The company is one of several China-based firms such as Duoyuan Printing Inc DYP.N and China MediaExpress (CCME.O) whose U.S. shares have been hit by accounting concerns, shareholder lawsuits or regulatory probes.
China Automotive Chairman Hanlin Chen said the accounting issues are non-cash in nature and do not affect the company's operations.
In March, the company said it will restate its previously issued financial statements for fiscal 2009 and unaudited interim financial statements for the first three quarters of 2010.
China Automotive also said it has made "solid progress" in addressing the errors in the accounting of its convertible notes.
It received a Nasdaq notice on March 18 regarding non-compliance with listing requirements due to the delay in filing financial reports with the U.S. Securities and Exchanges Commission.
The company had replaced its auditor Schwartz Levitsky Feldman LLP with PricewaterhouseCoopers Zhong Tian CPAs in December.
In the last five months, at least 15 U.S.-listed Chinese companies have upgraded to a Big Four auditor -- Deloitte, Ernst & Young, PricewaterhouseCoopers or KPMG -- from a smaller firm, according to an analysis from Audit Analytics.
"It is a solid operation. I always have a 'buy' rating on this company. Their previous financials are reliable," Maxim Group analyst Echo He told Reuters.
China Automotive, which designed and produced the first domestic electrically powered steerings in China, expects 2011 revenue to grow 20 percent, which works out to $415 million.
Analysts on average were expecting 2011 sales of $398.6 million, according to Thomson Reuters I/B/E/S.
Fourth-quarter preliminary sales at the company, which counts leading Chinese auto makers such as China FAW Group Corp, Dongfeng Auto Group Co Ltd and BYD Auto Co Ltd as its customers, came in at $100.5 million, beating analysts' expectations of $90 million.
Quarterly gross margin was 19.7 percent, compared with 21.8 percent a year earlier, due to increased warranty expenses and higher raw material costs.
Shares of the Jingzhou City, China-based company touched a high of $11.50 in heavy trade, making the stock one of the highest gainers on Friday on Nasdaq. They were up 37 percent at $11.15 in midday trade. (Reporting by Soham Chatterjee in Bangalore; For the latest updates PRESS CTR + D or visit Stock Market news Today
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