China Automotive Systems Inc. (CAAS) came up announcing approval of a share repurchase program by its board of directors. As per the program company will be repurchasing up to $5 million of its outstanding common shares. The program will be for next 12 month during which company will repurchase shares on periodic basis. The transactions so occurred will be in open market. Company will make repurchases on prevailing market price of not more than $3.50 per share. The transactions will be subject to laws, regulations and approval in force. The timing of repurchases will be decided by the company depending upon multiple scenarios including market conditions. Company’s executives can also make purchases individually which will be separate to the company’s repurchase program.
CAAS is a major provider of power steering components and systems in China. Company’s chairman Hanlin Chen described the current stock price as none matching with company’s worth. He was referring company’s leading position in the country’s automotive power steering industry. He also mentioned that number of Tier-1 OEMs using CAAS products have been growing in markets across Americas.
High quality of steering products helped China Automotive won several awards and exclusive supplier contracts to certain vehicles. The company is in joint venture with KYB (China) Investment Co., Ltd. to manufacture electric power steering systems. The said partner is the wholly owned company of Japan KYB Co. Ltd. China Automotive also manufactures advanced hydraulic steering products for commercial vehicles. The company also formed a joint venture with Hyoseong Electric Co. Ltd. The JV is aimed to design, manufacture and sell electric motors of electric power steering systems in the vehicles. Also the China Automotive has several other products on its portfolio which will further expand company’s growth strategy, Chen said.
Company’s total cash and cash equivalents as of June 30, 2020 were $105.9 million. Its receivables were reflecting an amount of $188.4 million on the said date.