Kevin Theiss
感谢各位今天参加我们的电话会议。欢迎参加中国汽车系统2020年第三季度业绩电话会议。今天出席会议的有中国汽车系统首席执行官吴启洲先生和首席财务官李杰先生。他们将在电话会议稍后的问答环节中，在翻译协助下回答问题。
在开始之前，我提醒所有听众，在整个电话会议期间，我们可能会做出包含前瞻性声明的陈述。前瞻性声明仅代表公司截至本次电话会议之日的估计和假设。因此，由于多种因素，包括公司于2020年5月14日向美国证券交易委员会提交的截至2019年12月31日年度Form 10-K年报中"风险因素"章节所述因素，以及公司不时向美国证券交易委员会提交的其他文件中所述因素，公司的实际结果可能与这些前瞻性声明中包含的内容存在重大差异。
如果COVID-19疫情未能得到有效及时控制，由于汽车销售市场前景恶化、区域和国家经济增长放缓、客户流动性及财务状况减弱或其他我们无法预见的因素，我们的业务运营和财务状况可能会受到重大不利影响。这些因素以及我们无法控制的其他因素都可能对整体商业环境产生不利影响，导致我们开展业务的某些地区出现不确定性，使我们的业务遭受无法预测的损害，并对我们的业务、财务状况和经营业绩产生重大不利影响。
如果我们任何生产设施的制造、交付和装配流程出现长期中断或其他进一步不可预见的延迟，可能会继续导致向客户发货延迟、成本增加和收入减少。
公司明确声明不承担更新本次电话会议中任何前瞻性声明的义务，无论是由于新信息、未来事件还是其他原因。
在本次电话会议上，我将简要概述和总结2020年第三季度及前9个月的财务业绩。管理层将进行问答环节。以下2020年第三季度及前9个月的财务业绩未经审计，按照美国通用会计准则报告。为便于今天讨论，我将以美元为单位回顾财务业绩。
我们将从回顾中国经济、汽车行业和中国汽车市场地位的最新动态开始。2020年第三季度，中国经济出现反弹，GDP增长率为4.9%，较2020年第二季度的3.2%显著增长，但远低于2019年第三季度6%的增长率。前9个月，中国GDP同比增长0.7%。
中国经济正继续从COVID-19疫情造成的严重干扰中复苏。在2020年第一季度广泛的企业关闭和旅行禁令之后，中国是首批放宽交通封锁和旅行限制的国家之一，中国经济在2020年第二季度开始重新开放。
政府为促进经济持续增长采取的激励措施包括增加实物支出、批准更多基础设施项目以及降低贷款利率以帮助刺激经济活动复苏。然而，国家统计局数据显示，2020年第三季度中国社会消费品零售总额仅增长0.9%，前9个月同比下降7.2%——抱歉，是与2019年同期相比。
工业生产在2020年9月增长6.9%，但前9个月仅增长1.2%。固定资产投资在前9个月也增长了0.8%。
根据中国乘用车市场信息联席会数据，截至2020年9月30日的第三季度，中国零售乘用车销量同比增长7.9%。中国汽车工业协会（CAAM）更详细的数据显示，2020年7月乘用车销量同比增长8.5%，其中轿车销量增长4.6%。MPV销量下降0.7%，SUV销量增长14%，跨界车销量较2020年7月增长8.5%。7月乘用车出口销量同比下降25.9%。
2020年8月，CAAM报告乘用车销量同比增长6%，其中轿车销量同比增长5.8%。MPV销量增长1.1%。SUV销量增长6.5%，跨界车这一较小市场的销量增长17.2%。8月乘用车出口销量同比下降18.7%。
2020年9月，乘用车销量同比增长8%，其中轿车销量增长3%。MPV销量下降12.3%，SUV销量增长16%，跨界车销量同比增长25.5%。9月乘用车出口销量同比增长14.7%。
2020年前9个月，CAAM报告乘用车销量同比下降12.4%，其中轿车销量较去年同期下降16%。SUV销量下降5.5%，MPV销量下降32.7%，跨界车销量下降7.9%。2020年前9个月乘用车出口销量较2019年同期下降11.1%。
在此行业背景下，2020年第三季度，我们的净销售额同比增长13.5%至1.141亿美元，而2019年第三季度为1.005亿美元。我们在中国先进液压转向产品销量的增长，加上北美出口收入的增加，抵消了国内电动助力转向产品（EPS）销量的下降。EPS净销售额为1,430万美元，而去年第三季度为1,600万美元。
2020年第三季度，我们在某些市场的销量有所下降。我们在北美的平均售价下降，加上EPS产品销售减少，导致毛利下降。然而，我们在2020年第三季度产生了1,980万美元的正向经营现金流，2020年前9个月产生了5,120万美元的正向经营现金流。截至2020年9月30日，我们的现金及现金等价物和质押现金存款总额为1.135亿美元，我们在2020年第三季度回购了约322,000股普通股。
我们继续优先考虑保持强劲的资产负债表。截至2020年9月30日，母公司股东权益总额为2.896亿美元。我们相信，随着国内政府进一步刺激经济以及消费者对其增长可持续性更有信心，中国的商业环境将继续改善。与2020年相比，2021年国内需求和定价环境应会改善。我们期待即使COVID-19疫情持续，外国经济也能稳定并改善。
让我回顾一下2020年第三季度的业绩。2020年第三季度，净销售额增长13.8%至1.144亿美元，而2019年同期为1.005亿美元。产品净销售额的增长主要得益于产品组合的变化、公司液压产品国内销量的增加以及对北美客户销售额的增长。对北美的产品净销售额增长9.8%至3,700万美元，而2019年同期为3,380万美元。公司电动助力转向（EPS）产品的净销售额为1,670万美元，占净销售额的14.6%。
2020年第三季度毛利为1,360万美元，而2019年第三季度为1,730万美元。毛利率为11.9%，而2019年同期为17.2%，主要原因是与去年第三季度相比，EPS和出口产品的单位成本更高。
2020年第三季度销售费用为380万美元，而2019年第三季度为360万美元。销售费用占净销售额的比例在2020年第三季度为3.3%，而2019年第三季度为3.6%。
2020年第三季度一般及行政费用（G&A）为510万美元，而2019年同期为440万美元。增加的主要原因是办公费用增加。G&A费用在2020年第三季度和2019年第三季度均占净销售额的4.5%。
2020年第三季度研发费用（R&D）为610万美元，而2019年第三季度为600万美元。研发费用在2020年第三季度占净销售额的5.3%，而去年第三季度为6%。研发费用占比降低主要是由于对研发支出实施了更严格的成本控制。
2020年第三季度净财务费用为230万美元，而2019年第三季度净财务收入为160万美元，这主要是由于与去年第三季度的汇兑收益相比，本季度出现了汇兑损失。
2020年第三季度经营收入为10万美元，而2019年同期经营收入为440万美元。经营收入减少主要是由于2020年第三季度毛利和毛利率下降。
2020年第三季度所得税费用及联营公司收益前亏损为230万美元，而2019年第三季度所得税费用及联营公司收益前收入为530万美元。所得税费用及联营公司收益前亏损主要是由于与2019年第三季度相比，2020年第三季度毛利和经营收入较低。
2020年第三季度归属于母公司普通股股东的净利润为240万美元，而2019年第三季度归属于母公司普通股股东的净利润为430万美元。稀释后每股收益在2020年第三季度为0.08美元，而2019年第三季度为0.14美元。
2020年第三季度稀释后加权平均流通普通股股数为31,113,374股，而2019年第三季度为31,492,035股。
现在我将简要总结前9个月的业绩。2020年前9个月净销售额为2.712亿美元，而2019年前9个月为3.155亿美元，这反映了COVID-19疫情对中国及全球汽车行业的影响。
前9个月毛利为3,260万美元，而去年同期为4,660万美元。前9个月毛利率为12%，而2019年同期为14.8%。截至2020年9月30日的前9个月，其他销售收入为290万美元，而2019年同期为490万美元。
经营亏损为410万美元，而2019年前9个月经营收入为810万美元。归属于母公司普通股股东的净亏损为180万美元，而去年同期归属于母公司普通股股东的净利润为820万美元。2020年前9个月稀释后每股亏损为0.06美元，而2019年同期稀释后每股收益为0.26美元。
2020年前9个月经营活动产生的净现金为5,270万美元，而2019年前9个月经营活动产生的净现金为410万美元。购置物业、厂房和设备的支出为890万美元，而2019年前9个月为2,360万美元。2020年第三季度回购了约322,000股普通股，公司预计未来将根据市场情况回购更多股份。
现在简要介绍资产负债表亮点。截至2020年9月30日，现金及现金等价物和质押现金存款总额为1.135亿美元。应收账款总额（包括应收票据）为2.09亿美元。应付账款总额（包括应付票据）为2.014亿美元，短期贷款为4,460万美元。截至2020年9月30日，母公司股东权益总额为2.93亿美元，而截至2019年12月31日为2.893亿美元。
业务展望。管理层已将2020年全年收入指引从3.6亿美元上调至3.9亿美元。此目标基于公司当前对运营和市场状况的看法，这些看法可能会发生变化。
主持人，至此，我们已准备好进行问答环节。
Kevin Theiss
Thank you, everyone, for joining us today. Welcome to China Automotive Systems 2020 Third Quarter Conference Call. Joining us today are Mr. Qizhou Wu, Chief Executive Officer; and Mr. Jie Li, Chief Financial Officer of China Automotive Systems. They will be available to answer questions later in the conference call with the assistance of translation.
Before we begin, I will remind all listeners that throughout this call, we may make statements that may contain forward-looking statements. Forward-looking statements represent the company's estimates and assumptions only as of the date of this call. As a result, the company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading Risk Factors in the company's Form 10-K annual report for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 14, 2020, and in other documents filed by the company from time to time with the Securities and Exchange Commission.
If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial conditions may be materially and adversely affected as a result of the deteriorating market outlook for automobile sales, slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in certain regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations.
A prolonged disruption or other further unforeseen delay in our operations of the manufacturing, delivery and assembly process with any of our production facilities could continue to result in delays in the shipment of products to our customers, increased cost and reduced revenue.
The company expressly disclaims any duty to provide updates to any forward-looking statements made in this call whether as a result of new information, future events or otherwise.
On this call, I will provide a brief overview and summary of the financial results for the third quarter and first 9 months of 2020. Management will conduct a question-and-answer session. The following 2020 third quarter and first 9 months financial results are unaudited and are reported under U.S. GAAP. For the purposes of today, I'll review the financial results in U.S. dollars.
We will begin with a review of the recent dynamics of the Chinese economy, the automobile industry and China automotive market position. In the third quarter of 2020, Chinese economy rebounded as GDP growth was 4.9%, a significant increase over the 3.2% in the second quarter of 2020 but much lower than the 6% growth in the third quarter of 2019. For the first 9 months, Chinese GDP growth was 0.7% compared with the same periods a year ago.
The Chinese economy is continuing to recover from the severe disruptions caused by the impact of the COVID-19 pandemic. After widespread business closures and travel bans in the first quarter of 2020, China was among the first countries to ease the transportation lockdown and travel restrictions, and the Chinese economy began to reopen in the second quarter of 2020.
Government incentives to promote continued economic growth included higher physical spending, more approved infrastructure projects and lower lending rates to help stimulate renewed economic activities. However, data from the National Bureau of Statistics show that the total retail sales in China grew by a paltry 0.9% in the third quarter of 2020 and declined by 7.2% for the first 9 months of the year compared with the same period in 2020 -- I'm sorry, in 2019.
Industrial production was up 6.9% in the month of September but increased only 1.2% for the 9-month period. Fixed asset investments increased by 0.8% in the first 9 months of 2020 as well.
For the third quarter ended September 30, 2020, the sale of retail passenger cars in China grew by 7.9% year-over-year, according to the China Passenger Car Association. A more detailed breakout by the China Association of Automobile Manufacturers, CAAM, showed the passenger car sales in the month of July 2020 rose by 8.5% year-over-year with sedan sales up by 4.6%. The sale of MPVs was reduced by 0.7%, SUV sales rose by 14%, and crossover vehicle sales increased 8.5% from July 2020. Export sales of passenger cars declined by 25.9% in the month of July year-over-year.
In August of 2020, CAAM reported a 6% year-over-year increase in passenger car sales with passenger car sedan sales up 5.8% year-over-year. MPV sales were 1.1% higher. SUV sales rose by 6.5%, and sales into the smaller market for crossover vehicles increased by 17.2%. Export sales of passenger cars decreased by 18.7% in August year-over-year.
For the month of September 2020, passenger car sales increased by 8% year-over-year with passenger car sedan sales up 3%. MPV sales decreased by 12.3%, SUV sales rose by 16%, and crossover vehicle sales improved by 25.5% year-over-year. Export sales of passenger cars increased by 14.7% in September on a year-over-year basis.
For the first 9 months of 2020, CAAM reports that passenger car sales declined by 12.4% year-over-year, with passenger car sedan sales 16% lower than the same period last year. SUV sales were down 5.5%, MPV sales were reduced by 32.7%, and crossover vehicles decreased by 7.9%. Export sales of passenger cars for the first 9 months of 2020 declined by 11.1% compared with the first 9 months of 2019.
Given this industry background, in the third quarter of 2020, our net sales increased by 13.5% to $114.1 million compared to $100.5 million in the third quarter of 2019. Higher sales of our advanced hydraulic steering products in China, combined with increased export revenues from North America, offset lower domestic sales of our electric power steering products, EPS. Net EPS sales were $14.3 million compared with $16 million in the third quarter last year.
Our sales volume declined in some markets in the third quarter of 2020. And our average selling price in North America decreased, which, combined with lower sales of our EPS products, generated lower gross profit. However, we generated $19.8 million in positive operating cash flow in the third quarter of 2020 and $51.2 million in the first 9 months of 2020. Our total cash and cash equivalents and pledged cash deposits were $113.5 million as of September 30, 2020, and we repurchased approximately 322,000 shares of common stock in the third quarter of 2020.
We continue to prioritize on maintaining our strong balance sheet. Total parent company stockholders' equity was $289.6 million as of September 30, 2020. We have confidence that business conditions will continue to increase in China as the domestic government further stimulates the economy and consumers become more confident in its growth sustainability. The domestic demand and pricing environment should improve in 2021 compared with 2020. We look forward to foreign economies stabilizing and improving even as the COVID-19 pandemic continues.
Let me review the results for the third quarter of 2020. In the third quarter of 2020, net sales were 13.8% to $114.4 million compared to $100.5 million in the same quarter of 2019. The increase in net product sales was mainly due to a change in product mix and higher domestic sales volume of the company's hydraulic products combined with increased sales to North American customers. Net product sales to North America grew by 9.8% to $37 million compared to $33.8 million for the same quarter in 2019. Net product sales for the company's electric power steering, EPS, products were $16.7 million or 14.6% of net sales.
Gross profit was $13.6 million in the third quarter of 2020 compared to $17.3 million in the third quarter of 2019. Gross margin was 11.9% compared to 17.2% for the same period of 2019 mainly due to higher unit costs for EPS and export products compared to the third quarter last year.
Selling expenses were $3.8 million in the third quarter of 2020 compared to $3.6 million in the third quarter of 2019. Selling expenses represented 3.3% of net sales in the third quarter of 2020 compared to 3.6% in the third quarter of 2019.
General and administrative expenses, G&A, were $5.1 million in third quarter 2020 compared to $4.4 million in the same quarter of 2019. The increase was primarily due to higher office expenses. G&A expenses represented 4.5% of net sales in both the third quarter of 2020 and the third quarter of 2019.
Research and development expenses, R&D, were $6.1 million in the third quarter of 2020 compared to $6 million in the third quarter of 2019. R&D expenses represent 5.3% of net sales in third quarter 2020 compared with 6% in the third quarter last year. The lower R&D percentage was mainly due to more strict cost controls over R&D expenditures.
Net financial expense was $2.3 million in the third quarter of 2020 compared to net financial income of $1.6 million in the third quarter of 2019, which was mainly due to foreign exchange losses compared with foreign exchange gains in the third -- in last year's third quarter.
Income from operation was $0.1 million in the third quarter of 2020 compared to income from operations of $4.4 million in the same quarter of 2019. The lower income from operations was mainly due to reduced gross profit and lower gross margin in the third quarter of 2020.
Loss before income taxes expenses and equity in earnings of affiliated companies was $2.3 million in the third quarter of 2020 compared to income before income tax expenses and equity in earnings of affiliated companies of $5.3 million in the third quarter of 2019. The loss before income tax expense and equity in earnings of affiliated companies was mainly due to lower gross profit and lower income from operations in the third quarter of 2020 compared with the third quarter of 2019.
Net income attributable to parent company's common shareholders was $2.4 million in the third quarter of 2020 compared to net income attributable to parent company's common shareholders of $4.3 million in the third quarter of 2019. Diluted earnings per share were $0.08 in the third quarter of 2020 compared to diluted earnings per share of $0.14 in the third quarter of 2019.
Weighted average number of diluted common shares outstanding was 31,113,374 in the third quarter of 2020 compared to 31,492,035 shares in the third quarter of 2019.
Now I'll provide a brief summary of the 9 months results. Net sales for the first 9 months of 2020 were $271.2 million compared to $315.5 million in the first 9 months of 2019, reflecting the impact of the COVID-19 pandemic on the automobile industry in China and globally.
9-month gross profit was $32.6 million compared to $46.6 million in the corresponding period last year. 9-month gross margin was 12% compared to 14.8% for the corresponding period in 2019. For the 9 months ended September 30, 2020, gain on other sales amounted to $2.9 million compared to $4.9 million for the corresponding period in 2019.
Loss from operations was $4.1 million compared to income from operations of $8.1 million in the first 9 months of 2019. Net loss attributable to parent company's common shareholders was $1.8 million compared with net income attributable to parent company's common shareholders of $8.2 million in the corresponding period last year. Diluted loss per share was $0.06 in the first 9 months of 2020 compared to diluted earnings per share of $0.26 for the corresponding period in 2019.
Net cash provided by operating activities was $52.7 million in the first 9 months of 2020 compared with net cash provided by operating activities of $4.1 million in the first 9 months of 2019. Payments to acquire property, plant and equipment were $8.9 million compared with $23.6 million in the first 9 months of 2019. Approximately 322,000 shares of common stock were repurchased during the third quarter of 2020, and the company expects to repurchase more shares in the future depending upon market conditions.
Now a few highlights of the balance sheet. As of September 30, 2020, total cash and cash equivalents and pledged cash deposits were $113.5 million. Total accounts receivable including notes receivable were $209 million. Accounts payable including notes payable were $201.4 million, and short-term loans were $44.6 million. Total parent company stockholders' equity was $293 million as of September 30, 2020, compared to $289.3 million as of September -- December 31, 2019.
Business outlook. Management has increased its revenue guidance from $360 million to $390 million for the full year 2020. This target is based on the company's current views on operating and market conditions, which are subject to change.
Operator, with that, we are ready for the Q&A.
