in the Automotive – Original Equipment industry that ranks in the Top 19% of our Zacks Industry Rank. Over the last 60 days, one analysts have increased their earnings estimates for the current quarter, while one analyst has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 7 cents per shareto 1 cents in that period.

Given the way analysts feel about China Automotive Systems right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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– 120,000 steering units shipped for electric vehicle (“EV”) models so far in 2020; may reach over 140,000 units by year end 2020 –

– targets sales of over 200,000 steering units for Chinese EV vehicles in 2021 –

WUHAN, China, Nov. 30, 2020 /PRNewswire/ — China Automotive Systems, Inc. (Nasdaq: CAAS) (“CAAS” or the “Company”), a leading power steering components and systems supplier in China, today announced that it shipped approximately 120,000 units from its portfolio of electric power steering (“EPS”) products for use in Chinese electric vehicles (“EV”) during 2020.

Among the Chinese EV OEMs that are utilizing CAAS’s EPS units in 2020 are: Great Wall Motors, China’s largest SUV and pickup manufacturer, Chery Automobile, the largest state-owned car manufacturer in China, Beijing Auto, part of a top 5 automobile manufacturing group in China and which has been the leader in the production of BEVs for 7 years in a row, JAC Motors, a leading manufacturer of commercial vehicles in China and a major producer of passenger vehicles in China, Dongfeng Auto which is one of the 5 largest automobile manufacturers in China, and Hozon Auto which is an emerging all-EV manufacturer developing innovative technology to create intelligent EV models.

Sales of Chinese EVs approximately doubled year-over-year to 144,000 units in the month of October 2020. With this rapid growth of EVs occurring in China, the outlook is for booming growth as the Chinese government has set an EV car target of 25% of all new cars by 2025.

Mr. Hanlin Chen, chairman of CAAS, commented, “These sales continue our long trend of providing advanced steering products to the largest automobile manufacturers in China. We are pleased to meet their high requirements for excellent performance and quality. We have shipped a large number of our EPS steering products to Great Wall Motors for their new EV model in 2020, and will continue to ship to them in 2021. Given our sales momentum, we expect to sell over 140,000 steering units for use in Chinese EV models in 2020 and to reach approximately 200,000 units in 2021. The sales of our advanced EPS products to the largest automobile companies in China complements our sales of state-of-the-art hydraulic products to the leading Chinese vehicle OEMs and global Tier-1 vehicle OEMs we supply in the North and South American markets.”

Mr. Qizhou Wu, chief executive officer of CAAS, commented, “We have a history of our products winning awards for their high quality and performance and these contracts confirm our EPS products meet or exceed the requirements of the leading Chinese automotive manufacturers for their EV models. Our joint venture with KYB (China) Investment Co., Ltd. (“KYB”), a wholly owned company of Japan KYB Co., Ltd., is advancing our EPS technology as we penetrate the Chinese EV market. Our joint venture with Hyoseong Electric Co. Ltd. to design and manufacture small electric motors will further improve the capabilities of our EPS products in 2021. Other new products are under development to meet

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Technavio has been monitoring the transportation management systems (TMS) market and it is poised to grow by USD 2.04 billion during 2020-2024, progressing at a CAGR of over over 8% during the forecast period. The report offers an up-to-date analysis regarding the current market scenario, latest trends and drivers, and the overall market environment.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201130005746/en/

Technavio has announced its latest market research report titled Global Transportation Management Systems (TMS) Market 2020-2024 (Graphic: Business Wire)

Technavio has announced its latest market research report titled Global Transportation Management Systems (TMS) Market 2020-2024 (Graphic: Business Wire)

Technavio suggests three forecast scenarios (optimistic, probable, and pessimistic) considering the impact of COVID-19. Please request Latest Free Sample Report on COVID-19 Impact

The market is fragmented, and the degree of fragmentation will accelerate during the forecast period. American Software Inc., Blue Yonder Group Inc., BluJay Solutions Inc., Continental Traffic Service Inc., Infor Inc., Manhattan Associates Inc., Oracle Corp., SAP SE, The Descartes Systems Group Inc., and Trimble Inc. are some of the major market participants. Although the adoption of technologically advanced devices will offer immense growth opportunities, data privacy concerns will challenge the growth of the market participants. To make the most of the opportunities, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.

Transportation Management Systems (TMS) Market 2020-2024 : Segmentation

Transportation Management Systems (TMS) Market is segmented as below:

  • End-user
    • Large Enterprises
    • SMEs
    • Government Organizations
  • Geography
    • North America
    • Europe
    • APAC
    • MEA
    • South America
  • Solution

To learn more about the global trends impacting the future of market research, download a free sample: https://www.technavio.com/talk-to-us?report=IRTNTR43299

Related Reports on Information Technology Include:

Blockchain Technology Market in Transportation and Logistics Industry by Mode and Geography – Forecast and Analysis 2020-2024: The blockchain technology market size in transportation and logistics industry will decrease by USD 811.51 million during 2020-2024, and the market’s growth momentum will decelerate during the forecast period because of the decline in year-over-year growth.

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Food Logistics Market by Transportation Mode and Geography – Forecast and Analysis 2020-2024: The food logistics market size has the potential to grow by USD 55.86 bn during 2020-2024, and the market’s growth momentum will accelerate during the forecast period. This report provides a detailed analysis of the market by transportation mode (roadways, railways, seaways, and airways) and geography (APAC, North America, Europe, MEA, and South America).

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Transportation Management Systems (TMS) Market 2020-2024 : Scope

Technavio presents a detailed picture of the market by the way of study, synthesis, and summation of data from multiple sources. Our transportation management systems (TMS) market report covers the following areas:

  • Transportation Management Systems (TMS) Market size
  • Transportation Management Systems (TMS) Market trends
  • Transportation Management Systems (TMS) Market industry analysis

This study identifies advent of smart cities as one of the prime reasons driving the transportation management systems (TMS) market growth during the next few years.

Transportation Management Systems (TMS) Market 2020-2024 : Vendor Analysis

We

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Thinking about buying stock in Moderna, Aurora Cannabis, China Automotive Systems, GameStop, or Sunesis Pharmaceuticals?

Thinking about buying stock in Moderna, Aurora Cannabis, China Automotive Systems, GameStop, or Sunesis Pharmaceuticals?

PR Newswire

NEW YORK, Nov. 30, 2020

NEW YORK, Nov. 30, 2020 /PRNewswire/ — InvestorsObserver issues critical PriceWatch Alerts for MRNA, ACB, CAAS, GME, and SNSS.



To see how InvestorsObserver’s proprietary scoring system rates these stocks, view the InvestorsObserver’s PriceWatch Alert by selecting the corresponding link.

(Note: You may have to copy this link into your browser then press the [ENTER] key.)

InvestorsObserver’s PriceWatch Alerts are based on our proprietary scoring methodology. Each stock is evaluated based on short-term technical, long-term technical and fundamental factors. Each of those scores is then combined into an overall score that determines a stock’s overall suitability for investment.

 


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InvestorPlace – Stock Market News, Stock Advice & Trading Tips

China Automotive Systems (NASDAQ:CAAS) news for Monday includes new sales numbers of its steering units boosting CAAS stock higher today.

an electric car plugged in for charging, representing electric car stocks

Source: buffaloboy / Shutterstock.com

A news release from China Automotive Systems notes that the company has sold 120,000 steering units so far in 2020. The company also mentions that it expects the total number of units sold during the year to surpass 140,000.

To go along with this news, China Automotive Systems also says that it’s expecting sales of steering units to increase further in 2021. The company’s current guidance is for more than 200,000 steering units to sell during the year.

China Automotive Systems offers its steering units to makers of electric vehicles (EVs) in China. Its customers include Chery Automobile, Beijing Auto, JAC Motors, Dongfeng Auto, and Hozon Auto.

Hanlin Chen, chairman of China Automotive Systems, said the following about the news.

“These sales continue our long trend of providing advanced steering products to the largest automobile manufacturers in China. We are pleased to meet their high requirements for excellent performance and quality. We have shipped a large number of our EPS steering products to Great Wall Motors for their new EV model in 2020, and will continue to ship to them in 2021.”

CAAS stock is experiencing heavy trading following the news. As of this writing, more than 26 million shares of the stock have changed hands. That’s a massive spike compared to its daily average trading volume of just 110,000 shares.

CAAS stock was up 61.1% as of Monday morning and is up 94.6% since the start of the year.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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