China Auto Logistics (NasdaqGM:CALI)
Q2 2011 Revenues Increased 130% and Net Income Advanced 23% Setting New Records
The Company reported on August 15, 2011 that a more than doubling in revenues from imported luxury car sales, and substantial top and bottom line gains in its automobile related services businesses, combined to generate record 2011 second quarter and first half results.
2011 Q2 revenues increased 130% year over year to $126.2 million. Net income attributable to shareholders grew 23% to $2.3 million, or $0.12 per share on 19.2 million diluted shares.
In the first half of 2011, revenues reached $207 million, up 90% from a year earlier. Net income attributable to shareholders grew 29% to $4.4 million of $0.23 per share.
The largest contributor to operating income in the 2011 quarter and first half was web-based advertising services. Through the first six months of the year, revenues in this segment grew 77% to approximately $4 million and generated $3 million in operating income, outstripping the contribution to operating income from auto sales.
The Company reiterated that it anticipates strong growth ahead it plans to greatly expand in China's domestic automobile sector with the anticipated second half acquisition of what is expected to be Tianjin's largest auto mall. For this reason, Mr. Tong Shiping, CEO and Chairman, stated, "…the second half of 2011, may well be looked on as one of the most exciting new chapters in the Company's history."
Q1 2011 Net Income Grew 36% Year Over Year On 50% Increase Revenues
Growth in the period reflected the continuing success of our growth strategy to expand high profit margin auto-related services, and the successful integration of the recently acquired www.goodcar.cn site into the www.cali.com.cn portal. The Company believes the continued shift in auto sales in the quarter to higher end models will improve margins over time. The average price of vehicles sold in the quarter rose to $99,703 from $83,681 a year earlier.
Reflecting the Company's financial strength and strong banking relationships, its facility lines of credit increased from $51 million at year end 2010, to $136 million as of March 31, 2011. The Company believes its financing service for dealers opens the door to providing additional web-based services to dealers and consumers.
As reported by the Company on May 16, 2011, in all business segments generated record first quarter sales and profits. Q1 revenues rose 50% to $81.2 million, led by a 183% gain in auto mall management services and an 83% gain in web-based advertising services. Imported auto sales grew 49% year over year. Net income in the quarter increased 36% to $2.1 million, or $0.11 per share on 19.2 million weighted average shares outstanding. Services businesses again were the largest contributors to growth in the period, led by web-based advertising services which contributed 51% of operating income on a year over year increase of 56% to $1.5 million.
$5.25 Million Private Equity Placement Above Market Price; Chairman Sees Shares As Significantly Undervalued and Forecasts Continuing Growth Coupled With Transparency; Company Plans To Expand Domestic Auto Sales With Mall Acquisition
On July 7, 2011, the Company reported it closed the sale of 3 million unregistered common shares to accredited individual investors at an above market price of $1.75 per share, raising a total of $5.25 million for general corporate purposes.
Mr. Tong Shiping, CEO and Chairman of the Company described the successful raise as an event in which the investors demonstrated appreciation of CALI's performance and growth potential "which has been masked by the unprecedented current predicament of Chinese stocks in the U.S." He commented further that "the Company has and will continue to be very transparent while generating outstanding performance," and added he believes "our shares are significantly undervalued because of the prevailing negativity temporarily affecting all Chinese shares in the U.S."
The Company added it is proceeding with plans to open Tianjin's largest domestic auto mall in the second half this year which will sell over 70 different models in what it sees as a continuing strong auto sales environment in China. The additional cash raised (prior to the raise the Company reported cash and cash equivalents of $7.5 million and working capital of $37.1 million as of the end of the first quarter) will increase the Company's flexibility to build growth in sales and services in China's domestic auto space. It views the acquisition of a major mall as essential to this goal.
Mr. Tong concluded, "We have a very bright future … and we will continue to provide the highest level of disclosure. We firmly believe this will lead us to be among the well deserving top companies to emerge as winners from a return in investor confidence."
Reflecting Company's Financial Strength and Performance Credit Line Is Increased To $143.2 Million Even As China's Banks Tighten Lending Policies
On July 12, 2011, the Company reported a further increase in its aggregate credit lines to $143.2 million, an increase of 127% over credit lines at year end 2010. Significantly, this occurred against a backdrop of a growing tight lending policy in China which has been hampering the growth of other companies.
Mr. Tong commented that the raise achieved by the Company reflects its strong performance as well as its strong banking relationships. He noted, "Our demonstrated ability to obtain and expand credit lines as needed positions the Company very well to continue on a strong growth track."