Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | May 14, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CHINA AUTOMOTIVE SYSTEMS INC | ||
Entity Central Index Key | 0001157762 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Trading Symbol | CAAS | ||
Entity Common Stock, Shares Outstanding | 31,174,045 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 20.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 76,708 | $ 86,346 |
Pledged cash | 29,688 | 29,623 |
Short-term investments | 5,832 | 17,543 |
Accounts and notes receivable, net - unrelated parties | 211,841 | 237,519 |
Accounts and notes receivable - related parties | 21,164 | 18,825 |
Advance payments and others, net - unrelated parties | 11,714 | 16,270 |
Advance payments and others - related parties | 1,287 | 1,281 |
Inventories | 82,931 | 88,021 |
Total current assets | 441,165 | 495,428 |
Non-current assets: | ||
Property, plant and equipment, net | 140,437 | 122,310 |
Land use rights,net | 10,346 | 7,543 |
Intangible assets, net | 1,352 | 605 |
Operating lease assets | 376 | |
Other receivables, net | 307 | 1,799 |
Advance payment for property, plant and equipment - unrelated parties | 6,157 | 6,135 |
Advance payment for property, plant and equipment - related parties | 2,311 | 8,723 |
Long-term government loan | 7,167 | 291 |
Long-term Investments. | 39,642 | 32,620 |
Deferred Income Tax Assets | 15,291 | 15,336 |
Other non-current assets | 2,580 | |
Total assets | 659,964 | 690,499 |
Current liabilities: | ||
Bank and government loans | 46,636 | 60,952 |
Accounts and notes payable - unrelated parties | 180,175 | 205,643 |
Accounts and notes payable - related parties | 6,492 | 4,477 |
Customer deposits | 1,303 | 750 |
Accrued payroll and related costs | 8,400 | 7,346 |
Accrued expenses and other payables | 45,337 | 47,032 |
Accrued pension costs | 3,161 | 3,282 |
Taxes payable | 11,492 | 11,137 |
Operating lease liabilities - current portion | 116 | |
Amounts due to shareholders/directors | 309 | 317 |
Advances payable (current portion) | 353 | 364 |
Total current liabilities | 303,774 | 341,300 |
Long-term liabilities: | ||
Long-term government loans | 7,167 | 291 |
Advances payable | 3,486 | 1,654 |
Operating lease liabilities - non-current portion | 271 | |
Other long-term payable | 4,948 | 8,726 |
Deferred tax liabilities | 4,253 | 4,198 |
Long-term tax payable | 26,693 | 29,503 |
Total liabilities | 350,592 | 385,672 |
Commitments and Contingencies ( Note 22) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value - Authorized - 80,000,000 shares Issued - 32,338,302 and 32,338,302 shares at December 31, 2019 and 2018, respectively | 3 | 3 |
Additional paid-in capital | 64,429 | 64,429 |
Retained earnings- | ||
Appropriated | 11,265 | 11,104 |
Unappropriated | 221,237 | 211,439 |
Accumulated other comprehensive (loss)/ income | (3,462) | 1,855 |
Treasury stock - 1,164,257 and 711,698 shares at December 31, 2019 and 2018, respectively | (4,261) | (2,953) |
Total parent company stockholders' equity | 289,211 | 285,877 |
Non-controlling interests | 20,161 | 18,950 |
Total stockholders' equity | 309,372 | 304,827 |
Total liabilities and stockholders' equity | $ 659,964 | $ 690,499 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 32,338,302 | 32,338,302 |
Treasury stock, shares | 1,164,257 | 711,698 |
Consolidated Statements of Inco
Consolidated Statements of Income or Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Operations and Comprehensive Income | ||
Net product sales | $ 431,427 | $ 496,158 |
Cost of products sold | 368,076 | 430,745 |
Gross profit | 63,351 | 65,413 |
Net gain on other sales | 5,067 | 3,940 |
Operating expenses: | ||
Selling expenses | 14,270 | 18,949 |
General and administrative expenses | 19,976 | 19,761 |
Research and development expenses | 27,992 | 33,551 |
Total operating expenses | 62,238 | 72,261 |
Operating income/(loss) | 6,180 | (2,908) |
Other income, net | 1,957 | 1,173 |
Interest expense | (3,034) | (2,928) |
Financial income, net | 2,456 | 2,162 |
Income/(loss) before income tax expenses and equity in earnings of affiliated companies | 7,559 | (2,501) |
Less: Income taxes | 586 | (1,465) |
Add: Equity in earnings of affiliated companies | 1,406 | 1,115 |
Net income | 8,379 | 79 |
Net loss attributable to non-controlling interests | (1,580) | (2,298) |
Net income attributable to parent company's common shareholders | $ 9,959 | $ 2,377 |
Net income/(loss) attributable to parent company's common shareholders per share - | ||
Basic - (in dollars per share) | $ 0.32 | $ 0.08 |
Diluted- (in dollars per share) | $ 0.32 | $ 0.08 |
Weighted average number of common shares outstanding - | ||
Basic (in shares) | 31,456,828 | 31,643,813 |
Diluted (in shares) | 31,458,926 | 31,645,594 |
Consolidated Statements of In_2
Consolidated Statements of Income or Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Operations and Comprehensive Income | ||
Revenue from Related Parties | $ 50,740 | $ 37,606 |
Related Party Costs | $ 23,814 | $ 25,558 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income or Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Income or Loss | ||
Net income | $ 8,379 | $ 79 |
Other comprehensive (loss)/income: | ||
Foreign currency translation (loss)/income | (5,735) | (16,548) |
Comprehensive income/(loss) | 2,644 | (16,469) |
Comprehensive loss attributable to non-controlling interest | (1,998) | (2,921) |
Comprehensive income/(loss) attributable to parent company | $ 4,642 | $ (13,548) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings, Appropriated [Member] | Retained Earnings, Unappropriated [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Non-controlling Interest [Member] | Total |
Balance at January 1 at Dec. 31, 2017 | $ 3 | $ 64,406 | $ 10,707 | $ 209,459 | $ 17,780 | $ (2,907) | $ 6,681 | |
Stock-based compensation | 23 | |||||||
Net income attributable to parent company | 2,377 | $ 2,377 | ||||||
Appropriation of retained earnings | 397 | (397) | ||||||
Repurchase of common stock in 2019 and 2018 - 452,559 shares and 17,400 shares, respectively | (46) | (50) | ||||||
Net foreign currency translation adjustment attributable to non-controlling interest | (623) | |||||||
Net loss attributable to non-controlling interests | (2,298) | (2,298) | ||||||
Net foreign currency translation adjustment attributable to parent company | (15,925) | |||||||
Contribution by non-controlling shareholder of Henglong KYB | 15,728 | |||||||
Distribution of retained earnings | (538) | |||||||
Balance at December 31 at Dec. 31, 2018 | 3 | 64,429 | 11,104 | 211,439 | 1,855 | (2,953) | 18,950 | 304,827 |
Total parent company stockholders' equity at Dec. 31, 2018 | 285,877 | |||||||
Stock-based compensation | 0 | |||||||
Net income attributable to parent company | 9,959 | 9,959 | ||||||
Appropriation of retained earnings | 161 | (161) | ||||||
Repurchase of common stock in 2019 and 2018 - 452,559 shares and 17,400 shares, respectively | (1,308) | (1,300) | ||||||
Net foreign currency translation adjustment attributable to non-controlling interest | (418) | |||||||
Net loss attributable to non-controlling interests | (1,580) | (1,580) | ||||||
Net foreign currency translation adjustment attributable to parent company | (5,317) | |||||||
Contribution by non-controlling shareholder of Henglong KYB | 3,542 | |||||||
Distribution of retained earnings | (333) | |||||||
Balance at December 31 at Dec. 31, 2019 | $ 3 | $ 64,429 | $ 11,265 | $ 221,237 | $ (3,462) | $ (4,261) | $ 20,161 | 309,372 |
Total parent company stockholders' equity at Dec. 31, 2019 | $ 289,211 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Treasury Stock, Shares, Beginning Balance | 711,698 | |
Repurchase of Treasury stock | 452,559 | 17,400 |
Treasury Stock, Shares, Ending Balance | 1,164,257 | 711,698 |
Common Stock [Member] | ||
Balance at January 1, Common stock | 32,338,302 | 32,338,302 |
Balance at December 31, Common stock | 32,338,302 | 32,338,302 |
Treasury Stock [Member] | ||
Treasury Stock, Shares, Beginning Balance | 711,698 | 694,298 |
Repurchase of Treasury stock | 452,559 | 0 |
Treasury Stock, Shares, Ending Balance | 1,164,257 | 711,698 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 8,379 | $ 79 |
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||
Stock-based compensation | 0 | 23 |
Depreciation and Amortization | 17,841 | 16,816 |
Deferred income taxes | 16 | (2,502) |
(Reversal)/accrual of provision for doubtful accounts | (441) | 887 |
Equity in net loss/(earnings) of affiliates | (1,406) | (1,115) |
Gain on disposal of fixed assets | (632) | (445) |
(Increase)/decrease in: | ||
Accounts and notes receivable | 21,036 | 27,526 |
Advance payments and other | 4,733 | (3,790) |
Inventories | 3,992 | (11,614) |
Increase/(decrease) in: | ||
Accounts and notes payable | (22,138) | (22,491) |
Customer deposits | 561 | (346) |
Accrued payroll and related costs | 1,115 | (964) |
Accrued expenses and other payables | (1,340) | 8,893 |
Accrued pension costs | (96) | (646) |
Taxes payable | (1,326) | 2,215 |
Net cash provided by operating activities | 30,294 | 12,526 |
Cash flows from investing activities: | ||
Purchase of short-term investments | (19,647) | (22,923) |
Proceeds from maturities of short-term investments | 31,268 | 34,175 |
Decrease in demand loans and employee housing loans included in other receivables | 1,504 | 337 |
Cash received from property, plant and equipment sales | 1,561 | 1,022 |
Government subsidy received for purchase of property, plant and equipment | 1,898 | 1,322 |
Cash paid to acquire property, plant and equipment and land use rights (including $5,238 and $9,207 paid to related parties for the years ended December 31, 2019 and 2018, respectively ) | (34,396) | (25,764) |
Cash paid to acquire intangible assets | (1,505) | (189) |
Cash received from long-term investment | 579 | 0 |
Cash received from repayment of the loan to a related party | 0 | 20,430 |
Investment under equity method | (6,018) | (5,957) |
Cash prepaid for acquisition of a subsidiary | (2,560) | 0 |
Net cash (used in)/ provided by investing activities | (27,316) | 2,453 |
Cash flows from financing activities: | ||
Proceeds from bank and government loans | 57,101 | 78,917 |
Repayments of bank and government loans | (65,576) | (92,215) |
Proceeds from sale and leaseback transaction | 0 | 11,758 |
Payment to broker agents for repurchase of common stock | (1,308) | (300) |
Repayments of the borrowing for sale and leaseback transaction | (4,164) | (3,218) |
Dividends paid to non-controlling interest holders of non-wholly owned subsidiaries | (333) | (524) |
Decrease in amounts due to shareholders/directors | 0 | (26) |
Cash received from capital contributions by non-controlling interest holder | 3,542 | 15,728 |
Net cash (used in)/provided by financing activities | (10,738) | 10,120 |
Cash and cash equivalents affected by foreign currency | (1,813) | (5,223) |
Net (decrease)/increase in cash, cash equivalents and pledged cash | (9,573) | 19,876 |
Cash, cash equivalents and pledged cash at beginning of year | 115,969 | 96,093 |
Cash, cash equivalents and pledged cash at end of year | 106,396 | 115,969 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 3,390 | 3,852 |
Cash paid for income taxes | 4,607 | 3,717 |
Non-cash investing activities: | ||
Property, plant and equipment recorded during the year which previously were advance payments | 13,964 | 13,347 |
Accounts payable for acquiring property, plant and equipment | 782 | $ 1,046 |
Property, plant and equipment and inventories used for investment in an associated company | $ 492 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Payments to Acquire Property, Plant, and Equipment | $ 34,396 | $ 25,764 |
Related Party [Member] | ||
Payments to Acquire Property, Plant, and Equipment | $ 5,238 | $ 9,207 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Business | |
Organization and Business | 1. China Automotive Systems, Inc., “China Automotive,” was incorporated in the State of Delaware on June 29, 1999 under the name of Visions-In-Glass, Inc. China Automotive, including, when the context so requires, its subsidiaries, is referred to herein as the “Company.” The Company is primarily engaged in the manufacture and sale of automotive systems and components, as described below. Great Genesis Holdings Limited, a company incorporated on January 3, 2003 under the Companies Ordinance of Hong Kong as a limited liability company, “Genesis,” is a wholly-owned subsidiary of the Company. Henglong USA Corporation, “HLUSA,” which was incorporated on January 8, 2007 in Troy, Michigan, is a wholly-owned subsidiary of the Company, and mainly engages in marketing of automotive parts in North America, and provides after-sales service and research and development support accordingly. The Company owns interests in the following subsidiaries incorporated in the PRC and Brazil as of December 31, 2019 and 2018. Percentage Interest December 31, December 31, Name of Entity 2019 2018 Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 100.00 % 100.00 % Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 100.00 % 100.00 % Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 70.00 % 70.00 % Universal Sensor Application Inc., “USAI” 4 83.34 % 83.34 % Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 85.00 % 85.00 % Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" 6 77.33 % 77.33 % Hubei Henglong Automotive System Group Co., Ltd., “Hubei Henglong” 7 100.00 % 100.00 % Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 100.00 % 100.00 % Chongqing Henglong Hongyan Automotive System Co., Ltd., “Chongqing Henglong” 9 70.00 % 70.00 % CAAS Brazil’s Imports and Trade In Automotive Parts Ltd., “Brazil Henglong” 10 95.84 % 95.84 % Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie” 11 85.00 % 85.00 % Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong” 12 100.00 % 100.00 % Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan” 13 60.00 % 60.00 % Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB” 14 66.60 % 66.60 % Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" 15 51.00 % — Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun" 16 100.00 % — 1. Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light duty vehicles. 2. Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. 3. Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. 4. USAI was established in 2005 and mainly engages in the production and sales of sensor modules. 5. Jielong was established in 2006 and mainly engages in the production and sales of automobile steering columns. 6. Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. 7. On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. 8. In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. 9. On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. 10. On August 21, 2012, Brazil Henglong was established by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sale of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. 11. In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. 12. In January 2015, Hubei Henglong formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong”, which mainly engages in the design and sale of automotive electronics. 13. In November 2017, Hubei Henglong formed Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan”, which mainly engages in the research and development of intelligent automotive technology. 14. In August 2018, Hubei Henglong and KYB (China) Investment Co., Ltd. (“KYB”) established Hubei Henglong KYB Automobile Electric Steering System Co., Ltd. (“Henglong KYB”), which mainly engages in design, manufacture, sales and after-sales service of automobile electronic systems. Hubei Henglong owns 66.6% of the shares of this entity and has consolidated it since its establishment. 15. In March 2019, Hubei Henglong and Hyoseong Electric Co., Ltd. established Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd. ("Wuhan Hyoseong"), which mainly engages in the design, manufacture and sales of automotive motors and electromechanical integrated systems. Hubei Henglong owns 51.0% of the shares of Wuhan Hyoseong and has consolidated it since its establishment. 16. In December 2019, Hubei Henglong formed Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun", which mainly engages in the development, manufacturing and sale of high polymer materials. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation - For the years ended December 31, 2019 and 2018, the consolidated financial statements include the accounts of the Company and its subsidiaries, which are described in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. Shenyang was formed in 2002, with 70% owned and controlled by the Company, and 30% owned by Shenyang Automotive Industry Investment Corporation, “JB Investment.” The highest authority of Shenyang is its board of directors, which is comprised of seven directors, four of whom, 57%, are appointed by the Company, and three of whom, 43%, are appointed by JB Investment. As for day-to-day operating matters, approval by more than two-thirds of the members of such board of directors, 67%, is required. The chairman of such board of directors is appointed by the Company. In March 2003, the Company and Jinbei entered into an act-in-concert agreement, under which the directors appointed by Jinbei agree to act in concert with the directors appointed by the Company. As a result, the Company obtained control of Shenyang in March 2003. The general manager of Shenyang is appointed by the Company. USAI was formed in 2005. At December 31, 2019, 83.34% of USAI was owned by the Company, and 16.66% of USAI was owned by Hubei Wanlong Investment Inc., “Hubei Wanlong.” The highest authority USAI is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company. The general manager of USAI is appointed by the Company. Jielong was formed in April 2006. As at December 31, 2019, 85% of Jielong was owned by the Company, and 15% of Jielong was owned by Hubei Wanlong. The highest authority of Jielong is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, and one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. Both the chairman of such board of directors and the general manager of Jielong are appointed by the Company. Wuhu was formed in May 2006, with 77.33% owned by the Company, and 22.67% owned by Wuhu Chery Technology Co., Ltd., “Chery Technology.” The highest authority of Wuhu is its board of directors, which is comprised of five directors, three of whom, 60%, are appointed by the Company, and two of whom, 40%, are appointed by Chery Technology. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. The directors of the Company and Chery Technology executed an “Act in Concert” agreement, resulting in the Company having voting control in Wuhu. The chairman of such board of directors is appointed by the Company. The general manager of Wuhu is appointed by the Company. Chongqing Henglong was formed in 2012, with 70% owned by the Company and 30% owned by SAIC-IVECO. The highest authority of the Chongqing Henglong is its board of directors, which is comprised of five directors, three of whom, 60%, are appointed by the Company, and two of whom, 40%, are appointed by SAIC-IVECO. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. In February 2012, the Company and SAIC-IVECO entered into an “Act in Concert” agreement. According to the agreement, the directors appointed by SAIC-IVECO agreed to execute the “Act in Concert” agreement with the directors designated by the Company, resulting in the Company having voting control of Chongqing Henglong. The chairman of such board of directors and the general manager of Chongqing Henglong are both appointed by the Company. Brazil Henglong was formed in 2012, with 80% owned by the Company and 20% owned by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. After the acquisition, the Company owns 95.84% of Brazil Henglong’s shares. The highest authority of Brazil Henglong is its board of directors. In making operational decision, approval by voting rights representing at least 3/4 of the capital, 75%, is required and 95.84% of voting rights were owned by the Company. The chairman of such board of directors is appointed by the Company. The general manager is Mr. Ozias Gaia Da Silva. Wuhan Chuguanjie was formed in 2014, with 85% owned by the Company and 15% owned by Hubei Wanlong. The highest authority of Wuhan Chuguanjie is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, and one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. Both of the chairman of such board of directors and the general manager of Chuguanjie are appointed by the Company. Jingzhou Qingyan was formed in 2017, with 60% owned by the Company and 40% owned by the other two parties. Hubei Honglong owns 60% of the shares of Jingzhou Qingyan and the remaining shares were owned by the other two parties. The highest authority of Jingzhou Qingyan is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom were appointed by the other two parties. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. Both of the chairman of the board of directors and the general manager are appointed by the Company. Henglong KYB was formed in 2018, with 66.60% owned by the Company and 33.40% owned by KYB. The highest authority of Henglong KYB is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom are appointed by KYB. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company and the general manager is appointed by KYB. Wuhan Hyoseong was formed in 2019, with 51% owned by the Company and 49% owned by Hyoseong. The highest authority of Wuhan Hyoseong is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom are appointed by Hyoseong. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company and the vice chairman is appointed by Wuhan Hyoseong. Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company is of the opinion that the significant estimates related to valuation of long term assets and investment, the realizable value of accounts receivable and inventories, the accrual of warranty obligations and the recoverability of deferred tax assets. Actual results could differ from those estimates. Cash and Cash Equivalents - Cash and cash equivalents include all highly-liquid investments with an original maturity of three months or less at the date of purchase. Pledged Cash - Pledged as collateral for the Company’s notes payable and restricted to use. The Company regularly pays some of its suppliers by bank notes. The Company has to deposit a cash deposit, equivalent to 30%‑100% of the face value of the relevant bank note, in order to obtain the bank note. Short-term Investments - Short-term investments are comprised of time deposits with original terms of three months to one year and wealth management financial products maturing within one year. The carrying values of time deposits approximate fair value because of their short-term maturities. The interest earned is recognized in the consolidated statements of income or loss over the contractual term of the deposits. The wealth management financial products are measured at fair value and classified as Level 3 within the fair value measurement hierarchy. Changes in the fair value are reflected in other income in the consolidated statements of income or loss. Allowance for Doubtful Accounts - In order to determine the value of the Company’s accounts receivable, the Company records a provision for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. Inventories - Inventories are stated at the lower of cost and net realizable value. Cost is calculated on the moving-average basis and includes all costs to acquire and other costs to bring the inventories to their present location and condition. The Company evaluates the net realizable value of its inventories on a regular basis and records a provision for loss to reduce the computed moving-average cost if it exceeds the net realizable value. Advance Payments - These amounts represent advances to acquire various assets to be utilized in the future in the Company’s normal business operations, such as machine equipment, raw materials and technology. Such amounts are paid according to their respective contract terms. Advance payment for machinery and equipment is classified as advance payment for property, plant and equipment in the consolidated balance sheet and advance payment of raw materials and technology are classified as advance payments and others in the consolidated balance sheet. Property, Plant and Equipment – Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements and maintenance and repairs are charged to operations. Depreciation is calculated on the straight-line method over the estimated useful lives of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 25 Machinery and equipment 6 Electronic equipment 4 Motor vehicles 8 Land use rights - Land use rights represent acquisition costs to purchase land use rights from the PRC government, which are evidenced by property certificates. The periods of these purchased land use rights are either 45 years or 50 years. The Company classifies land use rights as long-term assets on the balance sheet and cash outflows related to acquisition of land use right as investing activities. Land use rights are carried at cost less accumulated amortization and impairment losses, if any. Amortization is computed using the straight-line method over the term specified in the land use right certificate for 45 years or 50 years, as applicable. As of December 31, 2019 and 2018, the Company had pledged land use rights with a net book value of approximately $5.5 million and $5.7 million, respectively, as security for its comprehensive credit facilities with banks in China. Construction in Progress - represent buildings under construction and plant and equipment pending installation— are stated at cost. Cost includes construction and acquisitions, and interest charges arising from borrowings used to finance assets during the period of construction or installation and testing. No provision for depreciation is made on assets under construction until such time as the relevant assets are completed and ready for their intended commercial use. Gains or losses on disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the relevant asset, and are recognized in the consolidated statements of income or loss on the date of disposal. Interest Costs Capitalized - Interest costs incurred in connection with borrowings for the acquisition, construction or installation of property, plant and equipment are capitalized and depreciated as part of the asset’s total cost when the respective asset is placed into service. Interest costs capitalized for the years ended December 31, 2019 and 2018, were $0.7 million and $0.7 million, respectively. Intangible Assets - Intangible assets, representing patents and technical know-how acquired, are stated at cost less accumulated amortization and impairment losses. Amortization is calculated on the straight-line method over the estimated useful life of 5 to 15 years. Long-Lived Assets - The Company has adopted the provisions of ASC Topic 360 , “Accounting for the Impairment or Disposal of Long-Lived Assets.” Property, plant and equipment and definite life intangible assets are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If required, an impairment loss is recognized as the difference between the carrying value and the fair value of the assets. In assessing long-lived assets for impairment, management considered the Company’s product line portfolio, customers and related commercial agreements, and other factors in grouping assets and liabilities at the lowest level for which identifiable cash flows are largely independent. The Company considers projected future undiscounted cash flows, trends and other factors in its assessment of whether impairment conditions exist. Whilst the Company believes that its estimates of future cash flows are reasonable, different assumptions regarding such factors as future automotive production volumes, customer pricing, economics and productivity and cost saving initiatives, could significantly affect its estimates. In determining fair value of long-lived assets, management uses appraisals, management estimates or discounted cash flow calculations. Long-term Investments – The Company’s long-term investments include investments in corporations and investments in limited partnerships. Investments in corporations which the Company has the ability to exert significant influence are accounted for using the equity method. Investments in limited partnerships which the Company has more than virtually no influence are accounted for using the equity method. The Company continually reviews its investment to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company’s carrying value and the financial condition, operating performance and near term prospects of the investee. In addition, the Company considers the reason for the decline in fair value, including general market conditions, industry-specific or investee-specific reasons, changes in valuation subsequent to the balance sheet date and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If the decline in fair value is deemed to be other than temporary, the carrying value of the security is written down to fair value. There were no impairment losses for its long-term investment in the years ended December 31, 2019 and 2018. Revenue Recognition - The Company has adopted ASC Topic 606 “Revenue from Contracts with Customers”. Products sales to customers are made pursuant to master agreements entered into between the Company and its customers that provide for transfer of both title and risk of loss upon the Company’s delivery to the location specified in the contracts. The Company’s sales arrangements generally do not contain variable considerations and are short-term in nature. A period of credit term is granted to the customers after the delivery and before making payment. The Company recognizes revenue at a point in time based on management’s evaluation of when the customer obtains control of the products. Revenue is recognized when all performance obligations under the terms of a contract with the customer are satisfied and control of the product has been transferred to the customer. Sales of goods do not include multiple product and/or service elements. Revenue is measured as the amount of consideration management expects the Company to receive in exchange for transferring goods pursuant to the contracts. Value-added tax that the Company collects concurrent with revenue-producing activities is excluded from revenue. Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. At the time revenue is recognized, allowances are recorded, with the related reduction to revenue, for estimated price discounts based upon historical experience and related terms of customer arrangements. Where the Company has offered product warranties, the Company also establishes liabilities for estimated warranty costs based upon historical experience and specific warranty provisions. Warranty liabilities are adjusted when experience indicates the expected outcome will differ from initial estimates of the liability. The Company accounts for shipping and handling fees as a fulfillment cost since control of the products is usually transferred to the customer after the delivery. Revenue Disaggregation Revenue disaggregation under the segment reporting standard is measured on the same basis as under the revenue standard. Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard, and does not repeat the disaggregation of revenue under both standards. Contract Assets and Liabilities Contract assets, such as costs to obtain or fulfill contracts, are an insignificant component of the Company’s revenue recognition process. The majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing processes. Contract liabilities are mainly customer deposits. Customer Deposits As of December 31, 2019 and 2018, the Company has customer deposits of $1.3 million and $0.8 million , respectively. During the year ended December 31, 2019, $0.8 million was received and $1.5 million (including $0.8 million from the beginning balance of customer deposits) was recognized as net product sales revenue. During the year ended December 31, 2018, $2.5 million was received and $2.8 million (including $1.1 million from the beginning balance of customer deposits) was recognized as net product sales revenue. Customer deposits represent non-refundable cash deposits for customers to secure rights to an amount of products produced by the Company under supply agreements. When the products are shipped to customers, the Company will recognize revenue and bill the customers to reduce the amount of the customer deposit liability. Practical Expedient and Exemptions The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers promised goods to the customers and when the customers pay for the goods will be less than one year. Government Subsidies - The Company’s PRC based subsidiaries received government subsidies according to related policy from local government. For the subsidies for which the Chinese government has specified their purpose, such as product development and renewal of production facilities, the Company recorded specific purpose subsidies as advances payable when received. Upon government acceptance of the related project development or assets acquisition, the specific purpose subsidies are recognized to reduce related R&D expenses or cost of acquired assets. The Company recognized the subsidies that do not have specific purpose as other income upon receipt. Sales Taxes - The Company is subject to value added tax, “VAT.” The applicable VAT tax rate is 13% for products sold in the PRC. Products exported overseas are exempted from VAT. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold less VAT paid on purchases made with the relevant supporting invoices. VAT is collected from customers by the Company on behalf of the PRC tax authorities and is therefore not charged to the consolidated statements of income or loss. Uncertain Tax Positions - In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. As of December 31, 2019 and 2018, the Company has no uncertain tax positions. Product Warranties - The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis of actual claims and circumstances. For the years ended December 31, 2019 and 2018, the warranties activities were as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at the beginning of year $ 31,085 $ 29,033 Additions during the year 18,991 24,102 Settlement within the year (16,670) (20,599) Foreign currency translation (499) (1,451) Balance at end of year $ 32,907 $ 31,085 Pension - Most of the operations and employees of the Company are located in China. The Company records pension costs and various employment benefits in accordance with the relevant Chinese social security laws, which is approximately at a total of 34% of base salary. Base salary levels are the average salary determined by the local governments. For employees in overseas countries (mainly U.S. and Brazil), the Company records pension costs and various employment benefits in accordance with the relevant overseas social security regulations, which is approximately at a total of 28% of base salary. Concentration of Credit Risk - Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of trade accounts receivable. In 2019, the Company's five largest customers accounted for 47.4 % of the Company's consolidated sales, with one customer accounting for more than 10% of consolidated sales (i.e., 22.7% of consolidated sales, which comprised a total of $97.8 million in sales included in the Hubei Henglong segment (Note 26)). In 2018, the Company's five largest customers accounted for 39.3 % of the Company's consolidated sales, with one customer accounting for more than 10% of consolidated sales (i.e., 18.6% of consolidated sales, which comprised a total of $91.4 million in sales included in the Hubei Henglong segment (Note 26)). At December 31, 2019 and 2018, approximately 6.2% and 6.2% of accounts receivable were from trade transactions with the aforementioned customer (accounting for more than 10% of consolidated sales). The Company performs ongoing credit evaluations with respect to the financial condition of its debtors, but does not require collateral, and records a provision for doubtful accounts to cover probable credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. Income Taxes - Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the balance sheet liability method. Under this method, deferred income taxes are recognized for the tax consequences of significant temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period enacted. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered unlikely that some portion of, or all of, the deferred tax assets will not be realized. The Company applies ASC 740, “Income Taxes”, which clarifies the accounting for uncertainty in income taxes recognized in the Company’s consolidated financial statements and prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. If the amount of the Company’s taxable income or income tax liability is a determinant of the amount of a grant, the grant is treated as a reduction of the income tax provision in the year the grant is realized. Gain on other sales - Gain on other sales mainly consists of rental income, gain on disposal of intangible assets and property, plant and equipment and technical services revenue. Research and Development Costs - Research and development costs are expensed as incurred. Advertising, Shipping and Handling Costs – Advertising, shipping and handling costs are expensed as incurred and recorded in selling expense s. Shipping and handling costs relating to sales of $5.8 million and $6.5 million were included in selling expenses for the years ended December 31, 2019 and 2018, respectively. Leases – Prior to the adoption of ASC 842 on January 1, 2019: Leases, mainly leases of offices, where substantially all the rewards and risks of ownership of assets remain with the lessor were accounted for as operating leases. Payments made under operating leases were recognized as an expense on a straight-line basis over the lease term. The Company had no capital leases for any of the years stated herein. Future minimum lease payments for the Company's operating leases as of December 31, 2018 under ASC 840 were as follows: Year Ending December 31, 2019 $ 2020 2021 2022 2023 Total $ Upon and after the adoption of ASC 842 on January 1, 2019: The Company adopted ASU 2016-02, Leases, and other related ASUs (collectively, "ASC 842") on January 1, 2019, using the modified retrospective method of adoption. The Company elected the transition method, which allows entities to initially apply the requirements of ASC 842 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. There is no material impact on the balance of retained earnings, right of use assets or associated lease liabilities as of January 1, 2019 as a result of the adoption of ASC 842. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient. The Company determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. The Company's major plants and buildings are self-owned and limited temporary small offices were rented. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company's incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The discount rate used by the Company for its operating lease was 4.49%. As of December 31, 2019, the weighted average remaining lease term was 3 years. The Company did not have finance lease arrangements as of December 31, 2019. Income Per Share - Basic income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities, including convertible note holders, if any, based on their participating rights. Diluted income per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the effects on income of participating securities as if they were dilutive ordinary shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the convertible notes using the if-converted method, and shares issuable upon the exercise of stock options and warrants for the purchase of ordinary shares using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be antidilutive. Comprehensive Income – ASC Topic 220 establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. ASC Topic 220 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. Fair Value Measurements – For purposes of fair value measurements, the Company applies the applicable provisions of ASC 820 “Fair Value Measurements and Disclosures.” Accordingly, fair value for the Company’s financial accounting and reporting purposes represents the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the designated measur |
Accounts and Notes Receivable
Accounts and Notes Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts and Notes Receivable | |
Accounts and Notes Receivable | 3. The Company’s accounts receivable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accounts receivable - unrelated parties (1) $ 141,423 $ 149,100 Notes receivable - unrelated parties (2) (3) 72,797 90,412 Total accounts and notes receivable - unrelated parties 214,220 239,512 Less: allowance for doubtful accounts - unrelated parties (2,379) (1,993) Accounts and notes receivable, net - unrelated parties 211,841 237,519 Accounts and notes receivable - related parties 21,164 18,825 Accounts and notes receivable, net $ 233,005 $ 256,344 (1) Notes receivable represents accounts receivable in the form of bills of exchange whose acceptances and settlements are handled by banks. (2) As of December 31, 2019, the Company pledged its notes receivable in an amount of RMB 67.7 million, equivalent to approximately $9.7 million, as collateral in favor of the Chinese government for the government loan (See Note 10). As of December 31, 2018, the Company pledged its notes receivable in an amount of RMB 126.3 million, equivalent to approximately $18.4 million, as collateral for certain credit facilities with banks and the Chinese government (See Note 10). The activity in the Company’s allowance for doubtful accounts of accounts receivable during the years ended December 31, 2019 and 2018, is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at beginning of year $ 1,993 $ 1,083 Amounts provided for during the year 586 989 Amounts reversed of collection during the year (167) (27) Foreign currency translation (33) (52) Balance at end of year $ 2,379 $ 1,993 |
Advance Payments and Others
Advance Payments and Others | 12 Months Ended |
Dec. 31, 2019 | |
Advance Payments and Others | |
Advance Payments and Others | 4 . The Company’s advance payments and others as of December 31, 2019 and 2018, consisted of the following: Year Ended December 31, 2019 2018 Input VAT $ 5,554 $ 5,975 Prepayments for purchase of raw materials 4,283 8,630 Employee advances 944 1,595 Prepayments for advertising fee 293 — Rental and other deposits 264 184 Others 1,736 2,074 Total advance payments and others 13,074 18,458 Less: Allowance for doubtful accounts (73) (907) Advance payments and others, net $ 13,001 $ 17,551 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Inventories | 5. The Company’s inventories at December 31, 2019 and 2018, consisted of the following (figures are in thousands of USD): December 31, 2019 2018 Raw materials $ 21,464 $ 27,190 Work in process 9,469 11,932 Finished goods 51,998 48,899 Balance at end of year $ 82,931 $ 88,021 The Company recorded $3.9 million and $6.2 million of inventory write-down to cost of product sold for the years ended December 31, 2019 and 2018, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment | |
Property, Plant and equipment | 6. The Company’s property, plant and equipment at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Costs: Buildings $ 51,750 $ 51,176 Machinery and equipment 199,536 192,538 Electronic equipment 5,799 5,810 Motor vehicles 5,229 4,852 Construction in progress 33,063 12,526 295,377 266,902 Less: Accumulated depreciation (154,940) (144,592) Balance at end of year $ 140,437 $ 122,310 Depreciation charges for the years ended December 31, 2019 and 2018, were $17.5 million and $16.8 million, respectively. As of December 31, 2019 and 2018, the Company has pledged buildings, machinery and equipment with an aggregate net book value of approximately $50.9 million and $50.2 million, respectively, as security for its comprehensive credit facilities with banks in China. During the years ended December 31, 2019 and 2018, nil government subsidy was recorded as a reduction of the cost of property, plant and equipment. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets | |
Intangible Assets | 7. The Company’s intangible assets at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Costs: Patent technology $ 2,040 $ 2,063 Management software license 2,639 1,504 Total intangible assets - at cost 4,679 3,567 Less: Accumulated amortization (3,327) (2,962) Balance at end of year, net $ 1,352 $ 605 (1) Estimated Amortization Expenses 2020 2021 2022 2023 2024 Amortization expenses $ 365 $ 365 $ 298 $ 283 $ 101 |
Long-term Investments
Long-term Investments | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Investments | |
Long-Term Investments | 8. The Company's long-term investments at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Chongqing Venture Fund $ 15,085 $ 13,074 Suzhou Venture Fund 9,141 9,637 Hubei Venture Fund 8,730 5,488 Beijing Henglong 4,630 4,191 Henglong Tianyu 1,122 — Chongqing Jinghua 523 — Jiangsu Intelligent 411 230 Total $ 39,642 $ 32,620 In January 2010, the Company invested $3.1 million to establish a joint venture company, Beijing Henglong, with Beijing Hainachuan Automotive Parts Co., Ltd., "Hainachuan". The Company owns 50% equity in Beijing Henglong and can exercise significant influence over Beijing Henglong’s operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019 and 2018, the Company had $4.6 million and $4.2 million, respectively, of net equity in Beijing Henglong. In September 2014, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Suzhou Venture Fund”. Hubei Henglong has committed to make investments of RMB 50 million, equivalent to $7.6 million, in Suzhou Venture Fund. Hubei Henglong has made investments of RMB 50.0 million, equivalent to approximately $7.6 million, representing 12.5% of the Suzhou Venture Fund’s equity. As a limited partner, Hubei Henglong has more than virtually no influence over the Suzhou Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019 and 2018, the Company had $9.1 million and $9.6 million, respectively, of net equity in the Suzhou Venture Fund. In April 2019, the Suzhou Venture Fund made distributions that were proportional to each owner's allocated share of the fund, pursuant to which Hubei Henglong received RMB 3.9 million, equivalent to approximately $0.6 million, recorded as a reduction of the investment's carrying value. In May 2016, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Chongqing Venture Fund”. Hubei Henglong has committed to make investments of RMB 100 million, equivalent to $14.5 million, in Chongqing Venture Fund. As of December 31, 2019, Hubei Henglong has made investments of RMB 100.0 million, equivalent to approximately $14.5 million, representing 18.5% of Chongqing Venture Fund’s equity. As a limited partner, Hubei Henglong has more than virtually no influence over Chongqing Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019 and 2018, the Company had $15.1 million and $13.1 million, respectively, of net equity in Chongqing Venture Fund. In October 2016, Hubei Henglong invested RMB 3.0 million, equivalent to approximately $0.5 million, to establish an associate company, Chongqing Jinghua Automotive Intelligent Manufacturing Technology Research Co., Ltd., “Chongqing Jinghua”, with five other parties. The Company owns 30% of the equity in Chongqing Jinghua, and can exercise significant influence over Chongqing Jinghua’s operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019 and 2018, the Company had $0.5 million and $0.2 million, respectively, of net equity in Chongqing Jinghua. In March 2018, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Hubei Venture Fund”. Hubei Henglong has committed to make investments of RMB 76.0 million, equivalent to approximately $11.5 million. As of December 31, 2019, Hubei Henglong has made investments of RMB 60.8 million, equivalent to approximately $8.7 million, representing 27.1% of Hubei Venture Fund’s equity. As a limited partner, Hubei Henglong has more than virtually no influence over the Hubei Venture Fund’s operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019 and 2018, the Company had $8.7 million and $5.5 million, respectively, of net equity in the Hubei Venture Fund. In April 2019, Hubei Henglong entered into an agreement with other parties and committed to contribute RMB 5.0 million, equivalent to approximately $0.7 million, to Jiangsu Intelligent Networking Automotive Innovation Center Co. Ltd., "Jiangsu Intelligent", representing 19.2% of Jiangsu Intelligent's equity. Hubei Henglong can exercise significant influence over Jiangsu Intelligent's operational and financial policies. The investment is accounted for using the equity method. As of December 31, 2019, Hubei Henglong has made a capital contribution of RMB 3.0 million, equivalent to approximately $0.4 million. As of December 31, 2019, the Company had $0.4 million of net equity in Jiangsu Intelligent. In June 2019, the Company invested RMB 8.0 million, equivalent to approximately $1.2 million, to establish an associate company, "Henglong Tianyu", with Jingzhou Tianyu Auto Parts Co., Ltd. The Company owns 40% of the equity in Henglong Tianyu, and can exercise significant influence over Henglong Tianyu's operating and financial policies. The investment is accounted for using the equity method. As of December 31, 2019, the Company had $1.1 million of net equity in Henglong Tianyu. The Company’s consolidated statements of income or loss and comprehensive income included equity in earnings of affiliated companies of $1.4 million and $1.1 million for the years ended December 31, 2019 and 2018, respectively. |
Deferred Income Tax Assets and
Deferred Income Tax Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Deferred Income Tax Assets and Liabilities | 9. The components of deferred tax assets and liabilities at December 31, 2019 and 2018, were as follows (figures are in thousands of USD): December 31, 2019 2018 Losses carryforward (U.S.) (1) $ 2,816 $ 3,023 Losses carryforward (Non-U.S.) (1) 8,557 5,132 Product warranties and other reserves 5,907 5,695 Property, plant and equipment 4,589 4,884 Share-based compensation 62 131 Bonus accrual 150 363 Other accruals 1,547 1,858 Deductible temporary difference related to revenue recognition 1,476 1,756 Others 2,250 1,528 Total deferred tax assets 27,354 24,370 Less: Valuation allowance (1) (10,485) (7,522) Total deferred tax assets, net of valuation allowance 16,869 16,848 Deferred withholding tax for dividend distribution from PRC subsidiaries (Note 20) 4,253 4,198 Other taxable temporary differences 1,578 1,512 Total deferred tax liabilities $ 5,831 $ 5,710 (1) The net operating loss carry forwards for the U.S. entity for income tax purposes are available to reduce future years' taxable income. These carry forwards will not expire if not utilized, and the Company may carry the losses forward indefinitely. Net operating losses for China entities can be carried forward for 5 years to offset taxable income except for entities that qualify as a High & New Technology Enterprise, for which the net operating loss can be carried forward for 10 years. However, as of December 31, 2019, valuation allowance was $10.5 million, including $2.9 million allowance for the Company’s deferred tax assets in the United States and $7.6 million allowance for the Company’s non-U.S. deferred tax assets primarily in China. Based on the Company’s current operations, management believes that all deferred tax assets in the United States and certain deferred tax assets in non-U.S. regions are not likely to be realized in the future. The deferred tax assets and liabilities are classified in the consolidated balance sheets as follows (figures are in thousands of USD): December 31, 2019 2018 Deferred tax assets $ 15,291 $ 15,336 Deferred tax liabilities 4,253 4,198 The activity in the Company’s valuation allowance for deferred tax assets during the years ended December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at beginning of year $ 7,522 $ 6,058 Amounts provided for during the year 3,261 2,288 Amounts used during the year (227) (713) Foreign currency translation (71) (111) Balance at end of year $ 10,485 $ 7,522 |
Bank and Government Loans
Bank and Government Loans | 12 Months Ended |
Dec. 31, 2019 | |
Bank and Government Loans | |
Bank and Government Loans | 10. Loans consist of the following as of December 31, 2019 and 2018 (figures are in thousands of USD): December 31, 2019 2018 Short-term bank loans (1) $ 23,536 $ 29,146 Short-term bank loans (2) 20,663 24,521 Short-term government loan (3)(4) 2,150 7,285 Current portion of long-term government loan (5) 287 — Subtotal 46,636 60,952 Long-term government loan (5)(6) 7,454 291 Less: Current portion of long-term government loan (5) (287) — Subtotal 7,167 291 Total bank and government loans $ 53,803 $ 61,243 (1) (2) (3) (4) (5) (6) The Company must use the loans for the purpose specified in the borrowing agreement. If it fails to do so, it may be charged penalty interest or triggered early repayment. The Company complied with such financial covenants as of December 31, 2019, and management believes it will continue to comply with them. |
Accounts and Notes Payable
Accounts and Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Accounts and Notes Payable | |
Accounts and Notes Payable | 11. The Company’s accounts and notes payable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accounts payable - unrelated parties $ 110,246 $ 124,610 Notes payable - unrelated parties (1) 69,929 81,033 Accounts and notes payable - unrelated parties 180,175 205,643 Accounts payable - related parties 6,492 4,477 Balance at end of year $ 186,667 $ 210,120 (1) Notes payable represent payables in the form of notes issued by the bank. As of December 31, 2019 and 2018, the Company has pledged cash of $29.7 million and $29.6 million, respectively, notes receivable of $7.4 million and $2.3 million, respectively, and property, plant and equipment and land use rights with net book value of $56.4 million and $55.9 million, respectively, as collateral for banks to endorse the payment to the noteholder upon maturity. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Payables | |
Accrued Expenses and Other Payables | 12. Accrued Expenses and Other Payables The Company’s accrued expenses and other payables at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accrued expenses $ 6,306 $ 8,341 Warranty reserves (See Note 2) 32,907 31,085 Other payables 2,427 3,783 Current portion of other long-term payable (See Note 14) 3,593 3,400 Accrued interest 104 423 Balance at end of year $ 45,337 $ 47,032 |
Taxes Payable
Taxes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Payable | |
Taxes Payable | 13. Taxes Payable The Company’s taxes payable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Value-added tax payable $ 4,357 $ 3,790 Income tax payable 2,916 3,778 Long-term taxes payable - current portion (1) 2,810 2,810 Other tax payable (1) 1,409 759 Short-term taxes payable $ 11,492 $ 11,137 December 31, 2019 2018 Long-term taxes payable $ 29,503 $ 32,313 Less: Long-term taxes payable - current portion (1) (2,810) (2,810) Long-term taxes payable (1) $ 26,693 $ 29,503 (1) A one-time transition tax of $35.6 million was recognized in the fourth quarter of 2017 that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company elected to pay the one-time transition tax over eight years commencing in April 2018. During the years ended December 31, 2019 and 2018, $2.8 million and $2.8 million, respectively, was paid by the Company. See Note 20 for more details about the U.S. Tax Reform. |
Other Long-term Payable
Other Long-term Payable | 12 Months Ended |
Dec. 31, 2019 | |
Other Long-term Payable | |
Other Long-term Payable | 14. On January 31, 2018, the Company entered into an equipment sales agreement with a third party (the “buyer-lessor”) and simultaneously entered into a four-year contract to lease back the equipment from the buyer-lessor. The carrying value of the equipment was $13.1 million and the sales price was $14.3 million. Pursuant to the terms of the contract, the Company is required to pay to the buyer-lessor lease payments over 4 years with a quarterly lease payment of approximately $1.0 million and is entitled to obtain the ownership of this equipment at a nominal price upon the expiration of the lease. The Company is of the view that the transaction does not qualify as a sale. Therefore, the transaction was accounted for as a financing transaction by the Company. As of December 31, 2019 and 2018, $3.6 million and $3.4 million, respectively, was recognized as other payable (See Note 12); and $4.9 million and $8.7 million, respectively, was recognized as other long-term payable to the buyer-lessor. For the years ended December 31, 2019 and 2018, the Company recorded $0.8 million and $0.6 million, respectively, of interest expense related to the lease back transaction. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2019 | |
Stock Options | |
Stock Options | 15. The stock option plan was approved at the Annual Meeting of Stockholders held on June 28, 2005, and extended to June 27, 2025 at the Annual Meeting of Stockholders held on September 16, 2014. The maximum common shares available for issuance under this plan is 2,200,000. The stock incentive plan provides for the issuance, to the Company’s officers, directors, management and employees who served over three years or have given outstanding performance, of options to purchase shares of the Company’s common stock. The Company has issued 636,350 stock options under this plan as of December 31, 2019. Under the aforementioned plan, the stock options granted will have an exercise price equal to the closing price of the Company’s common stock traded on NASDAQ one day before the date of grant, and will expire two to five years after the grant date. Except for the 298,850 options granted to management in December 2008, which became exercisable on a ratable basis over the vesting period (3 years), the options were exercisable immediately on the grant dates. Stock options will be settled in shares of the Company’s common stock upon exercise and are recorded in the Company’s consolidated balance sheets under the caption “Additional paid-in capital.” As of December 31, 2019, the Company has sufficient unissued registered common stock for settlement of the stock incentive plan mentioned above. The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends. No stock options were granted in 2019. During the year ended December 31, 2018, the Company granted options to purchase an aggregate of 225,000 shares to the independent directors. Assumptions used to estimate the fair value of stock options on the grant dates are as follows: Issuance Date Expected volatility Risk-free rate Expected term (years) Dividend yield December 5, 2018 44.72 % 2.79 % 5 0.00 % The stock options granted during 2018 were exercisable immediately and their fair value on the grant date using the Black-Scholes option pricing model was $0.02 million. For the years ended December 31, 2019 and 2018, the Company recognized stock-based compensation expenses of nil and $0.02 million, respectively. The activities of stock options are summarized as follows, including granted, exercised and forfeited. Weighted-Average Weighted-Average Contractual Shares Exercise Price Term (years) Outstanding - January 1, 2018 135,000 $ 6.93 5 Granted 22,500 2.37 5 Expired (22,500) 10.00 5 Outstanding - December 31, 2018 135,000 $ 5.66 5 Expired (105,000) 5.85 5 Outstanding - December 31, 2019 30,000 $ 4.99 5 The following is a summary of the range of exercise prices for stock options that are outstanding and exercisable at December 31, 2019: Outstanding Stock Weighted Average Weighted Average Number of Stock Range of Exercise Prices Options Remaining Life Exercise Price Options Exercisable $2.00 - $10.00 30,000 2.35 $ 4.99 30,000 As of December 31, 2019 and 2018, the total intrinsic value of the Company’s stock options that were exercisable was nil and $0.1 million, respectively. For the years ended December 31, 2019 and 2018, no stock options were exercised. During the year ended December 31, 2018, the weighted average fair value of the Company’s stock options granted was $1.01. |
Retained Earnings
Retained Earnings | 12 Months Ended |
Dec. 31, 2019 | |
Retained Earnings | |
Retained Earnings | 16. Pursuant to the relevant PRC laws, the profits distribution of the Company’s subsidiaries, which are based on their PRC statutory financial statements, are available for distribution in the form of cash dividends after these subsidiaries have paid all relevant PRC tax liabilities, provided for losses in previous years, and made appropriations to statutory surplus at 10 % of their respective after-tax profits each year. When the statutory surplus reserve reaches 50% of the registered capital of a company, no additional reserve is required. For the years ended December 31, 2019 and 2018, the subsidiaries in China appropriated statutory reserves of $0.2 million and $0.4 million, respectively. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2019 | |
Treasury Stock | |
Treasury Stock | 17. Treasury stock represents shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury stock is accounted for under the cost method. On December 5, 2018, the Board of Directors of the Company approved a share repurchase program under which the Company was permitted to repurchase up to $5.0 million of its common stock from time to time in the open market at prevailing market prices not to exceed $4.00 per share through December 4, 2019. The Board of Directors of the Company approved the extension of such program to December 4, 2020. For the year ended December 31, 2019, the Company repurchased 452,559 shares of the Company's common stock for aggregate cash consideration of $1.3 million on the open market. For the year ended December 31, 2018, the Company repurchased 17,400 shares of the Company’s common stock for aggregate cash consideration of $0.05 million on the open market. As of December 31, 2019, the Company had cumulatively repurchased 1,164,257 shares of the Company’s common stock since inception. The repurchased shares are not cancelled and are presented as “treasury stock” on the balance sheet. |
Other Income, Net
Other Income, Net | 12 Months Ended |
Dec. 31, 2019 | |
Other Income, Net | |
Other Income, Net | 18 . During the years ended December 31, 2019 and 2018, the Company recorded other income which is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Government subsidy 2,094 1,717 Penalties income 449 — Charity donation (717) (729) Transaction gains recorded in earnings 131 185 Total other income, net $ 1,957 $ 1,173 |
Financial Income, Net
Financial Income, Net | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income, Net | |
Financial Income, Net | 19. During the years ended December 31, 2019 and 2018, the Company recorded financial income which is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Interest income $ 2,087 $ 2,275 Foreign exchange gain, net 752 457 Bank fees (383) (570) Total financial income, net $ 2,456 $ 2,162 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 20. PRC Corporate Income Tax The Company’s subsidiaries registered in the PRC are subject to national and local income taxes within the PRC at the applicable tax rate of 25% on the taxable income as reported in their PRC statutory financial statements in accordance with the relevant income tax laws applicable to foreign invested enterprise, unless preferential tax treatment is granted by local tax authorities. If the enterprise meets certain preferential terms according to the China income tax law, such as assessment as a “High & New Technology Enterprise” by the government, then, the enterprise will be subject to enterprise income tax at a rate of 15%. Pursuant to the New China Income Tax Law and the Implementing Rules, “New CIT”, which became effective as of January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise to its foreign investors will be subject to a 10% withholding tax if the foreign investors are considered as non-resident enterprises without any establishment or place within China or if the dividends payable have no connection with the establishment or place of the foreign investors within China, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Genesis, the Company’s wholly-owned subsidiary and the direct holder of the equity interests in the Company’s subsidiaries in China, is incorporated in Hong Kong. According to the Mainland China and Hong Kong Taxation Arrangement, dividends paid by a foreign-invested enterprise in China to its direct holding company in Hong Kong would be subject to withholding tax at a rate of 10% if Genesis could not obtain the Hong Kong tax resident certificate from the Hong Kong Inland Revenue Department. If Genesis obtains the Hong Kong tax resident certificate, owns directly at least 25% of the shares of the foreign invested enterprise and is qualified as the beneficial owner, it could benefit from a lower rate of 5%. According to PRC tax regulation, the Company should withhold income taxes for the profits distributed from the PRC subsidiaries to Genesis, the subsidiaries’ holding company incorporated in Hong Kong. For the profits that the PRC subsidiaries intended to distribute to Genesis, the Company accrues the withholding income tax as deferred tax liabilities. As of December 31, 2019 and 2018, the Company has recognized deferred tax liabilities of $4.3 million and $4.2 million for the undistributed profits of $42.9 million and $42.3 million, respectively, which are expected to be distributed to Genesis in the future. The Company intended to re-invest the remaining undistributed profits generated from the PRC subsidiaries in those subsidiaries indefinitely. As of December 31, 2019 and 2018, the Company still has undistributed earnings of approximately $309.5 million and $296.3 million, respectively, from investment in the PRC subsidiaries that are considered indefinitely reinvested. Had the undistributed earnings been distributed to Genesis and not indefinitely reinvested, the tax provision as of December 31, 2019 and 2018, of approximately $30.9 million and $29.6 million, respectively, would have been recorded. Such undistributed profits will be reinvested in Genesis and not further distributed to the parent company incorporated in the United States going forward. In 2014, Henglong, Jiulong, Hubei Henglong and Wuhu were awarded the title of “High & New Technology Enterprise”, and based on the PRC income tax law, they were subject to enterprise income tax at a rate of 15% from 2014 to 2016. They passed the reassessment of “High & New Technology Enterprise” in 2017. Therefore, they are subject to enterprise income tax at a rate of 15% from 2017 to 2019. The Companies estimated the applied tax rate in 2019 to be 15% as it is probable that they will pass the re-assessment in 2020 and continue to qualify as “High & New Technology Enterprise”. In 2015, Shenyang was awarded the title of “High & New Technology Enterprise”, and based on the PRC income tax law, it was subject to enterprise income tax at a rate of 15% from 2015 to 2017. In 2016, Jielong was awarded the title of “High & New Technology Enterprise” and, based on the PRC income tax law, it is subject to enterprise income tax at a rate of 15% from 2016 to 2018. It passed the reassessment of "High & New Technology Enterprise" in 2019. Therefore, it is subject to enterprise income tax at a rate of 15% from 2019 to 2021. In 2017, Chuguanjie was awarded the title of "High & New Technology Enterprise" and, based on the PRC income tax law, it is subject to enterprise income tax at a rate of 15% from 2017 to 2019. The Company estimated the applied tax rate in 2019 to be 15% as it is probable that it will pass the re-assessment in 2020 and continue to qualify as “High & New Technology Enterprise”. According to the New CIT, USAI, Shanghai Henglong, Testing Center, Chongqing Henglong, Henglong KYB and Wuhan Hyoseong are subject to income tax at a rate of 25%. Brazil Corporate Income Tax Based on Brazilian income tax laws, Brazil Henglong is subject to income tax at a uniform rate of 15%, and a resident legal person is subject to additional tax at a rate of 10% for the part of taxable income over BRL 0.24 million, equivalent to approximately $ 0.06 million. The Company had no assessable income in Brazil for the years ended December 31, 2019 and 2018. Hong Kong Corporate Income Tax The profits tax rate of Hong Kong is 16.5%. No provision for Hong Kong tax is made as Genesis is an investment holding company, and had no assessable income in Hong Kong for the years ended December 31, 2019 and 2018. U.S. Corporate Income Tax The Company is a Delaware corporation that is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump sum. The U.S. Tax Reform also includes provisions for a new tax on GILTI effective for tax years of foreign corporations beginning after December 31, 2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations (“CFCs”), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. To the extent that portions of the Company’s U.S. taxable income, such as Subpart F income or GILTI, are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. If dividends that the Company receives from its subsidiaries are determined to be from sources outside of the U.S., subject to certain limitations, the Company will generally not be required to pay U.S. corporate income tax on those dividends. Any liabilities for U.S. corporate income tax will be accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments will be made when required by U.S. law. In the fourth quarter of 2017, the Company recognized a one-time transition tax of $35.6 million that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company elected to pay the one-time transition tax over eight years commencing in April 2018. According to the 2017 U.S.federal income tax return of the Company filed in October 2018, the one-time transition tax was updated to $35.1 million. The Company made a true-up adjustment of $0.5 million in 2018. The provision for income taxes was calculated as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 One-Time Transition Tax Related to U.S. Tax Reform Tax rate 21 % 21 % Income before income taxes $ 7,559 $ (2,501) Income tax at federal statutory tax rate 1,587 (525) Tax benefit of super deduction of R&D expense (3,688) (3,731) Effect of differences in foreign tax rate (572) (749) Change in provision on valuation allowance for deferred income tax - U.S. (275) (583) Change in provision on valuation allowance for deferred income tax - Non-U.S. 3,309 2,158 Other differences 225 1,965 Total income tax expense $ 586 $ (1,465) The combined effects of the income tax exemption and reduction available to the Company are as follows (figures are in thousands of USD unless otherwise indicated): Year Ended December 31, 2019 2018 Tax holiday effect $ 572 $ 749 Basic net income per share effect 0.02 0.02 Diluted net income per share effect 0.02 0.02 The Company is subject to examination in the United States and China. The Company's tax years for 2015 through 2019 are still open for examination in China. The Company's tax years for 2010 through 2019 are still open for examination in the United States. Uncertain Tax Positions The Company did not have any uncertain tax positions for the years ended December 31, 2019 and 2018. |
Income Per Share
Income Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Income Per Share | |
Income Per Share | 21. Basic net income per share is computed using the weighted average number of the ordinary shares outstanding during the year. For diluted income per share, the Company uses the treasury stock method for options, assuming the issuance of common shares, if dilutive, resulting from the exercise of options. The calculations of basic and diluted income per share attributable to the parent company were (figures are in thousands of USD): Year Ended December 31, 2019 2018 Numerator: Net income attributable to the parent company’s common shareholders - Basic and Diluted $ 9,959 2,377 Denominator: Weighted average ordinary shares outstanding - Basic 31,456,828 31,643,813 Dilutive effects of stock options 2,098 1,781 Denominator for dilutive income per share - Diluted 31,458,926 31,645,594 Net income per share attributable to the parent company’s common shareholders Basic 0.32 0.08 Diluted 0.32 0.08 As of December 31, 2019 and 2018, the exercise prices for 22,500 shares and 112,500 shares, respectively, of outstanding stock options were above the weighted average market price of the Company’s common stock during the years ended December 31, 2019 and 2018, respectively, and these stock options were excluded from the calculation of the diluted income per share for the corresponding periods presented. |
Significant Concentrations
Significant Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Significant Concentrations | |
Significant Concentrations | 22. A significant portion of the Company’s business is conducted in China where the currency is the RMB. Regulations in China permit foreign owned entities to freely convert the RMB into foreign currency for transactions that fall under the “current account”, which includes trade related receipts and payments, interest and dividends. Accordingly, the Company’s Chinese subsidiaries may use RMB to purchase foreign exchange for settlement of such “current account” transactions without pre-approval. China Automotive, the parent company, may depend on Genesis and HLUSA dividend payments, which are generated from their subsidiaries in China, “China-based Subsidiaries,” after they receive payments from the China-based Subsidiaries. Regulations in the PRC currently permit payment of dividends of a PRC company only out of accumulated profits as determined in accordance with accounting standards and regulations in China. Under PRC law China-based Subsidiaries are required to set aside at least 10% of their after-tax profit based on PRC accounting standards each year to their general reserves until the cumulative amount reaches 50% of their paid-in capital. These reserves are not distributable as cash dividends, or as loans or advances. These foreign-invested enterprises may also allocate a portion of their after-tax profits, at the discretion of their boards of directors, to their staff welfare and bonus funds. Any amounts so allocated may not be distributed and, accordingly, would not be available for distribution to Genesis and HLUSA. The PRC government also imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currencies out of China, the China-based Subsidiaries may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currencies. If China Automotive is unable to receive dividend payments from its subsidiaries and China-based subsidiaries, China Automotive may be unable to effectively finance its operations or pay dividends on its shares. Transactions other than those that fall under the “current account” and that involve conversion of RMB into foreign currency are classified as “capital account” transactions; examples of “capital account” transactions include repatriations of investment by or loans to foreign owners, or direct equity investments in a foreign entity by a China domiciled entity. “Capital account” transactions require prior approval from China’s State Administration of Foreign Exchange, or SAFE, or its provincial branch to convert a remittance into a foreign currency, such as U.S. Dollars, and transmit the foreign currency outside of China. This system could be changed at any time and any such change may affect the ability of the Company or its subsidiaries in China to repatriate capital or profits, if any, outside China. Furthermore, SAFE has a significant degree of administrative discretion in implementing the laws and has used this discretion to limit convertibility of current account payments out of China. Whether as a result of a deterioration in the Chinese balance of payments, a shift in the Chinese macroeconomic prospects or any number of other reasons, China could impose additional restrictions on capital remittances abroad. As a result of these and other restrictions under the laws and regulations of the People’s Republic of China, or the PRC, the Company’s China subsidiaries are restricted in their ability to transfer a portion of their net assets to the parent. The Company has no assurance that the relevant Chinese governmental authorities in the future will not limit further or eliminate the ability of the Company’s Chinese subsidiaries to purchase foreign currencies and transfer such funds to the Company to meet its liquidity or other business needs. Any inability to access funds in China, if and when needed for use by the Company outside of China, could have a material and adverse effect on the Company’s liquidity and its business. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | 23. Related party transactions during the years ended December 31, 2019 and 2018, are as shown below (figures are in thousands of USD): Merchandise Sold to Related Parties Year Ended December 31, 2019 2018 Beijing Henglong $ 41,762 $ 31,291 Xiamen Automotive Parts 4,337 5,739 Hubei Hongrun 4,021 — Other related parties 620 576 Total $ 50,740 $ 37,606 Rental Income Obtained from Related Parties Year Ended December 31, 2019 2018 Rental Income $ 383 $ 375 Materials Sold to Related Parties Year Ended December 31, 2019 2018 Honghu Changrun $ 577 $ 637 Jingzhou Tongying 566 279 Jingzhou Yude 313 636 Beijing Henglong 39 — Other related parties 153 1 Total $ 1,648 $ 1,553 Materials Purchased from Related Parties Year Ended December 31, 2019 2018 Jingzhou Tongying $ 7,496 $ 9,091 Jiangling Tongchuang 7,039 7,066 Wuhan Tongkai 6,782 6,849 Honghu Changrun 1,751 1,665 Hubei Wiselink 424 884 Other related parties 322 3 Total $ 23,814 $ 25,558 Technology and Services Provided by Related Parties (recorded in R&D Expenses) Year Ended December 31, 2019 2018 Changchun Hualong $ 543 $ 496 Jingzhou Derun 27 25 Jingzhou Yude — 263 Other related parties 1 51 Total $ 571 $ 835 Property, Plant and Equipment Purchased from Related Parties Year Ended December 31, 2019 2018 Hubei Wiselink $ 5,238 $ 5,281 Ewinlink 1,052 — Henglong Real Estate — 2 Total $ 6,290 $ 5,283 As of December 31, 2019 and 2018, accounts receivable, other receivables, accounts payable and advance payments between the Company and related parties are as shown below (figures are in thousands of USD): Accounts and Notes Receivable from Related Parties December 31, 2019 2018 Beijing Henglong $ 14,743 $ 13,640 Xiamen Automotive Parts 1,957 2,527 Hubei Hongrun 1,786 — Jingzhou Yude 1,450 1,398 Xiamen Joylon 1,110 1,129 Other related parties 118 131 Total $ 21,164 $ 18,825 Accounts Payable to Related Parties December 31, 2019 2018 Jingzhou Tongying $ 1,672 $ 1,199 Wuhan Tongkai 1,586 1,081 Hubei Wiselink 1,538 914 Henglong Tianyu 782 — Jiangling Tongchuang 661 584 Honghu Changrun 208 325 Other related parties 45 374 Total $ 6,492 $ 4,477 Advance Payments for Property, Plant and Equipment to Related Parties December 31, 2019 2018 Hubei Wiselink $ 1,283 $ 7,679 Henglong Real Estate 1,028 1,044 Total $ 2,311 $ 8,723 Other Advance Payments and Others to Related Parties December 31, 2019 2018 Honghu Changrun 662 470 Ewinlink 160 — Henglong Tianyu 139 — Changchun Hualong 71 73 Wuhan Tongkai 69 57 Hubei Hongrun 68 — Jingzhou Yude — 120 Jingzhou WiseDawn — 533 Other related parties 118 28 Total $ 1,287 $ 1,281 As of May 14, 2020, the date the Company issued the financial statements, Hanlin Chen, Chairman, owns 57.3% of the common stock of the Company and has the effective power to control the vote on substantially all significant matters without the approval of other stockholders. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 24. a. On January 7, 2019, three purported stockholders of the Company filed a stockholder derivative complaint on behalf of the Company against the Company’s directors Hanlin Chen, Qizhou Wu and Guangxun Xu and former directors Arthur Wong and Robert Tung in the Delaware Court of Chancery, alleging that they had (a) breached their fiduciary duties by approving and paying excessive compensation to the non-employee directors of the Company, Arthur Wong, Guangxun Xu and Robert Tung, and (b) failed to make full and accurate disclosure of all material information with respect to director qualification and director compensation paid in 2017 in the Company’s annual proxy statement on Schedule 14A filed on October 10, 2018. The directors have engaged their own counsel to answer this complaint. On April 9, 2019, the Company moved to dismiss the complaint. The motion to dismiss was denied on July 17, 2019. The directors of the Company will continue to answer this complaint. Management expects the impact of the suit on the Company’s consolidated financial statements to be immaterial. Other than as described above, the Company is not a party to any pending or, to the best of the Company’s knowledge, any threatened legal proceedings; and no director, officer or affiliate of the Company, or owner of record of more than five percent of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation. b. In addition to bank loans, notes payables and the related interest, the following table summarizes the Company’s non-cancelable commitments and contingencies as of December 31, 2019 (figures are in thousands of USD): Payment Obligations by Period 2020 2021 2022 Thereafter Total Obligations for investment contracts (1) $ 4,272 $ 430 $ — $ — $ 4,702 Obligations for purchasing and services 19,928 $ 3,188 — — 23,116 Total $ 24,200 $ 3,618 $ — $ — $ 27,818 (1) In November 2019, Hubei Henglong entered into an agreement with other parties and committed to purchase 70% of the shares of Hefei Senye Light Plastic Technology Co., Ltd. for total consideration of RMB 33.6 million, equivalent to approximately $ 4.8 million. As of December 31, 2019, Hubei Henglong has paid the amount of RMB 18.0 million, equivalent to approximately $2.6 million, which was reported in other non-current assets as the transfer of shares had not been consummated. According to the agreement, the remaining consideration of RMB 15.6 million, equivalent to approximately $2.2 million, will be paid in 2020 and 2021. In April 2019, Hubei Henglong entered into an agreement with other parties and committed to contribute RMB 5.0 million, equivalent to approximately $0.7 million, to Jiangsu Intelligent Networking Automotive Innovation Center Co. Ltd., “Jiangsu Intelligent”, for 19.2% of the shares of Jiangsu Intelligent. As of December 31, 2019, Hubei Henglong has completed a capital contribution of RMB 3.0 million, equivalent to approximately $0.4 million. According to the agreement, the remaining capital commitment of RMB 2.0 million, equivalent to approximately $0.3 million, will be paid upon capital calls. In March 2018, Hubei Henglong entered into an agreement with other parties to establish a venture capital fund, the “Hubei Venture Fund”. Hubei Henglong has committed to make an investment of RMB 76.0 million, equivalent to approximately $10.9 million, in the Hubei Venture Fund in three installments, representing 27.1% of the Hubei Venture Fund’s shares. As of December 31, 2019, Hubei Henglong has completed a capital contribution of RMB 60.8 million, equivalent to approximately $8.7 million. According to the agreement, the remaining capital commitment of RMB 15.2 million, equivalent to approximately $2.2 million, will be paid upon capital calls received from the Hubei Venture Fund. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 25. As a result of the COVID-19 outbreak in December 2019 and continuing in the first quarter of 2020, the Company’s businesses, results of operations, financial position and cash flows were materially and adversely affected in the first quarter of 2020 with potential continuing impacts on subsequent periods, including but not limited to the material adverse impact on the Company’s revenues as result of the suspension of operations, interruption of supply chain and decline in demand by the Company’s customers. The Company expect, to report that its net product sales decreased by approximately 50% to 60% in the first quarter of 2020 compared with the same quarter in 2019. Because of the significant uncertainties surrounding COVID-19, which are still evolving, the extent of the business disruption, including the duration and the related financial impact on subsequent periods, cannot be reasonably estimated at this time. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting | |
Segment Reporting | 26. The accounting policies of the product sectors are the same as those described in the summary of significant accounting policies 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. As of December 31, 2019, the Company had 14 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, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other eight sectors were engaged in the production and sale of modular sensors (USAI), automobile steering columns (Jielong), provision of after sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), trade (Brazil Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie), research and development of intelligent automotive technology (Jingzhou Qingyan) and manufacture and sales of automotive motors and electromechanical integrated systems (Wuhan Hyoseong). As of December 31, 2018, the Company had 13 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, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other seven sectors were engaged in the production and sale of sensor modular (USAI), automobile steering columns (Jielong), provision of after sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), trade (Brazil Henglong), manufacture and sales of automobile electronic systems and parts (Wuhan Chuguanjie) and research and development of intelligent automotive technology (Jingzhou Qingyan). The Company’s product sector information is as follows (figures are in thousands of USD): Net Sales Net Income (Loss) Year Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Henglong $ 164,142 $ 250,532 $ 3,058 $ (496) Jiulong 88,469 102,994 694 932 Shenyang 20,247 25,941 1,104 (148) Wuhu 20,384 30,356 (1,059) (1,067) Hubei Henglong 121,719 123,237 8,801 8,957 Henglong KYB 70,952 23,423 (5,306) (6,560) Other Entities 64,619 72,421 3,582 3,664 Total Segments 550,532 628,904 10,874 5,282 Corporate — — (2,262) (3,150) Eliminations (119,105) (132,746) (233) (2,053) Total consolidated $ 431,427 496,158 $ 8,379 $ 79 Depreciation and Amortization Capital Expenditures Year Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Henglong $ 3,620 $ 4,633 $ 15,500 $ 6,622 Jiulong 2,916 2,876 1,663 3,439 Shenyang 605 595 627 610 Wuhu 670 617 1,506 256 Hubei Henglong 7,794 6,003 20,376 15,513 Henglong KYB 720 187 3,695 6,089 Other Entities 1,464 1,863 4,172 2,558 Total Segments 17,789 16,774 47,539 35,087 Corporate 52 42 — — Eliminations — — (694) (6,050) Total consolidated $ 17,841 $ 16,816 $ 46,845 $ 29,037 Total Assets December 31, 2019 2018 Henglong $ 278,266 $ 305,311 Jiulong 82,506 81,063 Shenyang 34,275 36,728 Wuhu 22,394 32,763 Hubei Henglong 349,172 358,445 Henglong KYB 59,865 63,364 Other Entities 79,888 96,881 Total Segments 906,366 974,555 Corporate 75,185 81,218 Eliminations (321,587) (365,274) Total consolidated $ 659,964 $ 690,499 Financial information segregated by geographic region is as follows (figures are in thousands of USD): Net Sales (1) Long-term assets Year Ended December 31, December 31, 2019 2018 2019 2018 Geographic region: China $ 309,212 $ 354,749 $ 161,031 $ 177,870 United States 115,810 113,124 756 770 Other foreign countries 6,405 28,285 727 490 Total consolidated $ 431,427 $ 496,158 $ 162,514 (2) $ 179,130 (2) (1) Revenue is attributed to each country based on location of customers. (2) Pursuant to ASC 280‑10‑50‑41, the deferred tax assets of $15.3 million and $15.3 million and the intangible assets, net of $1.4 million and $0.6 million were excluded from long-term assets as of December 31, 2019 and 2018, respectively. |
Basis of presentation and sig_2
Basis of presentation and significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation - For the years ended December 31, 2019 and 2018, the consolidated financial statements include the accounts of the Company and its subsidiaries, which are described in Note 1. Significant inter-company balances and transactions have been eliminated upon consolidation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. Shenyang was formed in 2002, with 70% owned and controlled by the Company, and 30% owned by Shenyang Automotive Industry Investment Corporation, “JB Investment.” The highest authority of Shenyang is its board of directors, which is comprised of seven directors, four of whom, 57%, are appointed by the Company, and three of whom, 43%, are appointed by JB Investment. As for day-to-day operating matters, approval by more than two-thirds of the members of such board of directors, 67%, is required. The chairman of such board of directors is appointed by the Company. In March 2003, the Company and Jinbei entered into an act-in-concert agreement, under which the directors appointed by Jinbei agree to act in concert with the directors appointed by the Company. As a result, the Company obtained control of Shenyang in March 2003. The general manager of Shenyang is appointed by the Company. USAI was formed in 2005. At December 31, 2019, 83.34% of USAI was owned by the Company, and 16.66% of USAI was owned by Hubei Wanlong Investment Inc., “Hubei Wanlong.” The highest authority USAI is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company. The general manager of USAI is appointed by the Company. Jielong was formed in April 2006. As at December 31, 2019, 85% of Jielong was owned by the Company, and 15% of Jielong was owned by Hubei Wanlong. The highest authority of Jielong is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, and one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. Both the chairman of such board of directors and the general manager of Jielong are appointed by the Company. Wuhu was formed in May 2006, with 77.33% owned by the Company, and 22.67% owned by Wuhu Chery Technology Co., Ltd., “Chery Technology.” The highest authority of Wuhu is its board of directors, which is comprised of five directors, three of whom, 60%, are appointed by the Company, and two of whom, 40%, are appointed by Chery Technology. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. The directors of the Company and Chery Technology executed an “Act in Concert” agreement, resulting in the Company having voting control in Wuhu. The chairman of such board of directors is appointed by the Company. The general manager of Wuhu is appointed by the Company. Chongqing Henglong was formed in 2012, with 70% owned by the Company and 30% owned by SAIC-IVECO. The highest authority of the Chongqing Henglong is its board of directors, which is comprised of five directors, three of whom, 60%, are appointed by the Company, and two of whom, 40%, are appointed by SAIC-IVECO. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. In February 2012, the Company and SAIC-IVECO entered into an “Act in Concert” agreement. According to the agreement, the directors appointed by SAIC-IVECO agreed to execute the “Act in Concert” agreement with the directors designated by the Company, resulting in the Company having voting control of Chongqing Henglong. The chairman of such board of directors and the general manager of Chongqing Henglong are both appointed by the Company. Brazil Henglong was formed in 2012, with 80% owned by the Company and 20% owned by Mr. Ozias Gaia Da Silva and Mr. Ademir Dal’ Evedove. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. After the acquisition, the Company owns 95.84% of Brazil Henglong’s shares. The highest authority of Brazil Henglong is its board of directors. In making operational decision, approval by voting rights representing at least 3/4 of the capital, 75%, is required and 95.84% of voting rights were owned by the Company. The chairman of such board of directors is appointed by the Company. The general manager is Mr. Ozias Gaia Da Silva. Wuhan Chuguanjie was formed in 2014, with 85% owned by the Company and 15% owned by Hubei Wanlong. The highest authority of Wuhan Chuguanjie is its board of directors, which is comprised of three directors, two of whom, 67%, are appointed by the Company, and one of whom, 33%, is appointed by Hubei Wanlong. As for day-to-day operating matters, approval by at least two-thirds of the members of such board of directors is required. Both of the chairman of such board of directors and the general manager of Chuguanjie are appointed by the Company. Jingzhou Qingyan was formed in 2017, with 60% owned by the Company and 40% owned by the other two parties. Hubei Honglong owns 60% of the shares of Jingzhou Qingyan and the remaining shares were owned by the other two parties. The highest authority of Jingzhou Qingyan is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom were appointed by the other two parties. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. Both of the chairman of the board of directors and the general manager are appointed by the Company. Henglong KYB was formed in 2018, with 66.60% owned by the Company and 33.40% owned by KYB. The highest authority of Henglong KYB is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom are appointed by KYB. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company and the general manager is appointed by KYB. Wuhan Hyoseong was formed in 2019, with 51% owned by the Company and 49% owned by Hyoseong. The highest authority of Wuhan Hyoseong is its board of directors, which is comprised of five directors, three of whom are appointed by the Company, and two of whom are appointed by Hyoseong. As for day-to-day operating matters, approval by at least three-fifths of the members of such board of directors is required. The chairman of such board of directors is appointed by the Company and the vice chairman is appointed by Wuhan Hyoseong. |
Use of Estimates | Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company is of the opinion that the significant estimates related to valuation of long term assets and investment, the realizable value of accounts receivable and inventories, the accrual of warranty obligations and the recoverability of deferred tax assets. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents - Cash and cash equivalents include all highly-liquid investments with an original maturity of three months or less at the date of purchase. |
Pledged Cash | Pledged Cash - Pledged as collateral for the Company’s notes payable and restricted to use. The Company regularly pays some of its suppliers by bank notes. The Company has to deposit a cash deposit, equivalent to 30%‑100% of the face value of the relevant bank note, in order to obtain the bank note. |
Short-term Investments | Short-term Investments - Short-term investments are comprised of time deposits with original terms of three months to one year and wealth management financial products maturing within one year. The carrying values of time deposits approximate fair value because of their short-term maturities. The interest earned is recognized in the consolidated statements of income or loss over the contractual term of the deposits. The wealth management financial products are measured at fair value and classified as Level 3 within the fair value measurement hierarchy. Changes in the fair value are reflected in other income in the consolidated statements of income or loss. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts - In order to determine the value of the Company’s accounts receivable, the Company records a provision for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. |
Inventories | Inventories - Inventories are stated at the lower of cost and net realizable value. Cost is calculated on the moving-average basis and includes all costs to acquire and other costs to bring the inventories to their present location and condition. The Company evaluates the net realizable value of its inventories on a regular basis and records a provision for loss to reduce the computed moving-average cost if it exceeds the net realizable value. |
Advance Payments | Advance Payments - These amounts represent advances to acquire various assets to be utilized in the future in the Company’s normal business operations, such as machine equipment, raw materials and technology. Such amounts are paid according to their respective contract terms. Advance payment for machinery and equipment is classified as advance payment for property, plant and equipment in the consolidated balance sheet and advance payment of raw materials and technology are classified as advance payments and others in the consolidated balance sheet. |
Property, Plant and Equipment | Property, Plant and Equipment – Property, plant and equipment are stated at cost. Major renewals and improvements are capitalized; minor replacements and maintenance and repairs are charged to operations. Depreciation is calculated on the straight-line method over the estimated useful lives of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 25 Machinery and equipment 6 Electronic equipment 4 Motor vehicles 8 |
Assets under Construction | Land use rights - Land use rights represent acquisition costs to purchase land use rights from the PRC government, which are evidenced by property certificates. The periods of these purchased land use rights are either 45 years or 50 years. The Company classifies land use rights as long-term assets on the balance sheet and cash outflows related to acquisition of land use right as investing activities. Land use rights are carried at cost less accumulated amortization and impairment losses, if any. Amortization is computed using the straight-line method over the term specified in the land use right certificate for 45 years or 50 years, as applicable. As of December 31, 2019 and 2018, the Company had pledged land use rights with a net book value of approximately $5.5 million and $5.7 million, respectively, as security for its comprehensive credit facilities with banks in China. Construction in Progress - represent buildings under construction and plant and equipment pending installation— are stated at cost. Cost includes construction and acquisitions, and interest charges arising from borrowings used to finance assets during the period of construction or installation and testing. No provision for depreciation is made on assets under construction until such time as the relevant assets are completed and ready for their intended commercial use. Gains or losses on disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the relevant asset, and are recognized in the consolidated statements of income or loss on the date of disposal. |
Interest Costs Capitalized | Interest Costs Capitalized - Interest costs incurred in connection with borrowings for the acquisition, construction or installation of property, plant and equipment are capitalized and depreciated as part of the asset’s total cost when the respective asset is placed into service. Interest costs capitalized for the years ended December 31, 2019 and 2018, were $0.7 million and $0.7 million, respectively. |
Intangible Assets | Intangible Assets - Intangible assets, representing patents and technical know-how acquired, are stated at cost less accumulated amortization and impairment losses. Amortization is calculated on the straight-line method over the estimated useful life of 5 to 15 years. |
Long-Lived Assets | Long-Lived Assets - The Company has adopted the provisions of ASC Topic 360 , “Accounting for the Impairment or Disposal of Long-Lived Assets.” Property, plant and equipment and definite life intangible assets are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If required, an impairment loss is recognized as the difference between the carrying value and the fair value of the assets. In assessing long-lived assets for impairment, management considered the Company’s product line portfolio, customers and related commercial agreements, and other factors in grouping assets and liabilities at the lowest level for which identifiable cash flows are largely independent. The Company considers projected future undiscounted cash flows, trends and other factors in its assessment of whether impairment conditions exist. Whilst the Company believes that its estimates of future cash flows are reasonable, different assumptions regarding such factors as future automotive production volumes, customer pricing, economics and productivity and cost saving initiatives, could significantly affect its estimates. In determining fair value of long-lived assets, management uses appraisals, management estimates or discounted cash flow calculations. |
Long-term Investments | Long-term Investments – The Company’s long-term investments include investments in corporations and investments in limited partnerships. Investments in corporations which the Company has the ability to exert significant influence are accounted for using the equity method. Investments in limited partnerships which the Company has more than virtually no influence are accounted for using the equity method. The Company continually reviews its investment to determine whether a decline in fair value below the carrying value is other than temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company’s carrying value and the financial condition, operating performance and near term prospects of the investee. In addition, the Company considers the reason for the decline in fair value, including general market conditions, industry-specific or investee-specific reasons, changes in valuation subsequent to the balance sheet date and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If the decline in fair value is deemed to be other than temporary, the carrying value of the security is written down to fair value. There were no impairment losses for its long-term investment in the years ended December 31, 2019 and 2018. |
Revenue Recognition | Revenue Recognition - The Company has adopted ASC Topic 606 “Revenue from Contracts with Customers”. Products sales to customers are made pursuant to master agreements entered into between the Company and its customers that provide for transfer of both title and risk of loss upon the Company’s delivery to the location specified in the contracts. The Company’s sales arrangements generally do not contain variable considerations and are short-term in nature. A period of credit term is granted to the customers after the delivery and before making payment. The Company recognizes revenue at a point in time based on management’s evaluation of when the customer obtains control of the products. Revenue is recognized when all performance obligations under the terms of a contract with the customer are satisfied and control of the product has been transferred to the customer. Sales of goods do not include multiple product and/or service elements. Revenue is measured as the amount of consideration management expects the Company to receive in exchange for transferring goods pursuant to the contracts. Value-added tax that the Company collects concurrent with revenue-producing activities is excluded from revenue. Incidental contract costs that are not material in the context of the delivery of goods and services are recognized as expense. At the time revenue is recognized, allowances are recorded, with the related reduction to revenue, for estimated price discounts based upon historical experience and related terms of customer arrangements. Where the Company has offered product warranties, the Company also establishes liabilities for estimated warranty costs based upon historical experience and specific warranty provisions. Warranty liabilities are adjusted when experience indicates the expected outcome will differ from initial estimates of the liability. The Company accounts for shipping and handling fees as a fulfillment cost since control of the products is usually transferred to the customer after the delivery. Revenue Disaggregation Revenue disaggregation under the segment reporting standard is measured on the same basis as under the revenue standard. Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard, and does not repeat the disaggregation of revenue under both standards. Contract Assets and Liabilities Contract assets, such as costs to obtain or fulfill contracts, are an insignificant component of the Company’s revenue recognition process. The majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory, fixed assets and intangible assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing processes. Contract liabilities are mainly customer deposits. Customer Deposits As of December 31, 2019 and 2018, the Company has customer deposits of $1.3 million and $0.8 million , respectively. During the year ended December 31, 2019, $0.8 million was received and $1.5 million (including $0.8 million from the beginning balance of customer deposits) was recognized as net product sales revenue. During the year ended December 31, 2018, $2.5 million was received and $2.8 million (including $1.1 million from the beginning balance of customer deposits) was recognized as net product sales revenue. Customer deposits represent non-refundable cash deposits for customers to secure rights to an amount of products produced by the Company under supply agreements. When the products are shipped to customers, the Company will recognize revenue and bill the customers to reduce the amount of the customer deposit liability. Practical Expedient and Exemptions The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers promised goods to the customers and when the customers pay for the goods will be less than one year. |
Government Subsidies | Government Subsidies - The Company’s PRC based subsidiaries received government subsidies according to related policy from local government. For the subsidies for which the Chinese government has specified their purpose, such as product development and renewal of production facilities, the Company recorded specific purpose subsidies as advances payable when received. Upon government acceptance of the related project development or assets acquisition, the specific purpose subsidies are recognized to reduce related R&D expenses or cost of acquired assets. The Company recognized the subsidies that do not have specific purpose as other income upon receipt. |
Sales Taxes | Sales Taxes - The Company is subject to value added tax, “VAT.” The applicable VAT tax rate is 13% for products sold in the PRC. Products exported overseas are exempted from VAT. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold less VAT paid on purchases made with the relevant supporting invoices. VAT is collected from customers by the Company on behalf of the PRC tax authorities and is therefore not charged to the consolidated statements of income or loss. |
Uncertain Tax Positions | Uncertain Tax Positions - In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. As of December 31, 2019 and 2018, the Company has no uncertain tax positions. |
Product Warranties | Product Warranties - The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis of actual claims and circumstances. For the years ended December 31, 2019 and 2018, the warranties activities were as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at the beginning of year $ 31,085 $ 29,033 Additions during the year 18,991 24,102 Settlement within the year (16,670) (20,599) Foreign currency translation (499) (1,451) Balance at end of year $ 32,907 $ 31,085 |
Pension | Pension - Most of the operations and employees of the Company are located in China. The Company records pension costs and various employment benefits in accordance with the relevant Chinese social security laws, which is approximately at a total of 34% of base salary. Base salary levels are the average salary determined by the local governments. For employees in overseas countries (mainly U.S. and Brazil), the Company records pension costs and various employment benefits in accordance with the relevant overseas social security regulations, which is approximately at a total of 28% of base salary. |
Concentration of Credit Risk | Concentration of Credit Risk - Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of trade accounts receivable. In 2019, the Company's five largest customers accounted for 47.4 % of the Company's consolidated sales, with one customer accounting for more than 10% of consolidated sales (i.e., 22.7% of consolidated sales, which comprised a total of $97.8 million in sales included in the Hubei Henglong segment (Note 26)). In 2018, the Company's five largest customers accounted for 39.3 % of the Company's consolidated sales, with one customer accounting for more than 10% of consolidated sales (i.e., 18.6% of consolidated sales, which comprised a total of $91.4 million in sales included in the Hubei Henglong segment (Note 26)). At December 31, 2019 and 2018, approximately 6.2% and 6.2% of accounts receivable were from trade transactions with the aforementioned customer (accounting for more than 10% of consolidated sales). The Company performs ongoing credit evaluations with respect to the financial condition of its debtors, but does not require collateral, and records a provision for doubtful accounts to cover probable credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. |
Income Taxes | Income Taxes - Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the balance sheet liability method. Under this method, deferred income taxes are recognized for the tax consequences of significant temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period enacted. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered unlikely that some portion of, or all of, the deferred tax assets will not be realized. The Company applies ASC 740, “Income Taxes”, which clarifies the accounting for uncertainty in income taxes recognized in the Company’s consolidated financial statements and prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. If the amount of the Company’s taxable income or income tax liability is a determinant of the amount of a grant, the grant is treated as a reduction of the income tax provision in the year the grant is realized. Gain on other sales - Gain on other sales mainly consists of rental income, gain on disposal of intangible assets and property, plant and equipment and technical services revenue. |
Research and Development Costs | Research and Development Costs - Research and development costs are expensed as incurred. |
Advertising, Shipping and Handling Costs | Advertising, Shipping and Handling Costs – Advertising, shipping and handling costs are expensed as incurred and recorded in selling expense s. Shipping and handling costs relating to sales of $5.8 million and $6.5 million were included in selling expenses for the years ended December 31, 2019 and 2018, respectively. |
Leases | Leases – Prior to the adoption of ASC 842 on January 1, 2019: Leases, mainly leases of offices, where substantially all the rewards and risks of ownership of assets remain with the lessor were accounted for as operating leases. Payments made under operating leases were recognized as an expense on a straight-line basis over the lease term. The Company had no capital leases for any of the years stated herein. Future minimum lease payments for the Company's operating leases as of December 31, 2018 under ASC 840 were as follows: Year Ending December 31, 2019 $ 2020 2021 2022 2023 Total $ Upon and after the adoption of ASC 842 on January 1, 2019: The Company adopted ASU 2016-02, Leases, and other related ASUs (collectively, "ASC 842") on January 1, 2019, using the modified retrospective method of adoption. The Company elected the transition method, which allows entities to initially apply the requirements of ASC 842 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. There is no material impact on the balance of retained earnings, right of use assets or associated lease liabilities as of January 1, 2019 as a result of the adoption of ASC 842. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. The Company did not elect the hindsight practical expedient. The Company determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. The Company's major plants and buildings are self-owned and limited temporary small offices were rented. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company's incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The discount rate used by the Company for its operating lease was 4.49%. As of December 31, 2019, the weighted average remaining lease term was 3 years. The Company did not have finance lease arrangements as of December 31, 2019 |
Income Per Share | Income Per Share - Basic income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities, including convertible note holders, if any, based on their participating rights. Diluted income per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the effects on income of participating securities as if they were dilutive ordinary shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the convertible notes using the if-converted method, and shares issuable upon the exercise of stock options and warrants for the purchase of ordinary shares using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be antidilutive. |
Comprehensive Income | Comprehensive Income – ASC Topic 220 establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. ASC Topic 220 defines comprehensive income to include all changes in equity except those resulting from investments by owners and distributions to owners, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. |
Fair Value Measurements | Fair Value Measurements – For purposes of fair value measurements, the Company applies the applicable provisions of ASC 820 “Fair Value Measurements and Disclosures.” Accordingly, fair value for the Company’s financial accounting and reporting purposes represents the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the designated measurement date. With an objective to increase consistency and comparability in fair value measurements and related disclosures, the Financial Accounting Standard Board established the fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. As at December 31, 2019 and 2018, the Company did not have any fair value assets and liabilities classified as Level 1. Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. As at December 31, 2019 and 2018, the Company did not have any fair value assets and liabilities classified as Level 2. Level 3 Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs shall reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). As at December 31, 2019 and 2018, wealth management financial products with amounts of $5.8 million and $17.5 million, respectively, were classified as Level 3. The Company’s financial instruments consist principally of cash and cash equivalents, pledged cash, time deposits, accounts and notes receivable, accounts and notes payable, advance payment or payable, other receivable or payable, accrued expenses and bank loans. As of December 31, 2019 and 2018, the respective carrying values of all financial instruments approximated fair value because any changes in fair value, after considering the discount rate, are immaterial. Segment Reporting - Based on the criteria established by ASC 280 "Segment Reporting," the Company currently operates and manages its business by product sectors and each of them is a reportable segment. The Company's chief operating decision-maker ("CODM") is the chief executive officer. The CODM reviews operating results to make decisions about allocating resources for the Company and assessing performance of its segments. Since most of the revenue generated of the Company and assets held by the Company are in PRC while others are generated and held in other countries, information by geographic region is also presented. |
Stock-Based Compensation | Stock-Based Compensation - The Company may issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs. The Company has adopted ASC Topic 718 , “Accounting for Stock-Based Compensation,” which establishes a fair value based method of accounting for stock-based compensation plans. In accordance with ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. |
Foreign Currencies | Foreign Currencies - China Automotive, the parent company, and HLUSA maintain their books and records in United States Dollars, “USD,” which is their functional currency. The Company’s subsidiaries based in the PRC and Genesis maintain their books and records in Renminbi, “RMB,” which is their functional currency. The Company’s subsidiary based in Brazil maintains its books and records in Brazilian reais, “BRL,” which is its functional currency. In accordance with ASC Topic 830 , “ FASB Accounting Standards Codification” , foreign currency transactions denominated in currencies other than the functional currency are remeasured into the functional currency at the rate of exchange prevailing at the balance sheet date for monetary items. Nonmonetary items are remeasured at historical rates. Income and expenses are remeasured at the rate in effect on the transaction dates. Transaction gains and losses, if any, are included in the determination of net income for the period. In translating the financial statements of the Company’s China and Brazil subsidiaries and Genesis from their functional currency into the Company’s reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in cumulative other comprehensive income (loss) in stockholders’ equity. |
Certain Relationships and Related Transactions | Certain Relationships and Related Transactions The following are the related parties of the Company. The Company or the major shareholders of the Company directly or indirectly have interests in these related parties: Jingzhou Henglong Fulida Textile Co., Ltd., “ Fulida ” Xiamen Joylon Co., Ltd., “ Xiamen Joylon ” Shanghai Tianxiang Automotive Parts Co., Ltd., “ Shanghai Tianxiang ” Shanghai Jinjie Industrial & Trading Co., Ltd., “ Shanghai Jinjie ” Changchun Hualong Automotive Technology Co., Ltd., “ Changchun Hualong ” Jiangling Tongchuang Machining Co., Ltd., “ Jiangling Tongchuang ” Shanghai Hongxi Investment Inc, “ Hongxi ” Hubei Wiselink Equipment Manufacturing Co., Ltd., “ Hubei Wiselink ” Jingzhou Derun Agricultural S&T Development Co., Ltd., “ Jingzhou Derun ” Jingzhou Tongying Alloys Materials Co., Ltd., “ Jingzhou Tongying ” Wuhan Dida Information S&T Development Co., Ltd., “ Wuhan Dida ” Hubei Wanlong Investment Co., Ltd., “ Hubei Wanlong ” Jingzhou Yude Machining Co., Ltd., “ Jingzhou Yude ” Wiselink Holdings Limited, “ Wiselink ” Beijing Hainachuan HengLong Automotive Steering System Co., Ltd., “ Beijing Henglong ” Honghu Changrun Automotive Parts Co., Ltd., “ Honghu Changrun ” Jingzhou Henglong Real Estate Co., Ltd., “ Henglong Real Estate ” Xiamen Joylon Automotive Parts Co., Ltd., “Xiamen Automotive Parts ” Jingzhou Jiulong Machinery and Electronic Trading Co., Ltd., “ Jiulong Machinery ” Wuhan Tongkai Automobile Motor Co., Ltd., “ Wuhan Tongkai ” Jingzhou Natural Astaxanthin Inc, “ Jingzhou Astaxanthin ” Hubei Asta Biotech Inc., “ Hubei Asta ” Shanghai Yifu Automotive Electronics Technology Co., Ltd., “ Shanghai Yifu ” Suzhou Qingyan Venture Capital Fund L.P., “ Suzhou Qingyan ” Chongqing Qingyan Venture Capital Fund L.P., “ Chongqing Qingyan ” Chongqing Jinghua Automotive Intelligent Manufacturing Technology Research Co., Ltd., “ Chongqing Jinghua ” Jingzhou WiseDawn Electric Car Co., Ltd., “ Jingzhou WiseDawn ” Hubei Zhirong Automobile Technology Co., Ltd., “ Hubei Zhirong ” Hubei Tongrun Automotive Parts Industry Development Co., Ltd., “ Hubei Tongrun ” · Hubei Henglongtianyu Pipe system Co.,Ltd., "Henglong Tianyu" · Wuhan Ewinlink Intelligent System Co., Ltd., "Ewinlink" |
Products Sold to Related Parties | Principal policies of the Company in connection with transactions with related parties are as follows: Products Sold to Related Parties – The Company sold products to related parties at fair market prices, and also granted them credit of three to four months. These transactions were consummated under similar terms as the Company’s other customers’. |
Materials Purchased from Related Parties | Materials Purchased from Related Parties – The Company purchased materials from related parties at fair market prices, and also received from them credit of three to four months. These transactions were consummated under similar terms as the Company’s other suppliers’. |
Equipment and Production Technology Purchased from Related Parties | Equipment and Production Technology Purchased from Related Parties - The Company purchased equipment and production technology from related parties at fair market prices, or reasonable cost-plus pricing if fair market prices are not available. The Company sometimes was required to pay in advance based on the purchase agreement, because equipment manufacturing and technology development normally requires a long period. These transactions are consummated under similar terms as the Company’s other suppliers’. |
Short-term Loans Extended to Related Parties | Short-term Loans Extended to Related Parties - The Company provides short-term loans to related parties and assists the borrowing entities in addressing certain cash flow needs. In general, the Company charges interest by referencing to the prevailing borrowing interest rates published by PBOC. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. For public business entities that are SEC filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This standard is effective for the Company beginning on January 1, 2020. Based on the conducted analyses and due to the nature and extent of the Company's financial instruments in the scope of this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, the adoption impact of ASU 2016-13 will increase the Company's allowance for credit losses by approximately $0.9 million, with an after-tax reduction to retained earnings of approximately $0.8 million. In May 2017, the FASB issued guidance within ASU 2017‑09: Scope of Modification Accounting. The amendments in ASU 2017‑09 to Topic 718, Compensation - Stock Compensation, provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity should account for the effects of a modification unless all of the following conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments should be applied prospectively to an award modified on or after the adoption date. The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 31, 2019. Early adoption is permitted, including adoption in any interim period. The adoption of this guidance did not have material impact on the Company’s consolidated financial statements. In August 2018, the FASB released ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements. The provisions of ASU 2018-13 are to be applied using a prospective or retrospective approach, depending on the amendment, and are effective for interim periods and fiscal years beginning after October 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements. In December 2019, the FASB issued ASU 2019‑12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this ASU on the Company’s consolidated financial statements. |
Organization and Business (Tabl
Organization and Business (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Business | |
Schedule of equity method investments | The Company owns interests in the following subsidiaries incorporated in the PRC and Brazil as of December 31, 2019 and 2018. Percentage Interest December 31, December 31, Name of Entity 2019 2018 Shashi Jiulong Power Steering Gears Co., Ltd., “Jiulong” 1 100.00 % 100.00 % Jingzhou Henglong Automotive Parts Co., Ltd., “Henglong” 2 100.00 % 100.00 % Shenyang Jinbei Henglong Automotive Steering System Co., Ltd., “Shenyang” 3 70.00 % 70.00 % Universal Sensor Application Inc., “USAI” 4 83.34 % 83.34 % Wuhan Jielong Electric Power Steering Co., Ltd., “Jielong” 5 85.00 % 85.00 % Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" 6 77.33 % 77.33 % Hubei Henglong Automotive System Group Co., Ltd., “Hubei Henglong” 7 100.00 % 100.00 % Jingzhou Henglong Automotive Technology (Testing) Center, “Testing Center” 8 100.00 % 100.00 % Chongqing Henglong Hongyan Automotive System Co., Ltd., “Chongqing Henglong” 9 70.00 % 70.00 % CAAS Brazil’s Imports and Trade In Automotive Parts Ltd., “Brazil Henglong” 10 95.84 % 95.84 % Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie” 11 85.00 % 85.00 % Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong” 12 100.00 % 100.00 % Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan” 13 60.00 % 60.00 % Hubei Henglong & KYB Automobile Electric Steering System Co., Ltd., “Henglong KYB” 14 66.60 % 66.60 % Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" 15 51.00 % — Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun" 16 100.00 % — 1. Henglong was established in 1997 and mainly engages in the production of rack and pinion power steering gears for cars and light duty vehicles. 2. Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. 3. Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. 4. USAI was established in 2005 and mainly engages in the production and sales of sensor modules. 5. Jielong was established in 2006 and mainly engages in the production and sales of automobile steering columns. 6. Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems. 7. On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. 8. In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. 9. On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. 10. On August 21, 2012, Brazil Henglong was established by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sale of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. 11. In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. 12. In January 2015, Hubei Henglong formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong”, which mainly engages in the design and sale of automotive electronics. 13. In November 2017, Hubei Henglong formed Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan”, which mainly engages in the research and development of intelligent automotive technology. 14. In August 2018, Hubei Henglong and KYB (China) Investment Co., Ltd. (“KYB”) established Hubei Henglong KYB Automobile Electric Steering System Co., Ltd. (“Henglong KYB”), which mainly engages in design, manufacture, sales and after-sales service of automobile electronic systems. Hubei Henglong owns 66.6% of the shares of this entity and has consolidated it since its establishment. 15. In March 2019, Hubei Henglong and Hyoseong Electric Co., Ltd. established Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd. ("Wuhan Hyoseong"), which mainly engages in the design, manufacture and sales of automotive motors and electromechanical integrated systems. Hubei Henglong owns 51.0% of the shares of Wuhan Hyoseong and has consolidated it since its establishment. 16. In December 2019, Hubei Henglong formed Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun", which mainly engages in the development, manufacturing and sale of high polymer materials. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Significant Accounting Policies | |
Schedule of depreciation property plant and equipment | Depreciation is calculated on the straight-line method over the estimated useful lives of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 25 Machinery and equipment 6 Electronic equipment 4 Motor vehicles 8 |
Schedule of product warranties activities | For the years ended December 31, 2019 and 2018, the warranties activities were as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at the beginning of year $ 31,085 $ 29,033 Additions during the year 18,991 24,102 Settlement within the year (16,670) (20,599) Foreign currency translation (499) (1,451) Balance at end of year $ 32,907 $ 31,085 |
Schedule of future minimum lease payments | Year Ending December 31, 2019 $ 2020 2021 2022 2023 Total $ |
Accounts and Notes Receivable (
Accounts and Notes Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts and Notes Receivable | |
Schedule of accounts and notes receivable | The Company’s accounts receivable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accounts receivable - unrelated parties (1) $ 141,423 $ 149,100 Notes receivable - unrelated parties (2) (3) 72,797 90,412 Total accounts and notes receivable - unrelated parties 214,220 239,512 Less: allowance for doubtful accounts - unrelated parties (2,379) (1,993) Accounts and notes receivable, net - unrelated parties 211,841 237,519 Accounts and notes receivable - related parties 21,164 18,825 Accounts and notes receivable, net $ 233,005 $ 256,344 (1) Notes receivable represents accounts receivable in the form of bills of exchange whose acceptances and settlements are handled by banks. (2) As of December 31, 2019, the Company pledged its notes receivable in an amount of RMB 67.7 million, equivalent to approximately $9.7 million, as collateral in favor of the Chinese government for the government loan (See Note 10). As of December 31, 2018, the Company pledged its notes receivable in an amount of RMB 126.3 million, equivalent to approximately $18.4 million, as collateral for certain credit facilities with banks and the Chinese government (See Note 10). |
Schedule of allowance for doubtful accounts of accounts receivable | The activity in the Company’s allowance for doubtful accounts of accounts receivable during the years ended December 31, 2019 and 2018, is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at beginning of year $ 1,993 $ 1,083 Amounts provided for during the year 586 989 Amounts reversed of collection during the year (167) (27) Foreign currency translation (33) (52) Balance at end of year $ 2,379 $ 1,993 |
Advance Payments and Others (Ta
Advance Payments and Others (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Advance Payments and Others | |
Schedule of components of advance payments and others | The Company’s advance payments and others as of December 31, 2019 and 2018, consisted of the following: Year Ended December 31, 2019 2018 Input VAT $ 5,554 $ 5,975 Prepayments for purchase of raw materials 4,283 8,630 Employee advances 944 1,595 Prepayments for advertising fee 293 — Rental and other deposits 264 184 Others 1,736 2,074 Total advance payments and others 13,074 18,458 Less: Allowance for doubtful accounts (73) (907) Advance payments and others, net $ 13,001 $ 17,551 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Schedule of inventories | The Company’s inventories at December 31, 2019 and 2018, consisted of the following (figures are in thousands of USD): December 31, 2019 2018 Raw materials $ 21,464 $ 27,190 Work in process 9,469 11,932 Finished goods 51,998 48,899 Balance at end of year $ 82,931 $ 88,021 |
Property, plant and Equipment (
Property, plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment | The Company’s property, plant and equipment at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Costs: Buildings $ 51,750 $ 51,176 Machinery and equipment 199,536 192,538 Electronic equipment 5,799 5,810 Motor vehicles 5,229 4,852 Construction in progress 33,063 12,526 295,377 266,902 Less: Accumulated depreciation (154,940) (144,592) Balance at end of year $ 140,437 $ 122,310 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets | |
Schedule of intangible assets | The Company’s intangible assets at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Costs: Patent technology $ 2,040 $ 2,063 Management software license 2,639 1,504 Total intangible assets - at cost 4,679 3,567 Less: Accumulated amortization (3,327) (2,962) Balance at end of year, net $ 1,352 $ 605 (1) |
Schedule of estimated amortization expenses | Estimated Amortization Expenses 2020 2021 2022 2023 2024 Amortization expenses $ 365 $ 365 $ 298 $ 283 $ 101 |
Long-term Investments (Tables)
Long-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Investments | |
Schedule of long-term investments | December 31, 2019 2018 Chongqing Venture Fund $ 15,085 $ 13,074 Suzhou Venture Fund 9,141 9,637 Hubei Venture Fund 8,730 5,488 Beijing Henglong 4,630 4,191 Henglong Tianyu 1,122 — Chongqing Jinghua 523 — Jiangsu Intelligent 411 230 Total $ 39,642 $ 32,620 |
Deferred Income Tax Assets an_2
Deferred Income Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | The components of deferred tax assets and liabilities at December 31, 2019 and 2018, were as follows (figures are in thousands of USD): December 31, 2019 2018 Losses carryforward (U.S.) (1) $ 2,816 $ 3,023 Losses carryforward (Non-U.S.) (1) 8,557 5,132 Product warranties and other reserves 5,907 5,695 Property, plant and equipment 4,589 4,884 Share-based compensation 62 131 Bonus accrual 150 363 Other accruals 1,547 1,858 Deductible temporary difference related to revenue recognition 1,476 1,756 Others 2,250 1,528 Total deferred tax assets 27,354 24,370 Less: Valuation allowance (1) (10,485) (7,522) Total deferred tax assets, net of valuation allowance 16,869 16,848 Deferred withholding tax for dividend distribution from PRC subsidiaries (Note 20) 4,253 4,198 Other taxable temporary differences 1,578 1,512 Total deferred tax liabilities $ 5,831 $ 5,710 (1) The net operating loss carry forwards for the U.S. entity for income tax purposes are available to reduce future years' taxable income. These carry forwards will not expire if not utilized, and the Company may carry the losses forward indefinitely. Net operating losses for China entities can be carried forward for 5 years to offset taxable income except for entities that qualify as a High & New Technology Enterprise, for which the net operating loss can be carried forward for 10 years. However, as of December 31, 2019, valuation allowance was $10.5 million, including $2.9 million allowance for the Company’s deferred tax assets in the United States and $7.6 million allowance for the Company’s non-U.S. deferred tax assets primarily in China. Based on the Company’s current operations, management believes that all deferred tax assets in the United States and certain deferred tax assets in non-U.S. regions are not likely to be realized in the future. |
Schedule of deferred tax assets and liabilities as classified in balance sheet | The deferred tax assets and liabilities are classified in the consolidated balance sheets as follows (figures are in thousands of USD): December 31, 2019 2018 Deferred tax assets $ 15,291 $ 15,336 Deferred tax liabilities 4,253 4,198 |
Schedule Of valuation allowance for deferred tax assets | The activity in the Company’s valuation allowance for deferred tax assets during the years ended December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Balance at beginning of year $ 7,522 $ 6,058 Amounts provided for during the year 3,261 2,288 Amounts used during the year (227) (713) Foreign currency translation (71) (111) Balance at end of year $ 10,485 $ 7,522 |
Bank and Government Loans (Tabl
Bank and Government Loans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Bank and Government Loans | |
Schedule of loans | Loans consist of the following as of December 31, 2019 and 2018 (figures are in thousands of USD): December 31, 2019 2018 Short-term bank loans (1) $ 23,536 $ 29,146 Short-term bank loans (2) 20,663 24,521 Short-term government loan (3)(4) 2,150 7,285 Current portion of long-term government loan (5) 287 — Subtotal 46,636 60,952 Long-term government loan (5)(6) 7,454 291 Less: Current portion of long-term government loan (5) (287) — Subtotal 7,167 291 Total bank and government loans $ 53,803 $ 61,243 (1) (2) (3) (4) (5) (6) |
Accounts and Notes payable (Tab
Accounts and Notes payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts and Notes Payable | |
Schedule of accounts and notes payable | The Company’s accounts and notes payable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accounts payable - unrelated parties $ 110,246 $ 124,610 Notes payable - unrelated parties (1) 69,929 81,033 Accounts and notes payable - unrelated parties 180,175 205,643 Accounts payable - related parties 6,492 4,477 Balance at end of year $ 186,667 $ 210,120 (1) Notes payable represent payables in the form of notes issued by the bank. As of December 31, 2019 and 2018, the Company has pledged cash of $29.7 million and $29.6 million, respectively, notes receivable of $7.4 million and $2.3 million, respectively, and property, plant and equipment and land use rights with net book value of $56.4 million and $55.9 million, respectively, as collateral for banks to endorse the payment to the noteholder upon maturity. |
Accrued Expenses and Other Pa_2
Accrued Expenses and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Payables | |
Schedule of accrued expenses and other payables | The Company’s accrued expenses and other payables at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Accrued expenses $ 6,306 $ 8,341 Warranty reserves (See Note 2) 32,907 31,085 Other payables 2,427 3,783 Current portion of other long-term payable (See Note 14) 3,593 3,400 Accrued interest 104 423 Balance at end of year $ 45,337 $ 47,032 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Taxes Payable | |
Schedule of taxes payable | The Company’s taxes payable at December 31, 2019 and 2018, are summarized as follows (figures are in thousands of USD): December 31, 2019 2018 Value-added tax payable $ 4,357 $ 3,790 Income tax payable 2,916 3,778 Long-term taxes payable - current portion (1) 2,810 2,810 Other tax payable (1) 1,409 759 Short-term taxes payable $ 11,492 $ 11,137 December 31, 2019 2018 Long-term taxes payable $ 29,503 $ 32,313 Less: Long-term taxes payable - current portion (1) (2,810) (2,810) Long-term taxes payable (1) $ 26,693 $ 29,503 (1) A one-time transition tax of $35.6 million was recognized in the fourth quarter of 2017 that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company elected to pay the one-time transition tax over eight years commencing in April 2018. During the years ended December 31, 2019 and 2018, $2.8 million and $2.8 million, respectively, was paid by the Company. See Note 20 for more details about the U.S. Tax Reform. |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock Options | |
Schedule of fair value of stock option | No stock options were granted in 2019. During the year ended December 31, 2018, the Company granted options to purchase an aggregate of 225,000 shares to the independent directors. Assumptions used to estimate the fair value of stock options on the grant dates are as follows: Issuance Date Expected volatility Risk-free rate Expected term (years) Dividend yield December 5, 2018 44.72 % 2.79 % 5 0.00 % |
Schedule of stock options activities | The activities of stock options are summarized as follows, including granted, exercised and forfeited. Weighted-Average Weighted-Average Contractual Shares Exercise Price Term (years) Outstanding - January 1, 2018 135,000 $ 6.93 5 Granted 22,500 2.37 5 Expired (22,500) 10.00 5 Outstanding - December 31, 2018 135,000 $ 5.66 5 Expired (105,000) 5.85 5 Outstanding - December 31, 2019 30,000 $ 4.99 5 |
Schedule of range of exercise prices for stock options | The following is a summary of the range of exercise prices for stock options that are outstanding and exercisable at December 31, 2019: Outstanding Stock Weighted Average Weighted Average Number of Stock Range of Exercise Prices Options Remaining Life Exercise Price Options Exercisable $2.00 - $10.00 30,000 2.35 $ 4.99 30,000 |
Other Income, Net (Table)
Other Income, Net (Table) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income, Net | |
Schedule of components of other income, net | During the years ended December 31, 2019 and 2018, the Company recorded other income which is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Government subsidy 2,094 1,717 Penalties income 449 — Charity donation (717) (729) Transaction gains recorded in earnings 131 185 Total other income, net $ 1,957 $ 1,173 |
Financial Income, Net (Tables)
Financial Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Income, Net | |
Schedule of recorded financial income | During the years ended December 31, 2019 and 2018, the Company recorded financial income which is summarized as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 Interest income $ 2,087 $ 2,275 Foreign exchange gain, net 752 457 Bank fees (383) (570) Total financial income, net $ 2,456 $ 2,162 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of provision for income taxes | The provision for income taxes was calculated as follows (figures are in thousands of USD): Year Ended December 31, 2019 2018 One-Time Transition Tax Related to U.S. Tax Reform Tax rate 21 % 21 % Income before income taxes $ 7,559 $ (2,501) Income tax at federal statutory tax rate 1,587 (525) Tax benefit of super deduction of R&D expense (3,688) (3,731) Effect of differences in foreign tax rate (572) (749) Change in provision on valuation allowance for deferred income tax - U.S. (275) (583) Change in provision on valuation allowance for deferred income tax - Non-U.S. 3,309 2,158 Other differences 225 1,965 Total income tax expense $ 586 $ (1,465) |
Schedule of income tax exemption and reduction | The combined effects of the income tax exemption and reduction available to the Company are as follows (figures are in thousands of USD unless otherwise indicated): Year Ended December 31, 2019 2018 Tax holiday effect $ 572 $ 749 Basic net income per share effect 0.02 0.02 Diluted net income per share effect 0.02 0.02 |
Income Per Share (Tables)
Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Per Share | |
Schedule of basic and diluted income per share | The calculations of basic and diluted income per share attributable to the parent company were (figures are in thousands of USD): Year Ended December 31, 2019 2018 Numerator: Net income attributable to the parent company’s common shareholders - Basic and Diluted $ 9,959 2,377 Denominator: Weighted average ordinary shares outstanding - Basic 31,456,828 31,643,813 Dilutive effects of stock options 2,098 1,781 Denominator for dilutive income per share - Diluted 31,458,926 31,645,594 Net income per share attributable to the parent company’s common shareholders Basic 0.32 0.08 Diluted 0.32 0.08 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Schedule of related party transactions | Related party transactions during the years ended December 31, 2019 and 2018, are as shown below (figures are in thousands of USD): Merchandise Sold to Related Parties Year Ended December 31, 2019 2018 Beijing Henglong $ 41,762 $ 31,291 Xiamen Automotive Parts 4,337 5,739 Hubei Hongrun 4,021 — Other related parties 620 576 Total $ 50,740 $ 37,606 Rental Income Obtained from Related Parties Year Ended December 31, 2019 2018 Rental Income $ 383 $ 375 Materials Sold to Related Parties Year Ended December 31, 2019 2018 Honghu Changrun $ 577 $ 637 Jingzhou Tongying 566 279 Jingzhou Yude 313 636 Beijing Henglong 39 — Other related parties 153 1 Total $ 1,648 $ 1,553 Materials Purchased from Related Parties Year Ended December 31, 2019 2018 Jingzhou Tongying $ 7,496 $ 9,091 Jiangling Tongchuang 7,039 7,066 Wuhan Tongkai 6,782 6,849 Honghu Changrun 1,751 1,665 Hubei Wiselink 424 884 Other related parties 322 3 Total $ 23,814 $ 25,558 Technology and Services Provided by Related Parties (recorded in R&D Expenses) Year Ended December 31, 2019 2018 Changchun Hualong $ 543 $ 496 Jingzhou Derun 27 25 Jingzhou Yude — 263 Other related parties 1 51 Total $ 571 $ 835 Property, Plant and Equipment Purchased from Related Parties Year Ended December 31, 2019 2018 Hubei Wiselink $ 5,238 $ 5,281 Ewinlink 1,052 — Henglong Real Estate — 2 Total $ 6,290 $ 5,283 As of December 31, 2019 and 2018, accounts receivable, other receivables, accounts payable and advance payments between the Company and related parties are as shown below (figures are in thousands of USD): Accounts and Notes Receivable from Related Parties December 31, 2019 2018 Beijing Henglong $ 14,743 $ 13,640 Xiamen Automotive Parts 1,957 2,527 Hubei Hongrun 1,786 — Jingzhou Yude 1,450 1,398 Xiamen Joylon 1,110 1,129 Other related parties 118 131 Total $ 21,164 $ 18,825 Accounts Payable to Related Parties December 31, 2019 2018 Jingzhou Tongying $ 1,672 $ 1,199 Wuhan Tongkai 1,586 1,081 Hubei Wiselink 1,538 914 Henglong Tianyu 782 — Jiangling Tongchuang 661 584 Honghu Changrun 208 325 Other related parties 45 374 Total $ 6,492 $ 4,477 Advance Payments for Property, Plant and Equipment to Related Parties December 31, 2019 2018 Hubei Wiselink $ 1,283 $ 7,679 Henglong Real Estate 1,028 1,044 Total $ 2,311 $ 8,723 Other Advance Payments and Others to Related Parties December 31, 2019 2018 Honghu Changrun 662 470 Ewinlink 160 — Henglong Tianyu 139 — Changchun Hualong 71 73 Wuhan Tongkai 69 57 Hubei Hongrun 68 — Jingzhou Yude — 120 Jingzhou WiseDawn — 533 Other related parties 118 28 Total $ 1,287 $ 1,281 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Schedule of non-cancelable commitments and contingencies | In addition to bank loans, notes payables and the related interest, the following table summarizes the Company’s non-cancelable commitments and contingencies as of December 31, 2019 (figures are in thousands of USD): Payment Obligations by Period 2020 2021 2022 Thereafter Total Obligations for investment contracts (1) $ 4,272 $ 430 $ — $ — $ 4,702 Obligations for purchasing and services 19,928 $ 3,188 — — 23,116 Total $ 24,200 $ 3,618 $ — $ — $ 27,818 (1) In November 2019, Hubei Henglong entered into an agreement with other parties and committed to purchase 70% of the shares of Hefei Senye Light Plastic Technology Co., Ltd. for total consideration of RMB 33.6 million, equivalent to approximately $ 4.8 million. As of December 31, 2019, Hubei Henglong has paid the amount of RMB 18.0 million, equivalent to approximately $2.6 million, which was reported in other non-current assets as the transfer of shares had not been consummated. According to the agreement, the remaining consideration of RMB 15.6 million, equivalent to approximately $2.2 million, will be paid in 2020 and 2021. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting | |
Schedule of revenue by major customers by reporting segments | The Company’s product sector information is as follows (figures are in thousands of USD): Net Sales Net Income (Loss) Year Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Henglong $ 164,142 $ 250,532 $ 3,058 $ (496) Jiulong 88,469 102,994 694 932 Shenyang 20,247 25,941 1,104 (148) Wuhu 20,384 30,356 (1,059) (1,067) Hubei Henglong 121,719 123,237 8,801 8,957 Henglong KYB 70,952 23,423 (5,306) (6,560) Other Entities 64,619 72,421 3,582 3,664 Total Segments 550,532 628,904 10,874 5,282 Corporate — — (2,262) (3,150) Eliminations (119,105) (132,746) (233) (2,053) Total consolidated $ 431,427 496,158 $ 8,379 $ 79 Depreciation and Amortization Capital Expenditures Year Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Henglong $ 3,620 $ 4,633 $ 15,500 $ 6,622 Jiulong 2,916 2,876 1,663 3,439 Shenyang 605 595 627 610 Wuhu 670 617 1,506 256 Hubei Henglong 7,794 6,003 20,376 15,513 Henglong KYB 720 187 3,695 6,089 Other Entities 1,464 1,863 4,172 2,558 Total Segments 17,789 16,774 47,539 35,087 Corporate 52 42 — — Eliminations — — (694) (6,050) Total consolidated $ 17,841 $ 16,816 $ 46,845 $ 29,037 Total Assets December 31, 2019 2018 Henglong $ 278,266 $ 305,311 Jiulong 82,506 81,063 Shenyang 34,275 36,728 Wuhu 22,394 32,763 Hubei Henglong 349,172 358,445 Henglong KYB 59,865 63,364 Other Entities 79,888 96,881 Total Segments 906,366 974,555 Corporate 75,185 81,218 Eliminations (321,587) (365,274) Total consolidated $ 659,964 $ 690,499 |
Schedule of segment reporting information, by geographic region | Financial information segregated by geographic region is as follows (figures are in thousands of USD): Net Sales (1) Long-term assets Year Ended December 31, December 31, 2019 2018 2019 2018 Geographic region: China $ 309,212 $ 354,749 $ 161,031 $ 177,870 United States 115,810 113,124 756 770 Other foreign countries 6,405 28,285 727 490 Total consolidated $ 431,427 $ 496,158 $ 162,514 (2) $ 179,130 (2) (1) Revenue is attributed to each country based on location of customers. (2) Pursuant to ASC 280‑10‑50‑41, the deferred tax assets of $15.3 million and $15.3 million and the intangible assets, net of $1.4 million and $0.6 million were excluded from long-term assets as of December 31, 2019 and 2018, respectively. |
Organization and Business (Deta
Organization and Business (Details) | May 14, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | May 31, 2017 | |||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 57.30% | 66.60% | 15.84% | ||||||
Shashi Jiulong Power Steering Gears Co Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [1] | 100.00% | 100.00% | ||||||
Jingzhou Henglong Automotive Parts Co Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 100.00% | 100.00% | |||||||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [2] | 70.00% | 70.00% | ||||||
Universal Sensor Application Inc [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [3] | 83.34% | 83.34% | ||||||
Wuhan Jielong Electric Power Steering Co Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [4] | 85.00% | 85.00% | ||||||
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 77.33% | 77.33% | |||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [5] | 100.00% | 100.00% | ||||||
Jingzhou Henglong Automotive Technology Testing Center [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [6] | 100.00% | 100.00% | ||||||
Chongqing Henglong Hongyan Automotive System Co., Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [7] | 70.00% | 70.00% | ||||||
CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 95.84% | [8] | 95.84% | [8] | 15.84% | ||||
Wuhan Chuguanjie Automotive Science and Technology Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [9] | 85.00% | 85.00% | ||||||
Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [10] | 100.00% | 100.00% | ||||||
Jingzhou Qingyan Intelligent Automotive Technology Rearch Institute Co Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | [11] | 60.00% | 60.00% | ||||||
Hubei Henglong KYB Automobile Electric Steering System Co., Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 66.60% | 66.60% | 66.60% | ||||||
Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 51.00% | 51.00% | |||||||
Wuhu Hongrun New Material Co., Ltd., "Wuhu Hongrun" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Percentage Interest | 100.00% | ||||||||
[1] | Jiulong was established in 1993 and mainly engages in the production of integral power steering gears for heavy-duty vehicles. | ||||||||
[2] | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | ||||||||
[3] | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | ||||||||
[4] | Jielong was established in 2006 and mainly engages in the production and sales of automobile steering columns.Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems.On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | ||||||||
[5] | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | ||||||||
[6] | In December 2009, Henglong, a subsidiary of Genesis, formed the Testing Center, which mainly engages in the research and development of new products. | ||||||||
[7] | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. | ||||||||
[8] | On August 21, 2012, Brazil Henglong was established by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sale of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. | ||||||||
[9] | In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. | ||||||||
[10] | In January 2015, Hubei Henglong formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., “Shanghai Henglong”, which mainly engages in the design and sale of automotive electronics. | ||||||||
[11] | In November 2017, Hubei Henglong formed Jingzhou Qingyan Intelligent Automotive Technology Research Institute Co., Ltd., “Jingzhou Qingyan”, which mainly engages in the research and development of intelligent automotive technology. |
Organization and Business - Add
Organization and Business - Additional Information (Details) | May 14, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | May 31, 2017 | |||
Organization And Principal Activities [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 57.30% | 66.60% | 15.84% | ||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | [1] | 100.00% | 100.00% | ||||||
Hubei Henglong KYB Automobile Electric Steering System Co., Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 66.60% | 66.60% | 66.60% | ||||||
CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 95.84% | [2] | 95.84% | [2] | 15.84% | ||||
Hyoseong (Wuhan) Motion Mechatronics System Co., Ltd., "Wuhan Hyoseong" [Member] | |||||||||
Organization And Principal Activities [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 51.00% | 51.00% | |||||||
[1] | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | ||||||||
[2] | On August 21, 2012, Brazil Henglong was established by Hubei Henglong and two Brazilian citizens, Ozias Gaia Da Silva and Ademir Dal’ Evedove. Brazil Henglong engages mainly in the import and sale of automotive parts in Brazil. In May 2017, the Company obtained an additional 15.84% equity interest in Brazil Henglong for nil consideration. The Company retained its controlling interest in Brazil Henglong and the acquisition of the non-controlling interest was accounted for as an equity transaction. |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Estimated useful lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Building [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Machinery and equipment [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 6 years |
Electronic equipment [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 4 years |
Motor vehicles [Member] | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 8 years |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Warranties activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | ||
Balance at the beginning of year | $ 31,085 | $ 29,033 |
Additions during the year | 18,991 | 24,102 |
Settlement within the year | (16,670) | (20,599) |
Foreign currency translation | (499) | (1,451) |
Balance at end of year | $ 32,907 | $ 31,085 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases, Operating [Abstract] | |
2019 | $ 127 |
2020 | 131 |
2021 | 132 |
2022 | 132 |
2023 | 22 |
Total | $ 544 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | May 14, 2020 | Dec. 31, 2017USD ($) | May 31, 2017 | ||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Shipping, Handling and Transportation Costs | $ 368,076,000 | $ 430,745,000 | ||||
Equity Method Investment, Ownership Percentage | 66.60% | 57.30% | 15.84% | |||
Rights of Use land Pledged With Net Book Value | 5,500,000 | $ 5,700,000 | ||||
Interest Costs Capitalized | 700,000 | 700,000 | ||||
Operating Lease, Right-of-Use Asset | 376,000 | |||||
Customer deposits | 1,303,000 | 750,000 | ||||
Revenue | $ 431,427,000 | 496,158,000 | ||||
Discount rate used for operating leases (as a percent) | 4.49% | |||||
Weighted average remaining lease term | 3 years | |||||
Wealth management financial products | $ 5,800,000 | 17,500,000 | ||||
Allowance for credit losses | 2,379,000 | $ 1,993,000 | $ 1,083,000 | |||
Restatement adjustment | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Retained earnings | 800,000 | |||||
ASU 2016-13 Financial Instruments-Credit Losses (Topic 326) | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Allowance for credit losses | $ 900,000 | |||||
Revenue | Customer concentration risk | Five largest customers | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Number of customers | item | 5 | |||||
Concentration risk (as a percent) | 47.40% | 39.30% | ||||
Revenue | Customer concentration risk | Customer one | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Concentration risk (as a percent) | 22.70% | 18.60% | ||||
Revenue | $ 97.8 | $ 91.4 | ||||
Accounts receivable | Credit concentration risk | Customer one | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Concentration risk (as a percent) | 6.20% | 6.20% | ||||
Customer Deposits [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Customer deposits | $ 1,300,000 | $ 800,000 | ||||
Customer deposits received | 800,000 | 2,500,000 | ||||
Customer deposits recognized as net product sales revenue | 1,500,000 | 2,800,000 | ||||
Customer deposits from the beginning balance recognized as net product sales revenue | 800,000 | 1,100,000 | ||||
Shipping and Handling [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Shipping, Handling and Transportation Costs | $ 5,800,000 | $ 6,500,000 | ||||
Chongqing Jinghua | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 30.00% | |||||
Percentage Of Directors Appointed By Entity | 20.00% | |||||
Jielong Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 85.00% | |||||
Wuhu Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 49.00% | |||||
Chongqing Henglong Formed in 2012 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 33.40% | |||||
Brazil Henglong Formed in 2012 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Minimum Voting Percentage To Approve Operational Matters | 95.84% | |||||
Minimum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||
Cash Equivalent Deposit Percentage | 30.00% | |||||
Maximum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||||
Cash Equivalent Deposit Percentage | 100.00% | |||||
Land [Member] | Minimum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 45 years | |||||
Land [Member] | Maximum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 50 years | |||||
Use Rights [Member] | Minimum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 45 years | |||||
Use Rights [Member] | Maximum [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 50 years | |||||
Shenyang Automotive Industry Investment Corporation [Member] | Shenyang Formed in 2002 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 30.00% | |||||
Wuhu Chery Technology Co Ltd [Member] | Wuhu Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 22.67% | |||||
The Saic Iveco Hongyan Company entity | Chongqing Henglong Formed in 2012 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 40.00% | |||||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | [1] | 70.00% | 70.00% | |||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Formed in 2002 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 57.00% | |||||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Board of Directors Chairman [Member] | Shenyang Formed in 2002 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Minimum Voting Percentage To Approve Operational Matters | 67.00% | |||||
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | Shenyang Automotive Industry Investment Corporation [Member] | Shenyang Formed in 2002 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 43.00% | |||||
Universal Sensor Application Inc [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | [2] | 83.34% | 83.34% | |||
Universal Sensor Application Inc [Member] | USAI Formed in 2005 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 83.34% | |||||
Percentage Of Directors Appointed By Entity | 67.00% | |||||
Wuhan Jielong Electric Power Steering Co Ltd [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | [3] | 85.00% | 85.00% | |||
Wuhan Jielong Electric Power Steering Co Ltd [Member] | Jielong Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 60.00% | |||||
Percentage Of Directors Appointed By Entity | 67.00% | |||||
Wuhan Jielong Electric Power Steering Co Ltd [Member] | Hong Kong Tongda [Member] | Jielong Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 33.00% | |||||
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 77.33% | 77.33% | ||||
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | Wuhu Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 77.33% | |||||
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | Wuhan Hyoseong was Formed in 2019 [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 51.00% | |||||
Beijing Henglong | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 50.00% | |||||
Chongqing Henglong Hongyan Automotive System Co., Ltd [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | [4] | 70.00% | 70.00% | |||
Chongqing Henglong Hongyan Automotive System Co., Ltd [Member] | Chongqing Henglong Formed in 2012 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 70.00% | |||||
Percentage Of Directors Appointed By Entity | 60.00% | |||||
Brazil Henglong [Member] | Brazil Henglong Formed in 2012 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 80.00% | |||||
Percentage Of Directors Appointed By Entity | 75.00% | |||||
Wuhan Chuguanjie Automotive Science and Technology Ltd [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | [5] | 85.00% | 85.00% | |||
Percentage Of Directors Appointed By Entity | 67.00% | |||||
Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 60.00% | |||||
Wuhu Henglong Auto Steering System Co Ltd [Member] | Wuhu Chery Technology Co Ltd [Member] | Wuhu Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Percentage Of Directors Appointed By Entity | 40.00% | |||||
Hubei Wanlong Investment Inc [Member] | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 15.00% | |||||
Percentage Of Directors Appointed By Entity | 33.00% | |||||
Hubei Wanlong Investment Inc [Member] | USAI Formed in 2005 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 16.66% | |||||
Percentage Of Directors Appointed By Entity | 33.00% | |||||
Hubei Wanlong Investment Inc [Member] | Jielong Formed in 2006 | ||||||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 15.00% | |||||
[1] | Shenyang was established in 2002 and focuses on power steering parts for light duty vehicles. | |||||
[2] | USAI was established in 2005 and mainly engages in the production and sales of sensor modules. | |||||
[3] | Jielong was established in 2006 and mainly engages in the production and sales of automobile steering columns.Wuhu was established in 2006 and mainly engages in the production and sales of automobile steering systems.On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. | |||||
[4] | On February 21, 2012, Hubei Henglong and SAIC-IVECO Hongyan Company, “SAIC-IVECO,” established Chongqing Henglong, to design, develop and manufacture both hydraulic and electric power steering systems and parts. | |||||
[5] | In May 2014, together with Hubei Wanlong, Jielong formed a subsidiary, Wuhan Chuguanjie Automotive Science and Technology Ltd., “Wuhan Chuguanjie”, which mainly engages in research and development, manufacture and sales of automobile electronic systems and parts. |
Accounts and notes receivable -
Accounts and notes receivable - Advance payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts and Notes Receivable | ||||
Accounts receivable - unrelated parties | [1] | $ 141,423 | $ 149,100 | |
Notes receivable - unrelated parties | [2] | 72,797 | 90,412 | |
Total accounts and notes receivable - unrelated parties | 214,220 | 239,512 | ||
Less: allowance for doubtful accounts - unrelated parties | (2,379) | (1,993) | $ (1,083) | |
Accounts and notes receivable, net - unrelated parties | 211,841 | 237,519 | ||
Accounts and notes receivable - related parties | 21,164 | 18,825 | ||
Accounts and notes receivable, net | $ 233,005 | $ 256,344 | ||
[1] | (1)Notes receivable represents accounts receivable in the form of bills of exchange whose acceptances and settlements are handled by banks. | |||
[2] | (2)As of December 31, 2019, the Company pledged its notes receivable in an amount of RMB 67.7 million, equivalent to approximately $9.7 million, as collateral in favor of the Chinese government for the government loan (See Note 10). As of December 31, 2018, the Company pledged its notes receivable in an amount of RMB 126.3 million, equivalent to approximately $18.4 million, as collateral for certain credit facilities with banks and the Chinese government (See Note 10). |
Accounts and Notes Receivable_2
Accounts and Notes Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts and Notes Receivable | ||
Balance at beginning of year | $ 1,993 | $ 1,083 |
Amounts provided for during the year | 586 | 989 |
Amounts reversed of collection during the year | (167) | (27) |
Foreign currency translation | (33) | (52) |
Balance at end of year | $ 2,379 | $ 1,993 |
Accounts and notes receivable_3
Accounts and notes receivable - Additional Information (Details) ¥ in Millions, $ in Millions | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) |
Accounts and Notes Receivable | ||||
Notes receivable pledged as collateral | ¥ 67.7 | $ 9.7 | ¥ 126.3 | $ 18.4 |
Advance Payments and Others (De
Advance Payments and Others (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Advance Payments and Others | |||
Input VAT | $ 5,554 | $ 5,975 | |
Prepayments for purchase of raw materials | [1] | 4,283 | 8,630 |
Employee advances | 944 | 1,595 | |
Prepayments for advertising fee | 293 | ||
Rental and other deposits | 264 | 184 | |
Others | 1,736 | 2,074 | |
Total advance payments and others | 13,074 | 18,458 | |
Less: Allowance for doubtful accounts | (73) | (907) | |
Advance payments and others, net | 13,001 | 17,551 | |
Advanced payments and others - related parties | $ 1,287 | $ 1,281 | |
[1] |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 21,464 | $ 27,190 |
Work in process | 9,469 | 11,932 |
Finished goods | 51,998 | 48,899 |
Balance at end of year | $ 82,931 | $ 88,021 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventories | ||
Valuation Allowances and Reserves, Adjustments | $ 3.9 | $ 6.2 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | $ 295,377 | $ 266,902 |
Less: Accumulated depreciation | (154,940) | (144,592) |
Total amount of property, plant and equipment, net | 140,437 | 122,310 |
Land use rights and buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 51,750 | 51,176 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 199,536 | 192,538 |
Electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 5,799 | 5,810 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | 5,229 | 4,852 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amount of property, plant and equipment | $ 33,063 | $ 12,526 |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Property, Plant and Equipment | |||
Depreciation | $ 17.5 | $ 16.8 | |
Pledged Assets Separately Reported, Loans Pledged for Other Debt Obligations, at Fair Value | 50.9 | 50.2 | $ 50.9 |
Interest Costs Capitalized | $ 0.7 | 0.7 | |
Subsidy On Property, Plant And Equipment Cost | $ 0 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Costs: | ||
Patent technology | $ 2,040 | $ 2,063 |
Management software license | 2,639 | 1,504 |
Total intangible assets - at cost | 4,679 | 3,567 |
Less: Accumulated amortization | (3,327) | (2,962) |
Balance at end of the year, net | $ 1,352 | $ 605 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 365 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 365 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 298 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 283 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 101 | |
Amortization of Intangible Assets | $ 300 | $ 300 |
Long-term Investments - Additio
Long-term Investments - Additional Information (Details) $ in Thousands, ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014CNY (¥) | Sep. 30, 2014USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | May 14, 2020 | Dec. 31, 2019USD ($) | Nov. 30, 2019CNY (¥) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Mar. 31, 2018CNY (¥) | Mar. 31, 2018USD ($) | May 31, 2017 | Oct. 31, 2016CNY (¥) | Oct. 31, 2016USD ($) | May 31, 2016CNY (¥) | May 16, 2016USD ($) | Sep. 30, 2014USD ($) | Jan. 31, 2010USD ($) | ||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 66.60% | 57.30% | 15.84% | ||||||||||||||||||
Net income of non-consolidated affiliates | $ 1,400 | $ 1,100 | |||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 32,620 | $ 39,642 | |||||||||||||||||||
Chongqing Venture Fund | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | 13,100 | 15,100 | |||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 13,074 | 15,085 | |||||||||||||||||||
Suzhou Venture Fund | |||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 9,637 | 9,141 | |||||||||||||||||||
Beijing Henglong | |||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 4,191 | 4,630 | |||||||||||||||||||
Henglong Tianyu | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | 1,100 | ||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | |||||||||||||||||||
Capital | ¥ 8 | $ 1,200 | |||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 1,122 | ||||||||||||||||||||
Jiangsu Intelligent | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | 400 | ||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | 230 | 411 | |||||||||||||||||||
Chongqing Jinghua | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | 200 | $ 500 | |||||||||||||||||||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% | |||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | $ 523 | ||||||||||||||||||||
Beijing Henglong | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | $ 4,200 | $ 4,600 | $ 3,100 | ||||||||||||||||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||||||||||||||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Proceeds from Partnership Contribution | ¥ 3.9 | $ 600 | |||||||||||||||||||
Equity Method Investment, Ownership Percentage | [1] | 100.00% | 100.00% | 100.00% | |||||||||||||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | Suzhou Venture Fund | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Proceeds from Partnership Contribution | $ 7,600 | ||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 12.50% | 12.50% | |||||||||||||||||||
Capital | ¥ 50 | $ 7,600 | |||||||||||||||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | Hubei Henglong [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Proceeds from Partnership Contribution | ¥ | ¥ 50 | ||||||||||||||||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | Jiangsu Intelligent | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | ¥ | ¥ 0.7 | ||||||||||||||||||||
Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | Chongqing Jinghua | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | ¥ | ¥ 3 | ||||||||||||||||||||
Suzhou Venture Fund | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | $ 9,600 | $ 9,100 | |||||||||||||||||||
Hubei Henglong [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | ¥ | ¥ 33.6 | ||||||||||||||||||||
Hubei Henglong [Member] | Chongqing Venture Fund | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 18.50% | 18.50% | |||||||||||||||||||
Capital | ¥ 100 | $ 14,500 | ¥ 100 | $ 14,500 | |||||||||||||||||
Hubei Henglong [Member] | Jiangsu Intelligent | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 19.20% | ||||||||||||||||||||
Capital | 3 | 400 | ¥ 5 | ||||||||||||||||||
Hubei Henglong [Member] | Chongqing Jinghua | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% | |||||||||||||||||||
Capital | $ 500 | ||||||||||||||||||||
Hubei Venture Fund [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | 5,500 | 8,700 | |||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||
Long-term Investments | $ 5,488 | 8,730 | |||||||||||||||||||
Hubei Venture Fund [Member] | Hubei Henglong Automotive System Group Co., Ltd., "Hubei Henglong" [Member] | Hubei Henglong [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | $ 11,500 | ||||||||||||||||||||
Hubei Venture Fund [Member] | Hubei Henglong [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity Method Investments | ¥ 15.2 | $ 2,200 | |||||||||||||||||||
Equity Method Investment, Ownership Percentage | 27.10% | 27.10% | 27.10% | 27.10% | |||||||||||||||||
Capital | ¥ 60.8 | $ 8,700 | ¥ 76 | $ 10,900 | |||||||||||||||||
Hubei Venture Fund [Member] | Hubei Henglong [Member] | Hubei Henglong [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Capital | ¥ | ¥ 76 | ||||||||||||||||||||
[1] | On March 7, 2007, Genesis established Hubei Henglong, formerly known as Jingzhou Hengsheng Automotive System Co., Ltd., its wholly-owned subsidiary, to engage in the production and sales of automotive steering systems. On July 8, 2012, Hubei Henglong changed its name to Hubei Henglong Automotive System Group Co., Ltd. |
Deferred Income Tax Assets an_3
Deferred Income Tax Assets and Liabilities - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes | |||
Losses carryforward (U.S.) | $ 2,816 | $ 3,023 | |
Losses carryforward (Non-U.S.) | 8,557 | 5,132 | |
Product warranties and other reserves | 5,907 | 5,695 | |
Property, plant and equipment | 4,589 | 4,884 | |
Share-based compensation | 62 | 131 | |
Bonus accrual | 150 | 363 | |
Other accruals | 1,547 | 1,858 | |
Deductible temporary difference related to revenue recognition | 1,476 | 1,756 | |
Others | 2,250 | 1,528 | |
Total deferred tax assets | 27,354 | 24,370 | |
Less: valuation allowance | (10,485) | (7,522) | $ (6,058) |
Total deferred tax assets, net of valuation allowance | 16,869 | 16,848 | |
Deferred withholding tax for dividend distribution from PRC subsidiaries | 4,253 | 4,198 | |
Other taxable temporary differences | 1,578 | 1,512 | |
Total deferred tax liabilities | $ 5,831 | $ 5,710 |
Deferred Income Tax Assets an_4
Deferred Income Tax Assets and Liabilities - Classified in the consolidated balance sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | ||
Deferred tax assets | $ 15,291 | $ 15,336 |
Deferred tax liabilities | $ 4,253 | $ 4,198 |
Deferred Income Tax Assets an_5
Deferred Income Tax Assets and Liabilities - Activity in the Company's valuation allowance for deferred tax assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Balance at beginning of year | $ 7,522 | $ 6,058 |
Amounts provided for during the year | 3,261 | 2,288 |
Amounts used during the year | (227) | (713) |
Foreign currency translation | (71) | (111) |
Balance at end of year | $ 10,485 | $ 7,522 |
Deferred Income Tax Assets an_6
Deferred Income Tax Assets and Liabilities - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Tax Assets and Liabilities [Line Items] | |||
Deferred Tax Assets, Valuation Allowance | $ 10,485 | $ 7,522 | $ 6,058 |
U.S [Member] | |||
Deferred Tax Assets and Liabilities [Line Items] | |||
Deferred Tax Assets, Valuation Allowance | $ 2,900 | ||
Amortizing Period Of Net Operating Loss | 5 years | ||
Non U.S [Member] | |||
Deferred Tax Assets and Liabilities [Line Items] | |||
Deferred Tax Assets, Valuation Allowance | $ 7,600 | ||
Amortizing Period Of Net Operating Loss | 10 years |
Bank and Government Loans (Deta
Bank and Government Loans (Details) $ in Thousands, ¥ in Millions | Dec. 31, 2019USD ($) | Dec. 26, 2019CNY (¥) | Dec. 26, 2019USD ($) | Sep. 03, 2019CNY (¥) | Sep. 03, 2019USD ($) | Aug. 07, 2019CNY (¥) | Aug. 07, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 07, 2018CNY (¥) | Sep. 07, 2018USD ($) | Nov. 13, 2017CNY (¥) | Nov. 13, 2017USD ($) | |||
Debt Instrument [Line Items] | |||||||||||||||
Current portion of long-term government loan | $ 287 | ||||||||||||||
Subtotal | 46,636 | $ 60,952 | |||||||||||||
Long-term government loan(5)(6) | 7,454 | 291 | |||||||||||||
Less: Current portion of long-term government loan ( | (287) | ||||||||||||||
Subtotal | 7,167 | 291 | |||||||||||||
Total short-term bank and government loans | 46,636 | 60,952 | |||||||||||||
Long-term government loans | 7,167 | 291 | |||||||||||||
Total bank and government loans | 53,803 | 61,243 | |||||||||||||
China Construction Bank [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Short-term bank loans | [1] | 23,536 | 29,146 | ||||||||||||
China Citic Bank [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Short-term bank loans | [2] | 20,663 | 24,521 | ||||||||||||
Chinese government loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Short-term bank loans | $ 2,150 | [3] | ¥ 15 | $ 2,200 | $ 7,285 | [3] | ¥ 50 | $ 7,300 | ¥ 2 | $ 300 | |||||
Subtotal | ¥ 30 | $ 4,300 | ¥ 20 | $ 2,900 | |||||||||||
Long-term government loans | ¥ 30 | $ 4,300 | ¥ 20 | $ 2,900 | |||||||||||
[1] | (1)These loans are secured by property, plant and equipment and land use rights of the Company and are repayable within one year (See Note 6). As of December 31, 2019 and 2018, the weighted average interest rate was 4.8% and 5.3% per annum, respectively. Interest is paid monthly or quarterly on the twentieth day of the applicable month or quarter and the principal repayment is at maturity. | ||||||||||||||
[2] | (5)On November 13, 2017, the Company borrowed from the Chinese government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which is due for repayment on November 12, 2020. | ||||||||||||||
[3] | (6)On August 7 and September 3, 2019, the Company received Chinese government loans of RMB 20.0 million and RMB 30.0 million, equivalent to approximately $2.9 million and $4.3 million, respectively. These loans are due for repayment on June 30, 2021 with an interest rate of 3.80% per annum. Henglong pledged RMB 51.9 million, equivalent to approximately $7.4 million, of notes receivable as collateral for the Chinese government loans (See Note 3). |
Bank and Government Loans - Add
Bank and Government Loans - Additional Information (Details) $ in Thousands, ¥ in Millions | 12 Months Ended | ||||||||||||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 26, 2019CNY (¥) | Dec. 26, 2019USD ($) | Sep. 03, 2019CNY (¥) | Sep. 03, 2019USD ($) | Aug. 07, 2019CNY (¥) | Aug. 07, 2019USD ($) | Sep. 07, 2018CNY (¥) | Sep. 07, 2018USD ($) | Nov. 13, 2017CNY (¥) | Nov. 13, 2017USD ($) | ||||
Debt Instrument [Line Items] | |||||||||||||||
Short-term Debt, Weighted Average Interest Rate | 4.80% | 5.30% | |||||||||||||
Long-term government loans | $ 7,167 | $ 291 | |||||||||||||
China Citic Bank [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Short-term Debt | [1] | $ 20,663 | $ 24,521 | ||||||||||||
China Citic Bank [Member] | Hubei Henglong CITIC Credit Facility [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.46% | 3.89% | |||||||||||||
Debt Instrument, Collateral Amount | $ 10,000 | $ 10,000 | |||||||||||||
Proceeds from Lines of Credit | 20,700 | 24,500 | |||||||||||||
Chinese government loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of Credit Facility, Interest Rate at Period End | 3.48% | 3.48% | 3.80% | 3.80% | 3.80% | 3.80% | 3.48% | 3.48% | 4.75% | 4.75% | |||||
Short-term Debt | $ 2,150 | [2] | $ 7,285 | [2] | ¥ 15 | $ 2,200 | ¥ 50 | $ 7,300 | ¥ 2 | $ 300 | |||||
Long-term government loans | ¥ 30 | $ 4,300 | ¥ 20 | $ 2,900 | |||||||||||
Debt Instrument, Collateral Amount | ¥ 15.8 | $ 2,300 | ¥ 51.9 | $ 7,400 | ¥ 51.5 | $ 7,500 | |||||||||
[1] | (5)On November 13, 2017, the Company borrowed from the Chinese government a loan of RMB 2.0 million, equivalent to approximately $0.3 million, with an interest rate of 4.75% per annum, which is due for repayment on November 12, 2020. | ||||||||||||||
[2] | (6)On August 7 and September 3, 2019, the Company received Chinese government loans of RMB 20.0 million and RMB 30.0 million, equivalent to approximately $2.9 million and $4.3 million, respectively. These loans are due for repayment on June 30, 2021 with an interest rate of 3.80% per annum. Henglong pledged RMB 51.9 million, equivalent to approximately $7.4 million, of notes receivable as collateral for the Chinese government loans (See Note 3). |
Accounts and Notes Payable (Det
Accounts and Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts and Notes Payable | ||
Accounts payable - unrelated parties | $ 110,246 | $ 124,610 |
Notes payable - unrelated parties | 69,929 | 81,033 |
Accounts and notes payable - unrelated parties | 180,175 | 205,643 |
Accounts and notes payable - related parties | 6,492 | 4,477 |
Balance at end of year | 186,667 | 210,120 |
Cash pledged as collateral | 29,700 | 29,600 |
Notes receivable pledged as collateral | 7,400 | 2,300 |
Property, plant and equipment pledged as collateral | $ 56,400 | $ 55,900 |
Accrued Expenses and Other Pa_3
Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses and Other Payables | ||
Accrued expenses | $ 6,306 | $ 8,341 |
Warranty reserves (See Note 2) | 32,907 | 31,085 |
Other payables | 2,427 | 3,783 |
Current portion of other long-term payable (See Note 14) | 3,593 | 3,400 |
Accrued interest | 104 | 423 |
Balance at end of year | $ 45,337 | $ 47,032 |
Taxes Payable (Details)
Taxes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Taxes Payable | |||
Value-added tax payable | $ 4,357 | $ 3,790 | |
Income tax payable | 2,916 | 3,778 | |
Long-term taxes payable - current portion (1) | 2,810 | 2,810 | |
Other tax payable | 1,409 | 759 | |
Short-term taxes payable | 11,492 | 11,137 | |
Long-term taxes payable | 29,503 | 32,313 | $ 35,600 |
Less: Long-term taxes payable - current portion (1) | (2,810) | (2,810) | |
Long-term taxes payable (1) | $ 26,693 | $ 29,503 |
Taxes Payable - Additional Info
Taxes Payable - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Taxes Payable | |||
Long-term taxes payable | $ 29,503 | $ 32,313 | $ 35,600 |
One-Time Transition Tax Payable,Current | $ 2,800 | $ 2,800 |
Other Long-term Payable (Detail
Other Long-term Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash | $ 14,300 | |
Other Accrued Liabilities, Current | 2,427 | $ 3,783 |
Other Long-term Debt, Noncurrent | 4,948 | 8,726 |
Payments to Acquire Property, Plant, and Equipment | 34,396 | 25,764 |
Sale Leaseback Transaction, Quarterly Rental Payments | 1,000 | |
Interest Expense | 3,034 | 2,928 |
Capital Lease Obligations [Member] | ||
Other Accrued Liabilities, Current | 3,600 | 3,400 |
Other Long-term Debt, Noncurrent | 4,900 | 8,700 |
Payments to Acquire Property, Plant, and Equipment | 13,100 | |
Interest Expense | $ 800 | $ 600 |
Stock Options (Details)
Stock Options (Details) | Dec. 05, 2018 |
Issuance Date, December 5, 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 44.72% |
Risk-free rate | 2.79% |
Expected term (years) | 5 years |
Dividend yield | 0.00% |
Issuance Date, August 16, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance Date | Dec. 5, 2018 |
Stock Options (Details 1)
Stock Options (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options | |||
Beginning, Shares Outstanding | 135,000 | 135,000 | |
Shares Granted | 22,500 | ||
Shares Expired | (105,000) | (22,500) | |
Ending, Shares Outstanding | 30,000 | 135,000 | 135,000 |
Beginning, Weighted-Average Exercise Price Outstanding | $ 5.66 | $ 6.93 | |
Weighted-Average Exercise Price Granted | 2.37 | ||
Weighted-Average Exercise Price Expired | 5.85 | 10 | |
Ending, Weighted-Average Exercise Price Outstanding | $ 4.99 | $ 5.66 | $ 6.93 |
Weighted-Average Contractual Term (years) Outstanding | 5 years | 5 years | 5 years |
Weighted-Average Contractual Term (years) Granted | 5 years | ||
Weighted-Average Contractual Term (years) Expired | 5 years | 5 years |
Stock Options (Details 2)
Stock Options (Details 2) - Range of Exercise Prices From $2.00 to $10.00 | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices Minimum (in dollars per share) | $ 2 |
Range of Exercise Prices Maximum (in dollars per share) | $ 10 |
Outstanding Stock Options | shares | 30,000 |
Weighted Average Remaining Life (in years) | 2 years 4 months 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.99 |
Number of Stock Options Exercisable | shares | 30,000 |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 0 | 225,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | $ 100,000 | |
Allocated Share-based Compensation Expense | $ 0 | 20,000 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Exercisable | $ 20,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.01 | ||
Stock Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 636,350 | 298,850 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 3 years | ||
Stock Incentive Plan [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 2,200,000 |
Retained Earnings (Details)
Retained Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retained Earnings | ||
Statutory Accounting Practices Statutory Surplus Required Percentage | 10.00% | |
Percentage Of Statutory Surplus Reserve | 50.00% | |
Statutory Accounting Practices Statutory Capital And Surplus Reserve | $ 0.2 | $ 0.4 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 04, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 05, 2018 |
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase, authorized amount | $ 5,000 | |||
Stock repurchased during period | 452,559 | 17,400 | ||
Stock repurchased during period, value | $ 1,300 | $ 50 | ||
Cumulatively repurchased shares | 1,164,257 | 711,698 | ||
Maximum [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase, authorized repurchase price per share | $ 4 |
Other Income, Net (Details Text
Other Income, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income, Net | ||
Government subsidy | $ 2,094 | $ 1,717 |
Penalties income | 449 | |
Charity donation | (717) | (729) |
Transaction gains recorded in earnings | 131 | 185 |
Total other income, net | $ 1,957 | $ 1,173 |
Financial Income, Net (Details)
Financial Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial Income, Net | ||
Interest income | $ 2,087 | $ 2,275 |
Foreign exchange gain, net | 752 | 457 |
Bank fees | (383) | (570) |
Total financial income, net | $ 2,456 | $ 2,162 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Provision For Income Taxes [Line Items] | |||
Tax rate | 21.00% | 21.00% | 35.00% |
Income before income taxes | $ 7,559 | $ (2,501) | |
Income tax at federal statutory tax rate | 1,587 | (525) | |
Tax benefit of super deduction of R&D expense | (3,688) | (3,731) | |
Effect of differences in foreign tax rate | (572) | (749) | |
Other differences | 225 | 1,965 | |
Total income tax expense | 586 | (1,465) | |
U.S [Member] | |||
Schedule Provision For Income Taxes [Line Items] | |||
Change in Provision on valuation allowance for deferred income tax | (275) | (583) | |
Non-US [Member] | |||
Schedule Provision For Income Taxes [Line Items] | |||
Change in Provision on valuation allowance for deferred income tax | $ 3,309 | $ 2,158 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||
Tax holiday effect | $ 572 | $ 749 |
Basic net income per share effect | $ 0.02 | $ 0.02 |
Diluted net income per share effect | $ 0.02 | $ 0.02 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) R$ in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 31, 2008 | Dec. 31, 2017USD ($) | Dec. 31, 2019BRL (R$) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Line Items] | ||||||||
Withholding Tax Percentage Applicable To Foreign Investors As Non Resident Enterprises | 10.00% | |||||||
Percentage Owned In Holding Company To Avail Withholding Tax Of Five Percent | 25.00% | 25.00% | ||||||
Undistributed Earnings, Basic | $ 309.5 | $ 296.3 | ||||||
Tax Provision On Retained Earning Not Reinvested | $ 30.9 | $ 29.6 | ||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 15.00% | 15.00% | ||||||
Increase In Income Tax Expense Benefit Percentage | 25.00% | 25.00% | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | 35.00% | ||||
Effective Income Tax Rate Reconciliation, transition tax, amount | $ 35.6 | |||||||
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Transition Tax on Accumulated Foreign Earnings, Amount | $ 35.1 | |||||||
Effective Income Tax Rate Reconciliation Tax Cuts And Jobs Act Of 2017 Adjustment One Time Transition Tax | $ 0.5 | |||||||
Description of Withholding Tax Rate on Dividend | According to the Mainland China and Hong Kong Taxation Arrangement, dividends paid by a foreign-invested enterprise in China to its direct holding company in Hong Kong would be subject to withholding tax at a rate of 10% if Genesis could not obtain the Hong Kong tax resident certificate from the Hong Kong Inland Revenue Department. If Genesis obtains the Hong Kong tax resident certificate, owns directly at least 25% of the shares of the foreign invested enterprise and is qualified as the beneficial owner, it could benefit from a lower rate of 5%. | According to the Mainland China and Hong Kong Taxation Arrangement, dividends paid by a foreign-invested enterprise in China to its direct holding company in Hong Kong would be subject to withholding tax at a rate of 10% if Genesis could not obtain the Hong Kong tax resident certificate from the Hong Kong Inland Revenue Department. If Genesis obtains the Hong Kong tax resident certificate, owns directly at least 25% of the shares of the foreign invested enterprise and is qualified as the beneficial owner, it could benefit from a lower rate of 5%. | ||||||
Hong Kong Enterprise [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 16.50% | 16.50% | ||||||
Chongqing Henglong Hongyan Automotive System Co., Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 25.00% | 25.00% | ||||||
CAAS Brazils Imports and Trade In Automotive Parts Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Additional Tax Payable Subject To Residential Status | R$ | R$ 240 | |||||||
CAAS Brazils Imports and Trade In Automotive Part Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 15.00% | 15.00% | ||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 10.00% | 10.00% | ||||||
Additional Tax Payable Subject To Residential Status | R$ | R$ 60 | |||||||
Genesis Subsidiaries Company [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Deferred State and Local Income Tax Expense (Benefit) | $ 4.3 | 4.2 | ||||||
Undistributed Earnings, Basic | $ 42.9 | $ 42.3 | ||||||
Shenyang | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 15.00% | |||||||
Jielong | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 15.00% | 15.00% | 15.00% | |||||
Chuguanjie | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 15.00% | 15.00% | 15.00% |
Income Per Share (Details)
Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net income attributable to parent company | $ 9,959 | $ 2,377 |
Denominator: | ||
Weighted average ordinary shares outstanding - Basic | 31,456,828 | 31,643,813 |
Dilutive effects of stock options | 2,098 | 1,781 |
Denominator for dilutive income per share - Diluted | 31,458,926 | 31,645,594 |
Net income per share attributable to the parent company's common shareholders | ||
Basic | $ 0.32 | $ 0.08 |
Diluted | $ 0.32 | $ 0.08 |
Income Per Share - Additional I
Income Per Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Option [Member] | ||
Earnings Per Share, Basic and Diluted [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,500 | 112,500 |
Significant Concentrations (Det
Significant Concentrations (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Concentrations | |
Minimum Percentage Of Profit Allocated To Foreign Investment | 10.00% |
Registered Capital Percentage | 50.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Revenue | ||
Revenue from Related Parties | $ 50,740,000 | $ 37,606,000 |
Related receivables | ||
Accounts and notes receivable from related parties | 21,164,000 | 18,825,000 |
Related advances payments | ||
Advanced equipment payment to related parties | 2,311,000 | 8,723,000 |
Advanced payments and others to related parties | 1,287,000 | 1,281,000 |
Related payables | ||
Accounts and notes payable | 6,492,000 | 4,477,000 |
Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 1,648,000 | 1,553,000 |
Related Party [Member] | Rental Income [Member] | ||
Related sales | ||
Merchandise sold to related parties | 383,000 | 375,000 |
Other Related Parties [Member] | Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 153,000 | 1,000 |
Technology Equipment [Member] | ||
Related purchases | ||
Technology purchased from related parties | 571,000 | 835,000 |
Technology Equipment [Member] | Other Related Parties [Member] | ||
Related purchases | ||
Technology purchased from related parties | 1,000 | 51,000 |
Equipment [Member] | ||
Related purchases | ||
Equipment purchased from related parties | 6,290,000 | 5,283,000 |
Equipment [Member] | Henglong Real Estate [Member] | ||
Related purchases | ||
Equipment purchased from related parties | 0 | 2 |
Materials [Member] | ||
Related purchases | ||
Related parties | 23,814,000 | 25,558,000 |
Materials [Member] | Other Related Parties [Member] | ||
Related purchases | ||
Related parties | 322,000 | 3,000 |
Advanced Equipment [Member] | ||
Related advances payments | ||
Advanced equipment payment to related parties | 2,311,000 | 8,723,000 |
Advanced Equipment [Member] | Henglong Real Estate [Member] | ||
Related advances payments | ||
Advanced equipment payment to related parties | 1,028,000 | 1,044,000 |
Merchandise [Member] | ||
Related sales | ||
Merchandise sold to related parties | 50,740,000 | 37,606,000 |
Merchandise [Member] | Other Related Parties [Member] | ||
Related sales | ||
Merchandise sold to related parties | 620,000 | 576,000 |
Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 21,164,000 | 18,825,000 |
Accounts receivable | Other Related Parties [Member] | ||
Related receivables | ||
Accounts and notes receivable from related parties | 118,000 | 131,000 |
Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 6,492,000 | 4,477,000 |
Accounts Payable [Member] | Other Related Parties [Member] | ||
Related payables | ||
Accounts and notes payable | 45,000 | 374,000 |
Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 1,287,000 | 1,281,000 |
Other Advance Payments [Member] | Henglong Real Estate [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 68,000 | 0 |
Other Advance Payments [Member] | Other Related Parties [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 118,000 | 28,000 |
Xiamen Joylon [Member] | Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 1,110,000 | 1,129,000 |
Hubei Wiselink [Member] | Equipment [Member] | ||
Related purchases | ||
Equipment purchased from related parties | 5,238,000 | 5,281,000 |
Hubei Wiselink [Member] | Materials [Member] | ||
Related purchases | ||
Related parties | 424,000 | 884,000 |
Hubei Wiselink [Member] | Advanced Equipment [Member] | ||
Related advances payments | ||
Advanced equipment payment to related parties | 1,283,000 | 7,679,000 |
Hubei Wiselink [Member] | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 1,538,000 | 914,000 |
Jingzhou Yude [Member] | Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 313,000 | 636,000 |
Jingzhou Yude [Member] | Technology Equipment [Member] | ||
Related purchases | ||
Technology purchased from related parties | 0 | 263,000 |
Jingzhou Yude [Member] | Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 1,450,000 | 1,398,000 |
Honghu Changrun [Member] | Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 577,000 | 637,000 |
Honghu Changrun [Member] | Materials [Member] | ||
Related purchases | ||
Related parties | 1,751,000 | 1,665,000 |
Honghu Changrun [Member] | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 208,000 | 325,000 |
Honghu Changrun [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 662,000 | 470,000 |
Jiangling Tongchuang [Member] | Materials [Member] | ||
Related purchases | ||
Related parties | 7,039,000 | 7,066,000 |
Jiangling Tongchuang [Member] | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 661,000 | 584,000 |
Jingzhou Tongying [Member] | Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 566,000 | 279,000 |
Jingzhou Tongying [Member] | Materials [Member] | ||
Related purchases | ||
Related parties | 7,496,000 | 9,091,000 |
Jingzhou Tongying [Member] | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 1,672,000 | 1,199,000 |
Wuhan Tongkai [Member] | Materials [Member] | ||
Related purchases | ||
Related parties | 6,782,000 | 6,849,000 |
Wuhan Tongkai [Member] | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 1,586,000 | 1,081,000 |
Wuhan Tongkai [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 69,000 | 57,000 |
Changchun Hualong [Member] | Technology Equipment [Member] | ||
Related purchases | ||
Technology purchased from related parties | 543,000 | 496,000 |
Changchun Hualong [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 71,000 | 73,000 |
Beijing Henglong [Member] | Raw Materials [Member] | ||
Related Party Revenue | ||
Revenue from Related Parties | 39,000 | 0 |
Beijing Henglong [Member] | Merchandise [Member] | ||
Related sales | ||
Merchandise sold to related parties | 41,762,000 | 31,291,000 |
Beijing Henglong [Member] | Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 14,743,000 | 13,640,000 |
Jingzhou Derun [Member] | Technology Equipment [Member] | ||
Related purchases | ||
Technology purchased from related parties | 27,000 | 25,000 |
Jingzhou Derun [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 0 | 120,000 |
Xiamen Automotive Parts [Member] | Merchandise [Member] | ||
Related sales | ||
Merchandise sold to related parties | 4,337,000 | 5,739,000 |
Xiamen Automotive Parts [Member] | Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 1,957,000 | 2,527,000 |
Jingzhou WiseDawn [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 0 | 533,000 |
Hubei Hongrun [Member] | Merchandise [Member] | ||
Related sales | ||
Merchandise sold to related parties | 4,021,000 | 0 |
Hubei Hongrun [Member] | Accounts receivable | ||
Related receivables | ||
Accounts and notes receivable from related parties | 1,786,000 | 0 |
Ewinlink [Member] | Equipment [Member] | ||
Related purchases | ||
Equipment purchased from related parties | 1,052,000 | 0 |
Ewinlink [Member] | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | 160,000 | 0 |
Henglong Tianyu | Accounts Payable [Member] | ||
Related payables | ||
Accounts and notes payable | 782,000 | 0 |
Henglong Tianyu | Other Advance Payments [Member] | ||
Related advances payments | ||
Advanced payments and others to related parties | $ 139,000 | $ 0 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | May 14, 2020 | Dec. 31, 2018 | May 31, 2017 |
Related Party Transactions | |||
Equity Method Investment, Ownership Percentage | 57.30% | 66.60% | 15.84% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | ||
2020 | $ 24,200 | |
2021 | 3,618 | |
2022 | 0 | |
Thereafter | 0 | |
Total | 27,818 | |
Obligations for investment contracts [Member] | ||
Commitments and Contingencies Disclosure [Line Items] | ||
2020 | 4,272 | [1] |
2021 | 430 | [1] |
2022 | 0 | [1] |
Thereafter | 0 | [1] |
Total | 4,702 | [1] |
Obligations for purchasing and services | ||
Commitments and Contingencies Disclosure [Line Items] | ||
2020 | 19,928 | |
2021 | 3,188 | |
2022 | 0 | |
Thereafter | 0 | |
Total | $ 23,116 | |
[1] | (1)In November 2019, Hubei Henglong entered into an agreement with other parties and committed to purchase 70% of the shares of Hefei Senye Light Plastic Technology Co., Ltd. for total consideration of RMB 33.6 million, equivalent to approximately $ 4.8 million. As of December 31, 2019, Hubei Henglong has paid the amount of RMB 18.0 million, equivalent to approximately $2.6 million, which was reported in other non-current assets as the transfer of shares had not been consummated. According to the agreement, the remaining consideration of RMB 15.6 million, equivalent to approximately $2.2 million, will be paid in 2020 and 2021.In April 2019, Hubei Henglong entered into an agreement with other parties and committed to contribute RMB 5.0 million, equivalent to approximately $0.7 million, to Jiangsu Intelligent Networking Automotive Innovation Center Co. Ltd., “Jiangsu Intelligent”, for 19.2% of the shares of Jiangsu Intelligent. As of December 31, 2019, Hubei Henglong has completed a capital contribution of RMB 3.0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) ¥ in Millions, $ in Millions | May 14, 2020 | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Nov. 30, 2019CNY (¥) | Nov. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Apr. 30, 2019USD ($) | Mar. 31, 2019CNY (¥) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Mar. 31, 2018USD ($) | May 31, 2017 |
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Equity Method Investment, Ownership Percentage | 57.30% | 66.60% | 15.84% | ||||||||||
Hubei Henglong [Member] | |||||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Capital | ¥ | ¥ 33.6 | ||||||||||||
Hefei Senye Light Plastic Technology Co., Ltd. [Member] | Hubei Henglong [Member] | |||||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Capital | ¥ 18 | $ 2.6 | $ 4.8 | ||||||||||
Equity Method Investment, Ownership Percentage | 70.00% | 70.00% | |||||||||||
Equity Method Investments | ¥ 15.6 | $ 2.2 | |||||||||||
Hubei Venture Fund [Member] | |||||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Equity Method Investments | $ | 8.7 | $ 5.5 | |||||||||||
Hubei Venture Fund [Member] | Hubei Henglong [Member] | |||||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Capital | ¥ 60.8 | $ 8.7 | ¥ 76 | $ 10.9 | |||||||||
Equity Method Investment, Ownership Percentage | 27.10% | 27.10% | 27.10% | 27.10% | |||||||||
Equity Method Investments | ¥ 15.2 | $ 2.2 | |||||||||||
Jiangsu Intelligent | Hubei Henglong [Member] | |||||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||||
Capital | 3 | 0.4 | ¥ 5 | $ 0.7 | |||||||||
Equity Method Investment, Ownership Percentage | 19.20% | 19.20% | |||||||||||
Equity Method Investments | ¥ 2 | $ 0.3 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 3 Months Ended |
Mar. 31, 2020 | |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Percentage of decrease in net product sales | 50.00% |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Percentage of decrease in net product sales | 60.00% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||
Net Sales | [1] | $ 431,427 | $ 496,158 |
Net Income (Loss) | 8,379 | 79 | |
Depreciation and Amortization | 17,841 | 16,816 | |
Capital Expenditures | 46,845 | 29,037 | |
Total Assets | 659,964 | 690,499 | |
Consolidation, Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | (119,105) | (132,746) | |
Net Income (Loss) | (233) | (2,053) | |
Depreciation and Amortization | 0 | 0 | |
Capital Expenditures | (694) | (6,050) | |
Total Assets | (321,587) | (365,274) | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 0 | 0 | |
Net Income (Loss) | (2,262) | (3,150) | |
Depreciation and Amortization | 52 | 42 | |
Capital Expenditures | 0 | 0 | |
Total Assets | 75,185 | 81,218 | |
Jingzhou Henglong Automotive Parts Co Ltd [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 164,142 | 250,532 | |
Net Income (Loss) | 3,058 | (496) | |
Depreciation and Amortization | 3,620 | 4,633 | |
Capital Expenditures | 15,500 | 6,622 | |
Total Assets | 278,266 | 305,311 | |
Shashi Jiulong Power Steering Gears Co Ltd [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 88,469 | 102,994 | |
Net Income (Loss) | 694 | 932 | |
Depreciation and Amortization | 2,916 | 2,876 | |
Capital Expenditures | 1,663 | 3,439 | |
Total Assets | 82,506 | 81,063 | |
Shenyang Jinbei Henglong Automotive Steering System Co Ltd [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 20,247 | 25,941 | |
Net Income (Loss) | 1,104 | (148) | |
Depreciation and Amortization | 605 | 595 | |
Capital Expenditures | 627 | 610 | |
Total Assets | 34,275 | 36,728 | |
Wuhu Henglong Automotive Steering System Co., Ltd., "Wuhu" [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 20,384 | 30,356 | |
Net Income (Loss) | (1,059) | (1,067) | |
Depreciation and Amortization | 670 | 617 | |
Capital Expenditures | 1,506 | 256 | |
Total Assets | 22,394 | 32,763 | |
Hubei Henglong [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 121,719 | 123,237 | |
Net Income (Loss) | 8,801 | 8,957 | |
Depreciation and Amortization | 7,794 | 6,003 | |
Capital Expenditures | 20,376 | 15,513 | |
Total Assets | 349,172 | 358,445 | |
Hubei Henglong KYB Automobile Electric Steering System Co Ltd [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 70,952 | 23,423 | |
Net Income (Loss) | (5,306) | (6,560) | |
Depreciation and Amortization | 720 | 187 | |
Capital Expenditures | 3,695 | 6,089 | |
Total Assets | 59,865 | 63,364 | |
Other Entities [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 64,619 | 72,421 | |
Net Income (Loss) | 3,582 | 3,664 | |
Depreciation and Amortization | 1,464 | 1,863 | |
Capital Expenditures | 4,172 | 2,558 | |
Total Assets | 79,888 | 96,881 | |
Total Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 550,532 | 628,904 | |
Net Income (Loss) | 10,874 | 5,282 | |
Depreciation and Amortization | 17,789 | 16,774 | |
Capital Expenditures | 47,539 | 35,087 | |
Total Assets | $ 906,366 | $ 974,555 | |
[1] | (1)Revenue is attributed to each country based on location of customers. |
Segment Reporting - Geographic
Segment Reporting - Geographic Region (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||
Net Sales | [1] | $ 431,427 | $ 496,158 |
Long-term assets | [2] | 162,514 | 179,130 |
China [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | [1] | 309,212 | 354,749 |
Long-term assets | 161,031 | 177,870 | |
U.S [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | [1] | 115,810 | 113,124 |
Long-term assets | 756 | 770 | |
Other Foreign Countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | [1] | 6,405 | 28,285 |
Long-term assets | $ 727 | $ 490 | |
[1] | (1)Revenue is attributed to each country based on location of customers. | ||
[2] | (2)Pursuant to ASC 280105041, the deferred tax assets of $15.3 million and $15.3 million and the intangible assets, net of $1.4 million and $0.6 million were excluded from long-term assets as of December 31, 2019 and 2018, respectively. |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting | ||
Deferred tax assets | $ 15,291 | $ 15,336 |
Intangible Assets, Net (Excluding Goodwill) | $ 1,352 | $ 605 |