This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

China Automotive Systems' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: CAAS

Interest rates have been cut twice since early in June 2012 and banks’ reserve requirements had been lower three times since November 2011 to stimulate loan and investment growth. Also railway construction spending has been accelerated and other investment projects are expected to be approved by the Chinese government to help the economy grow. We have dramatically increased our R&D to approximately 5% of net sales in the 2012 second quarter.

As we continue to invest in new advanced products to meet our customer evolving requirements for new technologies and new performance. We also look to innovate new cost efficient production techniques to reduce costs. Our R&D provides a competitive edge to further build our brand equity by supplying new products with global quality and performance that offer added value to our domestic customers and to capture additional contracts to the large international OEMs as well.

New products offer us a chance to enhance our leadership position as we get closer to our current customers, attract new OEM and vehicle models and replaced imported steering units now being used in different vehicles that we had supplied before. We are particularly focused on advancing our electric power steering technology and production capacities to capture additional market share.

We made two various strategic moves during the second quarter of 2012. First, on May 25, 2012, we redeemed all of our outstanding senior convertible notes before their maturity dates. The total principal amount at May 25 was $23.6 million and negotiated total redemption price was $32.4 million including all principal accrued and unpaid interest and the make-whole amounts as of the date of redemption.

The five-year senior convertible notes were part of the $35 million transaction in February 2008 with a schedule maturity date of February 15, 2013. As a result of the redemption of the senior convertible notes, the total share count on a fully diluted basis will be reduced by approximately 3.3 million shares. The senior convertible notes issued by the company included terms that restricted the actions we could take to defend our shareholder value. With the redemption of the senior convertible notes, CAAS has more financial flexibility to fund future operations as this enhances our ability to defend our shareholder value.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs