Q1 2025 China Automotive Systems Inc Earnings Call
Operator: Good morning, everyone, and welcome to China Automotive Systems first quarter 2025.
Good morning, everyone and welcome to China Automotive systems first quarter 2025 conference call.
Operator: At this time, all participants are in a listen-only mode, and we will be opening the floor for questions following the presentation.
At this time all participants are in a listen only mode and we will be opening the floor for questions. Following the presentation.
Operator: If anyone should require operator assistance during this conference, please press star zero on your phone.
If anyone should require operator assistance. During this conference. Please press star zero on your phone keypad. Please note. This conference is being recorded.
Operator: Please note this conference is being recorded.
Kevin Theiss: I will now turn the conference over to our host, Kevin Theiss, Investor Relations.
Speaker Change: I'll now turn the conference over to your host Kevin six Investor Relations, Kevin the floor is yours.
Kevin Theiss: Kevin, the floor is yours. Thank you, everyone, for joining us today. Welcome to China Automotive Systems 2025 First Quarter Conference Call.
Kevin Six: Thank you everyone for joining us today welcome to China automotive systems towards your 25 first quarter conference call. Joining us today are Mr. Jay Li Chief Financial Officer.
Kevin Theiss: Joining us today are Mr. Jie Li, Chief Financial Officer of China Automotive Systems. He will be available to answer questions later in the conference call with the assistance of translation. Before we begin, I will remind all listeners that throughout this call, we may make statements that may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent the company's estimates and assumptions only as of the date of this call.
Kevin Six: China automotive systems, he will be available to answer questions later in the conference call with the assistance of translation.
Kevin Six: Before we begin I believe.
Kevin Six: Mind, all listeners that throughout this call. We may make statements that may contain forward looking statements within the meaning of the.
Kevin Six: The private Securities Litigation Reform Act of 1995 forward looking statements represent the Companys estimates and assumptions only as of the date of this call as a result, the company's actual results could differ materially from those contained in these forward looking statements due to a number of.
Kevin Theiss: As a result, the company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading Risk Factors and Results of Operations in the company's Form 10-K Annual Report for the year ended December 31, 2024, as filed with the Securities and Exchange Commission and in other documents filed by the company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways we cannot predict.
Kevin Six: Factors, including those described under the heading risk factors and results of operations in the company's Form 10-K annual report for the year ended December 31, 2024, and that's why I was scared and exchange Commission and the other documents filed by the company from time to time.
Kevin Six: The Securities and Exchange Commission.
Kevin Six: Any of these factors and other factors beyond our control.
Kevin Six: To have an adverse effect on the overall business environment cause uncertainties in the regions, where we conduct business.
Kevin Six: So our business to suffer in ways, we cannot predict.
Kevin Theiss: and materially and adversely impact our business, financial condition and results of operation. A prolonged disruption or any unforeseen delay in our operations of the manufacturing, delivery and assembly processes within any of our production facilities could result in delay in the shipments of products to our customers. increase cost and reduce revenue.
Kevin Six: And materially and adversely affect our business.
Kevin Six: Actual condition and results of operations.
Kevin Six: Prolonged disruption or any unforeseen delay in our operations of the manufacturing delivery and assembly processes within any of our production facilities can result in delays in the shipments of products to our customers increased costs and reduced revenue.
Kevin Theiss: The company expressly disdains any duty to provide updates to any forward of the statements made in this call, whether as a result of new information, future events or otherwise.
Kevin Six: Company expressly disclaims any duty to provide updates to any forward looking statements made in this call whether as a result of new information future events or otherwise.
Kevin Theiss: On this call, I will provide a brief overview and summary of the first quarter 2025 results for the period ended March 31, 2025.
Kevin Six: On this call I will provide a brief overview and summary of the first quarter 'twenty to 'twenty five results for the period ended March 31 2025.
Kevin Theiss: Management will then conduct a question and answer session. The 2025 first quarter results are unaudited and are reported using U.S. GAAP accounting. For the purposes of today's call, I'll review the financial results in U.S. dollars.
Kevin Six: Management will then conduct a question and answer session.
25 first quarter results are unaudited and are reported using U S GAAP accounting towards.
Kevin Six: For the purposes of today's call I'll review the financial results in U S dollars.
Kevin Theiss: We will begin with a review of some of the quarterly business highlights, recent dynamics of the Chinese economy and automobile industry in our market position. Following our record net sales of $650.9 million for the 2024 year, our net sales increased by 19.9% to $167.1 million in the first quarter of 2025, compared to $139.4 million in the first quarter of 2024. All operations reported sales growth with the of North America in the first quarter of 2025. Total net sales of Electric Power Steering Systems, EPS, increased by 54% year over year as our sales mix transitions to a higher technology product.
Kevin Six: We will begin with a review of some of the quarterly business highlights recent dynamics of the Chinese economy, and automobile industry and our market position.
Following our record net sales of $659 million.
Kevin Six: The 'twenty 'twenty four you.
Kevin Six: Our net sales increased by 19, 9% to $167 $1 million in the first quarter of two.
Kevin Six: 25.
Kevin Six: Compared to $139 $4 million in the first quarter of 2020 for all operations reported sales growth with the exception of North America in the first quarter of 'twenty to 'twenty five.
Kevin Six: Total net sales of electric power steering systems, EPS increased by 54% year over year as our sales mix transitions to a higher technology products are headlong K Y B subsidiary.
Kevin Theiss: Our Henlong KYB subsidiary achieved 38.2% year-over-year sales growth of its EPS products in the first quarter of 2025. Our largest steering subsidiary, Henlong, which produces traditional hydraulic steering systems for the Chinese passenger vehicle market, reported a sales climb 37.5% year-over-year in the first quarter of 2025. Sales of traditional steering products, the Cherry Auto. increased by 13.5% year over year, and sales by Yulong's commercial vehicle steering products rallied to 17.4% year over year growth in the first quarter of 2025. While North American sales declined by 10.3% year-over-year to $27.2 million due primarily to lower sales to Stellantos, our sales to the Brazilian market increased by 30.2% year-over-year due to higher demand by Stellantos.
Kevin Six: Was 38, 2% year over year sales growth of its E. P. S products in the first quarter of 2025.
Kevin Six: Our largest steering subsidiary hemlock.
Kevin Six: Which produces traditional hydraulic steering systems for the Chinese passenger vehicle market reported the sales climbed 37, 5% year over year in the first quarter of 2025.
Kevin Six: Traditional steering products to Chery auto.
Increased by 13.5% year over year and sales by your lungs commercial vehicle steering products.
Kevin Six: Eight to 17, 4% year over year growth in the first quarter of 2025.
Kevin Six: While north American sales declined by 10, 3% year over year to 27.2 million due primarily to lower sales to stilettos.
Kevin Six: Our sales to the Brazilian market increased by 32% year over year due to a higher demand by still exists.
Kevin Theiss: The macro economy, Chinese GDP growth was 5.4% year over year in the first quarter of 2025, consistent with the fourth quarter of 2024. The Chinese economy is stabilized, but it's still facing challenges. According to statistics from the China Association of Automobile Manufacturers, CAAM, the combined unit sales of passenger and commercial vehicles increased by 11.2% year-over-year to 7.5 million units. for the first quarter of 2025. Passenger car unit sales grew 12.9% year-over-year to 6.4 million units. and China's passenger vehicle brands sales totaled 4.4 million units and represented 68.1% of total passenger vehicle market sales in the first quarter of 2025.
Kevin Six: The macro economy Chinese GDP growth was five 4% year over year in the first quarter of 'twenty 'twenty five consistent with the fourth quarter of 2024.
Kevin Six: The Chinese economy has stabilized, but it is still facing challenges.
Kevin Six: According to statistics from the China Association of automobile manufacturers C. E O. The combined unit sales of passenger and commercial vehicles increased by 11, 2% year over year to 7.5 million units for the first quarter of 'twenty or 'twenty five.
Kevin Six: Passenger car unit sales grew 12, 9% year over year to $6 4 million units.
Kevin Six: And China's passenger vehicle brands.
Kevin Six: <unk> totaled $4 4 million years, and represented 68, 1% with total passenger vehicle market sales in the first quarter of 'twenty to 'twenty five.
Kevin Theiss: new energy vehicle unit sales grew by 47.1% year over year to 3.1 million units. as any of these were 41.2% of the total car sales in China in the first quarter of 2025. for the first quarter of 2025. Chinese Commercial Vehicle Sales increased by 1.8% year-over-year to 1.05 million units. And exports of automotive vehicle units increased by 7.3% year-over-year to 1.4 million units. Tax incentives, subsidies for scrapping older vehicles and lower interest financing are among the government incentives to support the purchases of automobiles in China for 2025. Additionally, local government and private incentives may also aid buyers.
Kevin Six: New energy vehicle unit sales grew by 47, 1% year over year to $3 1 million units.
Kevin Six: Has any of these were 41, 2% of the.
Kevin Six: Total car sales in China in the first quarter of 2025.
Kevin Six: For the first quarter of 'twenty 'twenty five.
Kevin Six: Chinese commercial vehicle sales increased by one 8% year over year to 1 million.
Kevin Six: And five I'm, sorry, 1.15 million units and exports automotive vehicle units increased by seven points or 8% year over year to $1 4 million.
Kevin Six: <unk>.
Kevin Six: Faction Sandoz subsidies for scrapping older vehicles, and lower interest financing are among the government standards to support the purchases of automobiles in China for 2025.
Kevin Six: Additionally, local government and private and state incentives may also aid buyers.
Kevin Theiss: gross profit increased by 18.8% yearly year to $28.6 million compared to $24.1 million in 2024. Gross Margin was 17.1% compared to 17.3% in the first quarter last year, up from 15.6% in the fourth quarter of 2024. R&D expenses increased by 64% to $8.7 million from $5.3 million in the first quarter of 2024. The increased investment was partially due to continuous development of our hydraulic and EPS products, especially our R-EPS product, which recently started mass production. Also, the increase reflected the purchase of new molds for a new product beginning in the first quarter of 2025, as well as a project we're still in.
Kevin Six: Gross profit increased by 18, 8% year over year to $28 $6 million compared with $24 $1 million in 2024.
Kevin Six: Gross margin was 17 17, 1% compared to 17, 3% in the first quarter of last year up from 15, 6% in the fourth quarter of 2024.
Kevin Six: R&D expenses increased by 64% to $8 $7 million from $5 $8 million in the first quarter of 'twenty 'twenty four.
Kevin Six: Increased investment was partially due to continuous development of our hydraulic and E. P S products, especially R. R.
Kevin Six: E P S product, which recently started mass production.
Kevin Six: Also the increase reflected the purchase of new modes for a new product beginning in the first quarter of 2025 as well as the project was delayed.
Kevin Theiss: A 41.3% increase in operating expenses, including R&D, resulted in a 10.5% year-over-year reduction in income from operations. Net income attributable to the parent company shareholders per diluted shares was 24 cents versus 27% in the year-ago first quarter. Net cash provided by operating activities rose 73.1% year over year to $18.1 million for the first quarter of 2025. Total cash and cash equivalents, pledge cash, and short-term investments were $135.9 million or approximately $4.50 per diluted share at March 31, 2025. Our R EPS steering product developed for Nanjing Eleko has entered mass production in the first quarter of 2025.
Kevin Six: A 41, 3% increase in operating expenses, including R&D resulted in only a 10, 5%.
Kevin Six: Year over year reduction in income from operations net income attributable to the parent company shareholders per diluted shares was 24 cents versus 27% in the year ago first quarter.
Kevin Six: Net cash provided by operating activities Rose 73, 1% year over year to $18 $1 million for the first quarter with 2025.
Kevin Six: Total cash and cash equivalents pledged cash and short term investments were $135 $9 million or approximately $4 50.
Kevin Six: Fully diluted share.
Kevin Six: Excuse me at March 31, 2020 five.
Kevin Six: Our EPS steering product developed for Nanjing Lego has enter mass production in the first quarter 'twenty five.
Kevin Theiss: This product features an electric motor with a unit control. and a ball nut and bell drive reduction system to provide steering assist. Our EPS architecture is capable of performing autonomous driving functions, such as automatic parking, lane keep assist, and lane follow-as-you-go.
Kevin Six: This product features an electric motor with a unit control.
Kevin Six: And the ball not in Bell drive reduction system to provide steering assist.
Kevin Six: R E. T. S architecture is capable of performing autonomous driving functions such as automated automatic parking.
Kevin Six: Lane keep assist and lane followers.
Kevin Theiss: Arasagi Jurong Power Steering Gears Company subsidiary won customer awards and accolades from two major vehicle OEM customers. BK Flowtime Motors, and Shanxi Automobile Heavy Trucks. Shanxi Zhulong provides steering systems to various commercial vehicles in China. such as you long received do. the Excellent Supplier Series Award and the Excellent Supplier Series Award from the Allman Business Unit of Photon Motors for exemplary product development cooperation, supply guarantees, and quality reliability.
Kevin Six: Our SaaS you do long power steering gears company.
Kevin Six: Subsidiary, one customer awards and accolades from two major vehicle OEM customers.
Kevin Six: So photon modal.
Kevin Six: She actually automobile heavy truck.
Speaker Change: Do you like the lives steering systems to various commercial vehicles in China.
Kevin Six: Could you along with your dual hours.
The excellent supplier series award and the excellent supplier award from the online business unit on photon Motors.
Kevin Six: And exemplary product development cooperation supply guarantees and quality reliability.
Kevin Theiss: In addition, Shanshi Guilong won the Strategic Synergy Award, the highest award given by Shanshi, for future research development and supply chain cooperation.
Kevin Six: In addition, Saatchi new long run these strategic synergy award the highest award given by Shaanxi.
Kevin Six: So our future research development and supply chain cooperation.
Kevin Theiss: We remain well positioned with our advanced gearing technologies and diverse product portfolio to address market opportunities in China and overseas.
Kevin Six: We remain well positioned with our advanced steering technology and diverse product portfolio to address market opportunities in China and overseas.
Kevin Theiss: Now let me review the financial results. in the first quarter of 2025. Our net sales increased by 19.9% to $167.1 million in the first quarter of 2025, compared to $139.4 million in the first quarter of 2024. that sales of traditional steering products and parts increased by 2.3% to $94.1 million. compared to $92 million for the first quarter of 2024. Net sales of electronic power steering EPS products and parts grew by 54% to $73 million for the three months end of March 31, 2025, compared with $47.4 million for the same period in 2024. EPS products for the first quarter of 2025 were approximately 43.7% of total sales compared with 34% of total sales.
Well, let me review the financial results.
Kevin Six: In the first quarter of 2025.
Kevin Six: Our net sales increased by 19, 9% to $167 $1 million in the first quarter of 2025 compared to $139 $4 million in the first quarter at 12 24.
Kevin Six: Net sales of traditional steering products and parts increased by two 3% to $94 $1 million.
Kevin Six: Compared to $92 million for the first quarter of 2024.
Kevin Six: Net sales of electronic power steering EPS products.
Kevin Six: Imports grew by 54% to $73 million for three months ended March 31, 2025, compared with $47 4 million for the same period in 2024.
Kevin Six: EPS products, where the first quarter of 2025 were approximately 43, 7% of total sales.
Kevin Six: Paired with 44% hotel total net sales.
Kevin Theiss: in the first quarter of 2024. QB Henlong's export sales were $27.2 million, compared to $30.1 million in the first quarter of 2024, primarily due to lower demand for passenger vehicle products by Stellantis and Lee. Shaxi Geelong sales increased by 17.4% to $19.7 million from $16.8 million in the 2024 first quarter. Brazil and loans net product sales increased by 30.2% to 16.5 million dollars in the first quarter of 2025 compared to 12.7 million dollars for the same period in 2024 due to higher demand from Stanatos NV in that market. WooHoo Sales, which mainly provides steering systems to cherry automobile in China, increased by 13.5% year over year, and sales for other entities increased by 19.1% year over year to $34.6 million.
Kevin Six: In the first quarter of 'twenty 'twenty four.
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Kevin Six: Whereas $27.2 million compared to $31 million in the first quarter of 2024.
Kevin Six: Primarily due to lower demand for passenger vehicle products lifestyle. It is in the.
Kevin Six: So actually do long sales increased by 17, 4% and $19 7 million from $16 $8 million in the 2020 for first quarter.
Kevin Six: Brazil, and lowers net product sales increased by 32% to $16 $5 million in the first quarter of 2025 compared to $12 $7 million.
Kevin Six: The same periods in 2024 due to a higher demand from standalone entity in that market.
Kevin Six: Ooh sales, which.
Kevin Six: Mainly provides steering assistance to chery automobile automobile.
Kevin Six: In China increased by 13, 5% year over year and sales for other entities increased by 19, 1% year over year to $34 $6 million.
Kevin Theiss: Gross profit increased by 18.8% to $28.6 million in $24.1 million in the first quarter of 2024. gross margin in the first quarter of 2025 was 17.1%, which was consistent with 17.3% in the first quarter of 2024. selling expenses increased by 83% to $4.8 million from $4.1 million in the first quarter of 2024. This increase in selling expenses was primarily due to higher warehouse and logistical expenses due to higher revenue. selling expenses represented 2.9% of net sales in the first quarter of 2025 and the first quarter of 2024. General Administrative Expenses, G&A, increased by 36.4% to $7.6 million, compared with $5.5 million in the first quarter of 2024, mainly due to staff-related expenses, including a one-time severance cost of approximately $1.4 million at one subsidiary.
Kevin Six: Gross profit increased by 18, 8% to $28 $6 million from $24 $1 million in the first quarter 2024.
Kevin Six: Gross margin in the first quarter of 2025 was 17, 1%, which was consistent with 17, 3% in the first quarter of 2024.
Kevin Six: Selling expenses increased by EQ for 3% to $4 8 million from $4 $1 million in the first quarter of 2024.
Kevin Six: This increase in selling expenses was primarily due to a higher warehouse and logistical expenses.
Kevin Six: Due to higher revenues.
Kevin Six: Selling expenses represented two 9% of net sales in the first quarter of 2025.
Kevin Six: In the first quarter of 2024.
Kevin Six: General and administrative expenses G&A increased by 36, 4% to $7 $6 million compared with $5 $5 million in first quarter of 2024, mainly due to staff related expenses included a one time severance costs of approximately $1 4 million.
Kevin Six: One subsidiary.
Kevin Theiss: G&A expenses represented 4.5% of net sales in the first quarter of 2025, compared with 4% of net sales in the first quarter of 2024. Research and development expenses R&D increased by 64% to $8.7 million compared to $5.3 million in the first quarter of 2024, mainly due to higher R&D activities for new projects and products. R&D expenses represented 5.2% of net sales in the first quarter of 2025 compared to 3.8% in the first quarter of 2024. Other income was $1.9 million for the first quarter of 2025 compared to $2.4 million for the first quarter of 2024.
Kevin Six: G&A expenses represented four 5% of net sales in the first quarter of 2025, compared with 4% of net sales in the first quarter of 2024.
Kevin Six: Research and development expenses, R&D increased by 64% to $8 $7 million compared to $5 $2 million in the first quarter of 2024, mainly due to higher R&D activities for new projects and products.
Kevin Six: R&D expenses represented five 2% of net sales in the first quarter of 2025 compared to three 8% in the first quarter of 2024.
Kevin Six: Other income was $1 $9 million for the first quarter of 2025 compared to $84 million for the first quarter of 2024.
Kevin Theiss: income from operations declined by 10.5% to $8.6 million in the first quarter of 2025 compared to income from operations of $9.7 million in the first quarter of 2024. The decrease in 2025 first quarter income from operations was primarily due to a 41.3% increase in operating expenses. Interest expense was 0.5 million dollars in the first quarter of 2025 compared to 0.3 million dollars in the first quarter of 2024. Financial income net was $2 million in the first quarter of 2025 compared to financial expense net of $0.01 million in the first quarter of 2024. This change was primarily due to an increase in foreign exchange gains due to foreign exchange volatility.
Kevin Six: Income from operations declined by 10.5% to $8 $6 million in the first quarter of 2025.
Compared to income from operations of $9 $7 million.
Kevin Six: In the first quarter of 'twenty 'twenty four.
Kevin Six: The decrease in 2025 first quarter income from operations was primarily due to a 41, 8% increase in operating expenses.
Kevin Six: Interest expense was pumped.
Kevin Six: Point $5 million in the first quarter of 2025 compared to $3 million in the first quarter of 2024.
Kevin Six: Financial income.
Kevin Six: Net was $2 million in the first quarter with 20 to 25.
Kevin Six: Compared to financial expense.
Kevin Six: Net of 0.0 $1 million in the first quarter of 2024.
Kevin Six: This change was primarily due to an increase in foreign exchange gains due to foreign exchange volatility.
Kevin Theiss: income before income tax expenses and equity and earnings of affiliated companies was $12.1 million in the first quarter of 2025 compared to $11.8 million in the first quarter of 2024. equity and losses of affiliated companies was 0.7 million dollars in the first quarter of 2025 compared with equity and losses of affiliated companies 0.8 million dollars in the first quarter of 2024. income tax expense was $2.9 million for the first quarter of 2025 as compared to $1.7 million for the first quarter of 2024. This higher tax was primarily due to a higher income before income tax expenses as compared to the same period last year and a higher expected annual effective tax rate in 2025 based on the latest annual forecast as compared to 2024.
Kevin Six: Income before income tax expenses and equity in earnings of affiliated companies.
Kevin Six: Was $12 $1 million.
Kevin Six: The first quarter of 2025 compared to 11 $8 million in the first quarter of 2024.
Kevin Six: Equity and losses of affiliated companies was seven.
Kevin Six: $7 million in the first quarter of 'twenty.
Kevin Six: 25, compared with equity and losses of the affiliated companies.
Kevin Six: Point $8 million in the first quarter of 2024.
Kevin Six: Income tax expense was $2 $9 million for the first quarter of 2025 as compared to $1.7 million when the first quarter of 2024.
Kevin Six: Higher tax was primarily due to a higher income before income tax expenses as compared to the same period last year.
Kevin Six: And a higher expected annual effective tax rate in 2025 based on the latest annual forecast as compared to 2024.
Kevin Theiss: Net income attributable to parent companies common shareholders was $7.1 million in the first quarter of 2025 compared to $8.3 million in the first quarter of 2024. diluted income per share was $0.24 in the first quarter of 2025 compared to net income per diluted share of $0.27 in the first quarter of 2024. The weighted average number of diluted common shares outstanding was $30,170,172 in first quarter 2025 compared to $30,185,702 in the first quarter of 2024.
Kevin Six: Net income attributable to parent company's common shareholders was $7 1 million in the first quarter of 2025 compared to $8 $3 million in the first quarter of 2024.
Kevin Six: Diluted income per share was 24 cents in the first quarter of 2025 compared to net income per diluted share up 27.
In the first quarter of 2024.
Kevin Six: The weighted average number of diluted common shares outstanding was $30 million 170172 in first quarter of 2025 compared to $30 million 185007, two in the first quarter of 2024.
Kevin Theiss: Now let's provide some balance sheets and other financial highlights. As of March 31, 2025, total cash, cash equivalent, and short-term investments were $89.9 million. Total accounts receivable, including notes receivable, was $323.6 million. Accounts payable including notes payable were $282.6 million and short term bank loans were $66.7 million.
Kevin Six: Now, let's provide some balance sheet and other financial highlights.
Kevin Six: As of March 31, 2025, total cash cash equivalents and short term investments were $89 $9 million.
Kevin Six: Total accounts receivable, including notes receivable were $323 $6 million.
Kevin Six: Accounts payable, including notes payable were $282 $6 million.
Kevin Six: And short term bank loans were $66 $7 million.
Kevin Theiss: Our current ratio was 1.4 to 1, and working capital rose to $154.7 million as of March 31, 2025, compared to $146.2 million as of December 31, 2024. Total parent company's stockholders equity was $357.5 million as of March 31, 2025, compared to $349.6 million as of December 31, 2024.
Kevin Six: Our current ratio was one four to one and working capital rose to $154 $7 million as of March 31, 2025, compared to $146 2 million as of December 31, 2024.
Kevin Six: Total parent company's stock.
Kevin Six: Stockholders' equity was 357 $5 million as of March 31, 2025, compared to $349 $6 million as of December 31, 2024.
Kevin Theiss: Net cash flow from operating activities was $18.1 million in the first quarter of 2025 compared with $10.5 million in the first quarter of 2024. Cash paid to acquire property plant equipment and land use rates was 10.3 in the first quarter of 2025.
Kevin Six: Net cash flow from operating activities was $18 $1 million in the first quarter of 2025, compared with $10 $5 million in the first quarter of 2024.
Kevin Six: Cash paid to acquire property plant and equipment and land use rights.
Kevin Six: 10.3.
Kevin Six: In the first quarter of 2025.
Kevin Theiss: Business Outlook. Management has reiterated revenue guidance for the full fiscal year 2025 of $700 million. This target is based on companies' current views on operating the market conditions, which are subject to change.
Kevin Six: Business outlook.
Kevin Six: Management has reiterated the revenue guidance for the full fiscal year 2025 of $700 million. This target is based on Companys current views on operating and market conditions, which are subject to change.
Kevin Theiss: With that, Operator, we are ready to begin the Q&A session. Thank you very much.
Speaker Change: With that operator, we are ready to begin the Q&A session.
Speaker Change: Very much at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your fine keypad now a confirmation tone will indicate that your line is Nicky.
Operator: At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your A confirmation tone will indicate that your line You may press star 2 if you would like to remove.
Speaker Change: Press Star two if you would like to relieve your question from Nicky.
Operator: Since using speaker equipment, it may be necessary to Please wait a moment whilst we poll Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Speaker Change: Since using speaker equipment, it may be necessary to pick up your handset before pressing the keys. Please wait a moment, whilst we poll for questions.
Speaker Change: Thank you. Your first question is coming from Jonathan.
Speaker Change: Jonathan Your line is life.
Jonathan: Good morning, everybody or slow.
Speaker Change: My question is.
Unknown Attendee: Good morning, everybody, or hello.
Speaker Change: Why did research development increased by 64% in the 2025 first quarter.
Unknown Attendee: My question is, why did research development increase by 64% in the 2025 first quarter? Will R&D remain at this high level for the 2025 year or will it vary?
Speaker Change: Well R&D remain at this high level for the 2025 year or will it vary.
Speaker Change: Yeah.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. 科研费用上升了比去年同期同比上了四十六十四 Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. 2025年全國 Since the first quarter of this year, the company has increased its RETS R&D investment. We have increased the number of R&D staff and also increased the number of R&D models. So in the first quarter, the R&D cost has increased a lot. Our total budget is about 34 million US dollars. The sales income is about 5%. This is also to meet the requirement of high-tech companies in China. The R&D needs to account for 5% of the sales income.
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Jie Li: So the total budget is expected to be 5% of the sales income. In the first quarter, we did increase our R&D effort, and hence the R&D expenses also went up, mainly in the area of our research and development of our EPS product. For this product, we have increased the staffing.
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Speaker Change: Okay.
Speaker Change: In the first quarter with good increase our R&D.
Speaker Change: FERC and.
Speaker Change: As the R&D expenses also went up.
Speaker Change: Mainly in the area of our.
Speaker Change: Research and development of our EPS product.
Speaker Change: For this product.
Speaker Change: We have increased the staffing.
Speaker Change: No.
Speaker Change: To help us to further balance.
Speaker Change: New technologies.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. all contributed to higher R&D expenses in Q1. On the full year basis, looking forward, we are seeing about 5% of total revenue, give or take around 34 million US dollars on R&D. So this also, please be mindful, we are. We are maintaining 5% revenue in R&D. That will help us to qualify high-tech status in China. And then we will also, in turn, receive tax benefits.
Speaker Change: We also increased some of the equipment design modules. So.
Speaker Change: All contributed to higher R&D expenses.
Speaker Change: Expenses in Q1 on a full year basis looking forward.
Speaker Change:
We are.
Speaker Change: We're seeing that.
Speaker Change: 5% of our total revenue.
Speaker Change: Give or take around 34 million U.
Speaker Change: U S dollars on R&D.
Speaker Change:
Speaker Change: So.
Speaker Change: This also please be mindful.
Speaker Change: We are.
Speaker Change: Sure.
Speaker Change: We are maintaining 5% revenue in RMB.
Speaker Change: That will help us to qualify high tech.
Speaker Change: That is.
Speaker Change:
Speaker Change: In China and then we will also in turn receive tax benefit.
Speaker Change: Okay. You finished with your question Jonathan.
Unknown Attendee: to finish with your question.
Unknown Attendee: Yes, thank you very much. Thank you.
Jonathan Your: Yes, thank you very much.
Jonathan Your: Thank you. Thank you very much.
Unknown Attendee: Unknown Attendee, Hanlin Chen, China Automotive Systems Inc Transcribed by Transcription Outsourcing, LLC.
Gary Nash: And our next question is coming from Gary Nash from Nash consulting Gary Your line is live.
Unknown Attendee: Gary Nash from Nash Gary, your line is Thank you. First, good day to everyone.
Gary Nash: Thank you.
Speaker Change: First big data everyone.
Gary Nash: Two part question.
Unknown Attendee: Could you please comment on the almost $10 million increase in inventories in the first quarter of 2025? And then if you could also comment on what is the outlook for inventory levels in the rest of 2025?
Gary Nash: Could you please comment on the almost $10 million increase in inventories in the first quarter of 2025.
Gary Nash: Then if you could also comment on is what is the what is the outlook for inventory levels in the rest of 2025.
Gary Nash: Okay. Thank you.
Hudson: Just a new way with Hudson and the Olympia Tushar.
Unknown Attendee: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Gary Nash: The <unk> two one.
Gary Nash: Chaco.
Gary Nash: Chaco and <unk>.
Unknown Attendee: 点击点击327-4864帮我们来帮忙撰写字幕 谢谢 Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Gary Nash: So each one maybe that.
Gary Nash:
Gary Nash: <unk>, so machine cloud services.
Gary Nash: More volume.
Gary Nash: Just isn't that.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. To be honest, the increase in stock in the first quarter does have something to do with the trade war. In order to deal with the possibility of increasing tariffs in the U.S., we issued some goods to the U.S. in advance. And now, if it's already in stock, it can be used until September of this year. It can be used for about four months. So the goods are in stock in order to reduce the impact of tariffs on the company.
Gary Nash: So Tim.
Gary Nash: <unk> she's hiring.
Gary Nash: Thanks, guys.
Gary Nash: A trend yet.
Gary Nash: To go to them.
Gary Nash: Squishes illegal longhaul.
Gary Nash: At times like this one.
Gary Nash: Each of those at some point didn't yacht Chester Kensington Mountain Zander, you think white sheet.
Gary Nash: Hum.
Gary Nash: In page you get a more connected and Japan uncertainty well meant he changed if I might sound like why not take it.
Gary Nash: Oh yeah.
Gary Nash: Homes, you would see in Eugene who put up on the tableau Creed.
Gary Nash: G in the jewelry events other HEICO units.
Gary Nash: So he is let's say if I had some follow up on that sort of tranches.
Gary Nash: It sounds like you're going to see that finally vehicles or is it better user and teaching people. Since you got a free pizza and whether you wanted to find out that sends out let me know why not coming sometimes they don't back I am kind of in shock.
Jie Li: This is a non-standard. In addition, in terms of growth, the total amount is about $10 million, which is about 10% more. In terms of revenue, it grew by 19.9% in the first quarter. So the growth in revenue will also lead to a normal growth in stock. It looks like it will stay at this level for the whole year. Although after the third quarter, the U.S. stock expired, but by the fourth quarter, it will be a higher sales quarter for the whole year.
Gary Nash: In China tend to be you know if somebody who doesn't then guy that I'm just now on the solar and the wind down is it wasn't.
Gary Nash: Just Joe didn't you.
Gary Nash: So then it turns out that its something you got you got you got a gentlemen's ends up.
Gary Nash: And then kind of how that trended in that top door we.
Gary Nash: We have a broker he passes I think assumption now we'd say, yes, so to the degree of SMG toward a home to go to.
Gary Nash: Maybe I was wrong of course that will also help us even though so do you do that one that you know you always see a good trend isn't designees households.
Gary Nash: All that you do or are doing to kind of find out if I mentioned nameplate, which is the consumption.
Jie Li: Okay, so, Gary, to answer your question, the inventory increase, it's actually partly related to the trade war. And, you know, as the US administration has been putting a lot of pressure on the tariff. So in response to the potential pressure, we have made some advanced shipment to the US.
Gary Nash: Okay. So okay.
Larry: Larry to answer your questions.
Gary Nash: The inventory increase.
Gary Nash: Actually.
Gary Nash: Related to that.
Gary Nash: Hey, Wal.
Gary Nash: And you.
Gary Nash:
Gary Nash:
Gary Nash: As European.
Gary Nash: U S administration has been.
Gary Nash: Putting a lot of pressure on the tariff.
Gary Nash: So in response to the potential pressure we have.
Gary Nash: Some are ballast shipments to the U S.
Gary Nash:
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. for that consideration. So Our inventory in the U.S. has given us up to September, in case of any kind of volatilities, policy-wise. So, this is a... Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc But in terms of percentage inventory increased about 10% overall revenue we have increased 19 19.9% so it's not Completely outsized Increase and and on a four year basis, we believe we will maintain a healthy level. We will now have a oversized, the oversized inventory. Does that answer your question, Gary?
Gary Nash: Hum.
Gary Nash: Months ahead, so we do our customer will not experience any.
Disruption in the productions.
Gary Nash: For that consideration.
Gary Nash: So.
Gary Nash: We our inventory in U S.
Gary Nash: As given us up to September.
Gary Nash:
Gary Nash: In case of any kind of.
Gary Nash: Volatilities policy wise. So this is.
Gary Nash: Yeah.
Gary Nash: It sort of out of ordinary of practice, while we have to do something to address.
Gary Nash: Sure.
Gary Nash: Potential risks, that's why our inventory increased.
Gary Nash: But in terms of percentage inventory increased about 10% overall revenue we have increased 19.
Gary Nash: Or 19, 9% so it's not.
Gary Nash: Completely outsized.
Gary Nash: Increase.
Gary Nash: And on.
Gary Nash: On a full year basis, we believe.
Gary Nash: We will maintain.
Gary Nash: A healthy level.
Gary Nash: We will now have a over.
Gary Nash: Sized.
Gary Nash: The oversize the inventory.
Gary Nash: Okay.
Gary Nash: Okay does that answer you.
Gary Nash: Your question Gary.
Unknown Attendee: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Thank you very much.
Gary Nash: Yes. It does thank you very much.
Gary Nash: Thank you.
Speaker Change: Thank you very much just a reminder, if at all any remaining questions you can still join the queue by pressing star one on your fine keypad.
Operator: Just a reminder, if there are any remaining questions, you can still join the queue by pressing star 1 on your phone.
Unknown Attendee: Our next question is coming from Michael Fiedler, a private investor, Michael, your line is Good morning.
Speaker Change: Our next question is coming from Michael Feedlot, a private investor Michael Your line is live.
Michael Feedlot: Good morning. My question is the gross margin was 17, 1% for the first quarter of 2025, what is the outlook for gross margin for the rest of 2025.
Unknown Attendee: My question is, the gross margin was 17.1% for the first quarter of 2025.
Unknown Attendee: What is the outlook for the gross margin for the rest of 2025? Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. This year, the gross profit of the first quarter is 17.1%, compared to 17% last year and the whole year, which is about the same level as last year's first quarter. It's a little bit lower than the previous year, but this is also our initiative to reduce some gross profit, and then to fight for more market share. In recent quarters, the effect is still relatively significant. Our gross profit is still relatively significant.
Great. Thank you.
Michael Feedlot: <unk> told you that no one seems to bringing in orly.
Speaker Change: Molly D G E.
Michael Feedlot: E.
Michael Feedlot: China in Utah and enjoyed it took them all inquiries social Eagle shipping.
Michael Feedlot: Kinion integrate easily the Maui Illumina patent system. So that you can cheat and shouldn't isn't that bad news. It's C. N N samples Seeger atropine, that's one time Chilean the Egypt, that's how Borja you Sandarmokh assumption.
Michael Feedlot: And can change their name Pms that we've done like India doesn't that thinking as a woman so Don the chunky Zimbra E are not whole sheets and things you couldn't do the hits not further some teaching Vega GPU, there, except what I come out of advertising.
Michael Feedlot: As you enjoyed that.
Michael Feedlot: So was it a credit ads and thousands of apps that you do.
Unknown Attendee: In a nutshell, we will improve a little bit compared to last year, and then maintain a stable level with Q1. Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. Comparable Correspondent Quarter in 2024, as well as a full year. average cost margin.
Michael Feedlot: The advantage you have on just the Trinian Knowhow mountain amount, we can surely MP video games.
Michael Feedlot: Now her top doors needs again QE.
Michael Feedlot: You don't see the assumption that some of that.
Okay.
Michael Feedlot: Yes, Q1, our margin.
And those.
Michael Feedlot: Slightly higher than 17%.
Michael Feedlot: That's the Q1 gross margin is very similar to <unk>.
Michael Feedlot: Parable of corresponding quarter in 2024.
Michael Feedlot: As well as our full year.
Michael Feedlot: Average gross margin.
Michael Feedlot: Yeah.
Unknown Attendee: and we are, you know, we are We are fully aware this level of gross margin is typically, it's lower than our typical margin in the past. prior to 2024. But this is our Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Michael Feedlot: And we are you know where we are.
Michael Feedlot: We are fully aware this level of gross margin is.
Michael Feedlot: Typically it's lower than our typical margin in the past.
Michael Feedlot:
Michael Feedlot: Prior to 2024.
Michael Feedlot: But this is a hour.
Michael Feedlot: You know part of our strategy to proactively.
Michael Feedlot: Seeking more market share.
Michael Feedlot: By using some of the strategy of your pricing strategy.
Michael Feedlot: Hum.
Michael Feedlot: Clearly it has.
Michael Feedlot: Bear fruit this strategy is bearing fruit.
Michael Feedlot: So we are growing.
Unknown Attendee: So we are growing revenue, gaining market share on a four-year basis, 2025 four-year basis, we believe we will maintain at a similar cost margin level and with a slight improvement. Thank you. Thank you, Michael. Unknown Attendee That answers my question. Thanks.
Michael Feedlot: Growing revenue gains.
Michael Feedlot: Gaining market share.
Michael Feedlot: On a full year basis.
Michael Feedlot: 2025 full year basis, and so we believe we will maintain that.
Michael Feedlot: A similar gross margin level.
Michael Feedlot: With a slight improvement.
Michael Feedlot: Okay.
Thank you Mike.
Michael Feedlot: Thank you Michael.
Okay that answers my question. Thank you.
Speaker Change: Okay. We appear to have fat no further question in the Cuba, if he would like to ask a question you can still do you save by pressing star one on Youll find keep pack now.
Operator: Okay, we appear to have no further questions in the queue, but if you would like to ask a question, you can still do so by pressing star 1 on your phone.
Speaker Change: And I think anyone else pumps into the queue.
Kevin Six: Okay, I'll hand back over to Kevin <unk> for further comments.
Kevin Theiss: I'll hand back over to Kevin.
Kevin Theiss: Well, we have some additional questions that were emailed to us.
Well, we have some additional questions that were emailed to us. So I'll I'll go ahead and announce those so the first one is what is the impact of the U S are proposed to tire tariffs on your new order flow.
Unknown Attendee: So I'll go ahead and announce those. So the first one is, what is the impact of the U.S. proposed tariffs on your new order flow? And is it impacting any areas beyond North America?
Kevin Six: Uh huh.
Kevin Six: Are the is it impacting any areas beyond North America.
Kevin Six: Okay.
Unknown Attendee: We have some investment questions. The first question is, what impact will U.S. tariffs have on our new orders?
Speaker Change: Maybe we should concern or what you should Danielle Colorado.
Kevin Six: The one piece of it.
Kevin Six: Question. One question two women does seem to think that you'll see.
Kevin Six: Well, it's similar you Michelle.
Kevin Six: Oh geez.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc to make some advanced shipment to our U.S. facility, and those inventory help us to carry us to foreseeable challenges in the coming quarters, which turned out to be useful. And also, as yesterday, in China, the U.S. announced the truce on the trade, on the tariff.
Speaker Change: I would just as a pet Bailey wireless is huh.
Speaker Change: What are you assuming you'll be too good to go make water quality and Christmas Queen cloud. She has this holiday she would be helpful.
Speaker Change: Oh My theory is that sort of showed you you can set out in the country in terms of who you are as you're paying them off so is what you're saying well, it's actually I remember when he joins in ship out.
Speaker Change: I don't go teach MP Hawk C quite a finite quantity in China on that time of three D say megawatts N G. Digging conversion the claims into the whole only isn't G. G that you Cook, which isn't a gold home. She noted youre buying about hitting that kind of alignment has approved language chowder does you cannot cope with the one that you need a bank.
Speaker Change: And you can't to get towards a W shape when C C.
Speaker Change: So you're quite upon their women and women women Shuang XI longtime and good signs of Sundance a quiet we didn't kind of everyone. That's what's on the shelf placement at all.
Speaker Change: Each of them together you end up on that the Shanghai, that's a quiet year would be quite as you bring it on.
Speaker Change: No paid out of you sound pretty quiet.
Speaker Change: Seen that in band up on melamine here has a day tissue <unk> zone, and then Cindy Yang Mi Hudson's access for patients.
Speaker Change: That's b. They may you why that's a quite a fine which I know it can be.
Speaker Change: Kind of on the EMEA was more tied out as Michelle Ah well means when telling them. They called you don't want them, there and kind of Cui called E. G. G. Sorry, right. Jason would you say on the funding and the Zynga punctuated Indeed say quite a farmer you couldn't do before.
Speaker Change: Sure.
Speaker Change: Okay. So in terms of tariff.
Speaker Change: We mentioned earlier in the beginning of the year, we anticipated.
Speaker Change: There will be some.
Speaker Change: Pressure.
Speaker Change: Coming from the illustration.
Speaker Change: So we did.
Speaker Change: They made a decision to.
Speaker Change: Two.
Speaker Change: To make some.
Speaker Change: About shipment to our U S facility and.
<unk>.
Speaker Change: Those inventory helped us to carry us too.
Speaker Change: Placebo.
Speaker Change: Challenges.
Speaker Change: In the coming quarters.
Speaker Change: Which turned out to be a.
Speaker Change: That's useful.
Speaker Change: And also as.
Speaker Change: Yesterday.
Speaker Change: Uh huh.
Speaker Change: In China the U S.
<unk>.
Speaker Change: The truth.
Speaker Change: Choose on the trade.
Speaker Change: Tariff.
Jie Li: which is a very positive development. And we have immediately got in touch with our customer in North America. And we come to a very good conversation and decision and they all agreed to bear the increased part of the cost related with tariff. So to answer your question, overall, the tariff has very minimal. impact to our and the order flow.
Speaker Change: Which is a very positive development and we have.
Speaker Change: We really got in touch with our customer.
Speaker Change: And in North America and we.
We come to them.
A very good conversation.
Speaker Change: And they all agreed to.
Speaker Change: To.
Speaker Change: To bear.
Speaker Change: Increase part of.
Speaker Change: The cost.
Speaker Change: With Paragon.
Speaker Change: So to answer your question overall.
Speaker Change: The tariff is.
Speaker Change: Very minimal.
Speaker Change: Pack.
Speaker Change: Our business and the order flow.
Jie Li: The new order Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. product with our customers. And outside the US.
Speaker Change: The new order.
Speaker Change: Continues we'll continue to develop.
Speaker Change: Uh huh.
Speaker Change: Product towards our customers.
Speaker Change: And outside of the U S.
Speaker Change: We still see opportunities as we reported today would have a pretty healthy strong growth.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc in Brazil.
Speaker Change: In Brazil.
Jie Li: Unknown Speaker, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. So we are also making some strategic planning different kinds of volatilities in the market. Okay, thank you.
Speaker Change: Hum.
Speaker Change: So we are.
Speaker Change: Also making some strategic planning.
Speaker Change: Hum.
Speaker Change: Global expansion.
Speaker Change: That will also at some point.
Speaker Change: Well, we announced will help us to further.
Speaker Change:
Speaker Change: Weather.
Speaker Change: Different kind of volatilities in the marketplace.
Speaker Change: Okay. Thank you.
Unknown Attendee: I have another question that was emailed in.
Speaker Change: I have another question that was emailed in.
Unknown Attendee: Please provide an update on the manufacturing of the R-EPS steering product for Nijinko Eleko and have other automotive OEMs also ordered the R-EPS product?
Speaker Change: Please provide an update on the manufacturing of the R. E P S steering product.
Speaker Change: For now you can go and let go.
Speaker Change: And.
Speaker Change: Have other automotive Oems also ordered the R E P S.
Speaker Change: Perfect.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Speaker Change: Yeah.
Speaker Change: However, even when teachers.
Speaker Change: <unk>.
Speaker Change: Sometimes there's all these guys who are causing me a T cell to crate and barrel and gentlemen, Dorothy.
Speaker Change: Yes.
Speaker Change: Our EPS.
Speaker Change: The <unk> 19.
Speaker Change: 19, UA Coty been chewed up.
Speaker Change:
Speaker Change: Two the whole shebang, so machine the genes that are highly interesting humility TADA.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. The mass production and shipment to our customer Nanjing Evaco. In addition to Iveco, the other OEM also placing orders on our new product. They are including Cherry Auto, Guangzhou, Guangqi Auto, Yutong Bus, and Qingdao.
Speaker Change: Oh, Yeah, Yeah Ted.
Speaker Change: You can call them the IEPS shuttle.
Speaker Change: Got that.
Speaker Change: Our non U C.
Speaker Change: Quite a while now we can zoom personal opinion is intact.
Speaker Change: So, let's say you wanted to find out well I mean, it seems like you're kind of a gauge you need Johan do you want to take it up she now she now in Ghana.
Speaker Change: Since I kind of I call. It ends on the Cook on a higher quantity you Don Kinder. So you can't cut where they wind up those new ones in that younger and cover it. So you'll have that opinion weighs the same P&L sometime soon.
Speaker Change: So I think a R E T S private should slow down the bottom on the junior note, while not yet does not seem to tend to close on some children I shouldn't that's how long would tempt in good a R. E. P S that'd be great.
Speaker Change: And since I'm. The one that you can die because of that Schindler company suddenly Jayson.
Speaker Change: Thank you.
Yep.
Speaker Change: Yes Ari.
Speaker Change: Is a growth area we have.
Speaker Change: <unk> already begun.
Speaker Change: The mass production and shipment to our customer managing iveco.
Speaker Change: In addition to our Iveco.
Speaker Change: Cool.
Speaker Change: The other Oems also.
Speaker Change: Placing orders.
Speaker Change: New product they are including Chery auto.
Speaker Change:
Speaker Change: Guangzhou quality auto.
Speaker Change: You told us and Qingdao.
Jie Li: And for this new, for this ARC EPS product, we have also built a brand new facility dedicated to the production and install new production lines. And so we are pretty excited about this new opportunity presented. Thank you.
Speaker Change: For this new.
Speaker Change: For this our EPS product we have also.
Speaker Change: Bill.
Speaker Change: The new facility.
Speaker Change: Dedicated to the production and install.
Speaker Change: New production wise and so we are pretty excited about this.
Speaker Change: New opportunity presented to us.
Speaker Change: Okay.
Speaker Change: Thank you.
Unknown Attendee: Then the last question is, can you provide an update on the sentient operation and as far as the automatic driving systems?
Speaker Change: Then the last question is can.
Can you provide an update on the sentience operation and.
Speaker Change: As far as the automatic driving systems.
Unknown Attendee: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc.
Speaker Change: So even when teachers did grow as well.
Speaker Change: Is that just some sense here.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. This is the first one, and it has been in production since last year. It has already started to climb to more than 3,000 units in the moon factory. It is now 3,500 units in the moon factory.
Speaker Change: A b to go away.
Speaker Change: Maybe she has seen the team got quite you can take a wound Josh.
Speaker Change: How's that.
Speaker Change: MOOC CN, a tiny so let them buy mass a walk to that are there.
Speaker Change: E P S V class.
Speaker Change: Ah, Yes, Hao Nan Maggi and battle, a suntan tight trading agency die a slow anti you.
Speaker Change: So the one that kind of quasi Sunshine OEM Zaniness gypsum Vegas, Oh, sorry, so that Eugene sushi sometime that's from Chile, and Joe you can cause a popular with all your time, Samsung Santander I don't.
Speaker Change: James I don't want us in real time, so I say all that high.
Speaker Change: New I mean, why crime nowhere near sort of call. It a b I D that soon take attrition not home, which end up on that you kind of how those how big rollout you made on the neck, you told of Peanuts in China just.
Jie Li: The other one is the domestic BYD Song model. It is almost ready to be developed. It should be ready to be mass-produced within this year.
Jie Li: This is the second one. The third one is in the process of being developed. It is Volvo's commercial vehicle and Renault's commercial vehicle. These two models are all line-controlled conversion projects. This is our latest technology.
Speaker Change: They are deciding to die a general kind of our course enrollment as a water well that same is true for our label.
Speaker Change: No that sounds good.
Speaker Change: Well I'm not.
Speaker Change: Sure.
Speaker Change: Sound more cigarettes to the island. So you shouldn't you shouldn't useful color through the year.
Unknown Attendee: Okay, that's it.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. 年销售3000万欧元 Yes, we have quite a bit of development on Sentient AV, our subsidiary for developing autonomous driving technologies. Our Sentient's main customer now is Volvo truck for the EPS product. We are shipping 3,500 units, and this month, on a four-year basis, we are targeting 40,000 units. 2025. On the revenue side, for this particular customer, we're booking 30 million euros for 2025. Other than this particular customer, we have one contract with BYB, their new model, model Song, S-O-N-G. We are expecting mass production for this particular model, autonomous driving technology for 2025.
Speaker Change: Okay.
Speaker Change: Oh, when you enter a world Cup, because they've been that shuttle tankers the torso.
Speaker Change: In terms of the Sunshine OEM.
Speaker Change: Okay.
Speaker Change: Yes, we have a quite a bit development on Santander our.
Speaker Change: Our subsidiary <unk>.
Speaker Change: For developing.
Speaker Change: Economists driving technologies our.
Speaker Change: Our incentives main customer now.
Speaker Change: Volvo truck.
Speaker Change: For the EPS product, we are shipping 3500 units.
Speaker Change:
Speaker Change: And on a full year of this month on a full year basis.
Speaker Change: We are targeting 40000 units.
Speaker Change: For 2025.
Speaker Change:
Speaker Change: On the revenue side.
Speaker Change: Sent in for this particular customer we're booking.
Speaker Change: $30 million for 2025.
Speaker Change:
Speaker Change: Other than.
Speaker Change: This particular customer we have.
Speaker Change: We have one contract with BYD their new motto model. So S O N G M D.
Speaker Change: We are expecting a mass production for this particular model.
Speaker Change: What's driving technology for 2025.
Jie Li: So the mass production will start in 2025. And also, we have entered into Volvo passenger vehicle.
Speaker Change: So the mass production will start in 205 and also.
We have entered.
Speaker Change: Into Basel a passenger vehicle.
Speaker Change: With our fly by wire technology.
Jie Li: Unknown Attendee, Kevin Theiss, Jie Li, Hanlin Chen, China Automotive Systems Inc. Unknown Attendee And there's another automaker, which is Renault. So we are making very good progress with all different customers on both passenger and commercial side. So we are expecting a very meaningful contribution from our subsidiary, Sentia.
Speaker Change: <unk>.
Speaker Change: And there's another automaker was.
Speaker Change: Right now so.
So we are making very good progress with all different.
Speaker Change: Customers on both passenger and commercial side.
Speaker Change: So we are expecting a very meaningful contribution from.
Cynthia: From our subsidiaries Cynthia.
Unknown Attendee: Thank you.
Cynthia: Thank you.
Operator: Just before we wrap up the call, I'm going to check to see if there are any further questions from the audience.
Speaker Change: Just before we wrap up the call I'm going to check to see if there are any.
Speaker Change: Any further questions from the audience and if you want to press star one to join the key.
Speaker Change: Okay.
Operator: Is there anyone else in the queue at the moment?
Kevin Six: No one else in the queue at the moment I will now hand back over to Kevin for any closing remarks.
Kevin Theiss: I'll now hand back over to Kevin. Well, we want to thank everyone for your participation in today's conference call. Please be safe and we look forward to speaking with you in the future. Thank you.
Speaker Change: Well, we want to thank everyone for your participation in today's conference call.
Kevin Six: Please be safe and we look forward to speaking with you in the future. Thank.
Kevin Six: Thank you.
Kevin Six: Yeah.
Speaker Change: Thank you. Thank you very much. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day, we thank you for you.
Operator: Thank you very much, this does conclude You may disconnect your phone lines at this time and have
Speaker Change: Your participation.
Thank you.