China Automotive Systems, Inc. (CAAS), a manufacturer of power steering components, oil pumps and sensors in China, announced second quarter financial results this morning. Revenues rose to $46.5 million, an increase of 28.1% year over year and 12.2% sequentially. Net income grew 93.2% to $4.7 million, or 18 cents per share, compared to $2.5 million, or 10 cents per share, in the second quarter of fiscal 2007.

“We closed our slow season with a high note as we continue to outpace our market growth and win accounts from our competitors,” said Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems. “While we continue to expand market share among Chinese domestic branded auto makers, we are also increasingly pursing businesses from European joint venture auto makers in China, We now have two major European auto powerhouses, Volkswagen and Peugeot, in our customer list for domestic China market. As we strive to increase the shipment to those OEMs, our next target is American auto makers.”

Mr. Jie Li, the company’s Chief Financial Officer, stated, “While global and Chinese auto and auto parts markets are experiencing pressure from higher raw material prices and lower average selling prices, we have incorporated a series of efficiency measures to optimize our manufacturing facilities while providing growth. Also, since the first quarter, the unit cost of commercial vehicles steering gear increased, due to the sharp rise of the price of steel, its main raw material. We also successfully negotiated with our customers and raised the selling price of commercial vehicles steering gear. As a result, we maintained our gross margin over 30%.”

Shares of CAAS closed at $6.52 on Monday and have traded in a 52-week range of $4.40 – $10.47. With 24.9 million shares outstanding, CAAS has a market cap of $162 million and a trailing P/E of 11.6.

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