WUHAN,China,Nov. 13,2024 -- China Automotive Systems,Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"),a leading power steering components and systems supplier in China,today announced its unaudited financial results for the third quarter and nine months ended September 30,2024.

Third Quarter 2024 Highlights

Net sales rose 19.4% year-over-year to $164.2 million from $137.5 million in the third quarter of 2023.

Gross profit increased by 6.5% year-over-year to $26.4 million from $24.8 million in the third quarter of 2023; gross margin was 16.0% in the third quarter of 2024 compared to 18.0% in the third quarter of 2023.

Income from operations was $11.1 million for the third quarter of 2024,a nearly 10.0% increase compared to $10.2 million for the three months ended September 30,2023.

Net income attributable to parent company's common shareholders was $5.5 million,or diluted earnings per share of $0.18.

First Nine Months of 2024 Highlights

Net sales grew by 10.8% year-over-year to $462.2 million,compared to $417.2 million in the first nine months of 2023.

Gross profit increased by 15.4% year-over-year to $79.7 million,compared to $69.1 million in the first nine months of 2023; gross margin increased to 17.2% in the first nine months of 2024 from 16.6% in the same period last year.

Income from operations rose by 22.9% year-over-year to $31.6 million compared to income from operations of $25.7 million in the first nine months of 2023.

Net income attributable to parent company's common shareholders was $20.9 million.

Diluted earnings per share attributable to parent company's common shareholders was $0.69.

Cash and cash equivalents,and pledged cash were $138.8 million,or approximately $4.60 per share,as of September 30,2024.

A special cash dividend of $0.80 per common share was paid to shareholders in August 2024.

Mr.Qizhou Wu,Chief Executive Officer of CAAS,commented,"We are pleased to report sales growth for both the third quarter and the nine-month periods. Our third quarter's solid performance was driven by a noteworthy 43.5% year-over-year increase in sales of Electric Power Steering ("EPS") products,now accounting for almost 40.0% of our total sales. Additionally,sales of traditional steering products in the domestic Chinese passenger vehicle market climbed by 29.6% year-over-year,despite a slower industry growth environment. We are also pleased to see our commercial vehicle market sales rebounded with a 10.5% increase this quarter. Domestic sales were buoyed by the vehicle replacement cycle and subsidy policies. All business units,with the exception of North America,reported sales growth in the third quarter of 2024."

"According to statistics from the China Association of Automobile Manufacturers,overall automobile sales in China increased by 2.1% year-over-year in the first nine months of 2024 with passenger car sales up by 3.0% and commercial vehicle sales lower by 1.6%. Sales of new energy vehicles increased by 32.5% and Chinese vehicle exports rose by 27.3% for the first nine months of 2024."

"Given our recent financial performance and positive outlook,our shareholders were rewarded with a special cash dividend of $0.80 per common share in August of 2024. Also in August 2024,we celebrated the 20th anniversary of our NASDAQ listing," Mr. Wu concluded.

Mr. Jie Li,Chief Financial Officer of CAAS,"We continued to maintain a strong balance sheet with cash and cash equivalents plus pledged cash of $138.8 million,despite spending $9.3 million on cash dividends to shareholders and investing $18.3 million in property,plant and equipment in the first nine months of 2024. At September 30th,working capital was $156.6 million and positive cash flow from operations increased by almost 54.0% year-over-year in the first nine months of 2024. We remain well positioned in our markets for long-term growth."

Third Quarter of 2024

Net sales increased by 19.4% year-over-year to $164.2 million in the third quarter of 2024,compared to $137.5 million in the third quarter of 2023. Net sales of traditional steering products and parts increased by 7.4% year-over-year to $98.6 million for the third quarter of 2024,compared to $91.8 million for the same quarter in 2023. Net sales of EPS products rose 43.5% year-over-year to $65.6 million from $45.7 million for the same period in 2023. EPS product sales grew to 39.9% of the total net sales for the third quarter of 2024,compared to 33.2% for the same period in 2023. Sales of Henglong's passenger vehicle steering systems increased by 29.6% and sales to Chery Auto rose by 12.4% due to higher demand. Sales to the commercial vehicle markets increased by 10.5%. Export sales to North American customers decreased to $18.7 million in the third quarter of 2024,compared to $27.6 million in the third quarter of 2023. North American sales declined primarily due to decreased demand from one customer. Sales in Brazil were $14.3 million in the third quarter of 2024,compared to $13.3 million in the third quarter of 2023. Net product sales for other entities rose 23.4% to $35.2 million compared to $28.5 million for the third quarter in 2023.Gross profit grew by 6.5% year-over-year to $26.4 million from $24.8 million in the third quarter of 2023. Gross margin was 16.0% in the third quarter of 2024 compared to 18.0% in the third quarter of 2023. The change in gross margin was mainly due to the changes in the product mix for the three months ended September 30,2024.Gain on other sales was $0.6 million in the third quarter of 2024,compared to $2.2 million in the third quarter of 2023.Selling expenses increased by 14.6% year-over-year to $4.4 million compared to $3.8 million in the third quarter of 2023. This expense increase was primarily due to higher warehouse and logistic costs related to the increased revenue. Selling expenses represented 2.7% of net sales in the third quarter of 2024,compared to 2.8% in the third quarter of 2023.General and administrative expenses ("G&A expenses") decreased by 17.0% year-over-year to $5.1 million,compared to $6.1 million in the third quarter of 2023,primarily due to the reversal of bad debt provisions for receivables. G&A expenses represented 3.1% of net sales in the third quarter of 2024,compared to 4.4% of net sales in the third quarter of 2023.Research and development expenses ("R&D expenses") decreased by 7.1% year-over-year to $6.4 million compared to $6.9 million in the third quarter of 2023. This decrease was related to lower R&D miscellaneous expenses caused by a reduction in R&D activities for new projects. R&D expenses represented 3.9% of net sales in the third quarter of 2024,compared to 5.0% in the third quarter of 2023.Other income was $1.3 million for the third quarter of 2024,which is stable compared to $1.2 million for the three months ended September 30,2023.Incomefrom operations was $11.1 million for the third quarter of 2024,2023.Interest expensewas $0.3 million in the third quarter of 2024 compared to $0.2 million in the third quarter of 2023.Net financial expense was $0.2 million in the third quarter of 2024,compared to net financial income of $0.2 million in the third quarter of 2023. The change in net financial expense/income primarily resulted from an increase in the foreign exchange losses due to the foreign exchange volatility.Incomebefore income tax expenses and equity in earnings of affiliated companies was $11.9 million in the third quarter of 2024,compared to income before income tax expenses and equity in earnings of affiliated companies of $11.2 million in the third quarter of 2023.Income tax expense was $4.0million in the third quarter of 2024 compared to $0.7 million for the third quarter of 2023,primarily due to a one-time income tax expense settlement for the subsidiaries in the PRC and an increase in the Global Intangible Low-Taxed Income ("GILTI") tax expenses.Net income attributable to parent company's common shareholders was $5.5 million in the third quarter of 2024,compared to net income attributable to parent company's common shareholders of $9.5 million in the third quarter of 2023. Diluted earnings per share was $0.18 in the third quarter of 2024,compared to $0.31 per share in the third quarter of 2023.The weighted average number of diluted common shares outstanding was 30,185,702 in the third quarter of 2024,compared to 30,189,363 in the third quarter of 2023.First Nine Months of 2024 Net sales increased by 10.8% year-over-year to $462.2 million in the first nine months of 2024,compared to $417.2 million in the first nine months of 2023 primarily due to an increase in sales of both traditional steering and EPS products. Nine-month gross profit increased by 15.4% year-over-year to $79.7 million from $69.1 million in the corresponding period last year. Nine-month gross margin increased to 17.2% from 16.6% in the first nine months of 2023. Gain on other sales was $2.8 million in the first nine months of 2024,compared to $3.6 million in the corresponding period last year. Income from operations increased by 22.9% year-over-year to $31.6 million in the first nine months of 2024 from $25.7 million in the first nine months of 2023.Net income attributable to parent company's common shareholders was $20.9 million in the first nine months of 2024,compared to net income attributable to parent company's common shareholders of $26.8 million in the corresponding period in 2023. Diluted earnings per share in the first nine months of 2024 were $0.69,compared to diluted earnings per share of $0.89 in the first nine months of 2023.Balance SheetAs of September 30,2024,total cash and cash equivalents,total accounts receivable including notes receivable were $314.2 million,accounts payable including notes payable were $271.8 million and short-term loans were $59.7 million. Total parent company stockholders' equity was $388.6million as of September 30,compared to $367.8 million as of December 31,2023.Business OutlookManagement has raised its revenue guidance for the full year 2024 to $630.0 million. This target is based on the Company's current views on operating and market conditions,which are subject to change.Conference Call

Management will conduct a conference call on Wednesday,November 13,2024 at 8:00 A.M. EST/9:00 P.M. Beijing Time to discuss these results. A question and answer session will follow management's presentation. To participate,please see the dial-in information below,enter the call 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-888-506-0062 (North America)

Phone Number: +1-973-528-0011 (International)

Mainland China Toll Free: +86-400-120-3199

Code: 546311

A replay of the call will be available on the Company's website under the investor relations section.

About China Automotive Systems,Inc.

Based inHubei 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 eight 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 8 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 Motor Co.,Ltd. and Chery Automobile Co.,Ltd. in China,and Stellantis N.V. and Ford Motor Company in North America. For more information,please visit: http://www.caasauto.com.

Forward-Looking Statements

This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. 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" in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28,and in documents subsequently 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 that we cannot predict and materially and adversely impact our business,financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing,delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers,increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release,whether as a result of new information,future events or otherwise.

For further information,please contact:

Jie Li

Chief Financial Officer

China Automotive Systems,Inc.

jieli@chl.com.cn

Kevin Theiss

Awaken Advisors

+1-212-521-4050

Kevin@awakenlab.com

-Tables Follow -

China Automotive Systems,Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income

(In thousands of USD,except share and per share amounts)

Three Months Ended September30,

2024

2023

Net product sales ($13,703 and $8,407 sold to related parties for the three

months ended September 30,2024 and 2023)

$

164,215

$

137,541

Cost of products sold ($7,217 and $6,266 purchased from related parties

for the three months ended September 30,2024 and 2023)

137,859

112,784

Gross profit

26,356

24,757

Gain on other sales

553

2,177

Less: Operating expenses

Selling expenses

4,357

3,803

General and administrative expenses

5,070

6,108

Research and development expenses

6,383

6,870

Total operating expenses

15,810

16,781

Income from operations

11,099

10,153

Other income,net

1,251

1,155

Interest expense

(271)

(245)

Financial (expense)/income,net

(167)

163

Income before income tax expenses and equity in earnings of affiliated

companies

11,912

11,226

Less: Income taxes

4,042

688

Add: Equity in earnings of affiliated companies

203

706

Net income

8,073

11,244

Less: Net income attributable to non-controlling interests

2,562

1,749

Accretion to redemption value of redeemable non-controlling interests

(7)

(7)

Net income attributable to parent company's common shareholders

$

5,504

$

9,488

Comprehensive income:

Net income

$

8,073

$

11,244

Other comprehensive income:

Foreign currency translation gain,net of tax

6,584

3,580

Comprehensive income

14,657

14,824

Less: Comprehensive income attributable to non-controlling interests

3,287

3,590

Accretion to redemption value of redeemable non-controlling interests

(7)

(7)

Comprehensive income attributable to parent company

$

11,363

$

11,227

Net income attributable to parent company's common shareholders per

share -

Basic

$

0.18

$

0.31

Diluted

$

0.18

$

0.31

Weighted average number of common shares outstanding -

Basic

30,702

30,702

Diluted

30,363

China Automotive Systems,Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income

(In thousands of USD,except share and per share amounts)

Nine Months Ended September30,

2024

2023

Net product sales ($38,613 and $35,177 sold to related parties for the nine

months ended September 30,2024 and 2023)

$

462,217

$

417,194

Cost of products sold ($21,874 and $20,592 purchased from related parties

for the nine months ended September 30,2024 and 2023)

382,490

348,101

Gross profit

79,727

69,093

Gain on other sales

2,787

3,572

Less: Operating expenses

Selling expenses

13,044

10,981

General and administrative expenses

18,035

16,132

Research and development expenses

19,879

19,866

Total operating expenses

50,958

46,979

Income from operations

31,556

25,686

Other income,net

5,389

4,620

Interest expense

(712)

(770)

Financial (expense)/income,net

(869)

3,704

Income before income tax expenses and equity in earnings of affiliated

companies

35,364

33,240

Less: Income taxes

7,893

3,004

Add: Equity in (losses)/earnings of affiliated companies

(1,379)

359

Net income

26,092

30,595

Less: Net income attributable to non-controlling interests

5,159

3,799

Accretion to redemption value of redeemable non-controlling interests

(22)

(22)

Net income attributable to parent company's common shareholders

$

20,911

$

26,774

Comprehensive income:

Net income

$

26,092

$

30,595

Other comprehensive income:

Foreign currency translation gain/(loss),net of tax

3,390

(8,752)

Comprehensive income

29,482

21,843

Less: Comprehensive income attributable to non-controlling interests

5,659

4,831

Accretion to redemption value of redeemable non-controlling interests

(22)

(22)

Comprehensive income attributable to parent company

$

23,801

$

16,990

Net income attributable to parent company's common shareholders per

share -

Basic

$

0.69

$

0.89

Diluted

$

0.69

$

0.89

Weighted average number of common shares outstanding -

Basic

30,190,660

China Automotive Systems,Inc. and Subsidiaries

Condensed Unaudited Consolidated Balance Sheets

(In thousands of USD unless otherwise indicated)

September30,2024

December31,2023

ASSETS

Current assets:

Cash and cash equivalents

$

98,310

$

114,660

Pledged cash

40,514

40,534

Accounts and notes receivable,net- unrelated parties

295,515

261,237

Accounts and notes receivable,net- related parties

18,658

8,169

Inventories

108,880

112,392

Other current assets

28,245

27,083

Total current assets

590,122

564,075

Non-current assets:

Property,plant and equipment,net

100,703

101,359

Land use rights,net

9,130

9,233

Long-term investments

60,236

60,173

Other non-current assets

68,841

31,600

Total assets

$

829,032

$

766,440

LIABILITIES,MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term loans

$

59,744

$

48,005

Accounts and notes payable-unrelated parties

259,134

240,739

Accounts and notes payable-related parties

12,658

12,839

Accrued expenses and other payables

65,253

44,771

Other current liabilities

36,718

37,385

Total current liabilities

433,507

383,739

Long-term liabilities:

Long-term tax payable

—

8,781

Other non-current liabilities

6,266

5,498

Total liabilities

$

439,773

$

398,018

Mezzanine equity:

Redeemable non-controlling interests

635

613

Stockholders' equity:

Common stock,$0.0001 par value – Authorized – 80,000,000 shares; Issued – 32,338,302 and

32,302 shares as of September 30,2024 and December 31,2023,respectively,including treasury

stock

$

3

$

3

Additional paid-in capital

69,722

63,731

Retained earnings-

Appropriated

12,174

11,851

Unappropriated

281,271

284,832

Accumulated other comprehensive income

(5,368)

(8,258)

Treasury stock – 2,152,600 and 2,600 shares as of September30,2024 and December31,

respectively

(7,695)

(7,695)

Total parent company stockholders' equity

350,107

344,464

Non-controlling interests

38,517

23,345

Total stockholders' equity

388,624

367,809

Total liabilities,mezzanine equity and stockholders' equity

$

829,440

China Automotive Systems,Inc. and Subsidiaries

Condensed Unaudited Consolidated Statements of Cash Flows

(In thousands of USD unless otherwise indicated)

Nine Months Ended September 30,

2024

2023

Cash flows from operating activities:

Net income

$

26,595

Adjustments to reconcile net income from operations to net cash provided by

operating activities:

Depreciation and amortization

14,574

13,666

Reversal of credit losses

(903)

(450)

Deferred income taxes

—

(1,017)

Equity in earnings/(losses) of affiliated companies

1,379

(359)

Loss on property,plant and equipment disposals

1,133

79

(Increase)/decrease in:

Accounts and notes receivable

(40,350)

(24,315)

Inventories

4,653

6,070

Other current assets

874

(1,391)

Other non-current assets

(874)

(517)

Increase/(decrease) in:

Accounts and notes payable

12,996

(6,198)

Accrued expenses and other payables

4,945

849

Long-term taxes payable

(7,025)

(5,268)

Other current liabilities

(952)

(1,004)

Net cash provided by operating activities

16,542

10,740

Cash flows from investing activities:

Cash received from property,plant and equipment sales

1,359

664

Payments to acquire property,plant and equipment (including $4,597 and $6,414

paid to related parties for the nine months ended September 30,2024 and 2023,

respectively)

(18,268)

(12,184)

Payments to acquire intangible assets

(383)

(2,437)

Investments under the equity method

(2,283)

(7,729)

Purchase of short-term investments

(58,472)

(55,290)

Proceeds from maturities of short-term investments

25,373

48,281

Cash received from long-term investments

1,396

3,115

Net cash used in investing activities

(51,278)

(25,580)

Cash flows from financing activities:

Proceeds from bank loans

64,461

42,828

Repayments of bank loans

(54,394)

(48,147)

Dividends paid to the common shareholders

(9,318)

—

Cash received from capital contributions of a non-controlling interest

15,504

—

Net cash provided by/(used in) financing activities

16,253

(5,319)

Effects of exchange rate on cash,cash equivalents and pledged cash

2,113

(3,671)

Net decrease in cash,cash equivalents and pledged cash

(16,370)

(23,830)

Cash,cash equivalents and pledged cash at beginning of the period

155,194

158,951

Cash,cash equivalents and pledged cash at end of the period

$

138,824

$

135,121