| Segment reporting |
23. Segment reporting The accounting policies of the product sectors, each entity manufactures and sells different products and represents a different product sector, are the same as those described in the summary of significant accounting policies disclosed in the Company’s 2024 Annual Report on Form 10-K 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. Each product sector is considered a reporting segment. As of June 30, 2025, in addition to the holding company (Genesis and CAAS Cayman), the Company had 16 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, Wuhu, Henglong KYB, Hubei Henglong and Brazil Henglong. The other ten sectors were engaged in the development, manufacturing and sale of high polymer materials (Wuhu Hongrun), power steering parts (Shenyang), R&D services (Changchun Hualong), automobile steering columns (Jielong), provision of after-sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie), manufacture and sales of automotive motors and electromechanical integrated systems (Wuhan Hyoseong), inspection and testing of automotive products (Zhirong) and testing of parts and/or systems of automotive and commercial vehicle market (CAAS EUROPE). As of June 30, 2024, in addition to the holding company (Genesis), the Company had 15 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, Wuhu, Henglong KYB, Hubei Henglong and Brazil Henglong. The other nine sectors were engaged in the development, manufacturing and sale of high polymer materials (Wuhu Hongrun), power steering parts (Shenyang), R&D services (Changchun Hualong), automobile steering columns (Jielong), provision of after-sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie), manufacture and sales of automotive motors and electromechanical integrated systems (Wuhan Hyoseong) and inspection and testing of automotive products (Zhirong). The Company’s product sector information for the three and six months ended June 30, 2025 and 2024, is as follows (figures are in thousands of USD): | | | | | | | | | | | | | | | | | | | | | | | | | | | Henglong | | Jiulong | | Wuhu | | Hubei Henglong | | Henglong KYB | | Brazil Henglong | | Other Entities | | Total | Three Months Ended June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | Net sales to China | | $ | 71,867 | | $ | 20,350 | | $ | 6,092 | | $ | 247 | | $ | 47,442 | | $ | — | | $ | 31,039 | | $ | 177,037 | Net sales to foreign countries | | | 11,565 | | | 3,150 | | | — | | | 29,731 | | | 6,436 | | | 17,884 | | | 4,470 | | | 73,236 | Total segment net sales | | | 83,432 | | | 23,500 | | | 6,092 | | | 29,978 | | | 53,878 | | | 17,884 | | | 35,509 | | | 250,273 | Less: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of products sold | | | 75,803 | | | 20,685 | | | 6,263 | | | 27,537 | | | 45,163 | | | 14,003 | | | 29,194 | | | 218,648 | Selling, General and Research expense | | | 5,039 | | | 2,085 | | | 572 | | | 3,117 | | | 2,536 | | | 520 | | | 6,948 | | | 20,817 | Segment net income | | $ | 2,590 | | | 730 | | | (743) | | | (676) | | | 6,179 | | | 3,361 | | | (633) | | | 10,808 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Henglong | | Jiulong | | Wuhu | | Hubei Henglong | | Henglong KYB | | Brazil Henglong | | Other Entities | | Total | Six Months Ended June 30, 2025 | | | | | | | | | | | | | | | | | | | | | | | | | Net sales to China | | $ | 139,333 | | $ | 38,072 | | $ | 16,147 | | $ | 272 | | $ | 91,076 | | $ | — | | $ | 64,022 | | $ | 348,922 | Net sales to foreign countries | | | 24,828 | | | 5,099 | | | — | | | 56,964 | | | 11,172 | | | 34,415 | | | 6,039 | | | 138,517 | Total segment net sales | | | 164,161 | | | 43,171 | | | 16,147 | | | 57,236 | | | 102,248 | | | 34,415 | | | 70,061 | | | 487,439 | Less: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of products sold | | | 149,546 | | | 38,416 | | | 15,203 | | | 49,494 | | | 87,236 | | | 28,338 | | | 57,548 | | | 425,781 | Selling, General and Research expense | | | 11,565 | | | 3,993 | | | 1,142 | | | 5,229 | | | 4,405 | | | 1,106 | | | 15,467 | | | 42,907 | Segment net income | | $ | 3,050 | | | 762 | | | (198) | | | 2,513 | | | 10,607 | | | 4,971 | | | (2,954) | | | 18,751 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Henglong | | Jiulong | | Wuhu | | Hubei Henglong | | Henglong KYB | | Brazil Henglong | | Other Entities | | Total | Three Months Ended June 30, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | Net sales to China | | $ | 69,691 | | $ | 16,520 | | $ | 8,998 | | $ | 17 | | $ | 36,409 | | $ | — | | $ | 31,603 | | $ | 163,238 | Net sales to foreign countries | | | 10,309 | | | 2,195 | | | — | | | 26,787 | | | 6,361 | | | 11,974 | | | 3,498 | | | 61,124 | Total segment net sales | | | 80,000 | | | 18,715 | | | 8,998 | | | 26,804 | | | 42,770 | | | 11,974 | | | 35,101 | | | 224,362 | Less: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of products sold | | | 71,348 | | | 15,813 | | | 10,060 | | | 21,095 | | | 36,292 | | | 10,056 | | | 29,569 | | | 194,233 | Selling, General and Research expense | | | 5,474 | | | 1,941 | | | 1,091 | | | 3,959 | | | 3,592 | | | 711 | | | 6,894 | | | 23,662 | Segment net income | | $ | 3,178 | | | 961 | | | (2,153) | | | 1,750 | | | 2,886 | | | 1,207 | | | (1,362) | | | 6,467 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Henglong | | Jiulong | | Wuhu | | Hubei Henglong | | Henglong KYB | | Brazil Henglong | | Other Entities | | Total | Six Months Ended June 30, 2024 | | | | | | | | | | | | | | | | | | | | | Net sales to China | | $ | 117,928 | | $ | 31,800 | | $ | 17,858 | | $ | 279 | | $ | 67,376 | | $ | — | | $ | 59,187 | | $ | 294,428 | Net sales to foreign countries | | | 20,788 | | | 3,667 | | | — | | | 56,908 | | | 10,391 | | | 24,675 | | | 4,914 | | | 121,343 | Total segment net sales | | | 138,716 | | | 35,467 | | | 17,858 | | | 57,187 | | | 77,767 | | | 24,675 | | | 64,101 | | | 415,771 | Less: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of products sold | | | 124,186 | | | 30,150 | | | 19,019 | | | 46,210 | | | 67,467 | | | 19,419 | | | 53,984 | | | 360,435 | Selling, General and Research expense | | | 9,937 | | | 3,760 | | | 1,674 | | | 6,755 | | | 5,611 | | | 1,218 | | | 12,022 | | | 40,977 | Segment net income | | $ | 4,593 | | | 1,557 | | | (2,835) | | | 4,222 | | | 4,689 | | | 4,038 | | | (1,905) | | | 14,359 |
The following table presents a reconciliation of net sales of reportable segments to consolidated net product sales: | | | | | | | | | Three Months Ended June 30, | | | 2025 | | 2024 | Net sales to China | | $ | 177,037 | | $ | 163,238 | Net sales to foreign countries | | | 73,236 | | | 61,124 | Total segment net sales | | | 250,273 | | | 224,362 | Eliminations | | | (74,028) | | | (65,754) | Total consolidated net product sales | | $ | 176,245 | | $ | 158,608 |
| | | | | | | | | Six Months Ended June 30, | | | 2025 | | 2024 | Net sales to China | | $ | 348,922 | | $ | 294,428 | Net sales to foreign countries | | | 138,517 | | | 121,343 | Total segment net sales | | | 487,439 | | | 415,771 | Eliminations | | | (144,100) | | | (117,769) | Total consolidated net product sales | | $ | 343,339 | | $ | 298,002 |
The following table presents a reconciliation of net income of reportable segments to consolidated net income: | | | | | | | | | Three Months Ended June 30, | | | 2025 | | 2024 | Segment net income | | $ | 10,808 | | $ | 6,467 | Unallocated amounts: | | | | | | | Net gain on other sales | | | 1,783 | | | 4,019 | Other income, net | | | 1,060 | | | 1,735 | Interest Expenses | | | (292) | | | (183) | Financial income/(expense), net | | | 1,327 | | | (690) | Other corporate items | | | (265) | | | (485) | Less: Income Taxes | | | (4,049) | | | (2,108) | Total consolidated net income | | $ | 10,372 | | $ | 8,755 |
| | | | | | | | | Six Months Ended June 30, | | | 2025 | | 2024 | Segment net income | | $ | 18,751 | | $ | 14,359 | Unallocated amounts: | | | | | | | Net gain on other sales | | | 3,279 | | | 7,042 | Other income, net | | | 3,001 | | | 4,138 | Interest Expenses | | | (775) | | | (441) | Financial income/(expense), net | | | 3,305 | | | (702) | Other corporate items | | | (1,748) | | | (2,526) | Less: Income Taxes | | | (6,986) | | | (3,851) | Total consolidated net income | | $ | 18,827 | | $ | 18,019 |
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