2024-07-28 11:13:21 ET
Summary
- China Automotive Systems had a phenomenal 1Q24 with a 17% EPS increase, leading to a 19% stock increase after announcing a one-time $0.80 dividend per share.
- CAAS stock is undervalued, trading at 5.4x EBIT and a 74% discount to its book value, with strong revenue and margin growth.
- CAAS has potential for growth with increasing demand for EVs, unique electric power steering solutions, and favorable market conditions, making it a BUY opportunity worth at least $7.50 per share.
Investment Thesis
China Automotive Systems ( CAAS ) is one of the largest suppliers of power steering systems and components to China's automotive industry. CAAS poses an interesting, deep value play. The stock is currently trading at 5.4x EBIT (2025), and a 74% discount to its fully diluted book value of $392MM....
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China Automotive Systems: 74% Discount To Book Value, Great Earnings