Segment reporting

9 Months Ended

Sep. 30, 2020

Segment reporting

Segment reporting

25.         Segment reporting

The accounting policies of the product sectors (each entity manufactures and sells different products and represents a different product sector) are the same as those described in the summary of significant accounting policies disclosed in the Company’s 2019 Annual Report on Form 10-K except that the disaggregated financial results for the product sectors have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting them in making internal operating decisions. Generally, the Company evaluates performance based on stand-alone product sector operating income and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Each product sector is considered a reporting segment.

As of September 30, 2020, the Company had 15 product sectors, six of which were principal profit makers and were reported as separate sectors and engaged in the production and sales of power steering (Henglong, Jiulong, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other nine sectors were engaged in the development, manufacturing and sale of high polymer materials (Wuhu Hongrun), R&D services (Changchun Hualong), automobile steering columns (Jielong), provision of after-sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), 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 September 30, 2019, the Company had 15 product sectors, six of which were principal profit makers and were reported as separate sectors and engaged in the production and sales of power steering (Henglong, Jiulong, Shenyang, Wuhu, Henglong KYB and Hubei Henglong), and one holding company (Genesis). The other nine sectors were engaged in the production and sale of sensor modular (USAI), R&D services (Changchun Hualong), automobile steering columns (Jielong), provision of after-sales and R&D services (HLUSA), production and sale of power steering (Chongqing Henglong), 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).

The Company’s product sector information for the three months and nine months ended September 30, 2020 and 2019, is as follows (figures are in thousands of USD):

	Net Product Sales				Net (Loss)/Income
	Three Months Ended				Three Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Henglong	$	41,001	$	38,971	$	193	$	1,300
Jiulong		25,879		17,211		823		(726)
Shenyang		3,622		4,267		(5)		160
Wuhu		3,221		3,047		(100)		(190)
Hubei Henglong		37,014		33,664		3,239		2,425
Henglong KYB		14,298		15,971		(2,045)		(426)
Other Entities		16,743		14,120		150		1,031
Total Segments		141,778		127,251		2,255		3,574
Corporate		—		—		(678)		14
Eliminations		(27,361)		(26,709)		(64)		613
Total	$	114,417	$	100,542	$	1,513	$	4,201

	Net Product Sales				Net (Loss)/Income
	Nine Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Henglong	$	100,651	$	116,510	$	(298)	$	1,379
Jiulong		64,948		65,971		(53)		1,637
Shenyang		9,860		14,573		330		566
Wuhu		8,742		14,283		223		(577)
Hubei Henglong		76,565		89,423		5,391		6,209
Henglong KYB		32,987		54,803		(3,484)		(2,280)
Other Entities		39,054		46,769		(2,370)		3,776
Total Segments		332,807		402,332		(261)		10,710
Corporate		—		—		(1,766)		(1,450)
Eliminations		(61,651)		(86,849)		(1,328)		(1,718)
Total	$	271,156	$	315,483	$	(3,355)	$	7,542