Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 23, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | CHINA AUTOMOTIVE SYSTEMS INC | |
Entity Central Index Key | 0001157762 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | CAAS | |
Entity Common Stock, Shares Outstanding | 31,174,045 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
Condensed Unaudited Consolidate
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income | ||
Net product sales ($7,494 and $12,836 sold to related parties for the three months ended March 31, 2020 and 2019) | $ 73,555 | $ 109,193 |
Cost of products sold ($3,134 and $5,504 purchased from related parties for the three months ended March 31, 2020 and 2019) | 62,403 | 95,148 |
Gross profit | 11,152 | 14,045 |
Gain on other sales | 600 | 1,269 |
Less: Operating expenses | ||
Selling expenses | 2,118 | 3,085 |
General and administrative expenses | 3,429 | 4,590 |
Research and development expenses | 5,053 | 6,602 |
Total operating expenses | 10,600 | 14,277 |
Income from operations | 1,152 | 1,037 |
Other income, net | 117 | 1,407 |
Interest expense | (365) | (568) |
Financial expense, net | (531) | (665) |
Income before income tax expenses and equity in (loss)/earnings of affiliated companies | 373 | 1,211 |
Less: Income taxes | 514 | 198 |
Equity in (loss)/earnings of affiliated companies | (347) | 211 |
Net (loss)/income | (488) | 1,224 |
Net loss attributable to non-controlling interests | (533) | (243) |
Net income attributable to parent company's common shareholders | 45 | 1,467 |
Comprehensive income: | ||
Net (loss)/income | (488) | 1,224 |
Other comprehensive income: | ||
Foreign currency translation (loss)/income, net of tax | (4,961) | 6,363 |
Comprehensive (loss)/income | (5,449) | 7,587 |
Comprehensive (loss)/income attributable to non-controlling interests | (897) | 214 |
Comprehensive (loss)/income attributable to parent company | $ (4,552) | $ 7,373 |
Net income attributable to parent company's common shareholders per share - | ||
Basic - (in dollars per share) | $ 0.05 | |
Diluted- (in dollars per share) | $ 0.05 | |
Weighted average number of common shares outstanding - | ||
Basic (in shares) | 31,174,045 | 31,507,487 |
Diluted (in shares) | 31,174,119 | 31,513,297 |
Condensed Unaudited Consolida_2
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income | ||
Revenue from Related Parties | $ 7,494 | $ 12,836 |
Related Party Costs | $ 3,134 | $ 5,504 |
Condensed Unaudited Consolida_3
Condensed Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 108,171 | $ 76,708 |
Pledged cash | 24,398 | 29,688 |
Accounts and notes receivable, net - unrelated parties | 182,873 | 211,841 |
Accounts and notes receivable - related parties | 13,625 | 21,164 |
Inventories | 71,158 | 82,931 |
Other current assets | 16,885 | 18,833 |
Total current assets | 417,110 | 441,165 |
Non-current assets: | ||
Property, plant and equipment, net | 134,261 | 140,437 |
Land use rights,net | 10,121 | 10,346 |
Long-term Investments | 40,790 | 39,642 |
Other non-current assets | 27,395 | 28,374 |
Total assets | 629,677 | 659,964 |
Current liabilities: | ||
Short-term loans | 44,057 | 46,636 |
Accounts and notes payable - unrelated parties | 157,376 | 180,175 |
Accounts and notes payable - related parties | 8,391 | 6,492 |
Accrued expenses and other payables | 47,547 | 45,337 |
Other current liabilities | 24,115 | 25,134 |
Total current liabilities | 281,486 | 303,774 |
Long-term liabilities: | ||
Long-term government loans | 7,057 | 7,167 |
Other long-term payable | 3,938 | 4,948 |
Long-term tax payable | 26,693 | 26,693 |
Other non-current liabilities | 7,901 | 8,010 |
Total liabilities | 327,075 | 350,592 |
Commitments and Contingencies (See Note 22) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value - Authorized - 80,000,000 shares; Issued - 32,338,302 and 32,338,302 shares as of March 31, 2020 and December 31, 2019, respectively | 3 | 3 |
Additional paid-in capital | 64,400 | 64,429 |
Retained earnings- | ||
Appropriated | 11,265 | 11,265 |
Unappropriated | 220,493 | 221,237 |
Accumulated other comprehensive income | (8,059) | (3,462) |
Treasury stock - 1,164,257 and 1,164,257 shares as of March 31, 2020 and December 31, 2019, respectively | (4,261) | (4,261) |
Total parent company stockholders' equity | 283,841 | 289,211 |
Non-controlling interests | 18,761 | 20,161 |
Total stockholders' equity | 302,602 | 309,372 |
Total liabilities and stockholders' equity | $ 629,677 | $ 659,964 |
Condensed Unaudited Consolida_4
Condensed Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Unaudited Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 32,338,302 | 32,338,302 |
Treasury stock, shares | 1,164,257 | 1,164,257 |
Condensed Unaudited Consolida_5
Condensed Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss)/income | $ (488) | $ 1,224 |
Adjustments to reconcile net (loss)/income from operations to net cash provided by/(used in) operating activities: | ||
Depreciation and amortization | 5,100 | 3,987 |
Reversal of provision for doubtful accounts | (1) | (355) |
Deferred income taxes | (34) | (84) |
Equity in loss/(earnings) of affiliated companies | 347 | (211) |
Government subsidy reclassified from government loans | 287 | |
Loss on fixed assets disposals | 52 | |
(Increase)/decrease in: | ||
Accounts and notes receivable | 33,303 | (1,977) |
Inventories | 10,430 | (121) |
Other current assets | (3,455) | 2,387 |
Increase/(decrease) in: | ||
Accounts and notes payable | (18,047) | (21,299) |
Accrued expenses and other payables | 2,557 | (2,208) |
Other current liabilities | (824) | 443 |
Net cash provided by/(used in) operating activities | 29,227 | (18,214) |
Cash flows from investing activities: | ||
Increase in demand loans and employee housing loans included in other non-current assets | (212) | (249) |
Cash received from property, plant and equipment sales | 242 | 834 |
Payments to acquire property, plant and equipment (including $242 and $760 paid to related parties for the three months ended March 31, 2020 and 2019, respectively) | (1,976) | (8,777) |
Payments to acquire intangible assets | 0 | (1,194) |
Investment under equity method | (2,579) | |
Purchase of short-term investments | (15,563) | |
Proceeds from maturities of short-term investments | 5,781 | 14,901 |
Cash received from long-term investment | 448 | |
Net cash provided by/(used) in investing activities | 1,704 | (10,048) |
Cash flows from financing activities: | ||
Proceeds from bank loans | 14,368 | 15,275 |
Repayments of bank loans | (16,247) | (11,881) |
Repayments of the borrowing for sale and leaseback transaction | (1,028) | (1,063) |
Repurchase of common shares | 0 | (342) |
Net cash (used in)/provided by financing activities | (2,907) | 1,989 |
Effects of exchange rate on cash, cash equivalents and pledged cash | (1,851) | 1,980 |
Net increase/(decrease) in cash, cash equivalents and pledged cash | 26,173 | (24,293) |
Cash, cash equivalents and pledged cash at beginning of the period | 106,396 | 115,969 |
Cash, cash equivalents and pledged cash at end of the period | $ 132,569 | $ 91,676 |
Condensed Unaudited Consolida_6
Condensed Unaudited Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Payments to Acquire Property, Plant, and Equipment | $ 1,976 | $ 8,777 |
Related Party [Member] | ||
Payments to Acquire Property, Plant, and Equipment | $ 242 | $ 760 |
Organization and business
Organization and business | 3 Months Ended |
Mar. 31, 2020 | |
Organization and business | |
Organization and business | China Automotive Systems, Inc. and Subsidiaries Notes to Condensed Unaudited Consolidated Financial Statements Three Months Ended March 31, 2020 and 2019 1. Organization and business China Automotive Systems, Inc., “China Automotive,” was incorporated in the State of Delaware on June 29, 1999 under the name Visions-In-Glass, Inc. China Automotive, including, when the context so requires, its subsidiaries described below, is referred to herein as the “Company.” The Company is primarily engaged in the manufacture and sale of automotive systems and components, as described below. Great Genesis Holdings Limited, a company incorporated in Hong Kong on January 3, 2003 under the Companies Ordinance in Hong Kong as a limited liability company, “Genesis,” is a wholly-owned subsidiary of the Company. Henglong USA Corporation, “HLUSA,” incorporated on January 8, 2007 in Troy, Michigan, is a wholly-owned subsidiary of the Company, and mainly engages in marketing of automotive parts in North America, and provides after-sales service and research and development support accordingly. The Company owns the following aggregate net interests in the following subsidiaries organized in the People’s Republic of China, the “PRC,” and Brazil as of March 31, 2020 and December 31, 2019. Percentage Interest March 31, December 31, Name of Entity 2020 2019 Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 100.00 % 100.00 % Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 100.00 % 100.00 % Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 70.00 % 70.00 % Universal Sensor Application Inc., “USAI” 4 85.00 % 83.34 % Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 85.00 % 85.00 % Wuhu Henglong Automotive Steering System Co., Ltd., “Wuhu” 6 77.33 % 77.33 % Hubei Henglong Automotive System Group Co., Ltd., “Hubei Henglong” 7 100.00 % 100.00 % Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 100.00 % 100.00 % Chongqing Henglong Hongyan Automotive System Co., Ltd., “Chongqing Henglong” 9 70.00 % 70.00 % CAAS Brazil’s Imports and Trade In Automotive Parts Ltd., “Brazil Henglong” 10 95.84 % 95.84 % Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie” 11 85.00 % 85.00 % Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong” 12 100.00 % 100.00 % Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan” 13 60.00 % 60.00 % Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB” 14 66.60 % 66.60 % Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" 15 51.00 % 51.00 % Wuhu Hongrun New Material Co., Ltd., “Wuhu Hongrun” 16 100.00 % 100.00 % 1. Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. 2. Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light duty vehicles. 3. Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. 4. USAI was established in 2005 and mainly engages in the production and sales of sensor modules. 5. Jielong was established in 2006 and mainly engages in the production and sales of automotive steering columns. 6. Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. 7. On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. 8. In December 2009, Henglong, a subsidiary of Genesis, formed Testing Center, which mainly engages in the research and development of new products. 9. On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. 10. On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. 11. In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. Wuhan Chuguanjie is located in Wuhan, China. 12. In January 2015, Hubei Henglong formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong”, which mainly engages in the design and sales of automotive electronics. 13. In November 2017, Hubei Henglong formed Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan”, which mainly engages in the research and development of intelligent automotive technology. 14. In August 2018, Hubei Henglong and KYB (China) Investment Co., Ltd. (“KYB”) established Hubei Henglong KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB”, which mainly engages in design, manufacture, sales and after-sales service of automobile electronic systems. Hubei Henglong owns 66.6% of the shares of this entity and has consolidated it since its establishment. 15. In March 2019, Hubei Henglong and Hyoseong Electric Co., Ltd. established Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., “Wuhan Hyoseong”, which mainly engages in the design, manufacture and sales of automotive motors and electromechanical integrated systems. Hubei Henglong owns 51.0% of the shares of Wuhan Hyoseong and has consolidated it since its establishment. 16. In December 2019, Hubei Henglong formed Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun", which mainly engages in the development, manufacturing and sale of high polymer materials. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Basis of presentation and significant accounting policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of presentation and significant accounting policies (a) Basis of Presentation Basis of Presentation – The accompanying condensed unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. The details of subsidiaries are disclosed in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions in Regulation S-X. Accordingly they do not include all of the information and footnotes required by such accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019. The accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of the Company’s management, contain all necessary adjustments, which include normal recurring adjustments, for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. Estimation - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Foreign Currencies - China Automotive, the parent company, and HLUSA maintain their books and records in United States Dollars, “USD,” their functional currency. The Company’s subsidiaries based in the PRC and Genesis maintain their books and records in Renminbi, “RMB,” their functional currency. The Company’s subsidiary based in Brazil maintains its books and records in Brazilian reais, “BRL,” its functional currency. In accordance with ASC Topic 830, “FASB Accounting Standards Codification”, foreign currency transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the rate of exchange prevailing at the balance sheet date for monetary items. Nonmonetary items are remeasured at historical rates. Income and expenses are remeasured at the rate in effect on the transaction dates. Transaction gains and losses, if any, are included in the determination of net income for the period. (b) Recent Accounting Pronouncements On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13 ASC (Topic 326), Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The Company adopted the CECL model to recognize credit losses of financial assets using a modified retrospective method of accounting as of January 1, 2020. The impact of adopting the new standard on the consolidated financial statements was a reduction of $0.8 million to beginning retained earnings. (c) Significant Accounting Policies There have been no updates to the significant accounting policies set forth in the notes to the consolidated financial statements for the year ended December 31, 2019, except for the adoption of ASC Topic 326 (Note 2(b)). |
Accounts and notes receivable,
Accounts and notes receivable, net | 3 Months Ended |
Mar. 31, 2020 | |
Accounts and notes receivable, net | |
Accounts and notes receivable, net | 3. Accounts and notes receivable, net The Company’s accounts and notes receivable, net as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accounts receivable - unrelated parties $ 112,505 $ 141,423 Notes receivable - unrelated parties (1) (2) 73,726 72,797 Total accounts and notes receivable - unrelated parties 186,231 214,220 Less: allowance for doubtful accounts - unrelated parties (3) (3,358) (2,379) Accounts and notes receivable, net - unrelated parties 182,873 211,841 Accounts and notes receivable - related parties 13,625 21,164 Accounts and notes receivable, net $ 196,498 $ 233,005 (1) Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks. (2) As of March 31, 2020 and December 31, 2019, the Company pledged its notes receivable in amounts of $9.7 million and $9.7 million, respectively, as collateral in favor of the local government for the government loans. (See Note 7) (3) Provision for doubtful accounts and notes receivable recognized in the consolidated statements of operations amounted to $0.02 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 and December 31, 2019, the Company pledged its accounts and notes receivable in amounts of $2.3 million and $7.4 million, respectively, as collateral for banks to endorse the payment of the Company’s notes payable to the noteholder upon maturity. During the three months ended March 31, 2020, the Company’s five largest customers accounted for 53.7% of its consolidated net product sales, with one customer individually accounting for more than 10% of consolidated net sales, i.e., 33.7%. As of March 31, 2020, approximately 7.5% of accounts receivable were from trade transactions with the aforementioned customers and there was no individual customer with a receivables balance of more than 10% of total accounts receivable. During the three months ended March 31, 2019, the Company’s five largest customers accounted for 44.0% of its consolidated net product sales, with one customer individually accounting for more than 10% of consolidated net sales i.e., 18.1%. As of March 31, 2019, approximately 6.2% of accounts receivable were from trade transactions with the aforementioned customer and there was no individual customer with a receivables balance of more than 10% of total accounts receivable. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventories | |
Inventories | 4. Inventories The Company’s inventories as of March 31, 2020 and December 31, 2019 consisted of the following (figures are in thousands of USD): March 31, 2020 December 31, 2019 Raw materials $ 23,737 $ 21,464 Work in process 10,875 9,469 Finished goods 36,546 51,998 Total $ 71,158 $ 82,931 The Company recorded $0.8 million and $1.1 million of inventory write-down to cost of product sold for the three months ended March 31, 2020 and 2019, respectively. |
Long-term investments
Long-term investments | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Investments | |
Long-term investments | 5. Long-term investments The Company’s long-term investments at March 31, 2020 and December 31, 2019, are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Chongqing Venture Fund $ 14,818 $ 15,085 Hubei Venture Fund (1) 11,142 8,730 Suzhou Venture Fund (2) 8,210 9,141 Beijing Henglong 4,654 4,630 Henglong Tianyu 1,085 1,122 Chongqing Jinghua 469 523 Jiangsu Intelligent 412 411 Total $ 40,790 $ 39,642 (1) During the three months ended March 31, 2020, the Company made an equity investment of $2.6 million in the Hubei Venture Fund. (2) In January 2020, the Suzhou Venture Fund made distributions that were proportional to each owner’s allocated share of the fund, pursuant to which Hubei Henglong received $0.4 million. |
Property, plant and equipment,
Property, plant and equipment, net | 3 Months Ended |
Mar. 31, 2020 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | 6. Property, plant and equipment, net The Company’s property, plant and equipment, net as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Costs: Buildings $ 51,044 $ 51,750 Machinery and equipment 198,375 199,536 Electronic equipment 5,459 5,799 Motor vehicles 4,913 5,229 Construction in progress 31,409 33,063 Total amount of property, plant and equipment 291,200 295,377 Less: Accumulated depreciation (1) (156,939) (154,940) Total amount of property, plant and equipment, net (2)(3) $ 134,261 $ 140,437 (1) Depreciation charges were $5.0 million and $3.9 million for the three months ended March 31, 2020 and 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, the Company pledged property, plant and equipment with net book value of approximately $48.2 million and $50.9 million, respectively, as security for its comprehensive credit facilities with banks in China. (3) Interest costs capitalized for the three months ended March 31, 2020 and 2019, were $0.3 million and $0.1 million, respectively. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2020 | |
Loans | |
Loans | 7 . Loans Loans consist of the following as of March 31, 2020 and December 31, 2019 (figures are in thousands of USD): March 31, 2020 December 31, 2019 Short-term bank loans (1) $ 19,407 $ 23,536 Short-term bank loans (2) 22,533 20,663 Short-term government loan (3) 2,117 2,150 Current portion of long-term government loan (4) — 287 Subtotal 44,057 46,636 Long-term government loans (4)(5) 7,057 7,454 Less: Current portion of long-term government loan (4) — (287) Subtotal 7,057 7,167 Total bank and government loans $ 51,114 $ 53,803 (1) These loans are secured by property, plant and equipment and land use rights of the Company and are repayable within one year (See Note 6). As of March 31, 2020 and December 31, 2019, the weighted average interest rate was 4.6% and 4.8% per annum, respectively. (2) On October 27, 2017, Henglong and Hubei Henglong entered into credit facility agreements with China CITIC Bank , the “CITIC Credit Facility”. The maturity date of the CITIC Credit Facility was originally set for October 27, 2018 and was extended to October 26, 2019. On December 5, 2019, the CITIC Credit Facility was further extended to June 5, 2020. The Company is currently in the process of negotiating with the bank to renew the credit facility. The Company's property, plant and equipment and land use rights with book value amounting to $9.7 million were pledged as collateral for such loans. As of March 31, 2020 and December 31, 2019, the Company has drawn down loans with an aggregate amount of $19.8 million and $20.7 million, respectively. On March 1, 2019, Henglong and Hubei Henglong entered into credit facility agreements with China Merchants Bank, the "Merchants Credit Facility". The maturity date of the Merchants Credit Facility was originally set for February 29, 2020. The Company is currently in the process of negotiating with the bank to renew the credit facility. As of March 31, 2020 and December 31, 2019, the Company has drawn down loans with an aggregate amount of $2.7 million and nil, respectively. The weighted average interest rate of the loans as of March 31, 2020 and December 31, 2019 was 3.27% and 3.46% per annum, respectively. (3) On December 26, 2019, the Company borrowed from the local government a loan of RMB 15.0 million, equivalent to approximately $2.1 million, with an interest rate of 3.48% per annum, which is due for repayment on December 25, 2020. Henglong pledged RMB 15.5 million, equivalent to approximately $2.2 million, of notes receivable as collateral for the loan (See Note 3). (4) On November 13, 2017, the Company borrowed from the local government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which was due for repayment on November 12, 2020. In the first quarter of 2020, the Company received a notice from the government that the loan was reclassified as government subsidy, so repayment was no longer required. As a result, the Company reduced the loan balance and recorded it as other income in the consolidated statements of operations for the three months ended March 31, 2020. (5) On August 7 and September 3, 2019, the Company borrowed from the local government loans of RMB 20.0 million and RMB 30.0 million, equivalent to approximately $2.8 million and $4.2 million, respectively. These loans are due for repayment on June 30, 2021 and have an interest rate of 3.80% per annum. Henglong pledged RMB 53.0 million, equivalent to approximately $7.5 million, of notes receivable as collateral for the local government loans (See Note 3). The Company must use the loans for the purpose as prescribed in the loan contracts. If the Company fails to do so, it will be charged penalty interest and/or trigger early repayment. The Company complied with such financial covenants as of March 31, 2020, and management expects it will continue to comply with them. |
Accounts and notes payable
Accounts and notes payable | 3 Months Ended |
Mar. 31, 2020 | |
Accounts and notes payable | |
Accounts and notes payable | 8. Accounts and notes payable The Company’s accounts and notes payable as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accounts payable - unrelated parties $ 100,367 $ 110,246 Notes payable - unrelated parties (1) 57,009 69,929 Accounts and notes payable - unrelated parties 157,376 180,175 Accounts and notes payable - related parties 8,391 6,492 Total $ 165,767 $ 186,667 (1) Notes payable represent payables in the form of notes issued by the bank. As of March 31, 2020 and December 31, 2019, the Company has pledged cash of $24.4 million and $29.7 million, respectively, accounts and notes receivable of $2.3 million and $7.4 million, respectively, property, plant and equipment with net book value of $48.2 million and $50.9 million, respectively, and land use right with net book value of $5.4 million and $5.5 million, respectively, as collateral for banks to endorse the payment to the noteholder upon maturity. |
Accrued expenses and other paya
Accrued expenses and other payables | 3 Months Ended |
Mar. 31, 2020 | |
Accrued expenses and other payables | |
Accrued expenses and other payables | 9. Accrued expenses and other payables The Company’s accrued expenses and other payables as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accrued expenses $ 7,124 $ 6,306 Accrued interest 437 104 Current portion of other long-term payable (See Note 10) 3,593 Other payables 3,312 2,427 Dividends payable to holders of non-controlling interests 430 — Warranty reserves (1) 32,641 32,907 Total $ 47,547 $ 45,337 (1) The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties are based on, among other things, historical experience, product changes, material expenses, services and transportation expenses arising from the manufactured products. Estimates will be adjusted on the basis of actual claims and circumstances. For the three months ended March 31, 2020 and 2019, the warranties activities were as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 32,907 $ 31,085 Additions during the period 3,428 2,776 Settlement within the period (3,174) (2,294) Foreign currency translation (gain)/loss (520) 590 Balance at end of the period $ 32,641 $ 32,157 |
Other long-term payable
Other long-term payable | 3 Months Ended |
Mar. 31, 2020 | |
Other long-term payable | |
Other long-term payable | 10. Other long-term payable On January 31, 2018, the Company entered into an equipment sales agreement with a third party (the “buyer-lessor”) and simultaneously entered into a four-year contract to lease back the equipment from the buyer-lessor. The carrying value of the equipment was RMB 91.3 million (equivalent to $12.9 million as of March 31, 2020) and the sales price was RMB 100 million (equivalent to $14.1 million as of March 31, 2020). Pursuant to the terms of the contract, the Company is required to pay to the buyer-lessor lease payments over 4 years with a quarterly lease payment of approximately $1.0 million and is entitled to obtain the ownership of this equipment at a nominal price upon the expiration of the lease. The Company is of the view that the transaction does not qualify as a sale. Therefore, the transaction was accounted for as a financing transaction by the Company. As of March 31, 2020, $3.6 million was recognized as other payable (See Note 9) and $3.9 million was recognized as other long-term payable to the buyer-lessor according to the contract term. |
Additional paid-In capital
Additional paid-In capital | 3 Months Ended |
Mar. 31, 2020 | |
Additional paid-In capital | |
Additional paid-In capital | 11. Additional paid-in capital The Company’s positions in respect of the amounts of additional paid-in capital for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 64,429 $ 64,429 Acquisition of the non-controlling interest in USAI (29) — Balance at end of the period $ 64,400 $ 64,429 |
Retained earnings
Retained earnings | 3 Months Ended |
Mar. 31, 2020 | |
Retained earnings | |
Retained earnings | 12. Retained earnings Appropriated Pursuant to the relevant PRC laws, the profits distribution of the Company’s subsidiaries, which are based on their PRC statutory financial statements, are available for distribution in the form of cash dividends after these subsidiaries have paid all relevant PRC tax liabilities, provided for losses in previous years, and made appropriations to statutory surplus at 10% of their respective after-tax profits each year. When the statutory surplus reserve reaches 50% of the registered capital of a company, no additional reserve is required. For the three months ended March 31, 2020 and 2019, no statutory reserve was appropriated by the subsidiaries in China. The Company’s activities in respect of the amounts of appropriated retained earnings for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 11,265 $ 11,104 Balance at end of the period $ 11,265 $ 11,104 Unappropriated The Company’s activities in respect of the amounts of the unappropriated retained earnings for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 221,237 $ 211,439 Cumulative effect of accounting change - credit loss (789) — Net income attributable to parent company 45 1,467 Balance at end of the period $ 220,493 $ 212,906 |
Accumulated other comprehensive
Accumulated other comprehensive income | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated other comprehensive income | |
Accumulated other comprehensive income | 13. Accumulated other comprehensive income The Company’s activities in respect of the amounts of accumulated other comprehensive income for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ (3,462) $ 1,855 Foreign currency translation adjustment attributable to parent company (4,597) 5,906 Balance at end of the period $ (8,059) $ 7,761 |
Treasury stock
Treasury stock | 3 Months Ended |
Mar. 31, 2020 | |
Treasury stock | |
Treasury stock | 14. Treasury stock Treasury stock represents shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury stock is accounted for under the cost method. On December 5, 2018, the Board of Directors of the Company approved a share repurchase program under which the Company was permitted to repurchase up to $5.0 million of its common stock from time to time in the open market at prevailing market prices not to exceed $4.00 per share through December 4, 2019. The Board of Directors of the Company approved the extension of such program to December 4, 2020. As of each of March 31, 2020 and December 31, 2019, the Company had cumulatively repurchased 1,164,257 shares of the Company’s common stock since the inception of the program. The repurchased shares are presented as “treasury stock” on the balance sheet. |
Non-controlling interests
Non-controlling interests | 3 Months Ended |
Mar. 31, 2020 | |
Non-controlling interests | |
Non-controlling interests | 15. Non-controlling interests The Company’s activities in respect of the amounts of the non-controlling interests’ equity for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 20,161 $ 18,950 Net loss attributable to non-controlling interests (533) (243) Acquisition of the non-controlling interest in USAI 29 — Cumulative effect of accounting change - credit loss (102) — Dividends declared to non-controlling interest holders of non-wholly owned subsidiaries (430) — Foreign currency translation adjustment attributable to non-controlling interests (364) 457 Balance at end of the period $ 18,761 $ 19,164 |
Net product sales
Net product sales | 3 Months Ended |
Mar. 31, 2020 | |
Net product sales | |
Net product sales | 16. Net product sales Revenue Disaggregation Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard. Please refer to Note 24. Contract Assets and Liabilities Contract assets, such as costs to obtain or fulfill contracts, are an insignificant component of the Company’s revenue recognition process. The majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing processes. Contract liabilities are mainly customer deposits. As of March 31, 2020 and December 31, 2019, the Company has customer deposits of $1.0 million and $1.3 million, respectively, which were included in other current liabilities on the consolidated balance sheets. During the three months ended March 31, 2020, $0.3 million was received and $0.6 million (including $0.6 million from the beginning balance of customer deposits) was recognized as net product sales revenue. Customer deposits represent non-refundable cash deposits for customers to secure rights to an amount of products produced by the Company under supply agreements. When the products are shipped to customers, the Company will recognize revenue and bill the customers to reduce the amount of the customer deposit liability. |
Financial expense, net
Financial expense, net | 3 Months Ended |
Mar. 31, 2020 | |
Financial expense, net | |
Financial expense, net | 17. Financial expense, net During the three months ended March 31, 2020 and 2019, the Company recorded financial expense, net which is summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Interest income $ 351 $ 764 Foreign exchange loss, net (711) (1,250) Bank fees (171) (179) Total financial expense, net $ (531) $ (665) |
Income tax
Income tax | 3 Months Ended |
Mar. 31, 2020 | |
Income tax | |
Income tax | 18. Income tax Income tax expense was $0.5 million and $0.2 million for the three months ended March 31, 2020 and 2019, respectively. The increase in income tax expense was primarily due to the increase in Hubei Henglong’s income before income tax expenses and equity in earnings of affiliated companies |
Income per share
Income per share | 3 Months Ended |
Mar. 31, 2020 | |
Income per share | |
Income per share | 19. Income per share Basic income per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted income per share is computed using the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. The dilutive effect of outstanding stock options is determined based on the treasury stock method. The calculations of basic and diluted income per share attributable to the parent company for the three months ended March 31, 2020 and 2019, were as follows (figures are in thousands of USD, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to the parent company’s common shareholders – Basic and Diluted $ 45 $ 1,467 Denominator: Weighted average shares outstanding 31,174,045 31,507,487 Dilutive effects of stock options 74 5,810 Denominator for dilutive income per share - Diluted 31,174,119 31,513,297 Net income per share attributable to parent company’s common shareholders - Basic $ — $ 0.05 Net income per share attributable to parent company’s common shareholders - Diluted $ — $ 0.05 As of March 31, 2020 and 2019, the exercise prices for 22,500 shares and 112,500 shares, respectively, of outstanding stock options were above the weighted average market price of the Company’s common stock during the three months ended March 31, 2020 and 2019, respectively. Therefore, these stock options were excluded from the calculation of the diluted income per share for the corresponding periods presented. |
Significant concentrations
Significant concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Significant concentrations | |
Significant concentrations | 20. Significant concentrations A significant portion of the Company’s business is conducted in China where the currency is the RMB. Regulations in China permit foreign owned entities to freely convert the RMB into foreign currency for transactions that fall under the "current account", which includes trade related receipts and payments, interest and dividends. Accordingly, the Company’s Chinese subsidiaries may use RMB to purchase foreign exchange for settlement of such "current account" transactions without pre-approval. China Automotive, the parent company, may depend on dividend payments from Genesis and HLUSA, which are generated from their subsidiaries in China, "China-based Subsidiaries," after they receive payments from the China-based Subsidiaries. Regulations in the PRC currently permit payment of dividends of a PRC company only out of accumulated profits as determined in accordance with accounting standards and regulations in China. Under PRC law China-based Subsidiaries are required to set aside at least 10% of their after-tax profit based on PRC accounting standards each year to their general reserves until the cumulative amount reaches 50% of their paid-in capital. These reserves are not distributable as cash dividends, or as loans or advances. These foreign-invested enterprises may also allocate a portion of their after-tax profits, at the discretion of their boards of directors, to their staff welfare and bonus funds. Any amounts so allocated may not be distributed and, accordingly, would not be available for distribution to Genesis and HLUSA. The PRC government also imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currencies out of China. The China-based Subsidiaries may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currencies. If China Automotive is unable to receive dividend payments from its subsidiaries, including the China-based subsidiaries, China Automotive may be unable to effectively finance its operations or pay dividends on its shares. Transactions other than those that fall under the "current account" and that involve conversion of RMB into foreign currency are classified as "capital account" transactions; examples of "capital account" transactions include repatriations of investment by or loans to foreign owners, or direct equity investments in a foreign entity by a China domiciled entity. "Capital account" transactions require prior approval from China’s State Administration of Foreign Exchange, or SAFE, or its provincial branch to convert a remittance into a foreign currency, such as U.S. Dollars, and transmit the foreign currency outside of China. This system could be changed at any time and any such change may affect the ability of the Company or its subsidiaries in China to repatriate capital or profits, if any, outside China. Furthermore, SAFE has a significant degree of administrative discretion in implementing the laws and has used this discretion to limit convertibility of current account payments out of China. Whether as a result of a deterioration in the Chinese balance of payments, a shift in the Chinese macroeconomic prospects or any number of other reasons, China could impose additional restrictions on capital remittances abroad. As a result of these and other restrictions under the laws and regulations of the People's Republic of China, or the PRC, the Company’s China subsidiaries are restricted in their ability to transfer a portion of their net assets to the parent. The Company has no assurance that the relevant Chinese governmental authorities in the future will not limit further or eliminate the ability of the Company’s China subsidiaries to purchase foreign currencies and transfer such funds to the Company to meet its liquidity or other business needs. Any inability to access funds in China, if and when needed for use by the Company outside of China, could have a material and adverse effect on the Company’s liquidity and its business. |
Related party transactions and
Related party transactions and balances | 3 Months Ended |
Mar. 31, 2020 | |
Related party transactions and balances | |
Related party transactions and balances | 21. Related party transactions and balances Related party transactions are as follows (figures are in thousands of USD): Related sales Three Months Ended March 31, 2020 2019 Merchandise sold to related parties $ 7,494 $ 12,836 Materials and others sold to related parties 270 461 Rental income obtained from related parties 77 80 Total $ 7,841 $ 13,377 Related purchases Three Months Ended March 31, 2020 2019 Materials purchased from related parties $ 3,134 $ 5,504 Equipment purchased from related parties 69 760 Others purchased from related parties 4 11 Total $ 3,207 $ 6,275 Related receivables March 31, 2020 December 31, 2019 Accounts and notes receivable from related parties $ 13,625 $ 21,164 Related advance payments March 31, 2020 December 31, 2019 Advance payments for property, plant and equipment to related parties $ 2,514 $ 2,311 Advance payments and others to related parties 1,494 1,287 Total $ 4,008 $ 3,598 Related payables March 31, 2020 December 31, 2019 Accounts and notes payable $ 8,391 $ 6,492 These transactions were consummated under similar terms as those with the Company’s third party customers and suppliers. As of June 23, 2020, Hanlin Chen, the chairman of the board of directors of the Company, owns 57.3% of the common stock of the Company and has the effective power to control the vote on substantially all significant matters without the approval of other stockholders. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | 22. Commitments and contingencies Legal proceedings On January 7, 2019, three purported stockholders of the Company filed a stockholder derivative complaint on behalf of the Company against the Company’s directors Hanlin Chen, Qizhou Wu and Guangxun Xu and former directors Arthur Wong and Robert Tung in the Delaware Court of Chancery, alleging that they had (a) breached their fiduciary duties by approving and paying excessive compensation to the non-employee directors of the Company, Arthur Wong, Guangxun Xu and Robert Tung, and (b) failed to make full and accurate disclosure of all material information with respect to director qualification and director compensation paid in 2017 in the Company’s annual proxy statement on Schedule 14A filed on October 10, 2018. The directors have engaged their own counsel to answer this complaint. On April 9, 2019, the Company moved to dismiss the complaint. The motion to dismiss was denied on July 17, 2019. The directors of the Company will continue to answer this complaint. Management expects the impact of the suit on the Company’s consolidated financial statements to be immaterial. Other than as described above, the Company is not a party to any pending or, to the best of the Company’s knowledge, any threatened legal proceedings and no director, officer or affiliate of the Company, or owner of record of more than five percent of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation. Other commitments and contingencies In addition to the bank loans, notes payables and the related interest, the following table summarizes the Company’s major commitments and contingencies as of March 31, 2020 (figures are in thousands of USD): Payment obligations by period 2020 2021 2022 Thereafter Total Obligations for investment contracts (1) $ 4,841 $ 423 $ — $ — $ 5,264 Obligations for purchasing and service agreements 21,225 1,229 — — 22,454 Total $ 26,066 $ 1,652 $ — $ — $ 27,718 (1) In March 2018, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Hubei Venture Fund”. Hubei Henglong has committed to make investments of RMB 76.0 million, equivalent to approximately $11.5 million. In March 2020, Hubei Henglong entered into an agreement with Jingzhou Henglong Real Estate Co., Ltd. to purchase 8.0% of the Hubei Venture Fund’s equity for nil consideration, and Hubei Henglong has committed to increase its investments in Hubei Venture Fund to RMB 98.5 million, equivalent to approximately $13.9 million. As of March 31, 2020, Hubei Henglong has made investments of RMB 78.8 million, equivalent to approximately $11.1 million, representing 35.2% of Hubei Venture Fund’s equity. According to the agreement, the remaining capital commitment of RMB 19.7 million, equivalent to approximately $2.8 million, will be paid in 2020. In April 2019, Hubei Henglong entered into an agreement with other parties and committed to contribute RMB 5.0 million, equivalent to approximately $0.7 million, to Jiangsu Intelligent Networking Automotive Innovation Center Co. Ltd., “Jiangsu Intelligent”, representing 19.2% of Jiangsu Intelligent’s shares. As of March 31, 2020, Hubei Henglong has completed a capital contribution of RMB 3.0 million, equivalent to approximately $0.4 million. According to the agreement, the remaining capital commitment of RMB 2.0 million, equivalent to approximately $0.3 million, will be paid in 2020. In November 2019, Hubei Henglong entered into an agreement with other parties and committed to purchase 70% of the shares of Hefei Senye Light Plastic Technology Co., Ltd. for total consideration of RMB 33.6 million, equivalent to approximately $4.8 million. As of March 31, 2020, Hubei Henglong has paid the amount of RMB 18.0 million, equivalent to approximately $2.5 million, which was reported in other non-current assets as the transfer of shares had not been consummated. According to the agreement, of the remaining consideration of RMB 15.6 million, equivalent to approximately $2.2 million, $1.8 million will be paid in 2020 and the remaining $0.4 million will be paid in 2021. |
Off-balance sheet arrangements
Off-balance sheet arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Off-balance sheet arrangements | |
Off-balance sheet arrangements | 23 . Off-balance sheet arrangements As of March 31, 2020 and December 31, 2019, the Company did not have any significant transactions, obligations or relationships that could be considered off-balance sheet arrangements. |
Segment reporting
Segment reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment reporting | |
Segment reporting | 24. Segment reporting The accounting policies of the product sectors (each entity manufactures and sells different products and represents a different product sector) are the same as those described in the summary of significant accounting policies disclosed in the Company’s 2019 Annual Report on Form 10-K except that the disaggregated financial results for the product sectors have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting them in making internal operating decisions. Generally, the Company evaluates performance based on stand-alone product sector operating income and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Each product sector is considered a reporting segment. As of March 31, 2020, the Company had 14 product sectors, six of which were principal profit makers and were reported as separate sectors and engaged in the production and sales of power steering (Henglong, Jiulong, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other eight sectors were engaged in the production and sale of modular sensors (USAI), automobile steering columns (Jielong), provision of after sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), trade (Brazil Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie), research and development of intelligent automotive technology (Jingzhou Qingyan) and manufacture and sales of automotive motors and electromechanical integrated systems (Wuhan Hyoseong). As of March 31, 2019, the Company had 13 product sectors, six of which were principal profit makers and were reported as separate sectors and engaged in the production and sales of power steering (Henglong, Jiulong, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other seven sectors were engaged in the production and sale of sensor modular (USAI), automobile steering columns (Jielong), provision of after-sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), trade (Brazil Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie) and research and development of intelligent automotive technology (Jingzhou Qingyan). The Company’s product sector information for the three months ended March 31, 2020 and 2019, is as follows (figures are in thousands of USD): Net Product Sales Net (Loss)/Income Three Months Ended Three Months Ended March 31, March 31, 2020 2019 2020 2019 Henglong $ 23,907 $ 40,964 $ (682) $ (2,121) Jiulong 12,759 22,122 (1,450) 1,168 Shenyang 2,793 4,895 (170) (299) Wuhu 2,803 6,998 239 (175) Hubei Henglong 28,132 28,175 4,065 1,372 Henglong KYB 6,126 19,954 (907) (396) Other Entities 9,482 17,296 (1,795) 1,455 Total Segments 86,002 140,404 (700) 1,004 Corporate — — (61) (301) Eliminations (12,447) (31,211) 273 521 Total $ 73,555 $ 109,193 $ (488) $ 1,224 |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Basis of presentation and significant accounting policies | |
Basis of Presentation | (a) Basis of Presentation Basis of Presentation – The accompanying condensed unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. The details of subsidiaries are disclosed in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions in Regulation S-X. Accordingly they do not include all of the information and footnotes required by such accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019. The accompanying interim condensed consolidated financial statements are unaudited, but in the opinion of the Company’s management, contain all necessary adjustments, which include normal recurring adjustments, for a fair statement of the results of operations, financial position and cash flows for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. Estimation - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Foreign Currencies - China Automotive, the parent company, and HLUSA maintain their books and records in United States Dollars, “USD,” their functional currency. The Company’s subsidiaries based in the PRC and Genesis maintain their books and records in Renminbi, “RMB,” their functional currency. The Company’s subsidiary based in Brazil maintains its books and records in Brazilian reais, “BRL,” its functional currency. In accordance with ASC Topic 830, “FASB Accounting Standards Codification”, foreign currency transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the rate of exchange prevailing at the balance sheet date for monetary items. Nonmonetary items are remeasured at historical rates. Income and expenses are remeasured at the rate in effect on the transaction dates. Transaction gains and losses, if any, are included in the determination of net income for the period. |
Recent Accounting Pronouncements | (a) Recent Accounting Pronouncements On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13 ASC (Topic 326), Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The Company adopted the CECL model to recognize credit losses of financial assets using a modified retrospective method of accounting as of January 1, 2020. The impact of adopting the new standard on the consolidated financial statements was a reduction of $0.8 million to beginning retained earnings. |
Significant Accounting Policies | (a) Significant Accounting Policies There have been no updates to the significant accounting policies set forth in the notes to the consolidated financial statements for the year ended December 31, 2019, except for the adoption of ASC Topic 326 (Note 2(b)). |
Organization and business (Tabl
Organization and business (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization and business | |
Schedule of equity method investments | The Company owns the following aggregate net interests in the following subsidiaries organized in the People’s Republic of China, the “PRC,” and Brazil as of March 31, 2020 and December 31, 2019. Percentage Interest March 31, December 31, Name of Entity 2020 2019 Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 100.00 % 100.00 % Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 100.00 % 100.00 % Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 70.00 % 70.00 % Universal Sensor Application Inc., “USAI” 4 85.00 % 83.34 % Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 85.00 % 85.00 % Wuhu Henglong Automotive Steering System Co., Ltd., “Wuhu” 6 77.33 % 77.33 % Hubei Henglong Automotive System Group Co., Ltd., “Hubei Henglong” 7 100.00 % 100.00 % Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 100.00 % 100.00 % Chongqing Henglong Hongyan Automotive System Co., Ltd., “Chongqing Henglong” 9 70.00 % 70.00 % CAAS Brazil’s Imports and Trade In Automotive Parts Ltd., “Brazil Henglong” 10 95.84 % 95.84 % Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie” 11 85.00 % 85.00 % Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong” 12 100.00 % 100.00 % Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan” 13 60.00 % 60.00 % Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB” 14 66.60 % 66.60 % Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" 15 51.00 % 51.00 % Wuhu Hongrun New Material Co., Ltd., “Wuhu Hongrun” 16 100.00 % 100.00 % 1. Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. 2. Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light duty vehicles. 3. Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. 4. USAI was established in 2005 and mainly engages in the production and sales of sensor modules. 5. Jielong was established in 2006 and mainly engages in the production and sales of automotive steering columns. 6. Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. 7. On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. 8. In December 2009, Henglong, a subsidiary of Genesis, formed Testing Center, which mainly engages in the research and development of new products. 9. On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established a Sino-foreign joint venture company, Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. 10. On August 21, 2012, Brazil Henglong was established as a Sino-foreign joint venture company by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sales of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. 11. In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. Wuhan Chuguanjie is located in Wuhan, China. 12. In January 2015, Hubei Henglong formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong”, which mainly engages in the design and sales of automotive electronics. 13. In November 2017, Hubei Henglong formed Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan”, which mainly engages in the research and development of intelligent automotive technology. 14. In August 2018, Hubei Henglong and KYB (China) Investment Co., Ltd. (“KYB”) established Hubei Henglong KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB”, which mainly engages in design, manufacture, sales and after-sales service of automobile electronic systems. Hubei Henglong owns 66.6% of the shares of this entity and has consolidated it since its establishment. 15. In March 2019, Hubei Henglong and Hyoseong Electric Co., Ltd. established Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., “Wuhan Hyoseong”, which mainly engages in the design, manufacture and sales of automotive motors and electromechanical integrated systems. Hubei Henglong owns 51.0% of the shares of Wuhan Hyoseong and has consolidated it since its establishment. 16. In December 2019, Hubei Henglong formed Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun", which mainly engages in the development, manufacturing and sale of high polymer materials. |
Accounts and notes receivable_2
Accounts and notes receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounts and notes receivable, net | |
Schedule of accounts and notes receivable | The Company’s accounts and notes receivable, net as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accounts receivable - unrelated parties $ 112,505 $ 141,423 Notes receivable - unrelated parties (1) (2) 73,726 72,797 Total accounts and notes receivable - unrelated parties 186,231 214,220 Less: allowance for doubtful accounts - unrelated parties (3) (3,358) (2,379) Accounts and notes receivable, net - unrelated parties 182,873 211,841 Accounts and notes receivable - related parties 13,625 21,164 Accounts and notes receivable, net $ 196,498 $ 233,005 (1) Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks. (2) As of March 31, 2020 and December 31, 2019, the Company pledged its notes receivable in amounts of $9.7 million and $9.7 million, respectively, as collateral in favor of the local government for the government loans. (See Note 7) (3) Provision for doubtful accounts and notes receivable recognized in the consolidated statements of operations amounted to $0.02 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventories | |
Schedule of inventories | The Company’s inventories as of March 31, 2020 and December 31, 2019 consisted of the following (figures are in thousands of USD): March 31, 2020 December 31, 2019 Raw materials $ 23,737 $ 21,464 Work in process 10,875 9,469 Finished goods 36,546 51,998 Total $ 71,158 $ 82,931 |
Long-term investments (Tables)
Long-term investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Investments | |
Schedule of long-term investments | The Company’s long-term investments at March 31, 2020 and December 31, 2019, are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Chongqing Venture Fund $ 14,818 $ 15,085 Hubei Venture Fund (1) 11,142 8,730 Suzhou Venture Fund (2) 8,210 9,141 Beijing Henglong 4,654 4,630 Henglong Tianyu 1,085 1,122 Chongqing Jinghua 469 523 Jiangsu Intelligent 412 411 Total $ 40,790 $ 39,642 (1) During the three months ended March 31, 2020, the Company made an equity investment of $2.6 million in the Hubei Venture Fund. (2) In January 2020, the Suzhou Venture Fund made distributions that were proportional to each owner’s allocated share of the fund, pursuant to which Hubei Henglong received $0.4 million. |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment, net as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Costs: Buildings $ 51,044 $ 51,750 Machinery and equipment 198,375 199,536 Electronic equipment 5,459 5,799 Motor vehicles 4,913 5,229 Construction in progress 31,409 33,063 Total amount of property, plant and equipment 291,200 295,377 Less: Accumulated depreciation (1) (156,939) (154,940) Total amount of property, plant and equipment, net (2)(3) $ 134,261 $ 140,437 (1) Depreciation charges were $5.0 million and $3.9 million for the three months ended March 31, 2020 and 2019, respectively. (2) As of March 31, 2020 and December 31, 2019, the Company pledged property, plant and equipment with net book value of approximately $48.2 million and $50.9 million, respectively, as security for its comprehensive credit facilities with banks in China. (3) Interest costs capitalized for the three months ended March 31, 2020 and 2019, were $0.3 million and $0.1 million, respectively. |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loans | |
Schedule of loans | Loans consist of the following as of March 31, 2020 and December 31, 2019 (figures are in thousands of USD): March 31, 2020 December 31, 2019 Short-term bank loans (1) $ 19,407 $ 23,536 Short-term bank loans (2) 22,533 20,663 Short-term government loan (3) 2,117 2,150 Current portion of long-term government loan (4) — 287 Subtotal 44,057 46,636 Long-term government loans (4)(5) 7,057 7,454 Less: Current portion of long-term government loan (4) — (287) Subtotal 7,057 7,167 Total bank and government loans $ 51,114 $ 53,803 (1) These loans are secured by property, plant and equipment and land use rights of the Company and are repayable within one year (See Note 6). As of March 31, 2020 and December 31, 2019, the weighted average interest rate was 4.6% and 4.8% per annum, respectively. (2) On October 27, 2017, Henglong and Hubei Henglong entered into credit facility agreements with China CITIC Bank , the “CITIC Credit Facility”. The maturity date of the CITIC Credit Facility was originally set for October 27, 2018 and was extended to October 26, 2019. On December 5, 2019, the CITIC Credit Facility was further extended to June 5, 2020. The Company is currently in the process of negotiating with the bank to renew the credit facility. The Company's property, plant and equipment and land use rights with book value amounting to $9.7 million were pledged as collateral for such loans. As of March 31, 2020 and December 31, 2019, the Company has drawn down loans with an aggregate amount of $19.8 million and $20.7 million, respectively. On March 1, 2019, Henglong and Hubei Henglong entered into credit facility agreements with China Merchants Bank, the "Merchants Credit Facility". The maturity date of the Merchants Credit Facility was originally set for February 29, 2020. The Company is currently in the process of negotiating with the bank to renew the credit facility. As of March 31, 2020 and December 31, 2019, the Company has drawn down loans with an aggregate amount of $2.7 million and nil, respectively. The weighted average interest rate of the loans as of March 31, 2020 and December 31, 2019 was 3.27% and 3.46% per annum, respectively. (3) On December 26, 2019, the Company borrowed from the local government a loan of RMB 15.0 million, equivalent to approximately $2.1 million, with an interest rate of 3.48% per annum, which is due for repayment on December 25, 2020. Henglong pledged RMB 15.5 million, equivalent to approximately $2.2 million, of notes receivable as collateral for the loan (See Note 3). (4) On November 13, 2017, the Company borrowed from the local government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which was due for repayment on November 12, 2020. In the first quarter of 2020, the Company received a notice from the government that the loan was reclassified as government subsidy, so repayment was no longer required. As a result, the Company reduced the loan balance and recorded it as other income in the consolidated statements of operations for the three months ended March 31, 2020. (5) On August 7 and September 3, 2019, the Company borrowed from the local government loans of RMB 20.0 million and RMB 30.0 million, equivalent to approximately $2.8 million and $4.2 million, respectively. These loans are due for repayment on June 30, 2021 and have an interest rate of 3.80% per annum. Henglong pledged RMB 53.0 million, equivalent to approximately $7.5 million, of notes receivable as collateral for the local government loans (See Note 3). |
Accounts and notes payable (Tab
Accounts and notes payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounts and notes payable | |
Schedule of accounts and notes payable | The Company’s accounts and notes payable as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accounts payable - unrelated parties $ 100,367 $ 110,246 Notes payable - unrelated parties (1) 57,009 69,929 Accounts and notes payable - unrelated parties 157,376 180,175 Accounts and notes payable - related parties 8,391 6,492 Total $ 165,767 $ 186,667 (1) Notes payable represent payables in the form of notes issued by the bank. As of March 31, 2020 and December 31, 2019, the Company has pledged cash of $24.4 million and $29.7 million, respectively, accounts and notes receivable of $2.3 million and $7.4 million, respectively, property, plant and equipment with net book value of $48.2 million and $50.9 million, respectively, and land use right with net book value of $5.4 million and $5.5 million, respectively, as collateral for banks to endorse the payment to the noteholder upon maturity. |
Accrued expenses and other pa_2
Accrued expenses and other payables (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued expenses and other payables | |
Schedule of accrued expenses and other payables | The Company’s accrued expenses and other payables as of March 31, 2020 and December 31, 2019 are summarized as follows (figures are in thousands of USD): March 31, 2020 December 31, 2019 Accrued expenses $ 7,124 $ 6,306 Accrued interest 437 104 Current portion of other long-term payable (See Note 10) 3,593 Other payables 3,312 2,427 Dividends payable to holders of non-controlling interests 430 — Warranty reserves (1) 32,641 32,907 Total $ 47,547 $ 45,337 (1) The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties are based on, among other things, historical experience, product changes, material expenses, services and transportation expenses arising from the manufactured products. Estimates will be adjusted on the basis of actual claims and circumstances. |
Schedule of product warranty liability | For the three months ended March 31, 2020 and 2019, the warranties activities were as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 32,907 $ 31,085 Additions during the period 3,428 2,776 Settlement within the period (3,174) (2,294) Foreign currency translation (gain)/loss (520) 590 Balance at end of the period $ 32,641 $ 32,157 |
Additional paid-in capital (Tab
Additional paid-in capital (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Additional paid-In capital | |
Schedule of additional paid-in capital | The Company’s positions in respect of the amounts of additional paid-in capital for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 64,429 $ 64,429 Acquisition of the non-controlling interest in USAI (29) — Balance at end of the period $ 64,400 $ 64,429 |
Retained earnings (Tables)
Retained earnings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retained earnings | |
Schedule of appropriated retained earnings | The Company’s activities in respect of the amounts of appropriated retained earnings for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 11,265 $ 11,104 Balance at end of the period $ 11,265 $ 11,104 |
Schedule of unappropriated retained earnings | The Company’s activities in respect of the amounts of the unappropriated retained earnings for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 221,237 $ 211,439 Cumulative effect of accounting change - credit loss (789) — Net income attributable to parent company 45 1,467 Balance at end of the period $ 220,493 $ 212,906 |
Accumulated other comprehensi_2
Accumulated other comprehensive income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated other comprehensive income | |
Schedule of accumulated other comprehensive income | The Company’s activities in respect of the amounts of accumulated other comprehensive income for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ (3,462) $ 1,855 Foreign currency translation adjustment attributable to parent company (4,597) 5,906 Balance at end of the period $ (8,059) $ 7,761 |
Non-controlling interests (Tabl
Non-controlling interests (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Non-controlling interests | |
Schedule of non-controlling interests | The Company’s activities in respect of the amounts of the non-controlling interests’ equity for the three months ended March 31, 2020 and 2019, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Balance at beginning of the period $ 20,161 $ 18,950 Net loss attributable to non-controlling interests (533) (243) Acquisition of the non-controlling interest in USAI 29 — Cumulative effect of accounting change - credit loss (102) — Dividends declared to non-controlling interest holders of non-wholly owned subsidiaries (430) — Foreign currency translation adjustment attributable to non-controlling interests (364) 457 Balance at end of the period $ 18,761 $ 19,164 |
Financial expense, net (Tables)
Financial expense, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Financial expense, net | |
Schedule of recorded financial expense, net | During the three months ended March 31, 2020 and 2019, the Company recorded financial expense, net which is summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2020 2019 Interest income $ 351 $ 764 Foreign exchange loss, net (711) (1,250) Bank fees (171) (179) Total financial expense, net $ (531) $ (665) |
Income per share (Tables)
Income per share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income per share | |
Schedule of basic and diluted income per share | The calculations of basic and diluted income per share attributable to the parent company for the three months ended March 31, 2020 and 2019, were as follows (figures are in thousands of USD, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to the parent company’s common shareholders – Basic and Diluted $ 45 $ 1,467 Denominator: Weighted average shares outstanding 31,174,045 31,507,487 Dilutive effects of stock options 74 5,810 Denominator for dilutive income per share - Diluted 31,174,119 31,513,297 Net income per share attributable to parent company’s common shareholders - Basic $ — $ 0.05 Net income per share attributable to parent company’s common shareholders - Diluted $ — $ 0.05 |
Related party transactions an_2
Related party transactions and balances (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related party transactions and balances | |
Schedule of related party transactions | Related party transactions are as follows (figures are in thousands of USD): Related sales Three Months Ended March 31, 2020 2019 Merchandise sold to related parties $ 7,494 $ 12,836 Materials and others sold to related parties 270 461 Rental income obtained from related parties 77 80 Total $ 7,841 $ 13,377 Related purchases Three Months Ended March 31, 2020 2019 Materials purchased from related parties $ 3,134 $ 5,504 Equipment purchased from related parties 69 760 Others purchased from related parties 4 11 Total $ 3,207 $ 6,275 Related receivables March 31, 2020 December 31, 2019 Accounts and notes receivable from related parties $ 13,625 $ 21,164 Related advance payments March 31, 2020 December 31, 2019 Advance payments for property, plant and equipment to related parties $ 2,514 $ 2,311 Advance payments and others to related parties 1,494 1,287 Total $ 4,008 $ 3,598 Related payables March 31, 2020 December 31, 2019 Accounts and notes payable $ 8,391 $ 6,492 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and contingencies | |
Schedule of major commitments and contingencies | In addition to the bank loans, notes payables and the related interest, the following table summarizes the Company’s major commitments and contingencies as of March 31, 2020 (figures are in thousands of USD): Payment obligations by period 2020 2021 2022 Thereafter Total Obligations for investment contracts (1) $ 4,841 $ 423 $ — $ — $ 5,264 Obligations for purchasing and service agreements 21,225 1,229 — — 22,454 Total $ 26,066 $ 1,652 $ — $ — $ 27,718 (1) In March 2018, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Hubei Venture Fund”. Hubei Henglong has committed to make investments of RMB 76.0 million, equivalent to approximately $11.5 million. In March 2020, Hubei Henglong entered into an agreement with Jingzhou Henglong Real Estate Co., Ltd. to purchase 8.0% of the Hubei Venture Fund’s equity for nil consideration, and Hubei Henglong has committed to increase its investments in Hubei Venture Fund to RMB 98.5 million, equivalent to approximately $13.9 million. As of March 31, 2020, Hubei Henglong has made investments of RMB 78.8 million, equivalent to approximately $11.1 million, representing 35.2% of Hubei Venture Fund’s equity. According to the agreement, the remaining capital commitment of RMB 19.7 million, equivalent to approximately $2.8 million, will be paid in 2020. |
Segment reporting (Tables)
Segment reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment reporting | |
Schedule of revenue by major customers by reporting segments | The Company’s product sector information for the three months ended March 31, 2020 and 2019, is as follows (figures are in thousands of USD): Net Product Sales Net (Loss)/Income Three Months Ended Three Months Ended March 31, March 31, 2020 2019 2020 2019 Henglong $ 23,907 $ 40,964 $ (682) $ (2,121) Jiulong 12,759 22,122 (1,450) 1,168 Shenyang 2,793 4,895 (170) (299) Wuhu 2,803 6,998 239 (175) Hubei Henglong 28,132 28,175 4,065 1,372 Henglong KYB 6,126 19,954 (907) (396) Other Entities 9,482 17,296 (1,795) 1,455 Total Segments 86,002 140,404 (700) 1,004 Corporate — — (61) (301) Eliminations (12,447) (31,211) 273 521 Total $ 73,555 $ 109,193 $ (488) $ 1,224 |
Organization and business (Deta
Organization and business (Details) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Aug. 31, 2018 | May 31, 2017 |
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 15.84% | ||||
Shashi Jiulong Power Steering Gears Co., Ltd., "Jiulong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% | |||
Jingzhou Henglong Automotive Parts Co., Ltd., "Henglong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% | |||
Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., "Shenyang" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 70.00% | 70.00% | |||
Universal Sensor Application Inc [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 85.00% | 83.34% | |||
Wuhan Jielong Electric Power Steering Co., Ltd., "Jielong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 85.00% | 85.00% | |||
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 77.33% | 77.33% | |||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% | |||
Jingzhou Henglong Automotive Technology (Testing) Center, "Testing Center" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% | |||
Chongqing Henglong Hongyan Automotive System Co., Ltd., "Chongqing Henglong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 70.00% | 70.00% | |||
CAAS Brazil's Imports and Trade In Automotive Parts Ltd., "Brazil Henglong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 95.84% | 95.84% | |||
Wuhan Chuguanjie Automotive Science and Technology Ltd., "Wuhan Chuguanjie" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 85.00% | 85.00% | |||
Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., "Shanghai Henglong" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% | |||
Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., "Jingzhou Qingyan" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 60.00% | 60.00% | |||
Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., "Henglong KYB" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 66.60% | 66.60% | 66.60% | ||
Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong"[Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 51.00% | 51.00% | 51.00% | ||
Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Percentage Interest | 100.00% | 100.00% |
Organization and business - Add
Organization and business - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
May 31, 2017 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Aug. 31, 2018 | |
Organization And Principal Activities [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 15.84% | ||||
Consideration for additional equity interest acquired | $ 0 | ||||
Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., "Henglong KYB" [Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 66.60% | 66.60% | 66.60% | ||
Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong"[Member] | |||||
Organization And Principal Activities [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 51.00% | 51.00% | 51.00% |
Basis of presentation and sig_3
Basis of presentation and significant accounting policies - (Details) $ in Millions | Mar. 31, 2020USD ($) |
Restatement adjustment | |
Basis of presentation and significant accounting policies | |
Retained earnings | $ 0.8 |
Accounts and notes receivable_3
Accounts and notes receivable, net - Advance payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts and notes receivable, net | ||
Accounts receivable - unrelated parties | $ 112,505 | $ 141,423 |
Notes receivable - unrelated parties | 73,726 | 72,797 |
Total accounts and notes receivable - unrelated parties | 186,231 | 214,220 |
Less: allowance for doubtful accounts - unrelated parties | (3,358) | (2,379) |
Accounts and notes receivable, net - unrelated parties | 182,873 | 211,841 |
Accounts and notes receivable - related parties | 13,625 | 21,164 |
Accounts and notes receivable, net | $ 196,498 | $ 233,005 |
Accounts and notes receivable_4
Accounts and notes receivable, net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Financing Receivables [Line Items] | ||||
Financing Receivable, Net | $ 9,700 | $ 9,700 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | $ 20 | $ 100 | ||
Notes receivable pledged as collateral | $ 2,300 | $ 7,400 | ||
Concentration Risk, Percentage | 33.70% | 18.10% | ||
Product Concentration Risk [Member] | ||||
Financing Receivables [Line Items] | ||||
Concentration Risk, Percentage | 53.70% | 44.00% | ||
Accounts receivable | ||||
Financing Receivables [Line Items] | ||||
Concentration Risk, Percentage | 7.50% | 6.20% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories | ||
Raw materials | $ 23,737 | $ 21,464 |
Work in process | 10,875 | 9,469 |
Finished goods | 36,546 | 51,998 |
Total | $ 71,158 | $ 82,931 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Inventories | ||
Valuation Allowances and Reserves, Adjustments | $ 0.8 | $ 1.1 |
Long-term investments (Details)
Long-term investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Long-term Investments | $ 40,790 | $ 39,642 | |
Chongqing Venture Fund | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 14,818 | 15,085 | |
Hubei Venture Fund | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 11,142 | 8,730 | |
Equity method investments | 2,600 | ||
Hubei Henglong | |||
Debt Instrument [Line Items] | |||
Proceeds from Partnership Contribution | $ 400 | ||
Suzhou Venture Fund | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 8,210 | 9,141 | |
Beijing Henglong | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 4,654 | 4,630 | |
Henglong Tianyu | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 1,085 | 1,122 | |
Chongqing Jinghua | |||
Debt Instrument [Line Items] | |||
Long-term Investments | 469 | 523 | |
Jiangsu Intelligent | |||
Debt Instrument [Line Items] | |||
Long-term Investments | $ 412 | $ 411 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | $ 291,200 | $ 295,377 |
Less: Accumulated depreciation | (156,939) | (154,940) |
Total amount of property, plant and equipment, net | 134,261 | 140,437 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 51,044 | 51,750 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 198,375 | 199,536 |
Electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 5,459 | 5,799 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 4,913 | 5,229 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | $ 31,409 | $ 33,063 |
Property, plant and equipment_4
Property, plant and equipment, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Property, plant and equipment, net | |||
Depreciation | $ 5 | $ 3.9 | |
Pledged Assets Separately Reported, Loans Pledged for Other Debt Obligations, at Fair Value | 48.2 | $ 50.9 | |
Interest Costs Capitalized | $ 0.3 | $ 0.1 |
Loans (Details)
Loans (Details) $ in Thousands, ¥ in Millions | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 26, 2019CNY (¥) | Dec. 26, 2019USD ($) | Sep. 03, 2019CNY (¥) | Sep. 03, 2019USD ($) | Aug. 07, 2019CNY (¥) | Aug. 07, 2019USD ($) | Nov. 13, 2017CNY (¥) | Nov. 13, 2017USD ($) | |||
Debt Instrument [Line Items] | |||||||||||||
Current portion of long-term government loan | $ 0 | $ 287 | |||||||||||
Subtotal | 44,057 | 46,636 | |||||||||||
Long-term government loans | [1] | 7,057 | 7,454 | ||||||||||
Less: Current portion of long-term government loan | 0 | (287) | |||||||||||
Subtotal | 7,057 | 7,167 | |||||||||||
Total bank and government loans | 51,114 | 53,803 | |||||||||||
China Construction Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Short-term bank loans | [2] | 19,407 | 23,536 | ||||||||||
China Citic Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Short-term bank loans | 22,533 | 20,663 | |||||||||||
Chinese government loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Short-term bank loans | $ 2,117 | [3] | $ 2,150 | [3] | ¥ 15 | $ 2,100 | ¥ 30 | $ 4,200 | ¥ 20 | $ 2,800 | ¥ 2 | $ 300 | |
[1] | On August 7 and September 3, 2019, the Company borrowed from the local government loans of RMB 20.0 million and RMB 30.0 million, equivalent to approximately $2.8 million and $4.2 million, respectively. These loans are due for repayment on June 30, 2021 and have an interest rate of 3.80% per annum. Henglong pledged RMB 53.0 million, equivalent to approximately $7.5 million, of notes receivable as collateral for the local government loans (See Note 3). | ||||||||||||
[2] | These loans are secured by property, plant and equipment and land use rights of the Company and are repayable within one year (See Note 6). As of March 31, 2020 and December 31, 2019, the weighted average interest rate was 4.6% and 4.8% per annum, respectively. | ||||||||||||
[3] | On December 26, 2019, the Company borrowed from the local government a loan of RMB 15.0 million, equivalent to approximately $2.1 million, with an interest rate of 3.48% per annum, which is due for repayment on December 25, 2020. Henglong pledged RMB 15.5 million, equivalent to approximately $2.2 million, of notes receivable as collateral for the loan (See Note 3).On November 13, 2017, the Company borrowed from the local government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which was due for repayment on November 12, 2020. In the first quarter of 2020, the Company received a notice from the government that the loan was reclassified as government subsidy, so repayment was no longer required. As a result, the Company reduced the loan balance and recorded it as other income in the consolidated statements of operations for the three months ended March 31, 2020. |
Loans - Additional Information
Loans - Additional Information (Details) $ in Thousands, ¥ in Millions | Mar. 31, 2020CNY (¥) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 26, 2019CNY (¥) | Dec. 26, 2019USD ($) | Sep. 03, 2019CNY (¥) | Sep. 03, 2019USD ($) | Aug. 07, 2019CNY (¥) | Aug. 07, 2019USD ($) | Nov. 13, 2017CNY (¥) | Nov. 13, 2017USD ($) | ||
Debt Instrument [Line Items] | |||||||||||||
Short-term Debt, Weighted Average Interest Rate | 4.60% | 4.80% | |||||||||||
Debt Instrument, Collateral Amount | ¥ | ¥ 53 | ||||||||||||
China Citic Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Short-term Debt | $ 22,533 | $ 20,663 | |||||||||||
China Citic Bank [Member] | Henglong CITIC Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.27% | 3.46% | |||||||||||
Proceeds from Lines of Credit | $ 19,800 | $ 20,700 | |||||||||||
China Citic Bank [Member] | Hubei Henglong CITIC Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Collateral Amount | 9,700 | ||||||||||||
Chinese government loan [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.48% | 3.48% | 3.80% | 3.80% | 4.75% | 4.75% | |||||||
Short-term Debt | $ 2,117 | [1] | 2,150 | [1] | ¥ 15 | $ 2,100 | ¥ 30 | $ 4,200 | ¥ 20 | $ 2,800 | ¥ 2 | $ 300 | |
Debt Instrument, Collateral Amount | ¥ 15.5 | $ 2,200 | $ 7,500 | ||||||||||
China Merchants Bank | Merchants Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Proceeds from Lines of Credit | ¥ 2.7 | $ 0 | |||||||||||
[1] | On December 26, 2019, the Company borrowed from the local government a loan of RMB 15.0 million, equivalent to approximately $2.1 million, with an interest rate of 3.48% per annum, which is due for repayment on December 25, 2020. Henglong pledged RMB 15.5 million, equivalent to approximately $2.2 million, of notes receivable as collateral for the loan (See Note 3).On November 13, 2017, the Company borrowed from the local government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which was due for repayment on November 12, 2020. In the first quarter of 2020, the Company received a notice from the government that the loan was reclassified as government subsidy, so repayment was no longer required. As a result, the Company reduced the loan balance and recorded it as other income in the consolidated statements of operations for the three months ended March 31, 2020. |
Accounts and notes payable (Det
Accounts and notes payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts and notes payable | ||
Accounts payable - unrelated parties | $ 100,367 | $ 110,246 |
Notes payable - unrelated parties | 57,009 | 69,929 |
Accounts and notes payable - unrelated parties | 157,376 | 180,175 |
Accounts and notes payable - related parties | 8,391 | 6,492 |
Total | 165,767 | 186,667 |
Cash pledged as collateral | 24,400 | 29,700 |
Notes receivable pledged as collateral | 2,300 | 7,400 |
Property, plant and equipment pledged as collateral | 48,200 | 50,900 |
Land use right pledged as collateral | $ 5,400 | $ 5,500 |
Accrued expenses and other pa_3
Accrued expenses and other payables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued expenses and other payables | ||
Accrued expenses | $ 7,124 | $ 6,306 |
Accrued interest | 437 | 104 |
Current portion of other long-term payable (See Note 10) | 3,603 | 3,593 |
Other payables | 3,312 | 2,427 |
Dividends payable to holders of non-controlling interests | 430 | |
Warranty reserves | 32,641 | 32,907 |
Total | $ 47,547 | $ 45,337 |
Accrued expenses and other pa_4
Accrued expenses and other payables - Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accrued expenses and other payables | ||
Balance at beginning of the period | $ 32,907 | $ 31,085 |
Additions during the period | 3,428 | 2,776 |
Settlement within the period | (3,174) | (2,294) |
Foreign currency translation (gain)/loss | (520) | 590 |
Balance at end of the period | $ 32,641 | $ 32,157 |
Other long-term payable (Detail
Other long-term payable (Details) $ in Thousands, ¥ in Millions | 3 Months Ended | |||||
Mar. 31, 2020CNY (¥) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 31, 2018 | |
Term of Contract | 4 years | |||||
Payments to Acquire Property, Plant, and Equipment | $ 1,976 | $ 8,777 | ||||
Cash | ¥ 100 | $ 14,100 | ||||
Sale Leaseback Transaction, Quarterly Rental Payments | 1,000 | |||||
Other Accrued Liabilities, Current | 3,312 | $ 2,427 | ||||
Other Long-term Debt, Noncurrent | 3,938 | $ 4,948 | ||||
Capital Lease Obligations [Member] | ||||||
Payments to Acquire Property, Plant, and Equipment | ¥ 91.3 | $ 12,900 | ||||
Other Accrued Liabilities, Current | 3,600 | |||||
Other Long-term Debt, Noncurrent | $ 3,900 |
Additional paid-in capital (Det
Additional paid-in capital (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
May 31, 2017 | Mar. 31, 2020 | |
Additional paid-In capital | ||
Balance at beginning of the period | $ 64,429 | |
Acquisition of the non-controlling interest in USAI | (29) | |
Balance at end of the period | $ 64,400 | |
Consideration for additional equity interest acquired | $ 0 |
Retained earnings - Appropriate
Retained earnings - Appropriated (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Retained earnings | |||
Balance at beginning of the period | $ 11,265 | $ 11,104 | $ 11,104 |
Balance at end of the period | $ 11,265 | $ 11,265 | $ 11,104 |
Retained earnings - Unappropria
Retained earnings - Unappropriated (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Retained earnings | ||
Balance at beginning of the period | $ 221,237 | $ 211,439 |
Cumulative effect of accounting change - credit loss | (789) | |
Net income attributable to parent company | 45 | 1,467 |
Balance at end of the period | $ 220,493 | $ 212,906 |
Retained earnings (Details)
Retained earnings (Details) $ in Thousands | 3 Months Ended | 15 Months Ended |
Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Retained earnings | ||
Statutory Accounting Practices Statutory Surplus Required Percentage | 10.00% | |
Percentage Of Statutory Surplus Reserve | 50.00% | |
Statutory Accounting Practices, Statutory Capital and Surplus Required | $ 0 | $ 0 |
Statutory Accounting Practices Statutory Capital And Surplus Reserve | $ 0 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated other comprehensive income | ||
Balance at beginning of the period | $ (3,462) | $ 1,855 |
Foreign currency translation adjustment attributable to parent company | (4,597) | 5,906 |
Balance at end of the period | $ (8,059) | $ 7,761 |
Treasury stock (Details)
Treasury stock (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 05, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 04, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||
Stock Repurchased During Period, Value | $ 5 | |||
Cumulatively repurchased shares | 1,164,257 | 1,164,257 | ||
Maximum [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares Issued, Price Per Share | $ 4 |
Non-controlling interests (Deta
Non-controlling interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Non-controlling interests | ||
Balance at beginning of the period | $ 20,161 | $ 18,950 |
Net loss attributable to non-controlling interests | (533) | (243) |
Acquisition of the non-controlling interest in USAI | 29 | |
Cumulative effect of accounting change - credit loss | (102) | |
Dividends declared to non-controlling interest holders of non-wholly owned subsidiaries | (430) | |
Foreign currency translation adjustment attributable to non-controlling interests | (364) | 457 |
Balance at end of the period | $ 18,761 | $ 19,164 |
Net product sales (Details)
Net product sales (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Contract with Customer, Liability, Current | $ 1 | $ 1.3 | $ 0.6 |
Revenue from Contract with Customer, Including Assessed Tax | 0.3 | ||
Sale revenue | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 0.6 |
Financial expense, net (Details
Financial expense, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Financial expense, net | ||
Interest income | $ 351 | $ 764 |
Foreign exchange loss, net | (711) | (1,250) |
Bank fees | (171) | (179) |
Total financial expense, net | $ (531) | $ (665) |
Income tax (Details)
Income tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income tax | ||
Income tax expense | $ 514 | $ 198 |
Income per share (Details)
Income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income attributable to the parent company's common shareholders - Basic and Diluted | $ 45 | $ 1,467 |
Denominator: | ||
Weighted average shares outstanding | 31,174,045 | 31,507,487 |
Dilutive effects of stock options | 74 | 5,810 |
Denominator for dilutive income per share - Diluted | 31,174,119 | 31,513,297 |
Net income per share attributable to the parent company's common shareholders | ||
Basic | $ 0.05 | |
Diluted | $ 0.05 |
Income per share - Additional I
Income per share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2018 | |
Equity Option [Member] | ||
Earnings Per Share, Basic and Diluted [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,500 | 112,500 |
Significant concentrations (Det
Significant concentrations (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Significant concentrations | |
Minimum Percentage Of Profit Allocated To Foreign Investment | 10.00% |
Registered Capital Percentage | 50.00% |
Related party transactions an_3
Related party transactions and balances (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related sales | |||
Merchandise sold to related parties | $ 7,494 | $ 12,836 | |
Related receivables | |||
Accounts and notes receivable from related parties | 13,625 | $ 21,164 | |
Related advances payments | |||
Advance payments for property, plant and equipment to related parties | 2,514 | 2,311 | |
Advanced payments and others to related parties | 1,494 | 1,287 | |
Total | 4,008 | 3,598 | |
Related payables | |||
Accounts and notes payable | 8,391 | $ 6,492 | |
Raw Materials [Member] | |||
Related purchases | |||
Related party purchases | 3,134 | 5,504 | |
Related Party [Member] | |||
Related sales | |||
Merchandise sold to related parties | 7,841 | 13,377 | |
Related purchases | |||
Related party purchases | 3,207 | 6,275 | |
Related Party [Member] | Raw Materials [Member] | |||
Related sales | |||
Merchandise sold to related parties | 270 | 461 | |
Related Party [Member] | Rental Income [Member] | |||
Related sales | |||
Merchandise sold to related parties | 77 | 80 | |
Equipment [Member] | Related Party [Member] | |||
Related purchases | |||
Related party purchases | 69 | 760 | |
Other Purchased [Member] | Related Party [Member] | |||
Related purchases | |||
Related party purchases | $ 4 | $ 11 |
Related party transactions an_4
Related party transactions and balances - Additional Information (Details) | Jun. 23, 2020 | May 31, 2017 |
Related Party Transaction [Line Items] | ||
Equity Method Investment, Ownership Percentage | 15.84% | |
Subsequent Event [Member] | ||
Related Party Transaction [Line Items] | ||
Equity Method Investment, Ownership Percentage | 57.30% |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
2020 | $ 26,066 |
2021 | 1,652 |
2022 | 0 |
Thereafter | 0 |
Total | 27,718 |
Obligations for investment contracts [Member] | |
Commitments and Contingencies Disclosure [Line Items] | |
2020 | 4,841 |
2021 | 423 |
2022 | 0 |
Thereafter | 0 |
Total | 5,264 |
Obligations for purchasing and service agreements | |
Commitments and Contingencies Disclosure [Line Items] | |
2020 | 21,225 |
2021 | 1,229 |
2022 | 0 |
Thereafter | 0 |
Total | $ 22,454 |
Commitments and contingencies -
Commitments and contingencies - Additional Information (Details) ¥ in Millions, $ in Millions | 1 Months Ended | |||||||||
Mar. 31, 2020CNY (¥) | Mar. 31, 2020USD ($) | Nov. 30, 2019CNY (¥) | Nov. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Apr. 30, 2019USD ($) | Mar. 31, 2018CNY (¥) | Mar. 31, 2018USD ($) | Mar. 31, 2020USD ($) | May 31, 2017 | |
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Equity Method Investment, Ownership Percentage | 15.84% | |||||||||
Hefei Senye Light Plastic Technology Co., Ltd. [Member] | Hubei Henglong | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Payments to Acquire Equity Method Investments | ¥ 33.6 | $ 4.8 | ||||||||
Equity Method Investment, Ownership Percentage | 70.00% | 70.00% | ||||||||
Equity Method Investments | ¥ 18 | $ 2.5 | ||||||||
Remaining Capital Commitment | ¥ | ¥ 15.6 | |||||||||
Jingzhou Henglong Real Estate Co., Ltd [Member] | Hubei Henglong | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Payments to Acquire Equity Method Investments | $ 0 | |||||||||
Equity Method Investment, Ownership Percentage | 8.00% | 8.00% | ||||||||
Remaining Capital Commitment | $ 2.2 | |||||||||
Remaining Capital Commitment Paid in 2020 | 1.8 | |||||||||
Remaining Capital Commitment Paid in 2021 | $ 0.4 | |||||||||
Hubei Venture Fund | Hubei Henglong | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Capital Commitment | ¥ 76 | $ 11.5 | ||||||||
Payments to Acquire Equity Method Investments | ¥ 98.5 | $ 13.9 | ||||||||
Equity Method Investment, Ownership Percentage | 35.20% | 35.20% | ||||||||
Equity Method Investments | ¥ 78.8 | $ 11.1 | ||||||||
Remaining Capital Commitment | 19.7 | 2.8 | ||||||||
Jiangsu Intelligent | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Equity Method Investments | 0.3 | |||||||||
Remaining Capital Commitment | ¥ | 2 | |||||||||
Jiangsu Intelligent | Hubei Henglong | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Capital Commitment | ¥ 5 | $ 0.7 | ||||||||
Equity Method Investment, Ownership Percentage | 19.20% | 19.20% | ||||||||
Equity Method Investments | ¥ 3 | 0.4 | ||||||||
Remaining Capital Commitment | $ 0.3 |
Segment reporting (Details)
Segment reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net Product Sales | $ 73,555 | $ 109,193 |
Net (Loss)/Income | (488) | 1,224 |
Consolidation, Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | (12,447) | (31,211) |
Net (Loss)/Income | 273 | 521 |
Corporate Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 0 | 0 |
Net (Loss)/Income | (61) | (301) |
Jingzhou Henglong Automotive Parts Co., Ltd., "Henglong" [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 23,907 | 40,964 |
Net (Loss)/Income | (682) | (2,121) |
Shashi Jiulong Power Steering Gears Co., Ltd., "Jiulong" [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 12,759 | 22,122 |
Net (Loss)/Income | (1,450) | 1,168 |
Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., "Shenyang" [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 2,793 | 4,895 |
Net (Loss)/Income | (170) | (299) |
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 2,803 | 6,998 |
Net (Loss)/Income | 239 | (175) |
Hubei Henglong | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 28,132 | 28,175 |
Net (Loss)/Income | 4,065 | 1,372 |
Hubei Henglong KYB Automobile Electric Steering System Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 6,126 | 19,954 |
Net (Loss)/Income | (907) | (396) |
Other Entities [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 9,482 | 17,296 |
Net (Loss)/Income | (1,795) | 1,455 |
Total Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Product Sales | 86,002 | 140,404 |
Net (Loss)/Income | $ (700) | $ 1,004 |
Segment reporting - Additional
Segment reporting - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2020productitem | Mar. 31, 2019productitem | |
Segment reporting | ||
Concentration Risk, Percentage | 33.70% | 18.10% |
Number of product sectors | product | 14 | 13 |
Number of principal profit makers | 6 | 6 |
Number of holding company | 1 | 1 |
Number of sectors engaged in production and sale of products | 8 | 7 |