Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 09, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
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 Filer Category | Non-accelerated Filer | |
Trading Symbol | CAAS | |
Entity Common Stock, Shares Outstanding | 31,497,723 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
Condensed Unaudited Consolidate
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net product sales ($12,836 and $10,846 sold to related parties for the three months ended March 31, 2019 and 2018) | $ 109,193 | $ 134,018 |
Cost of products sold ($5,504 and $8,249 purchased from related parties for the three months ended March 31, 2019 and 2018) | 95,148 | 112,379 |
Gross profit | 14,045 | 21,639 |
Gain on other sales | 1,269 | 1,513 |
Less: Operating expenses | ||
Selling expenses | 3,085 | 5,827 |
General and administrative expenses | 4,590 | 4,424 |
Research and development expenses | 6,602 | 8,307 |
Total operating expenses | 14,277 | 18,558 |
Income from operations | 1,037 | 4,594 |
Other income, net | 1,407 | 621 |
Interest expense | (568) | (415) |
Financial expense, net | (665) | (765) |
Income before income tax expenses and equity in earnings of affiliated companies | 1,211 | 4,035 |
Less: Income taxes | 198 | 588 |
Equity in earnings of affiliated companies | 211 | 585 |
Net income | 1,224 | 4,032 |
Net loss attributable to non-controlling interests | (243) | (280) |
Net income attributable to parent company's common shareholders | 1,467 | 4,312 |
Comprehensive income: | ||
Net income | 1,224 | 4,032 |
Other comprehensive income: | ||
Foreign currency translation gain, net of tax | 6,363 | 13,242 |
Comprehensive income | 7,587 | 17,274 |
Comprehensive income attributable to non-controlling interests | 214 | 236 |
Comprehensive income attributable to parent company | $ 7,373 | $ 17,038 |
Net income attributable to parent company's common shareholders per share | ||
Basic – (in dollars per share) | $ 0.05 | $ 0.14 |
Diluted- (in dollars per share) | $ 0.05 | $ 0.14 |
Weighted average number of common shares outstanding | ||
Basic (in shares) | 31,507,487 | 31,644,004 |
Diluted (in shares) | 31,513,297 | 31,644,004 |
Condensed Unaudited Consolida_2
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Related Parties | $ 12,836 | $ 10,846 |
Related Party Costs | $ 5,504 | $ 8,249 |
Condensed Unaudited Consolida_3
Condensed Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | ||
Current assets: | ||||
Cash and cash equivalents | $ 65,471 | $ 86,346 | ||
Pledged cash | 26,205 | 29,623 | ||
Accounts and notes receivable, net - unrelated parties | 242,574 | 237,519 | ||
Accounts and notes receivable, net - related parties | 21,701 | 18,825 | ||
Inventories | 90,202 | 88,021 | ||
Other current assets | 34,076 | 35,094 | ||
Total current assets | 480,229 | 495,428 | ||
Non-current assets: | ||||
Property, plant and equipment, net | [2],[3] | 137,033 | [1] | 129,853 |
Long-term investments | 33,433 | 32,620 | ||
Other non-current assets | 34,621 | 32,598 | ||
Total assets | 685,316 | 690,499 | ||
Current liabilities: | ||||
Short-term loans | 65,888 | 60,952 | ||
Accounts and notes payable - unrelated parties | 187,612 | 205,643 | ||
Accounts and notes payable - related parties | 5,668 | 4,477 | ||
Accrued expenses and other payables | 45,897 | 47,032 | ||
Other current liabilities | 24,181 | 23,196 | ||
Total current liabilities | 329,246 | 341,300 | ||
Long-term liabilities: | ||||
Long-term government loan | 297 | 291 | ||
Other long-term payable | 7,977 | 8,726 | ||
Long-term tax payable | [4] | 29,503 | 29,503 | |
Other non-current liabilities | 6,221 | 5,852 | ||
Total liabilities | 373,244 | 385,672 | ||
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, 2019 and December 31, 2018, respectively | 3 | 3 | ||
Additional paid-in capital | 64,429 | 64,429 | ||
Retained earnings- | ||||
Appropriated | 11,104 | 11,104 | ||
Unappropriated | 212,906 | 211,439 | ||
Accumulated other comprehensive income | 7,761 | 1,855 | ||
Treasury stock - 840,579 and 711,698 shares as of March 31, 2019 and December 31, 2018, respectively | (3,295) | (2,953) | ||
Total parent company stockholders' equity | 292,908 | 285,877 | ||
Non-controlling interests | 19,164 | 18,950 | ||
Total stockholders' equity | 312,072 | 304,827 | ||
Total liabilities and stockholders' equity | $ 685,316 | $ 690,499 | ||
[1] | Depreciation charges were $3.9 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. | |||
[2] | Depreciation charges were $4.4 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. | |||
[3] | Interest costs capitalized for the three months ended March 31, 2019 and 2018, were $0.1 million and $0.2 million, respectively. | |||
[4] | A one-time transition tax of $35.6 million was recognized in the fourth quarter of 2017 that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company elected to pay the one-time transition tax over eight years commencing in April 2018. As of March 31, 2019 and December 31, 2018, $2.8 million was included in taxes payable as a current liability which the Company believes will be paid within one year and the remaining balance was included in long-term taxes payable. See Note 25 for more details about the U.S. Tax Reform. |
Condensed Unaudited Consolida_4
Condensed Unaudited Consolidated Balance Sheets [Parenthetical] - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 840,579 | 711,698 |
Condensed Unaudited Consolida_5
Condensed Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,224 | $ 4,032 |
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||
Depreciation and amortization | 3,987 | 4,342 |
(Reversal)/accrual of provision for doubtful accounts | (355) | 275 |
Inventory write downs | 1,112 | 1,543 |
Deferred income taxes | (84) | 33 |
Equity in earnings of affiliated companies | (211) | (585) |
Gain on fixed assets disposals | 0 | 12 |
Increase/(decrease) in: | ||
Accounts and notes receivable | (1,977) | 559 |
Inventories | (1,233) | (6,592) |
Other current assets | 2,387 | (128) |
Increase/(decrease) in: | ||
Accounts and notes payable | (21,299) | (11,950) |
Accrued expenses and other payables | (2,208) | (4,031) |
Other current liabilities | 443 | 4,988 |
Net cash provided by operating activities | (18,214) | (7,502) |
Cash flows from investing activities: | ||
(Decrease)/increase in other receivables | (249) | 647 |
Cash received from property, plant and equipment sales | 834 | 26 |
Payments to acquire property, plant and equipment (including $760 and $5,224 paid to related parties for the three months ended March 31, 2019 and 2018, respectively) | (8,777) | (8,192) |
Payments to acquire intangible assets | (1,194) | 0 |
Purchase of short-term investments | (15,563) | (1,414) |
Proceeds from maturities of short-term investments | 14,901 | 19,108 |
Cash received from repayment of the loan to a related party | 0 | 20,430 |
Net cash (used in)/provided by investing activities | (10,048) | 30,605 |
Cash flows from financing activities: | ||
Proceeds from bank loans | 15,275 | 19,672 |
Repayments of bank loans | (11,881) | (31,037) |
Repayments of the borrowing for sale and leaseback transaction | (1,063) | 0 |
Repurchase of common shares | (342) | 0 |
Net cash provided by/(used in) financing activities | 1,989 | (11,365) |
Effects of exchange rate on cash, cash equivalents and pledged cash | 1,980 | 3,595 |
Net (decrease)/increase in cash, cash equivalents and pledged cash | (24,293) | 15,333 |
Cash, cash equivalents and pledged cash at beginning of the period | 115,969 | 96,093 |
Cash, cash equivalents and pledged cash at end of the period | $ 91,676 | $ 111,426 |
Condensed Unaudited Consolida_6
Condensed Unaudited Consolidated Statements of Cash Flows [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Payments to Acquire Property, Plant, and Equipment | $ 8,777 | $ 8,192 |
Related Party [Member] | ||
Payments to Acquire Property, Plant, and Equipment | $ 760 | $ 5,224 |
Organization and business
Organization and business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business [Text Block] | 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 and the joint ventures 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 Sino-foreign joint ventures, wholly-owned subsidiaries and joint ventures organized in the People's Republic of China, the “PRC,” and Brazil as of March 31, 2019 and December 31, 2018. Percentage Interest Name of Entity March 31, 2019 December 31, 2018 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 83.34 % 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 % 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 Rearch 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. |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | 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, 2018. 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, 2018 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, 2019 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. 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, 2019, the Company adopted ASU 2016-02, Leases (c) Significant Accounting Policies The following significant accounting policies have been added or changed since the date of the Company’s 2018 Annual Report on Form 10-K. Leases The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. There is no material impact on the balance of retained earnings, right of use assets or associated lease liabilities as of January 1, 2019 due to the adoption of ASC 842. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient. The Company determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. The Company’s major plants and buildings are self-owned and limited temporary small offices were rented. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The discount rate used by the Company for its operating lease was 4.49%. The operating lease right of use assets was included in other current assets and current portion of operating lease liabilities was included in other current liabilities and the non-current portion was included in other non-current liabilities. The weighted average remaining lease term was 4 years. The Company does not have finance lease arrangements as of March 31, 2019. |
Accounts and notes receivable,
Accounts and notes receivable, net | 3 Months Ended |
Mar. 31, 2019 | |
Accounts and Notes Receivable Disclosure [Abstract] | |
Accounts and Notes Receivable Disclosure [Text Block] | 3. Accounts and notes receivable, net The Company’s accounts and notes receivable, net as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accounts receivable - unrelated parties $ 150,415 $ 149,100 Notes receivable - unrelated parties (1)(2) 94,255 90,412 Total accounts and notes receivable- unrelated parties 244,670 239,512 Less: allowance for doubtful accounts - unrelated parties (3) (2,096 ) (1,993 ) Accounts and notes receivable, net - unrelated parties 242,574 237,519 Accounts and notes receivable - related parties 21,701 18,825 Accounts and notes receivable, net $ 264,275 $ 256,344 (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, 2019 and December 31, 2018, the Company pledged its notes receivable in an amount of approximately $7.6 million and $18.4 million, respectively, as security for its comprehensive credit facilities or loans. (3) Provision for doubtful accounts and notes receivable amounted to and $0.3 million for the three months ended March 31, 2019 and 2018, respectively. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 4. Inventories The Company’s inventories as of March 31, 2019 and December 31, 2018 consisted of the following (figures are in thousands of USD): March 31, 2019 December 31, 2018 Raw materials $ 29,206 $ 27,190 Work in process 12,340 11,932 Finished goods 48,656 48,899 Total $ 90,202 $ 88,021 The write down of inventories amounted to $1.1 million and $1.5 million for the three months ended March 31, 2019 and 2018, respectively. |
Long-term Investments
Long-term Investments | 3 Months Ended |
Mar. 31, 2019 | |
Long-term Investments [Abstract] | |
Long-Term Investments [Text Block] | 5. Long-term investments In January 2010, the Company invested $3.1 million to establish a joint venture company, Beijing Henglong, with Hainachuan. The Company owns 50% of the equity in Beijing Henglong and can exercise significant influence over Beijing Henglong’s operating and financial policies. The Company accounted for Beijing Henglong’s operational results using the equity method. As of March 31, 2019 and December 31, 2018, the Company had $4.3 million and $4.2 million, respectively, of net equity in Beijing Henglong. In September 2014, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Suzhou Venture Fund”, which mainly focuses on investments in emerging automobiles and parts industries. Hubei Henglong has committed to make investments of RMB 50.0 million, equivalent to approximately $7.4 million, in the Suzhou Venture Fund in three installments. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 50.0 million, equivalent to approximately $7.4 million, representing 12.5% of the Suzhou Venture Fund’s shares. As a limited partner, Hubei Henglong has more than virtually no influence over the Suzhou Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of March 31, 2019 and December 31, 2018, the Company had $10.0 million and $9.7 million, respectively, of net equity in the Suzhou Venture Fund. In May 2016, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Chongqing Venture Fund”. Hubei Henglong has committed to make investments of RMB 120.0 million, equivalent to approximately $18.0 million, representing 23.5% of the Chongqing Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 84.0 million, equivalent to approximately $12.5 million. As a limited partner, Hubei Henglong has more than virtually no influence over the Chongqing Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of March 31, 2019 and December 31, 2018, the Company had $13.3 million and $13.1 million, respectively, of net equity in the Chongqing Venture Fund. In October 2016, Hubei Henglong invested RMB 3.0 million, equivalent to approximately $0.4 million, to establish a joint venture company, Chongqing Jinghua Automotive Intelligent Manufacturing Technology Research Co., Ltd., “Chongqing Jinghua”, with five other parties. The Company owns 30% of the equity in Chongqing Jinghua, and can exercise significant influence over Chongqing Jinghua’s operating and financial policies. The Company accounts for Chongqing Jinghua’s operational results using the equity method. As of March 31, 2019 and December 31, 2018, the Company had $0.2 million and $0.2 million, respectively, of net equity in Chongqing Jinghua. 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, representing 27.1% of the Hubei Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 38.0 million, equivalent to approximately $5.6 million. As a limited partner, Hubei Henglong has more than virtually no influence over the Hubei Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of March 31, 2019 and December 31, 2018, the Company had $5.6 million and $5.5 million, respectively, of net equity in the Hubei Venture Fund. The Company’s consolidated financial statements reflect the net income of non-consolidated affiliates of $0.2 million and $0.6 million for the three months ended March 31, 2019 and 2018, respectively. |
Property, plant and equipment,
Property, plant and equipment, net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 6. Property, plant and equipment, net The Company’s property, plant and equipment, net as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Costs: Land use rights and buildings $ 62,846 $ 60,593 Machinery and equipment 198,351 192,538 Electronic equipment 5,858 5,810 Motor vehicles 4,933 4,852 Construction in progress 15,214 12,526 Total amount of property, plant and equipment 287,202 276,319 Less: Accumulated depreciation (1) (150,169 ) (146,466 ) Total amount of property, plant and equipment, net (2)(3) $ 137,033 $ 129,853 (1) As of March 31, 2019 and December 31, 2018, the Company pledged property, plant and equipment with a net book value of approximately $57.4 million and $55.9 million, respectively, as security for its comprehensive credit facilities with banks in China. (2) Depreciation charges were $3.9 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. (3) Interest costs capitalized for the three months ended March 31, 2019 and 2018, were $0.1 million and $0.2 million, respectively. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | 7. Loans Loans consist of the following as of March 31, 2019 and December 31, 2018 (figures are in thousands of USD): March 31, 2019 December 31, 2018 Short-term bank loans (1) $ 58,462 $ 53,667 Short-term government loan (2) 7,426 7,285 Total short-term bank and government loans $ 65,888 $ 60,952 Long-term government loan (3) 297 291 Total bank and government loans $ 66,185 $ 61,243 (1) These loans are secured by property, plant and equipment of the Company and are repayable within one year (See Note 6). As of March 31, 2019 and December 31, 2018, the weighted average interest rate was 5.0% and 5.3% per annum, respectively. Interest is to be paid monthly on the twentieth day of the applicable month or at maturity and the principal repayment is at maturity. On October 27, 2017, Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 224.0 million (equivalent to $33.3 million as of March 31, 2019), the “Henglong CITIC Credit Facility”. The original maturity date of the Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). As security for the Henglong CITIC Credit Facility, Henglong’s property, plant and equipment were pledged and Hubei Henglong provided a guarantee. Henglong provided Jielong with a Standby Letter of Credit under the Credit Facility. On August 21, 2018, Henglong drew down loans amounting to RMB 23.2 million and RMB 48.1 million (equivalent to $3.4 million and $7.1 million), respectively. On August 23 and September 7, 2018, Henglong drew down loans amounting to RMB 19.3 million and RMB 5.8 million (equivalent to $2.9 million and $0.9 million), respectively. On March 15 and March 26, 2019, Henglong drew down loans amounting to RMB 7.2 million and RMB 7.8 million (equivalent to $1.0 million and $1.2 million), respectively. The annual interest rate of the loans was 3.63%, 3.98%, 3.79%, 3.95%, 3.52% and 3.52%, respectively. On October 27, 2017, Hubei Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 140.0 million (equivalent to $20.8 million as of March 31, 2019), the “Hubei Henglong CITIC Credit Facility”. The Hubei Henglong CITIC Credit Facility expired on October 27, 2018. Henglong provided a guarantee for the Hubei Henglong CITIC Credit Facility. The original maturity date of the Hubei Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). Hubei Henglong provided Jiulong with a Standby Letter of Credit under the Credit Facility. On August 10, 2018, Hubei Henglong drew down loans amounting to RMB 11.5 million and RMB 27.0 million (equivalent to $1.7 million and $4.0 million), respectively. On August 22 and September 6, 2018, Hubei Henglong drew down loans amounting to RMB 26.0 million and RMB 7.6 million (equivalent to $3.9 million and $1.1 million), respectively. On March 15, 2019, Hubei Henglong drew down loans amounting to RMB 28.0 million and RMB 14.1 million (equivalent to $4.2 million and $2.1 million), respectively. The annual interest rate of the loans was 3.93%, 3.84%, 3.98%, 4.01%, 3.63% and 3.52%, respectively. (2) On September 27, 2018, the Company received a Chinese government loan of RMB 50.0 million, equivalent to approximately $7.4 million, with an interest rate of 3.48% per annum, which will mature on June 28, 2019. Henglong pledged RMB 51.5 million, equivalent to approximately $7.6 million, of notes receivable as security for the Chinese government loan (See Note 3). (3) On , the Company received a Chinese government loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which will mature on . 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 or trigger early repayment. The Company complied with such financial covenants as of March 31, 2019, and believes it will continue to comply with them. |
Accounts and notes payable
Accounts and notes payable | 3 Months Ended |
Mar. 31, 2019 | |
Accounts and Notes Payable Disclosure [Abstract] | |
Accounts and Notes Payable [Text Block] | 8. Accounts and notes payable The Company’s accounts and notes payable as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accounts payable - unrelated parties $ 115,355 $ 124,610 Notes payable - unrelated parties (1) 72,257 81,033 Accounts and notes payable- unrelated parties 187,612 205,643 Accounts payable - related parties 5,668 4,477 Balance at end of the period $ 193,280 $ 210,120 (1) Notes payable represent accounts payable in the form of notes issued by the Company. The notes are endorsed by banks to ensure that noteholders will be paid after maturity. The Company has pledged cash deposits, short-term investments, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. |
Accrued expenses and other paya
Accrued expenses and other payables | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses and Other Payables Disclosure [Abstract] | |
Accrued Expenses and Other Payables [Text Block] | 9. Accrued expenses and other payables The Company’s accrued expenses and other payables as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accrued expenses $ 6,884 $ 8,341 Accrued interest 748 423 Current portion of other long-term payable (See Note 10) 3,529 3,400 Other payables 2,579 3,783 Warranty reserves (1) 32,157 31,085 Total $ 45,897 $ 47,032 (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, 2019 and 2018, and for the year ended December 31, 2018, the warranties activities were as follows (figures are in thousands of USD): Three Months Ended March 31, Year Ended 2019 2018 2018 Balance at beginning of the period $ 31,085 $ 29,033 $ 29,033 Additions during the period 2,776 4,248 24,102 Settlement within period (2,294 ) (4,206 ) (20,599 ) Foreign currency translation loss/(gain) 590 1,126 (1,451 ) Balance at end of the period $ 32,157 $ 30,201 $ 31,085 |
Other long-term payable
Other long-term payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Other Long-term Payable [Text Block] | 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 $13.6 million and the sales price was $14.9 million. 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 $1.1 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 is accounted for as a financing transaction by the Company. As of March 31, 2019, $3.5 million is recognized as other payable (See Note 9) and $8.0 million is 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, 2019 | |
Additional Paid in Capital [Abstract] | |
Additional Paid-In Capital [Text Block] | 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, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31 2019 2018 Balance at beginning of the period $ 64,429 $ 64,406 Balance at end of the period $ 64,429 $ 64,406 Assumptions used to estimate the fair value of the stock options on the grant date are as follows: Issuance Date Expected volatility Risk-free rate Expected term (years) Dividend yield December 5, 2018 44.72 % 2.79 % 5 0.00 % The stock options granted during 2018 were exercisable immediately. Their aggregate fair value on the grant date using the Black-Scholes option pricing model was $0.02 million. For the year ended December 31, 2018, the Company recognized stock-based compensation expenses of $0.02 million. |
Retained earnings
Retained earnings | 3 Months Ended |
Mar. 31, 2019 | |
Retained Earnings Note Disclosure [Abstract] | |
Retained Earnings Disclosure [Text Block] | 12. Retained earnings Appropriated Pursuant to the relevant PRC laws, the profits distribution of the Company’s Sino-foreign subsidiaries, which are based on their PRC statutory financial statements, other than the financial statement that was prepared in accordance with generally accepted accounting principles in the United States of America, 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%. When the statutory surplus reserve reaches 50% of the registered capital of a company, additional reserve is no longer required. However, the reserve cannot be distributed to shareholders. Based on the business licenses of the PRC subsidiaries, the registered capital of Henglong, Jiulong, Shenyang, USAI, Jielong, Wuhu, Hubei Henglong and Chongqing are $10.0 million, $4.2 million (equivalent to RMB 35.0 million), $8.1 million (equivalent to RMB 67.5 million), $2.6 million, $6.0 million, $3.8 million (equivalent to RMB 30.0 million), $39.0 million and $9.5 million (equivalent to RMB 60.0 million), respectively. The Company’s activities in respect of the amounts of appropriated retained earnings for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31 2019 2018 Balance at beginning of the period $ 11,104 $ 10,707 Balance at end of the period $ 11,104 $ 10,707 Unappropriated The Company’s activities in respect of the amounts of the unappropriated retained earnings for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three months Ended March 31, 2019 2018 Balance at beginning of the period $ 211,439 $ 209,459 Net income attributable to parent company 1,467 4,312 Balance at end of the period $ 212,906 $ 213,771 |
Accumulated other comprehensive
Accumulated other comprehensive income | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Other Comprehensive Income, Noncontrolling Interest [Text Block] | 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, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2019 2018 Balance at beginning of the period $ 1,855 $ 17,780 Foreign currency translation adjustment attributable to parent company 5,906 12,726 Balance at end of the period $ 7,761 $ 30,506 |
Treasury stock
Treasury stock | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Treasury Stock [Text Block] | 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. During the three months ended March 31, 2019, the Company repurchased 128,881 shares of the Company’s common stock for cash consideration of $0.3 million on the open market. As of March 31, 2019 the Company had cumulatively repurchased 840,579 shares and 711,698 shares, respectively, of the Company’s common stock since inception. The repurchased shares are presented as “treasury stock” on the balance sheet. |
Non-controlling interests
Non-controlling interests | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest Disclosure [Text Block] | 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, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three months Ended March 31, 2019 2018 Balance at beginning of the period $ 18,950 $ 6,681 Loss attributable to non-controlling interests (243 ) (280 ) Foreign currency translation adjustment attributable to non-controlling interests 457 516 Balance at end of the period $ 19,164 $ 6,917 |
Net product sales
Net product sales | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 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. Customer Deposits As of March 31, 2019 and December 31, 2018, the Company has customer deposits of $0.7 million and $0.8 million, respectively. During the three months ended March 31, 2019, $3.2 million was received and $3.2 million (including $0.8 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, 2019 | |
Financial Income Expenses Disclosure [Abstract] | |
Financial Income Expenses Disclosure [Text Block] | 17. Financial expense, net During the three months ended March 31, 2019 and 2018, the Company recorded financial , net which is summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2019 2018 Interest income $ 764 $ 374 Foreign exchange loss, net (1,250 ) (1,037 ) Bank fees (179 ) (102 ) Total financial expense, net $ (665 ) $ (765 ) |
Income tax
Income tax | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 18. Income tax The Company’s effective tax rates were 16.4% and 14.7% in the three months ended March 31, 2019 and 2018, respectively. The increase in effective tax rate was primarily due to the increase in the valuation allowance provided for loss-making entities. |
Income per share
Income per share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 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, 2019 and 2018, were as follows (figures are in thousands of USD, except share and per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net income attributable to the parent company’s common shareholders – Basic and Diluted $ 1,467 $ 4,312 Denominator: Weighted average shares outstanding 31,507,487 31,644,004 Dilutive effects of stock options 5,810 - Denominator for dilutive income per share - Diluted 31,513,297 31,644,004 Net income per share attributable to parent company’s common shareholders - Basic $ 0.05 $ 0.14 Net income per share attributable to parent company’s common shareholders - Diluted $ 0.05 $ 0.14 As of March 31, 2019 and 2018, the exercise prices for 112,500 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, 2019 and 2018, respectively, and 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, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 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. 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% 50% 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 USD, 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 PRC, the Company’s PRC 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 PRC 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. The Company grants credit to its customers in the ordinary course of its business, including Xiamen Joylon, Xiamen Automotive Parts, Shanghai and Jingzhou Yude, which are related parties of the Company. The Company’s customers are mostly located in the PRC. 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. During the three months ended March 31, 2018, the Company’s five largest customers accounted for 41.9% of its consolidated net product sales, with one customer individually accounting for more than 10% of consolidated net sales i.e., 18.9%. As of March 31, 2018, approximately 4.8% 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. |
Related party transactions and
Related party transactions and balances | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 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, 2019 2018 Merchandise sold to related parties $ 12,836 $ 10,846 Materials and others sold to related parties 461 446 Rental income obtained from related parties 80 102 Total $ 13,377 $ 11,394 Related purchases Three Months Ended March 31, 2019 2018 Materials purchased from related parties $ 5,504 $ 8,249 Equipment purchased from related parties 760 1,248 Others purchased from related parties 11 49 Total $ 6,275 $ 9,546 Related receivables March 31, 2019 December 31, 2018 Accounts and notes receivable from related parties $ 21,701 $ 18,825 Related advances and loan balance March 31, 2019 December 31, 2018 Advance payments for property, plant and equipment to related parties $ 3,819 $ 8,723 Advance payments and others to related parties 1,100 1,281 Total $ 4,919 $ 10,004 Related payables March 31, 2019 December 31, 2018 Accounts and notes payable $ 5,668 $ 4,477 These transactions were consummated under similar terms as those with the Company's third party customers and suppliers. As of May 9, 2019, Hanlin Chen, Chairman, owns 56.4% 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, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 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, Arthur Wong, Guangxun Xu and Robert Tung Management expects the impact of the suit on the Company’s consolidated financial statements to be immaterial. Other than as described above, (a) the Company is not a party to any pending or, to the best of the Company’s knowledge, any threatened legal proceedings and (b) 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, 2019 (figures are in thousands of USD): Payment obligations by period 2019 2020 2021 Thereafter Total Obligations for investment contracts (1) $ 10,990 $ - $ - $ - $ 10,990 Obligations for purchasing and service agreements 30,558 3,894 - - 34,452 Total $ 41,548 $ 3,894 $ - $ - $ 45,442 (1) In May 2016, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Chongqing Venture Fund”. Hubei Henglong has committed to make investments of RMB 120.0 million, equivalent to approximately $18.0 million, in the Chongqing Venture Fund in three installments, representing 23.5% of the Chongqing Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 84.0 million, equivalent to approximately $12.5 million, According to the agreement, the remaining capital commitment of RMB 36.0 million, equivalent to approximately $5.3 million, will be paid upon capital calls received from the Chongqing Venture Fund. 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 of RMB 76.0 million, equivalent to approximately $11.5 million, in the Hubei Venture Fund in three installments, representing 27.1% of the Hubei Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 38.0 million, equivalent to approximately $5.6 million. According to the agreement, the remaining capital commitment of RMB 38.0 million, equivalent to approximately $5.6 million, will be paid upon capital calls received from the Hubei Venture Fund. |
Off-balance sheet arrangements
Off-balance sheet arrangements | 3 Months Ended |
Mar. 31, 2019 | |
Off Balance Sheet Arrangements Disclosure [Abstract] | |
Off Balance Sheet Arrangements Disclosure [Text Block] | 23. Off-balance sheet arrangements As of March 31, 2019 and December 31, 2018, 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, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 24. Segment reporting The accounting policies of the product sectors are the same as those described in the summary of significant accounting policies 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. 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). As of March 31, 2018, the Company had 12 product sectors, five 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 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, 2019 and 2018, is as follows (figures are in thousands of USD): Net Product Sales Net Income (Loss) Three Months Ended Three Months Ended March 31, March 31, 2019 2018 2019 2018 Henglong $ 40,964 $ 68,896 $ (2,121 ) $ (312 ) Jiulong 22,122 27,445 1,168 455 Shenyang 4,895 6,348 (299 ) (618 ) Wuhu 6,998 4,636 (175 ) (397 ) Hubei Henglong 28,175 33,393 1,372 3,089 Henglong KYB 19,954 - (396 ) - Other 17,296 17,898 1,455 794 Total Segments 140,404 158,616 1,004 3,011 Corporate - - (301 ) 564 Eliminations (31,211 ) (24,598 ) 521 457 Total $ 109,193 $ 134,018 $ 1,224 $ 4,032 |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | (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, 2018. 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, 2018 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, 2019 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. 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. |
New Accounting Pronouncements, Policy [Policy Text Block] | (b) Recent Accounting Pronouncements On January 1, 2019, the Company adopted ASU 2016-02, Leases |
Significant Accounting Policies [Policy Text Block] | (c) Significant Accounting Policies The following significant accounting policies have been added or changed since the date of the Company’s 2018 Annual Report on Form 10-K. Leases The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. There is no material impact on the balance of retained earnings, right of use assets or associated lease liabilities as of January 1, 2019 due to the adoption of ASC 842. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient. The Company determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. The Company’s major plants and buildings are self-owned and limited temporary small offices were rented. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The discount rate used by the Company for its operating lease was 4.49%. The operating lease right of use assets was included in other current assets and current portion of operating lease liabilities was included in other current liabilities and the non-current portion was included in other non-current liabilities. The weighted average remaining lease term was 4 years. The Company does not have finance lease arrangements as of March 31, 2019. |
Organization and business (Tabl
Organization and business (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Equity Method Investments [Table Text Block] | The Company owns the following aggregate net interests in the following Sino-foreign joint ventures, wholly-owned subsidiaries and joint ventures organized in the People's Republic of China, the “PRC,” and Brazil as of March 31, 2019 and December 31, 2018. Percentage Interest Name of Entity March 31, 2019 December 31, 2018 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 83.34 % 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 % 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 Rearch 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. |
Accounts and notes receivable_2
Accounts and notes receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts and Notes Receivable Disclosure [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | 3. Accounts and notes receivable, net The Company’s accounts and notes receivable, net as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accounts receivable - unrelated parties $ 150,415 $ 149,100 Notes receivable - unrelated parties (1)(2) 94,255 90,412 Total accounts and notes receivable- unrelated parties 244,670 239,512 Less: allowance for doubtful accounts - unrelated parties (3) (2,096 ) (1,993 ) Accounts and notes receivable, net - unrelated parties 242,574 237,519 Accounts and notes receivable - related parties 21,701 18,825 Accounts and notes receivable, net $ 264,275 $ 256,344 (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, 2019 and December 31, 2018, the Company pledged its notes receivable in an amount of approximately $7.6 million and $18.4 million, respectively, as security for its comprehensive credit facilities or loans. (3) Provision for doubtful accounts and notes receivable amounted to and $0.3 million for the three months ended March 31, 2019 and 2018, respectively. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | The Company’s inventories as of March 31, 2019 and December 31, 2018 consisted of the following (figures are in thousands of USD): March 31, 2019 December 31, 2018 Raw materials $ 29,206 $ 27,190 Work in process 12,340 11,932 Finished goods 48,656 48,899 Total $ 90,202 $ 88,021 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | The Company’s property, plant and equipment, net as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Costs: Land use rights and buildings $ 62,846 $ 60,593 Machinery and equipment 198,351 192,538 Electronic equipment 5,858 5,810 Motor vehicles 4,933 4,852 Construction in progress 15,214 12,526 Total amount of property, plant and equipment 287,202 276,319 Less: Accumulated depreciation (1) (150,169 ) (146,466 ) Total amount of property, plant and equipment, net (2)(3) $ 137,033 $ 129,853 (1) As of March 31, 2019 and December 31, 2018, the Company pledged property, plant and equipment with a net book value of approximately $57.4 million and $55.9 million, respectively, as security for its comprehensive credit facilities with banks in China. (2) Depreciation charges were $3.9 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. (3) Interest costs capitalized for the three months ended March 31, 2019 and 2018, were $0.1 million and $0.2 million, respectively. |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Loans consist of the following as of March 31, 2019 and December 31, 2018 (figures are in thousands of USD): March 31, 2019 December 31, 2018 Short-term bank loans (1) $ 58,462 $ 53,667 Short-term government loan (2) 7,426 7,285 Total short-term bank and government loans $ 65,888 $ 60,952 Long-term government loan (3) 297 291 Total bank and government loans $ 66,185 $ 61,243 (1) These loans are secured by property, plant and equipment of the Company and are repayable within one year (See Note 6). As of March 31, 2019 and December 31, 2018, the weighted average interest rate was 5.0% and 5.3% per annum, respectively. Interest is to be paid monthly on the twentieth day of the applicable month or at maturity and the principal repayment is at maturity. On October 27, 2017, Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 224.0 million (equivalent to $33.3 million as of March 31, 2019), the “Henglong CITIC Credit Facility”. The original maturity date of the Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). As security for the Henglong CITIC Credit Facility, Henglong’s property, plant and equipment were pledged and Hubei Henglong provided a guarantee. Henglong provided Jielong with a Standby Letter of Credit under the Credit Facility. On August 21, 2018, Henglong drew down loans amounting to RMB 23.2 million and RMB 48.1 million (equivalent to $3.4 million and $7.1 million), respectively. On August 23 and September 7, 2018, Henglong drew down loans amounting to RMB 19.3 million and RMB 5.8 million (equivalent to $2.9 million and $0.9 million), respectively. On March 15 and March 26, 2019, Henglong drew down loans amounting to RMB 7.2 million and RMB 7.8 million (equivalent to $1.0 million and $1.2 million), respectively. The annual interest rate of the loans was 3.63%, 3.98%, 3.79%, 3.95%, 3.52% and 3.52%, respectively. On October 27, 2017, Hubei Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 140.0 million (equivalent to $20.8 million as of March 31, 2019), the “Hubei Henglong CITIC Credit Facility”. The Hubei Henglong CITIC Credit Facility expired on October 27, 2018. Henglong provided a guarantee for the Hubei Henglong CITIC Credit Facility. The original maturity date of the Hubei Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). Hubei Henglong provided Jiulong with a Standby Letter of Credit under the Credit Facility. On August 10, 2018, Hubei Henglong drew down loans amounting to RMB 11.5 million and RMB 27.0 million (equivalent to $1.7 million and $4.0 million), respectively. On August 22 and September 6, 2018, Hubei Henglong drew down loans amounting to RMB 26.0 million and RMB 7.6 million (equivalent to $3.9 million and $1.1 million), respectively. On March 15, 2019, Hubei Henglong drew down loans amounting to RMB 28.0 million and RMB 14.1 million (equivalent to $4.2 million and $2.1 million), respectively. The annual interest rate of the loans was 3.93%, 3.84%, 3.98%, 4.01%, 3.63% and 3.52%, respectively. (2) On September 27, 2018, the Company received a Chinese government loan of RMB 50.0 million, equivalent to approximately $7.4 million, with an interest rate of 3.48% per annum, which will mature on June 28, 2019. Henglong pledged RMB 51.5 million, equivalent to approximately $7.6 million, of notes receivable as security for the Chinese government loan (See Note 3). (3) On , the Company received a Chinese government loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which will mature on . |
Accounts and notes payable (Tab
Accounts and notes payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts and Notes Payable Disclosure [Abstract] | |
Schedule Of Accounts and Notes Payable [Table Text Block] | The Company’s accounts and notes payable as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accounts payable - unrelated parties $ 115,355 $ 124,610 Notes payable - unrelated parties (1) 72,257 81,033 Accounts and notes payable- unrelated parties 187,612 205,643 Accounts payable - related parties 5,668 4,477 Balance at end of the period $ 193,280 $ 210,120 (1) Notes payable represent accounts payable in the form of notes issued by the Company. The notes are endorsed by banks to ensure that noteholders will be paid after maturity. The Company has pledged cash deposits, short-term investments, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. |
Accrued expenses and other pa_2
Accrued expenses and other payables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | The Company’s accrued expenses and other payables as of March 31, 2019 and December 31, 2018 are summarized as follows (figures are in thousands of USD): March 31, 2019 December 31, 2018 Accrued expenses $ 6,884 $ 8,341 Accrued interest 748 423 Current portion of other long-term payable (See Note 10) 3,529 3,400 Other payables 2,579 3,783 Warranty reserves (1) 32,157 31,085 Total $ 45,897 $ 47,032 (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 [Table Text Block] | For the three months ended March 31, 2019 and 2018, and for the year ended December 31, 2018, the warranties activities were as follows (figures are in thousands of USD): Three Months Ended March 31, Year Ended 2019 2018 2018 Balance at beginning of the period $ 31,085 $ 29,033 $ 29,033 Additions during the period 2,776 4,248 24,102 Settlement within period (2,294 ) (4,206 ) (20,599 ) Foreign currency translation loss/(gain) 590 1,126 (1,451 ) Balance at end of the period $ 32,157 $ 30,201 $ 31,085 |
Additional paid-in capital (Tab
Additional paid-in capital (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Additional Paid in Capital [Abstract] | |
Schedule Of Additional Paid In Capital [Table Text Block] | The Company’s positions in respect of the amounts of additional paid-in capital for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31 2019 2018 Balance at beginning of the period $ 64,429 $ 64,406 Balance at end of the period $ 64,429 $ 64,406 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Assumptions used to estimate the fair value of the stock options on the grant date are as follows: Issuance Date Expected volatility Risk-free rate Expected term (years) Dividend yield December 5, 2018 44.72 % 2.79 % 5 0.00 % |
Retained earnings (Tables)
Retained earnings (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retained Earnings Disclosure [Abstract] | |
Schedule Of Appropriated Retained Earnings [Table Text Block] | The Company’s activities in respect of the amounts of appropriated retained earnings for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31 2019 2018 Balance at beginning of the period $ 11,104 $ 10,707 Balance at end of the period $ 11,104 $ 10,707 |
Schedule Of Unappropriated Retained Earnings [Table Text Block] | The Company’s activities in respect of the amounts of the unappropriated retained earnings for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three months Ended March 31, 2019 2018 Balance at beginning of the period $ 211,439 $ 209,459 Net income attributable to parent company 1,467 4,312 Balance at end of the period $ 212,906 $ 213,771 |
Accumulated other comprehensi_2
Accumulated other comprehensive income (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The Company’s activities in respect of the amounts of accumulated other comprehensive income for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2019 2018 Balance at beginning of the period $ 1,855 $ 17,780 Foreign currency translation adjustment attributable to parent company 5,906 12,726 Balance at end of the period $ 7,761 $ 30,506 |
Non-controlling interests (Tabl
Non-controlling interests (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule Of Non Controlling Interests Disclosure [Table Text Block] | The Company’s activities in respect of the amounts of the non-controlling interests’ equity for the three months ended March 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Three months Ended March 31, 2019 2018 Balance at beginning of the period $ 18,950 $ 6,681 Loss attributable to non-controlling interests (243 ) (280 ) Foreign currency translation adjustment attributable to non-controlling interests 457 516 Balance at end of the period $ 19,164 $ 6,917 |
Financial expense, net (Tables)
Financial expense, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Financial Income Expenses Disclosure [Abstract] | |
Schedule Of Financial Expenses [Table Text Block] | During the three months ended March 31, 2019 and 2018, the Company recorded financial , net which is summarized as follows (figures are in thousands of USD): Three Months Ended March 31, 2019 2018 Interest income $ 764 $ 374 Foreign exchange loss, net (1,250 ) (1,037 ) Bank fees (179 ) (102 ) Total financial expense, net $ (665 ) $ (765 ) |
Income per share (Tables)
Income per share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The calculations of basic and diluted income per share attributable to the parent company for the three months ended March 31, 2019 and 2018, were as follows (figures are in thousands of USD, except share and per share amounts): Three Months Ended March 31, 2019 2018 Numerator: Net income attributable to the parent company’s common shareholders – Basic and Diluted $ 1,467 $ 4,312 Denominator: Weighted average shares outstanding 31,507,487 31,644,004 Dilutive effects of stock options 5,810 - Denominator for dilutive income per share - Diluted 31,513,297 31,644,004 Net income per share attributable to parent company’s common shareholders - Basic $ 0.05 $ 0.14 Net income per share attributable to parent company’s common shareholders - Diluted $ 0.05 $ 0.14 |
Related party transactions an_2
Related party transactions and balances (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Related party transactions are as follows (figures are in thousands of USD): Related sales Three Months Ended March 31, 2019 2018 Merchandise sold to related parties $ 12,836 $ 10,846 Materials and others sold to related parties 461 446 Rental income obtained from related parties 80 102 Total $ 13,377 $ 11,394 Related purchases Three Months Ended March 31, 2019 2018 Materials purchased from related parties $ 5,504 $ 8,249 Equipment purchased from related parties 760 1,248 Others purchased from related parties 11 49 Total $ 6,275 $ 9,546 Related receivables March 31, 2019 December 31, 2018 Accounts and notes receivable from related parties $ 21,701 $ 18,825 Related advances and loan balance March 31, 2019 December 31, 2018 Advance payments for property, plant and equipment to related parties $ 3,819 $ 8,723 Advance payments and others to related parties 1,100 1,281 Total $ 4,919 $ 10,004 Related payables March 31, 2019 December 31, 2018 Accounts and notes payable $ 5,668 $ 4,477 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | 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, 2019 (figures are in thousands of USD): Payment obligations by period 2019 2020 2021 Thereafter Total Obligations for investment contracts (1) $ 10,990 $ - $ - $ - $ 10,990 Obligations for purchasing and service agreements 30,558 3,894 - - 34,452 Total $ 41,548 $ 3,894 $ - $ - $ 45,442 (1) In May 2016, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Chongqing Venture Fund”. Hubei Henglong has committed to make investments of RMB 120.0 million, equivalent to approximately $18.0 million, in the Chongqing Venture Fund in three installments, representing 23.5% of the Chongqing Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 84.0 million, equivalent to approximately $12.5 million, According to the agreement, the remaining capital commitment of RMB 36.0 million, equivalent to approximately $5.3 million, will be paid upon capital calls received from the Chongqing Venture Fund. 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 of RMB 76.0 million, equivalent to approximately $11.5 million, in the Hubei Venture Fund in three installments, representing 27.1% of the Hubei Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 38.0 million, equivalent to approximately $5.6 million. According to the agreement, the remaining capital commitment of RMB 38.0 million, equivalent to approximately $5.6 million, will be paid upon capital calls received from the Hubei Venture Fund. |
Segment reporting (Tables)
Segment reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | The Company’s product sector information for the three months ended March 31, 2019 and 2018, is as follows (figures are in thousands of USD): Net Product Sales Net Income (Loss) Three Months Ended Three Months Ended March 31, March 31, 2019 2018 2019 2018 Henglong $ 40,964 $ 68,896 $ (2,121 ) $ (312 ) Jiulong 22,122 27,445 1,168 455 Shenyang 4,895 6,348 (299 ) (618 ) Wuhu 6,998 4,636 (175 ) (397 ) Hubei Henglong 28,175 33,393 1,372 3,089 Henglong KYB 19,954 - (396 ) - Other 17,296 17,898 1,455 794 Total Segments 140,404 158,616 1,004 3,011 Corporate - - (301 ) 564 Eliminations (31,211 ) (24,598 ) 521 457 Total $ 109,193 $ 134,018 $ 1,224 $ 4,032 |
Organization and business (Deta
Organization and business (Details) | Mar. 31, 2019 | Dec. 31, 2018 | May 31, 2017 |
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 15.84% | ||
Shashi Jiulong Power Steering Gears Co Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 100.00% | 100.00% | |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 100.00% | 100.00% | |
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [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 | 83.34% | 83.34% | |
Wuhu Henglong Auto Steering System Co Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 77.33% | 77.33% | |
Wuhan Jielong Electric Power Steering Co Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 85.00% | 85.00% | |
Hubei Henglong Automotive System Group Co Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 100.00% | 100.00% | |
Jingzhou Henglong Automotive Technology (Testing) Center [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 100.00% | 100.00% | |
Chongqing Henglong Hongyan Automotive System Co., Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 70.00% | 70.00% | |
CAAS Brazil's Imports and Trade In Automotive Parts Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 95.84% | 95.84% | |
Wuhan Chuguanjie Automotive Science and Technology Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 85.00% | 85.00% | |
Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd [Member] | |||
Organization And Principal Activities [Line Items] | |||
Percentage Interest | 100.00% | 100.00% | |
Jingzhou Qingyan Intelligent Automotive Technology Rearch Institute Co Ltd [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% |
Organization and business (De_2
Organization and business (Details Textual) | May 31, 2017 |
Organization And Principal Activities [Line Items] | |
Equity Method Investment, Ownership Percentage | 15.84% |
Basis of presentation and sig_3
Basis of presentation and significant accounting policies (Details Textual) | Mar. 31, 2019 |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Lessee, Operating Lease, Discount Rate | 4.49% |
Operating Lease, Weighted Average Remaining Lease Term | 4 years |
Accounts and notes receivable_3
Accounts and notes receivable, net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Financing Receivables [Line Items] | |||
Accounts receivable - unrelated parties | $ 150,415 | $ 149,100 | |
Notes receivable - unrelated parties | [1],[2] | 94,255 | 90,412 |
Total accounts and notes receivable - unrelated parties | 244,670 | 239,512 | |
Less: allowance for doubtful accounts - unrelated parties | [3] | (2,096) | (1,993) |
Accounts and notes receivable, net - unrelated parties | 242,574 | 237,519 | |
Accounts and notes receivable - related parties | 21,701 | 18,825 | |
Accounts and notes receivable, net | $ 264,275 | $ 256,344 | |
[1] | As of March 31, 2019 and December 31, 2018, the Company pledged its notes receivable in an amount of approximately $7.6 million and $18.4 million, respectively, as security for its comprehensive credit facilities or loans. | ||
[2] | Notes receivable represent accounts receivable in the form of bills of exchange for which acceptances are guaranteed and settlements are handled by banks or third parties. | ||
[3] | Provision for doubtful accounts and notes receivable amounted to $0.1 million and $0.3 million for the three months ended March 31, 2019 and 2018, respectively. |
Accounts and notes receivable_4
Accounts and notes receivable, net (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Financing Receivables [Line Items] | |||
Financing Receivable, Net | $ 7.6 | $ 18.4 | |
Provision for Doubtful Accounts | $ 100,000 | $ 300,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory [Line Items] | ||
Raw materials | $ 29,206 | $ 27,190 |
Work in process | 12,340 | 11,932 |
Finished goods | 48,656 | 48,899 |
Total | $ 90,202 | $ 88,021 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Inventory [Line Items] | ||
Valuation Allowances and Reserves, Adjustments | $ 1.1 | $ 1.5 |
Long-term Investments (Details
Long-term Investments (Details Textual) ¥ in Millions, $ in Millions | 3 Months Ended | |||||||||||||
Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | Mar. 31, 2018USD ($) | Mar. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | May 31, 2017 | Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | May 16, 2016USD ($) | May 16, 2016CNY (¥) | Sep. 22, 2014USD ($) | Sep. 22, 2014CNY (¥) | Jan. 24, 2010USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||
Equity Method Investment, Ownership Percentage | 15.84% | |||||||||||||
Net income of non-consolidated affiliates | $ 0.2 | $ 0.6 | ||||||||||||
Hubei Henglong [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Equity Method Investments | 13.3 | $ 13.1 | ||||||||||||
Equity Method Investment, Ownership Percentage | 23.50% | 23.50% | ||||||||||||
Capital | 12.5 | $ 11.5 | ¥ 84 | ¥ 76 | $ 0.4 | ¥ 3 | $ 18 | ¥ 120 | $ 7.4 | ¥ 50 | ||||
Hubei Henglong [Member] | Hubei Venture Fund [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Equity Method Investments | 5.6 | 5.5 | ||||||||||||
Equity Method Investment, Ownership Percentage | 27.10% | 27.10% | ||||||||||||
Capital | 5.6 | ¥ 38 | ||||||||||||
Chongqing Jinghua Automotive Intelligent ManufacturingTechnology Research Co Ltd [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Equity Method Investments | 0.2 | 0.2 | ||||||||||||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% | ||||||||||||
Beijing Henglong Automotive System Co Ltd [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Equity Method Investments | 4.3 | $ 4.2 | $ 3.1 | |||||||||||
Equity Method Investment, Ownership Percentage | 50.00% | |||||||||||||
Hubei Henglong Automotive System Group Co Ltd [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from Partnership Contribution | $ 7.4 | ¥ 50 | ||||||||||||
Equity Method Investment, Ownership Percentage | 100.00% | 100.00% | 100.00% |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | [3],[4] | Mar. 31, 2018 | |||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | $ 287,202 | $ 276,319 | |||||
Less: Accumulated depreciation | [1] | (150,169) | (146,466) | ||||
Total amount of property, plant and equipment, net | 137,033 | [2],[3],[4] | $ 129,853 | 129,853 | [2],[5] | ||
Land use rights and buildings [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | 62,846 | 60,593 | |||||
Machinery and equipment [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | 198,351 | 192,538 | |||||
Electronic equipment [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | 5,858 | 5,810 | |||||
Motor vehicles [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | 4,933 | 4,852 | |||||
Construction in progress [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Total amount of property, plant and equipment | $ 15,214 | $ 12,526 | |||||
[1] | As of March 31, 2019 and December 31, 2018, the Company pledged property, plant and equipment with a net book value of approximately $57.4 million and $55.9 million, respectively, as security for its comprehensive credit facilities with banks in China. | ||||||
[2] | Depreciation charges were $3.9 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. | ||||||
[3] | Depreciation charges were $4.4 million and $4.2 million for the three months ended March 31, 2019 and 2018, respectively. | ||||||
[4] | Interest costs capitalized for the three months ended March 31, 2019 and 2018, were $0.1 million and $0.2 million, respectively. | ||||||
[5] | Interest costs capitalized for the three months ended March 31, 2019 and 2018, were $0.1 million and $0.2 million, respectively. |
Property, plant and equipment_4
Property, plant and equipment, net (Details Textual) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 3.9 | $ 4.2 | |
Pledged Assets Separately Reported, Loans Pledged for Other Debt Obligations, at Fair Value | 57.4 | $ 55.9 | |
Interest Costs Capitalized | $ 0.1 | $ 0.2 |
Loans (Details)
Loans (Details) $ in Thousands, ¥ in Millions | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 27, 2018USD ($) | Sep. 27, 2018CNY (¥) | Nov. 13, 2017USD ($) | Nov. 13, 2017CNY (¥) | |
Debt Instrument [Line Items] | |||||||
Short-term bank loan | $ 7,400 | ¥ 50 | $ 300 | ¥ 2 | |||
Total short-term bank and government loans | $ 65,888 | $ 60,952 | |||||
Long-term bank and government loan | [1] | 297 | 291 | ||||
Total bank and government loans | 66,185 | 61,243 | |||||
China Construction Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Short-term bank loan | [2] | 58,462 | 53,667 | ||||
Chinese government loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Short-term bank loan | [3] | $ 7,426 | $ 7,285 | ||||
[1] | On November 13, 2017, the Company received a Chinese government loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which will mature on November 12, 2020. | ||||||
[2] | These loans are secured by property, plant and equipment of the Company and are repayable within one year (See Note 6). As of March 31, 2019 and December 31, 2018, the weighted average interest rate was 5.0% and 5.3% per annum, respectively. Interest is to be paid monthly or quarterly, on the twentieth day of the applicable month or quarter, or at maturity and the principal repayment is at maturity. On October 27, 2017, Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 224.0 million (equivalent to $33.3 million as of March 31, 2019), the “Henglong CITIC Credit Facility”. The original maturity date of the Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). As security for the Henglong CITIC Credit Facility, Henglong’s property, plant and equipment were pledged and Hubei Henglong provided a guarantee. Henglong provided Jielong with a Standby Letter of Credit under the Credit Facility. On August 21, 2018, Henglong drew down loans amounting to RMB 23.2 million and RMB 48.1 million (equivalent to $3.4 million and $7.1 million), respectively. On August 23 and September 7, 2018, Henglong drew down loans amounting to RMB 19.3 million and RMB 5.8 million (equivalent to $2.9 million and $0.9 million), respectively. On March 15 and March 26, 2019, Henglong drew down loans amounting to RMB 7.2 million and RMB 7.8 million (equivalent to $1.0 million and $1.2 million), respectively. The annual interest rate of the loans was 3.63%, 3.98%, 3.79%, 3.95%, 3.52% and 3.52%, respectively. On October 27, 2017, Hubei Henglong entered into a credit facility agreement with China CITIC Bank to obtain credit facilities in the amount of RMB 140.0 million (equivalent to $20.8 million as of March 31, 2019), the “Hubei Henglong CITIC Credit Facility”. The Hubei Henglong CITIC Credit Facility expired on October 27, 2018. Henglong provided a guarantee for the Hubei Henglong CITIC Credit Facility. The original maturity date of the Hubei Henglong CITIC Credit Facility was October 27, 2018 and was extended to October 26, 2019. The amount of the Hubei Henglong CITIC Credit Facility changed into RMB 200.0 million (equivalent to $29.7 million as of March 31, 2019). Hubei Henglong provided Jiulong with a Standby Letter of Credit under the Credit Facility. On August 10, 2018, Hubei Henglong drew down loans amounting to RMB 11.5 million and RMB 27.0 million (equivalent to $1.7 million and $4.0 million), respectively. On August 22 and September 6, 2018, Hubei Henglong drew down loans amounting to RMB 26.0 million and RMB 7.6 million (equivalent to $3.9 million and $1.1 million), respectively. On March 15, 2019, Hubei Henglong drew down loans amounting to RMB 28.0 million and RMB 14.1 million (equivalent to $4.2 million and $2.1 million), respectively. The annual interest rate of the loans was 3.93%, 3.84%, 3.98%, 4.01%, 3.63% and 3.52%, respectively. | ||||||
[3] | On September 27, 2018, the Company received a Chinese government loan of RMB 50.0 million, equivalent to approximately $7.4 million, with an interest rate of 3.48% per annum, which will mature on June 28, 2019. Henglong pledged RMB 51.5 million, equivalent to approximately $7.6 million, of notes receivable as security for the Chinese government loan (See Note 3). |
Loans (Details Textual)
Loans (Details Textual) ¥ in Millions, $ in Millions | Mar. 15, 2019USD ($) | Mar. 15, 2019CNY (¥) | Sep. 07, 2018USD ($) | Sep. 07, 2018CNY (¥) | Sep. 06, 2018USD ($) | Sep. 06, 2018CNY (¥) | Aug. 10, 2018USD ($) | Aug. 10, 2018CNY (¥) | Mar. 26, 2019USD ($) | Mar. 26, 2019CNY (¥) | Aug. 23, 2018USD ($) | Aug. 23, 2018CNY (¥) | Aug. 22, 2018USD ($) | Aug. 22, 2018CNY (¥) | Aug. 21, 2018USD ($) | Aug. 21, 2018CNY (¥) | Oct. 27, 2017USD ($) | Oct. 27, 2017CNY (¥) | Mar. 31, 2019 | Dec. 31, 2018 | Oct. 27, 2018USD ($) | Oct. 27, 2018CNY (¥) | Sep. 27, 2018USD ($) | Sep. 27, 2018CNY (¥) | Nov. 13, 2017USD ($) | Nov. 13, 2017CNY (¥) | Oct. 27, 2017CNY (¥) |
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Short-term Debt, Weighted Average Interest Rate | 5.00% | 5.30% | |||||||||||||||||||||||||
Line of Credit Facility, Interest Rate at Period End | 4.75% | 4.75% | |||||||||||||||||||||||||
Short-term Debt | $ 7.4 | ¥ 50 | $ 0.3 | ¥ 2 | |||||||||||||||||||||||
Debt Instrument, Collateral Amount | $ 7.6 | ¥ 51.5 | |||||||||||||||||||||||||
Proceeds from Lines of Credit | $ 1.7 | ¥ 11.5 | |||||||||||||||||||||||||
Henglong CITIC Credit Facility [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 33.3 | ¥ 224 | |||||||||||||||||||||||||
Henglong CITIC Credit Facility [Member] | Restatement Adjustment [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 29.7 | ¥ 200 | |||||||||||||||||||||||||
Hubei Henglong CITIC Credit Facility [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 20.8 | 140 | |||||||||||||||||||||||||
Proceeds from Lines of Credit | $ | $ 26 | ||||||||||||||||||||||||||
Hubei Henglong CITIC Credit Facility [Member] | Restatement Adjustment [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 29.7 | ¥ 200 | |||||||||||||||||||||||||
China CITIC Bank [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Proceeds from Lines of Credit | ¥ 3.9 | ||||||||||||||||||||||||||
China CITIC Bank [Member] | Henglong CITIC Credit Facility [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.52% | 3.52% | 3.95% | 3.95% | 3.52% | 3.52% | 3.79% | 3.79% | 3.63% | 3.98% | 3.98% | 3.63% | |||||||||||||||
Proceeds from Lines of Credit | $ 1 | ¥ 7.2 | $ 0.9 | ¥ 5.8 | $ 1.1 | ¥ 7.6 | $ 4 | ¥ 27 | $ 1.2 | ¥ 7.8 | $ 2.9 | ¥ 19.3 | $ 4.2 | ¥ 28 | $ 7.1 | ¥ 48.1 | $ 3.4 | ||||||||||
Repayments of Long-term Lines of Credit | ¥ 23.2 | ||||||||||||||||||||||||||
China CITIC Bank [Member] | Hubei Henglong CITIC Credit Facility [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.52% | 3.52% | 3.63% | 3.63% | 3.98% | 3.98% | 4.01% | 4.01% | 3.93% | 3.84% | 3.84% | 3.93% |
Accounts and notes payable (Det
Accounts and notes payable (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Accounts And Notes Payable [Line Items] | |||
Accounts payable - unrelated parties | $ 115,355 | $ 124,610 | |
Notes payable - unrelated parties | [1] | 72,257 | 81,033 |
Accounts and notes payable - unrelated parties | 187,612 | 205,643 | |
Accounts payable - related parties | 5,668 | 4,477 | |
Balance at end of year | $ 193,280 | $ 210,120 | |
[1] | Notes payable represent accounts payable in the form of notes issued by the Company. The notes are endorsed by banks to ensure that noteholders will be paid after maturity. The Company has pledged cash deposits, short-term investments, notes receivable and certain property, plant and equipment to secure notes payable granted by banks. |
Accrued expenses and other pa_3
Accrued expenses and other payables (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Accrued Expenses [Line Items] | |||
Accrued expenses | $ 6,884 | $ 8,341 | |
Accrued interest | 748 | 423 | |
Current portion of other long-term payable (See Note 10) | 3,529 | 3,400 | |
Other payables | 2,579 | 3,783 | |
Warranty reserves | [1] | 32,157 | 31,085 |
Total | $ 45,897 | $ 47,032 | |
[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. |
Accrued expenses and other pa_4
Accrued expenses and other payables (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accrued Expenses [Line Items] | |||
Balance at the beginning of year | $ 31,085 | $ 29,033 | $ 29,033 |
Additions during the period | 2,776 | 4,248 | 24,102 |
Settlement within period | (2,294) | (4,206) | (20,599) |
Foreign currency translation loss/(gain) | 590 | 1,126 | (1,451) |
Balance at end of year | $ 32,157 | $ 30,201 | $ 31,085 |
Other long-term payable (Detail
Other long-term payable (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash | $ 14,900 | |||
Other Accrued Liabilities, Current | $ 2,579 | $ 3,783 | ||
Other Long-term Debt, Noncurrent | 7,977 | $ 8,726 | ||
Payments to Acquire Property, Plant, and Equipment | 13,600 | 8,777 | $ 8,192 | |
Sale Leaseback Transaction, Quarterly Rental Payments | $ 1,100 | |||
Capital Lease Obligations [Member] | ||||
Other Accrued Liabilities, Current | 3,500 | |||
Other Long-term Debt, Noncurrent | $ 8,000 |
Additional paid-in capital (Det
Additional paid-in capital (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Additional Paid In Capital [Line Items] | |||
Balance at beginning of year | $ 64,429 | $ 64,406 | $ 64,406 |
Balance at end of year | $ 64,429 | $ 64,429 | $ 64,406 |
Additional paid-in capital (D_2
Additional paid-in capital (Details 1) | 3 Months Ended |
Mar. 31, 2019 | |
Additional Paid In Capital [Line Items] | |
Issuance Date | Dec. 5, 2018 |
Expected volatility | 44.72% |
Risk-free rate | 2.79% |
Expected term (years) | 5 years |
Dividend yield | 0.00% |
Additional paid-in capital (D_3
Additional paid-in capital (Details Textual) - USD ($) $ in Thousands | Dec. 05, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Additional Paid In Capital [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 20,000 | ||
Allocated Share-based Compensation Expense | $ 20 | ||
Employee Stock Option [Member] | |||
Additional Paid In Capital [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 22,500 |
Retained earnings (Details)
Retained earnings (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Retained Earnings Adjustments [Line Items] | |||
Balance at beginning of the period | $ 11,104 | $ 10,707 | $ 10,707 |
Balance at end of the period | $ 11,104 | $ 11,104 | $ 10,707 |
Retained earnings (Details 1)
Retained earnings (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retained Earnings Adjustments [Line Items] | ||
Balance at beginning of the period | $ 211,439 | $ 209,459 |
Net income attributable to parent company | 1,467 | 4,312 |
Balance at end of the period | $ 212,906 | $ 213,771 |
Retained earnings (Details Text
Retained earnings (Details Textual) - 3 months ended Mar. 31, 2019 ¥ in Millions, $ in Millions | USD ($) | CNY (¥) |
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices Statutory Surplus Required Percentage | 10.00% | |
Percentage Of Statutory Surplus Reserve | 50.00% | |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | $ 10 | |
Shashi Jiulong Power Steering Gears Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 4.2 | ¥ 35 |
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 8.1 | 67.5 |
Universal Sensor Application Inc [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 2.6 | |
Wuhan Jielong Electric Power Steering Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 6 | |
Wuhu Henglong Automotive Steering System Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 3.8 | 30 |
Hubei Henglong Automotive System Group Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 39 | |
Chongqing Henglong Hongyan Automotive Systems Co Ltd [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | 9.5 | 60 |
Henglong KYB [Member] | ||
Retained Earnings Adjustments [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus Required | $ 41.7 | ¥ 320 |
Accumulated other comprehensi_3
Accumulated other comprehensive income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of year | $ 1,855 | $ 17,780 |
Foreign currency translation adjustment attributable to parent company | 5,906 | 12,726 |
Balance at end of year | $ 7,761 | $ 30,506 |
Treasury stock (Details Textual
Treasury stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Dec. 05, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Treasury Stock [Line Items] | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 0.3 | ||
Stock Repurchased During Period, Value | $ 5 | ||
Stock Repurchased During Period, Shares | 128,881 | ||
Treasury Stock Shares Repurchased | 840,579 | 711,698 | |
Shares Issued, Price Per Share | $ 4 |
Non-controlling interests (Deta
Non-controlling interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||
Balance at beginning of year | $ 18,950 | $ 6,681 |
Loss attributable to non-controlling interests | (243) | (280) |
Foreign currency translation adjustment attributable to non-controlling interests | 457 | 516 |
Balance at end of year | $ 19,164 | $ 6,917 |
Net product sales (Detail Textu
Net product sales (Detail Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer, Including Assessed Tax | $ 3.2 | ||
Contract with Customer, Liability, Current | 700,000 | $ 800,000 | $ 800,000 |
Sales Revenue, Net [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 3.2 |
Financial expense, net (Details
Financial expense, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Financial Expenses [Line Items] | ||
Interest income | $ 764 | $ 374 |
Foreign exchange gain/(loss), net | (1,250) | (1,037) |
Bank fees | (179) | (102) |
Total financial income, net | $ (665) | $ (765) |
Income tax (Details Textual)
Income tax (Details Textual) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Percent | 16.40% | 14.70% |
Income per share (Details)
Income per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income/(loss) attributable to the parent company's common shareholders - Basic and Diluted | $ 1,467 | $ 4,312 |
Denominator: | ||
Weighted average ordinary shares outstanding - Basic | 31,507,487 | 31,644,004 |
Dilutive effects of stock options | 5,810 | 0 |
Denominator for dilutive income per share - Diluted | 31,513,297 | 31,644,004 |
Net income/(loss) per share attributable to the parent company's common shareholders | ||
Basic | $ 0.05 | $ 0.14 |
Diluted | $ 0.05 | $ 0.14 |
Income per share (Details Textu
Income per share (Details Textual) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity Option [Member] | ||
Earnings Per Share, Basic and Diluted [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 112,500 | 112,500 |
Significant concentrations (Det
Significant concentrations (Details Textual) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Unusual Risk or Uncertainty [Line Items] | ||
Minimum Percentage Of Profit Allocated To Foreign Investment | 50.00% | |
Registered Capital Percentage | 10.00% | |
Sales Revenue, Net [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Accounts Receivable [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Hubei Hnglong Automotive System Group Co Ltd [Member] | Sales Revenue, Net [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 18.10% | 18.90% |
Customer One [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Five Largest Customers [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 44.00% | 41.90% |
Five Largest Customers [Member] | Accounts Receivable [Member] | ||
Unusual Risk or Uncertainty [Line Items] | ||
Concentration Risk, Percentage | 6.20% | 4.80% |
Related party transactions an_3
Related party transactions and balances (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Related sales | |||
Merchandise sold to related parties | $ 12,836 | $ 10,846 | |
Related purchases | |||
Related parties | 5,504 | 8,249 | |
Related receivables | |||
Accounts and notes receivable from related parties | 21,701 | $ 18,825 | |
Related advances | |||
Advanced equipment payment to related parties | 3,819 | 8,723 | |
Advanced payments and others to related parties | 1,100 | 1,281 | |
Total | 4,919 | 10,004 | |
Related payables | |||
Accounts and notes payable | 5,668 | $ 4,477 | |
Related Party [Member] | |||
Related sales | |||
Merchandise sold to related parties | 13,377 | 11,394 | |
Related purchases | |||
Related parties | 6,275 | 9,546 | |
Related Party [Member] | Raw Materials And Others [Member] | |||
Related sales | |||
Merchandise sold to related parties | 461 | 446 | |
Related Party [Member] | Rental Income [Member] | |||
Related sales | |||
Merchandise sold to related parties | 80 | 102 | |
Equipment [Member] | Related Party [Member] | |||
Related purchases | |||
Related parties | 760 | 1,248 | |
Other purchased [Member] | |||
Related purchases | |||
Related parties | $ 11 | $ 49 |
Related party transactions an_4
Related party transactions and balances (Details Textual) | May 09, 2019 | 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 | 56.40% |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Mar. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | ||
2019 | $ 41,548 | |
2020 | 3,894 | |
2021 | 0 | |
Thereafter | 0 | |
Total | 45,442 | |
Obligations for investment contracts [Member] | ||
Commitments and Contingencies Disclosure [Line Items] | ||
2019 | 10,990 | [1] |
2020 | 0 | [1] |
2021 | 0 | [1] |
Thereafter | 0 | [1] |
Total | 10,990 | [1] |
Obligations for purchasing and service [Member] | ||
Commitments and Contingencies Disclosure [Line Items] | ||
2019 | 30,558 | |
2020 | 3,894 | |
2021 | 0 | |
Thereafter | 0 | |
Total | $ 34,452 | |
[1] | In May 2016, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Chongqing Venture Fund”. Hubei Henglong has committed to make investments of RMB 120.0 million, equivalent to approximately $17.8 million, in the Chongqing Venture Fund in three installments, representing 23.5% of the Chongqing Venture Fund’s shares. As of March 31, 2019, Hubei Henglong has completed a capital contribution of RMB 84.0 million, equivalent to approximately $12.5 million, According to the agreement, the remaining capital commitment of RMB 36.0 million, equivalent to approximately $5.3 million, will be paid upon capital calls received from the Chongqing Venture Fund. |
Commitments and contingencies_3
Commitments and contingencies (Details Textual) ¥ in Millions, $ in Millions | Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | May 31, 2017 | May 31, 2016USD ($) | May 31, 2016CNY (¥) |
Commitments and Contingencies Disclosure [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 15.84% | ||||||
Chongquing Venture Fund [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Unpaid Capital | $ 5.3 | ¥ 36 | |||||
Equity Method Investment, Ownership Percentage | 23.50% | 23.50% | |||||
Chongquing Venture Fund [Member] | Hubei Henglong [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Capital | 12.5 | 84 | ¥ 120 | ||||
Hubei Venture Fund [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Unpaid Capital | 5.6 | 38 | |||||
Hubei Venture Fund [Member] | Hubei Henglong [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Capital | $ 5.6 | ¥ 38 | $ 11.5 | ¥ 76 | $ 18 | ||
Equity Method Investment, Ownership Percentage | 27.10% | 27.10% |
Segment reporting (Details)
Segment reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 109,193 | $ 134,018 |
Net Income (Loss) | 1,224 | 4,032 |
Consolidation, Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | (31,211) | (24,598) |
Net Income (Loss) | 521 | 457 |
Corporate Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 0 | 0 |
Net Income (Loss) | (301) | 564 |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 40,964 | 68,896 |
Net Income (Loss) | (2,121) | (312) |
Shashi Jiulong Power Steering Gears Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 22,122 | 27,445 |
Net Income (Loss) | 1,168 | 455 |
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 4,895 | 6,348 |
Net Income (Loss) | (299) | (618) |
Wuhu Henglong Automotive Steering System Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 6,998 | 4,636 |
Net Income (Loss) | (175) | (397) |
Hubei Henglong Automotive System Group Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 28,175 | 33,393 |
Net Income (Loss) | 1,372 | 3,089 |
Hubei Henglong KYB Automobile Electric Steering System Co Ltd [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 19,954 | 0 |
Net Income (Loss) | (396) | 0 |
Other Entities [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 17,296 | 17,898 |
Net Income (Loss) | 1,455 | 794 |
Total Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | 140,404 | 158,616 |
Net Income (Loss) | $ 1,004 | $ 3,011 |
Segment reporting (Details Text
Segment reporting (Details Textual) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Sales Revenue, Net [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |