China Automotive Systems Inc (CAAS) 2024 Q2 法說會逐字稿

Good morning, everyone, and welcome to the China Automotive Systems Inc second-quarter earnings conference call.

大家早安，歡迎參加中國汽車系統公司第二季財報電話會議。

(Operator Instructions) Please note, this conference is being recorded.

（操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Kevin Theiss.

現在我將把會議交給主持人凱文·泰斯 (Kevin Theiss)。

Kevin, the floor is yours.

凱文，地板是你的。

Thank you, and thank you, everyone, for joining us today.

謝謝大家，謝謝大家今天加入我們。

Welcome to China Automotive's 2024 second quarter conference call.

歡迎參加中國汽車2024年第二季電話會議。

Joining us today are Mr. Jie Li, Chief Financial Officer of the China Automotive Systems.

今天加入我們的是中國汽車系統財務長李傑先生。

He will be available to answer questions later in the conference call with the assistance of translation.

他稍後將在翻譯的幫助下在電話會議中回答問題。

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.

在我們開始之前，我要提醒所有聽眾，在整個電話會議中，我們可能會發表可能包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述的聲明。

Forward-looking statements represent the company's estimates and assumptions only as of the date of this call.

前瞻性陳述僅代表本公司截至本次電話會議日的估計和假設。

As a result, the company's actual results could materially differ 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, 2023, as filed with the Securities and Exchange Commission and another documents filed by the company from time to time with the Securities and Exchange Commission.

因此，由於多種因素，包括公司 10-K 表格年度報告中風險因素和營運結果標題下所述的因素，公司的實際結果可能與這些前瞻性陳述中包含的結果有重大差異。 31 日的年度，如向美國證券交易委員會提交的文件以及該公司不時向美國證券交易委員會提交的其他文件。

Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainty 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.

任何這些因素以及我們無法控制的其他因素都可能對整體商業環境產生不利影響，在我們開展業務的地區造成不確定性，導致我們的業務以我們無法預測的方式遭受損失，並對我們的業務產生重大不利影響、財務狀況及經營績效。

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 delays in the shipment of products to our customers, increased cost, and reduced revenue.

我們任何生產設施內的製造、交付和組裝流程的營運的長期中斷或任何不可預見的延誤都可能導致向客戶運送產品的延誤、成本增加和收入減少。

The 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.

該公司明確表示不承擔對本次電話會議中所做的任何前瞻性陳述進行更新的義務，無論是由於新資訊、未來事件或其他原因。

On this call, I will provide a brief overview and summary of the second quarter for the period June 30, 2024.

在本次電話會議上，我將提供 2024 年 6 月 30 日第二季的簡要概述和總結。

Management will then conduct a question-and-answer session.

隨後，管理層將進行問答環節。

The 2024 second quarter and six months results are unaudited and financial results are reported using US GAAP accounting.

2024 年第二季及六個月的業績未經審計，財務表現採用美國公認會計準則會計報告。

For the purposes of our call today, I'll review the financial results in US dollars.

為了今天的電話會議，我將回顧以美元計算的財務表現。

We'll begin with a review of some of the quarterly business highlights, recent dynamics of the Chinese economy and automobile industry and our market position.

我們將首先回顧一些季度業務亮點、中國經濟和汽車行業的最新動態以及我們的市場地位。

Our net sales of steering products increased by 15.4% year over year and gross profit grew faster at a 29% year over year rate in the second quarter of 2024, thanks to changes in product mix and effect of cost control.

2024年第二季度，得益於產品結構的變化和成本控制的效果，我們的轉向產品淨銷售額同比增長15.4%，毛利潤同比增長更快，達到29%。

Sales of our additional steering products grew by 7.5% year over year, with our electric power steering, EPS products, sales increased by 33.7% year over year.

附加轉向產品銷量較去年同期成長7.5%，其中電動輔助轉向器、EPS產品銷量較去年同期成長33.7%。

Our growth in the second quarter was led by the increase in the EPS sales as well as higher sales to Chery Auto's passenger vehicles and an almost 19% year over year sales increase by our Henglong subsidiary, the Chinese passenger vehicle OEMs.

我們第二季的成長得益於 EPS 銷量的成長以及奇瑞汽車乘用車銷量的增加，以及我們的子公司——中國乘用車原始設備製造商恆隆的銷量同比增長近 19%。

In the Chinese commercial vehicle market, our sales declined by approximately $1 million to $18.7 million in this slower growth market.

在中國商用車市場，我們的銷售額下降了約 100 萬美元，降至 1,870 萬美元，這個成長速度較慢的市場。

Internationally, North America declined by $2.1 million year over year, mostly from reduced demand by Stellantis, with South American sales experiencing a slight decline.

國際方面，北美地區年減 210 萬美元，主要是由於 Stellantis 的需求減少，南美地區的銷售額略有下降。

For the six months ended June 30, 2024, Stellantis consolidated shipments in North America had declined by 18.1% year over year.

截至 2024 年 6 月 30 日的六個月，Stellantis 在北美的綜合出貨量年減 18.1%。

For the macro economy during the first half year, Chinese GDP grew by 5% with total retail sales of consumer goods, up by a minus 3.7% year over year.

從宏觀經濟來看，上半年，國內生產毛額成長5%，其中社會消費品零售總額較去年同期成長-3.7%。

Investment in fixed income, excluding rural households, increased in the first half of 2024 by 3.9% year over year.

2024年上半年，扣除農戶在內的固定收益投資年增3.9%。

However, some important market segments declined with real estate development down by 10.1% year over year and the sales of floor space of newly built commercial buildings decreased by 19% year over year.

但一些重要細分市場出現下滑，房地產開發較去年同期下降10.1%，新建商品房銷售面積較去年同期下降19%。

However, automotive sales posted different performance.

然而，汽車銷售卻表現不同。

According to statistics from the China Association of Automobile Manufacturer, CAAM, the combined sale of passenger and commercial vehicles increased by 6.1% year over year in the first half of 2024.

根據中國汽車工業協會統計，2024年上半年，乘用車和商用車合計銷量較去年同期成長6.1%。

Sales of passenger vehicles rose by 6.3% year over year and commercial vehicle sales grew by 4.9% year over year.

乘用車銷量較去年同期成長6.3%，商用車銷量較去年同期成長4.9%。

Sales of new energy vehicles increased by 32% year over year, led by an 85.2% year over year rise in plug-in hybrid vehicles.

新能源汽車銷量較去年同期成長32%，其中插電式混合動力汽車銷量較去年同期成長85.2%。

In addition, automobile exports increased by 30.5% from the six-month period a year ago.

此外，汽車出口較去年同期成長30.5%。

Purchase subsidies by the government and some auto OEMs, favorable trading policies, better loan terms, all aided the automobile industry sales.

政府和部分汽車整車廠的購車補貼、優惠的貿易政策、更好的貸款條件，都有助於汽車產業的銷售。

The automotive industry is a critical industry for the continued growth of the Chinese economy and is expected to receive ongoing support from the Chinese government.

汽車產業是中國經濟持續成長的關鍵產業，預計將得到中國政府的持續支持。

Back to our business performance.

回到我們的業務表現。

During the second quarter, our gross profit rose by 29% year over year with a gross margin of 18.5%, up from 17.3% in the first quarter of 2024 and 16.5% in the second quarter of 2023.

第二季度，我們的毛利年增29%，毛利率為18.5%，高於2024年第一季的17.3%和2023年第二季的16.5%。

Greater sales of our EPS products, improved economies of scale in EPS production and cost control generated our higher gross margin.

EPS 產品銷售的增加、EPS 生產規模經濟的改善和成本控制使我們的毛利率更高。

Our operating income climbed faster at 38.7% year over year in the second quarter of 2024 despite higher research and development and SG&A expenses.

儘管研發和銷售、一般管理費用較高，但 2024 年第二季我們的營業收入較去年同期成長更快，達到 38.7%。

Diluted net income per share was $0.24 in the 2024 second quarter and $0.51 for the six months.

2024 年第二季稀釋後每股淨利為 0.24 美元，前六個月稀釋後每股淨利為 0.51 美元。

Cash flow from operations was $9.1 million in the first six months of 2024 compared with cash yield in the same six-month period last year.

2024 年前六個月的營運現金流為 910 萬美元，而去年同期的現金收益率為 910 萬美元。

The Board of Directors recently declared a special dividend of $0.80 per common share to be paid on or about August 22, 2024.

董事會最近宣布將於 2024 年 8 月 22 日左右支付每股普通股 0.80 美元的特別股息。

The aggregate dividend amount should be approximately $25 million with repaid internal funds and cash flow.

加上償還的內部資金和現金流，股利總額應約為 2,500 萬美元。

The cash dividend highlights our confidence in our sustainable growth and cash generation through support and as I thank you to our long-term shareholders.

現金股利凸顯了我們對透過支持實現永續成長和現金產生的信心，並感謝我們的長期股東。

We also celebrate the 20th anniversary of our Nasdaq listing later on August 24, 2024.

我們也將於 2024 年 8 月 24 日晚些時候慶祝我們在納斯達克上市 20 週年。

During these 20 years, we grew from a small Chinese domestic player to a large global one-tier supplier with operations and customers in North America, South America, Europe, India, and Asia, with highly successful customers such as BYD Auto, Zhicheng Automobile, Chery Automobile, Changan Kuayue Automobile, SAIC Motor, and FAW Group domestically.

在這20年裡，我們從一家小型的中國國內企業成長為一家大型的全球一級供應商，業務和客戶遍及北美、南美、歐洲、印度和亞洲，擁有比亞迪汽車、致誠汽車等非常成功的客戶國內有奇瑞汽車、長安跨越汽車、上汽汽車、一汽集團。

We also have global customers such as Stellantis NV in North and South America and Europe, Ford Motor Company in North America, and Mahindra & Mahindra in India.

我們也擁有全球客戶，例如北美、南美和歐洲的 Stellantis NV、北美的福特汽車公司以及印度的 Mahindra & Mahindra。

Sales have also grown from $58.2 million in 2004 to $576.4 million in 2023.

銷售額也從 2004 年的 5,820 萬美元成長到 2023 年的 5.764 億美元。

We look forward to the further growth of our company's operations as our traditional steering product remain a solid contributor even as we expand our EPS, our advanced driver assist systems with our Sentient AB operations, and other products under development.

我們期待公司業務的進一步成長，因為我們的傳統轉向產品仍然是一個堅實的貢獻者，即使我們擴大我們的 EPS、我們的先進駕駛員輔助系統與 Sentient AB 業務以及其他正在開發的產品。

Before diving into details of financials, we would like to remind all shareholders and interested investors, there are two concurrent technological transitions in global automotive sector from internal combustion engine to electric powertrain and from human driving to autonomous driving.

在深入了解財務細節之前，我們想提醒所有股東和有興趣的投資者，全球汽車產業同時存在兩個技術轉型：從內燃機到電動動力系統以及從人類駕駛到自動駕駛。

Our well-diversified global customer base, award-winning product quality, large-scale manufacturing capacity, and best-in-class technology offers -- prepares us and positions us with strong advantages for global competition.

我們多元化的全球客戶群、屢獲殊榮的產品品質、大規模的製造能力和一流的技術產品—使我們在全球競爭中擁有強大的優勢。

Now let me review the financial results in the second quarter of 2024.

現在讓我回顧一下2024年第二季的財務表現。

Net sales increased by 15.4% year over year to $158.6 million in the second quarter of 2024 compared to $137.4 million in the second quarter of 2023.

2024 年第二季淨銷售額年增 15.4%，達到 1.586 億美元，而 2023 年第二季為 1.374 億美元。

Net sales of traditional steering products and parts increased by 7.5% year over year to $103 million for the second quarter of 2024 compared to $95.8 million for the same quarter in 2023.

2024 年第二季傳統轉向產品和零件的淨銷售額年增 7.5%，達到 1.03 億美元，而 2023 年同一季度為 9,580 萬美元。

Net sales of EPS products rose 33.7% year over year to $55.6 million from $41.6 million for the same period in 2023.

EPS 產品的淨銷售額年增 33.7%，從 2023 年同期的 4,160 萬美元增至 5,560 萬美元。

EPS product sales grew to 35.1% of the total net sales for the second quarter of 2024 compared to 30.3% for the same period in 2023.

EPS 產品銷售額佔 2024 年第二季總淨銷售額的 35.1%，而 2023 年同期為 30.3%。

Sales of Henglong's passenger vehicle steering customers increased by 18.9% and sales to Chery Auto rose by 28.8% due to higher demand.

由於需求增加，恆隆客車轉向系統客戶銷售成長18.9%，奇瑞汽車銷售成長28.8%。

Export sales to North American customers were consistent at $26.8 million in the second quarter 2024 compared to $28.9 million second quarter 2023.

2024 年第二季對北美客戶的出口銷售額穩定為 2,680 萬美元，而 2023 年第二季為 2,890 萬美元。

North American sales declined basically due to decreased demand from one customer.

北美銷售下降主要是因為一位顧客的需求減少。

Sales in Brazil were $12 million in the second quarter of 2024 compared to -- I'm sorry, to $12.2 million in the second quarter of 2023.

2024 年第二季巴西的銷售額為 1,200 萬美元，而 2023 年第二季的銷售額為 1,220 萬美元。

Gross profit grew by 29% year over year to $29.3 million from $22.7 million in the second quarter of 2023.

毛利年增 29%，從 2023 年第二季的 2,270 萬美元增至 2,930 萬美元。

Gross margin increased to 18.5% in the second quarter of 2024 from 16.5% in the second quarter of 2023.

毛利率從2023年第二季的16.5%增加至2024年第二季的18.5%。

Increase in gross margin was mainly due to changes in the product mix and improved cost management.

毛利率的成長主要是由於產品結構的變化和成本管理的改善。

Gain on other sales was $1.7 million in the second quarter of 2024 compared to $0.7 million in the second quarter 2023.

2024 年第二季其他銷售收益為 170 萬美元，而 2023 年第二季為 70 萬美元。

Selling expenses increased by 21.6% year over year to $4.6 million compared to $3.8 million in the second quarter of 2023.

銷售費用年增 21.6%，達到 460 萬美元，而 2023 年第二季為 380 萬美元。

Selling expenses represented 2.9% of net sales in the second quarter of 2024 compared to 2.8% in the second quarter of 2023.

2024 年第二季銷售費用佔淨銷售額的 2.9%，而 2023 年第二季為 2.8%。

General and administrative expenses, G&A, increased by 40.7% year over year to $7.4 million from $5.3 million in the second quarter of 2023, mainly due to higher consulting fees and business tax and surcharges.

一般及管理費用 (G&A) 年增 40.7%，從 2023 年第二季的 530 萬美元增至 740 萬美元，主要是因為諮詢費和營業稅及附加費增加。

G&A expenses represented 4.7% of net sales in the second quarter of 2024 compared to 3.9% of net sales in the second quarter of 2023.

一般及行政費用佔 2024 年第二季淨銷售額的 4.7%，而 2023 年第二季則佔淨銷售額的 3.9%。

Research and development expenses, R&D, increased by 23.9% year over year to $8.2 million compared to $6.6 million in the second quarter of 2023.

研發費用（R&D）年增 23.9%，達到 820 萬美元，而 2023 年第二季為 660 萬美元。

R&D expenses represented 5.2% of net sales in the second quarter of 2024 compared to 4.8% in the second quarter of 2023.

2024 年第二季研發費用佔淨銷售額的 5.2%，而 2023 年第二季為 4.8%。

Research and development programs include electric power and hydraulic steering systems, automotive intelligence and software technologies, automobile electronics, steering columns, high polymer materials, automotive parts, manufacturing technologies, and automotive parts, among other things.

研發項目包括電動及液壓轉向系統、汽車智慧及軟體技術、汽車電子、轉向柱、高分子材料、汽車零件、製造技術、汽車零件等。

Other income was $1.7 million for the second quarter of 2024 compared to $2 million for the three months ended June 30, 2023.

2024 年第二季的其他收入為 170 萬美元，而截至 2023 年 6 月 30 日的三個月為 200 萬美元。

The decrease was primarily due to lower government subsidies in the second quarter of 2024.

這一下降主要是由於 2024 年第二季政府補貼減少。

Income from operations rose 38.7% to $10.8 million in the second quarter of 2024 from $7.8 million in the second quarter of 2023.

營運收入從 2023 年第二季的 780 萬美元成長 38.7%，至 2024 年第二季的 1,080 萬美元。

The increase was primarily due to higher sales and better margins.

這一增長主要是由於銷售額增加和利潤率提高。

Interest expense was $0.2 million in the second quarter of 2024 compared to $0.3 million in the second quarter of 2023.

2024 年第二季的利息支出為 20 萬美元，而 2023 年第二季的利息支出為 30 萬美元。

Net financial expense was $0.7 million in the second quarter of 2024 compared to net financial income of $4 million in the second quarter of 2023.

2024 年第二季的淨財務費用為 70 萬美元，而 2023 年第二季的淨財務收入為 400 萬美元。

The change in net financial expense/income was primarily due to foreign exchange volatility, generating a loss in the second quarter of 2024 compared with income in last year's same quarter.

淨財務費用/收入的變化主要是由於外匯波動，導致2024年第二季與去年同季度的收入相比出現虧損。

Income before income tax expenses and equity in earnings of affiliated companies was $11.7 million in the second quarter of 2024 compared to income before income tax expenses and equity and earnings of affiliated companies of $13.4 million in the second quarter of 2023.

2024 年第二季關聯公司收益中的所得稅費用和權益之前的收入為 1,170 萬美元，而 2023 年第二季關聯公司的所得稅費用和權益以及收益之前的收益為 1,340 萬美元。

The change in income before income tax expenses and equity in earnings of affiliated companies was mainly due to foreign exchange volatility, generating a loss in the second quarter of 2024 compared with income in last year's same quarter.

所得稅費用前收入和聯營公司收益中權益的變化主要是由於外匯波動，導致2024年第二季較去年同季收入虧損。

Income tax expense was $2.1 million in the second quarter of 2024 compared to $1.5 million for the second quarter of 2023, primarily due to an increase in the global intangible low taxed income, GILTI tax expenses.

2024 年第二季的所得稅費用為 210 萬美元，而 2023 年第二季的所得稅費用為 150 萬美元，這主要是由於全球無形低稅收入 GILTI 稅務費用的增加。

Net income attributable to parent company's common shareholders was $7.1 million in the second quarter of 2024, compared to net income attributable to parent company's common shareholders of $10.5 million in the second quarter of 2023.

2024年第二季歸屬於母公司普通股股東的淨利為710萬美元，而2023年第二季歸屬於母公司普通股股東的淨利為1,050萬美元。

Diluted earnings per share was $0.24 in the second quarter of 2024 compared to $0.35 in the second quarter of 2023.

2024 年第二季的稀釋每股收益為 0.24 美元，而 2023 年第二季的稀釋每股收益為 0.35 美元。

Weighted average number of diluted common shares outstanding was 30,185,702 in the second quarter of 2024, compared to 30,189,537 in the second quarter of 2023.

2024 年第二季稀釋後已發行普通股的加權平均數量為 30,185,702 股，而 2023 年第二季為 30,189,537 股。

We will now review (technical difficulty) for the first six months of 2024.

我們現在將回顧 2024 年前六個月的（技術難度）。

Net sales increased by 6.6% year over year to $298 million in the first six months of 2024 compared to $279.7 million in the first six months of 2023.

2024 年前 6 個月的淨銷售額年增 6.6%，達到 2.98 億美元，而 2023 年前 6 個月的淨銷售額為 2.797 億美元。

Net sales of traditional steering products and parts increased by 2.5% to $195 million for the six months ended June 30, 2024, and compared to $190.3 million for the same period in 2023.

截至 2024 年 6 月 30 日的六個月，傳統轉向產品和零件的淨銷售額成長 2.5%，達到 1.95 億美元，而 2023 年同期為 1.903 億美元。

Net sales of EPS systems and parts increased by 15.2% to $103 million for the six months ended June 30, 2024, compared to $89.4 million a year ago.

截至 2024 年 6 月 30 日的六個月，EPS 系統和零件的淨銷售額成長了 15.2%，達到 1.03 億美元，而去年同期為 8,940 萬美元。

As a percentage of net sales, sales of EPS (technical difficulty) 34.6% for the six months ended June 30, 2024, compared to 32% for the same period in 2023.

截至 2024 年 6 月 30 日止六個月，EPS（技術難度）銷售額佔淨銷售額的百分比為 34.6%，而 2023 年同期為 32%。

The six-months profit increased by 20.4% year over year to $53.4 million from $44.3 million in the corresponding period last year.

六個月利潤年增 20.4%，從去年同期的 4,430 萬美元增至 5,340 萬美元。

The six-month gross margin was 17.9% compared with 15.9% in the first six months of 2023, primarily due to the sales product mix and lower unit cost.

六個月的毛利率為 17.9%，而 2023 年前六個月的毛利率為 15.9%，這主要是由於銷售產品組合和較低的單位成本。

Gain on other sales were $2.2 million in the first six months of 2024 compared to $1.4 million in the corresponding period last year.

2024 年前 6 個月的其他銷售收益為 220 萬美元，而去年同期為 140 萬美元。

Operating expenses rose by 16.4% year over year, led by a 29.3% increase in general and administrative expenses due to higher consulting fees and tax-related expenses.

營運費用年增 16.4%，其中諮詢費和稅務相關費用增加導致一般和管理費用增加 29.3%。

Income from operations increased by 31.7% year over year to $20.5 million for first ix months of 2024 from $15.5 million in the first six months of 2023.

營運收入年增 31.7%，從 2023 年前 6 個月的 1,550 萬美元增至 2024 年前 9 個月的 2,050 萬美元。

The increase in the operating income was primarily due to a $9 million increase in gross profits compared with a nearly $5 million gain in operating expenses.

營業收入的成長主要是由於毛利增加了 900 萬美元，而營業費用則增加了近 500 萬美元。

Operating margin was 6.9% in the first six months of 2024 compared to $5.6 million in the first six months of 2023.

2024 年前六個月的營業利益率為 6.9%，而 2023 年前六個月的營業利益率為 560 萬美元。

Other income net increased to $4.1 million for the six months ended June 30, 2024, mainly due to an increase of $0.6 million in government subsidies compared with last year's period.

截至2024年6月30日的六個月，其他收入淨額增加至410萬美元，主要是由於政府補貼較去年同期增加了60萬美元。

Financial expense net was $0.7 million for the six months ended June 30, 2024, compared to financial income net of $3.5 million, similar six months period a year ago.

截至 2024 年 6 月 30 日的六個月，財務費用淨額為 70 萬美元，而去年同期六個月的財務收入淨額為 350 萬美元。

This $4.2 million increase mostly resulted from an increase in foreign exchange loss due to foreign exchange volatility.

這420萬美元的增加主要是由於外匯波動導致外匯損失增加。

Income tax increased by almost 65% year over year to $3.9 million due to higher GILTI tax expenses.

由於 GILTI 稅收費用增加，所得稅年增近 65% 至 390 萬美元。

The equity and losses of affiliated companies increased by $1.2 million in the 2024 first six months period compared with the corresponding period last year.

2024 年前 6 個月，關聯公司的股本和虧損比去年同期增加了 120 萬美元。

Net income attributable to parent company's shareholders was $15.4 million in the first six months of 2024 compared to net income attributable to parent company's common shareholders of $17.3 million in the corresponding period in 2023.

2024 年 6 個月歸屬於母公司股東的淨利為 1,540 萬美元，而 2023 年同期歸屬於母公司普通股股東的淨利為 1,730 萬美元。

Diluted earnings per share for the first six months of 2024 were $0.51 compared to diluted earnings per share of $0.57 in the first six months of 2023.

2024 年前六個月的稀釋每股收益為 0.51 美元，而 2023 年前六個月的稀釋每股收益為 0.57 美元。

Now we'll give some balance sheet and other financial highlights.

現在我們將提供一些資產負債表和其他財務亮點。

As of June 30, 2024, total cash and cash equivalents and pledged cash was $148.4 million.

截至2024年6月30日，現金及現金等價物及質押現金總額為1.484億美元。

Total accounts receivable, including notes receivable, were $288.1 million.

應收帳款總額（包括應收票據）為 2.881 億美元。

Accounts payable, including notes payable, were $254 million; short-term loans were $46.6 million.

應付帳款（包括應付票據）為 2.54 億美元；短期貸款為 4 660 萬美元。

Total parent stockholders' equity was $362.9 million as of June 30, 2024, compared to $344.5 million as of December 31, 2023.

截至 2024 年 6 月 30 日，母公司股東權益總額為 3.629 億美元，截至 2023 年 12 月 31 日為 3.445 億美元。

Our current ratio was approximately [1.5] and working capital, total current assets less total current liabilities, was $190 million as of June 30, 2024.

截至 2024 年 6 月 30 日，我們的流動比率約為 [1.5]，營運資本（總流動資產減去總流動負債）為 1.9 億美元。

Net cash provided by operating activities was $9.1 million for the 2024 first six months compared to net cash used in operating expenses of $0.05 million in the first six months of 2023.

2024 年前六個月營運活動提供的現金淨額為 910 萬美元，而 2023 年前六個月營運費用使用的現金淨額為 50 萬美元。

Payments to acquire property, plant and equipment was $10 million compared to $5.5 million in the first six months of 2023.

購買不動產、廠房和設備的付款為 1000 萬美元，而 2023 年前六個月為 550 萬美元。

Management has reiterated revenue guidance for the full year 2024 of $605 million.

管理層重申 2024 年全年收入指引為 6.05 億美元。

This target is based on the company's current views on operating and market conditions, which are subject to change.

該目標是基於公司目前對營運和市場狀況的看法，這些看法可能會改變。

With that, operator, we are ready to begin the Q&A.

接線員，我們準備好開始問答了。

(Operator Instructions) Jonathan Mitches, Private Investor.

（操作員說明）喬納森·米奇斯（Jonathan Mitches），私人投資者。

My question is gross market has increased to 18.5% in the second quarter.

我的問題是第二季總市場成長至 18.5%。

What is the outlook for the gross margin going forward?

未來毛利率前景如何？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) Yes, our second quarter gross margin reached 18.5%.

（解釋）是的，我們第二季的毛利率達到了18.5%。

If you look at the whole first six months or first half of the year, our gross margin was 17.9%, both second quarter and first half of the year are 2 percentage points higher than the same period of last year.

如果你看整個前六個月或上半年，我們的毛利率是17.9%，第二季和上半年都比去年同期高出2個百分點。

The reason our gross margin improved is mainly due to EPS sales volume increase and also the value higher priced or higher value-added products are selling well.

我們的毛利率改善的原因主要是由於每股盈餘銷售增加以及高價或高附加價值產品的暢銷。

And due to the better economy of scale of those products, our gross margin are experiencing a very nice improvement.

由於這些產品具有更好的規模經濟，我們的毛利率正在經歷非常好的改善。

And looking into the future, I think for the rest of the year, we are very confident we can maintain at least 18% for the gross margin.

展望未來，我認為在今年剩餘時間裡，我們非常有信心維持至少 18% 的毛利率。

Todd Golow, Private Investor.

托德·戈洛，私人投資者。

My question is, how much are your capital expenditures in 2024?

我的問題是，你們2024年的資本支出是多少？

And in what product areas are these investments being made?

這些投資是在哪些產品領域進行的？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) Our capital expenditure for 2024 full year is going to be $25 million.

（解釋）我們 2024 年全年的資本支出將為 2500 萬美元。

As you can see, in the first half of the year, we already spent $10 million in the CapEx, and we're going to continue to inject $15 million in the second half of the year.

正如你所看到的，今年上半年，我們已經在資本支出上花費了 1000 萬美元，下半年我們將繼續注入 1500 萬美元。

And out of our $25 million annual CapEx budget, 80% is about $20 million, will go to EPS-related products.

在我們 2,500 萬美元的年度資本支出預算中，80%（約 2,000 萬美元）將用於 EPS 相關產品。

We have a number of exciting and innovative products, including IRCP product that's coming into the market.

我們擁有許多令人興奮的創新產品，包括即將進入市場的 IRCP 產品。

The remaining 20% of our CapEx will go to other traditional products.

我們剩餘 20% 的資本支出將用於其他傳統產品。

Andrew Pobrade, Private Investor.

安德魯波夫拉德，私人投資者。

Should we -- you reiterated your guidance, but should we look at -- how is August looking for -- or the first month of quarter three.

我們是否應該 - 您重申了您的指導，但我們是否應該看看 - 八月的情況如何 - 或第三季的第一個月。

How is it looking compared to -- and how much should we expect the same revenue, $158 million in quarter three?

與第三季 1.58 億美元的相同收入相比，我們應該期望多少？

Andrew, we couldn't hear the second half of your questions.

安德魯，我們聽不到你的後半部問題。

Andrew, I think your line got a bit distorted.

安德魯，我認為你的台詞有點扭曲。

Could you just try asking the question again, please?

您可以嘗試再問一次這個問題嗎？

Yes, sorry.

是的，抱歉。

So should we expect in quarter three the same $158 million in revenue.

因此，我們是否應該預期第三季的營收將達到 1.58 億美元。

Also congratulations for your results.

也恭喜你的結果。

And yes, how is the first month of July and the bit of August looking for revenue?

是的，七月第一個月和八月的收入狀況如何？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) Yes, thank you for your question.

（翻譯）是的，謝謝你的提問。

Third quarter, due to the summer season, usually or seasonally are lower than the second quarter.

第三季度，由於夏季，通常或季節性低於第二季度。

And lot of -- due to the higher temperature and heat waves during the summer season, a lot of OEMs tend to -- go to adjust their production schedules.

由於夏季氣溫較高和熱浪，許多原始設備製造商傾向於調整生產計劃。

And also they're going to spend some time on maintaining, upkeeping their production line.

他們還將花一些時間來維護和保養他們的生產線。

And for that reason, and that we'll see the Q3 is in line with prior year Q3 seasonality.

出於這個原因，我們將看到第三季與去年第三季的季節性一致。

But overall, we maintain a very strong growth momentum.

但總體而言，我們保持著非常強勁的成長動能。

Okay.

好的。

And if I could ask another question.

如果我能問另一個問題的話。

Should we expect future dividends in the next year?

我們應該期待明年的股利嗎？

Or what is the capital allocation going to be for shareholders, buybacks also maybe are more accretive for shareholders?

或是股東的資本配置是什麼，回購也可能為股東帶來更多增值？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) We are not excluding all these options.

（解釋）我們並不排除所有這些選項。

And it's all based on, as we disclosed in our announcement on the recent dividend announcement.

正如我們在最近的股息公告中所揭露的那樣，這一切都是基於這一點。

Our capital reward program to shareholders always based on our cash flow and need for CapEx.

我們對股東的資本獎勵計劃始終基於我們的現金流量和資本支出需求。

We believe the business is in strong momentum.

我們相信該業務勢頭強勁。

We will make announcement when we get to that stage on future plan, whether dividend or buyback.

當我們到達該階段時，我們將宣布未來的計劃，無論是股息還是回購。

Again, we believe it's all based on our cash flow conditions and our overall business has been on good track.

同樣，我們相信這一切都是基於我們的現金流狀況，並且我們的整體業務一直處於良好軌道。

Okay.

好的。

Last question would be talking about cash flow.

最後一個問題是關於現金流。

What do we expect free cash flow to be in 2024 for full year, considering CapEx is a bit larger.

考慮到資本支出稍大一些，我們預期 2024 年全年自由現金流是多少。

Net cash from operations, will it be higher than last year, compensating for the increased CapEx from 2023.

營運產生的淨現金是否會高於去年，以補償 2023 年以來增加的資本支出。

What is free cash flow approximately?

自由現金流大約是多少？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) Yes.

（解釋）是的。

So on cash flow, our overall cash flow is doing very well.

所以在現金流方面，我們的整體現金流表現非常好。

And as you know, as we grow revenue -- as we continue to grow revenue, we're going to see some fluctuation on the cash flow.

正如你所知，隨著我們收入的成長——隨著我們收入的持續增長，我們將看到現金流出現一些波動。

As we -- bulk of our business still in Mainland China.

我們的大部分業務仍在中國大陸。

The Chinese OEM tend to -- the billing cycle and the payment cycle usually are four to five months.

中國OEM傾向－計費週期和付款週期通常為四到五個月。

So the more we grow our top line in sales in China, the more we're going to experience accounts receivable collection cycles.

因此，我們在中國的銷售額成長得越多，就越會經歷應收帳款催收週期。

So just bear in mind, we'll continue to work with OEM on the collection.

因此請記住，我們將繼續與 OEM 合作開發該系列。

But at the same time, we believe the cash flow is highly depends on how fast we can collect from our customers.

但同時，我們相信現金流在很大程度上取決於我們從客戶那裡收回資金的速度。

At the same time, based on our $605 million revenue guidance for 2024, we are confident we will continue to have a positive free cash flow for 2024.

同時，根據 2024 年 6.05 億美元的收入指引，我們有信心 2024 年將繼續擁有正的自由現金流。

Okay.

好的。

Thank you very much.

非常感謝。

Four to five months, you said, right?

你說的是四到五個月吧？

(multiple speakers)

（多個發言者）

Yes, four months to five months.

是的，四個月到五個月。

(Operator Instructions) Jessica Lin, Private Investor.

（操作員說明）Jessica Lin，私人投資者。

My question, I'm just wondering if you could go over what percent of your R&D was spent on the traditional products?

我的問題是，我只是想知道您是否可以說明您的研發費用有多少百分比用於傳統產品？

And then what percent of the R&D was spent on EPS products?

那麼 EPS 產品的研發費用佔多少百分比呢？

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) The short answer to your question is it's about half-half, 50% of R&D expenses going to traditional steering products, 50% goes to EPS product.

（解釋）對你的問題的簡短回答是，大約一半，50%的研發費用用於傳統轉向產品，50%用於EPS產品。

Although at the moment, EPS revenue only accounts for 35% of total revenue.

儘管目前EPS收入僅佔總收入的35%。

However, given the importance of electric power steering, EPS product, it's a key technology going to be fully integrated in the future of automotive industry.

然而，鑑於電動輔助轉向、EPS產品的重要性，它是未來汽車產業將全面整合的關鍵技術。

Whether it's smart vehicle or further electrification, all need strong electric power steerings to help execute their missions.

無論是智慧汽車還是進一步的電氣化，都需要強大的電動輔助轉向系統來幫助執行任務。

So that being said, we will continue to increase in the technology for the future.

話雖這麼說，我們將繼續增加未來的技術。

For that reason, we're investing -- spending about 50% of R&D expense into EPS product.

出於這個原因，我們正在投資——將大約 50% 的研發費用投入 EPS 產品中。

(Operator Instructions) Andrew Pobrade, Private Investor.

（操作員說明）Andrew Pobrade，私人投資者。

Yeah.

是的。

Sorry, I did not really understand the cash flow from operations if it's looking better in the first month of July, August.

抱歉，我不太了解營運現金流是否在七月、八月的第一個月看起來更好。

Cash flow from operations, if they improved in Q3 a bit?

營運現金流是否在第三季有所改善？

Or what's the guidance for that in Q4?

或第四季的指導是什麼？

I understood that the billing cycle is four or five months, but -- and as you grow revenue, cash flow will increase more -- cash flow from operations, but I'm curious in July and August, if cash from operation is better a bit?

I understood that the billing cycle is four or five months, but -- and as you grow revenue, cash flow will increase more -- cash flow from operations, but I'm curious in July and August, if cash from operation is better a位元?

(spoken in foreign language)

（用外語說）

(spoken in foreign language)

（用外語說）

(interpreted) So Andrew, the short answer to your question is as we mentioned, July -- as we mentioned earlier, July, August, it is slower season due to the summer seasonality.

（解釋）安德魯，對你問題的簡短回答是，正如我們之前提到的，七月——正如我們之前提到的，七月、八月，由於夏季季節性，這是淡季。

The nature of slow season for our collections is actually better because we're not shipping as many products as our high season.

對於我們的產品系列來說，淡季的性質實際上更好，因為我們運送的產品數量沒有旺季那麼多。

So our collection is in full gear, and so our cash flow is better in the months of July and August.

所以我們的收藏已經全面啟動，因此我們的現金流在七月和八月更好。

Thank you very much.

非常感謝。

Well, we appear to have reached the end of our question-and-answer session.

好吧，我們的問答環節似乎已經結束了。

So I will now hand back over to Kevin for any closing remarks.

現在我將把結束語交給凱文。

Kevin, is your line live?

凱文，你的線路上線了嗎？

Thank you for your participation in today's conference call.

感謝您參加今天的電話會議。

Please be safe, and we look forward to speaking with you in the future.

請注意安全，我們期待將來與您交談。

Thank you very much.

非常感謝。

This does conclude today's conference.

今天的會議到此結束。

You may now disconnect your phone line at this time and have a wonderful day.

您現在可以斷開電話線並度過美好的一天。

Thank you for your participation.

感謝您的參與。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。

The interpreter was provided by the company sponsoring this event.

口譯員由贊助本次活動的公司提供。