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What: Shares of China Automotive Systems (NASDAQ:CAAS) were slipping today, down as much as 25% after a disappointing earnings report.

So what: Sales for the automotive supplier increased 21.8% to $97.9 million, but that was well short of expectations at $102.7 million. Earnings per share, meanwhile, came in at $0.18, matching expectations. CEO Qizhou Wu noted that the company grew its market share during the quarter as vehicle sales in China only increased by 12.3%. Despite the growth in revenue, earnings per share actually fell from $0.21 a year ago due to a lower gross margin on a change in the product mix, and increases in selling and R&D expenses.

Now what: Even with the poor sales growth and the drop in the share price, management raised its full-year revenue growth guidance to 15%, or $387 million, though that is below analyst estimates of $407 million. Still, China Automotive's shares have been all over the place in the past year, and with recent economic indicators from China looking up, I wouldn't count out the auto supplier despite the underwhelming sales growth.  A P/E of 8.4 doesn't hurt either; profits should begin to grow again as long as sales are increasing.