gross profit

The company reported a record adjusted gross profit margin of 13.7% for the year and $1.3 billion in cash and liquidity.

Since its growth cycle started in 2022, the auto spare parts producer’s manufacturing revenue and gross profit have re-accelerated, thanks to improved cost control, better utilization, and a broader original-equipment-manufacturer client base, the analyst says.

Trivariate Research’s Adam Parker emphasizes gross profit margins as a key indicator for stock valuation and future performance.

“We have now really achieved a new level on gross profit margin that we also consider sustainable,” said CEO Martin Hoffmann on the earnings call.

As excess profitability in China may attract intensified competition and slow the pace of technology adoption, the company is expected to face some challenges on maintaining its gross profit margin above 40%, they add.