benduan, I didn't go to the 10Q for earnings; I used Yahoo instead and to me it looks like .72 for the first 3 quarters of 2010. I agree with the rest of your statements. You may be right about .77 from the 10Q... 5 cents per share difference (over 3 quarters) is not so much.
thanks for your clarification. In summary, the 20% interest in Jinheng was disposed and reflected in the fincial report as $5 million gain; then Jinheng was acquired at 100% through Vital Glee. So if consider earnings from Jinheng, the first 9 month EPS of WATG was $0.77 per 10Q.
Correct me, if wrong.
From the 8K on 11/23/10:
"As previously disclosed, on July 10, 2010, Vital Glee Development Limited (" Vital Glee "), a wholly-owned subsidiary of Wonder Auto Technology, Inc. (the " Company "), entered into a conditional disposal agreement (the " Conditional Disposal Agreement ") with Jinheng Automotive Safety Technology Holdings Limited (" Jinheng Holdings "), pursuant to which Vital Glee agreed to acquire from Jinheng Holdings its 100% equity interest in Jinheng (BVI) Ltd., a British Virgin Islands corporation (" Jinheng BVI"), for a total cash consideration of HK $1,130 million (approximately US$145.54 million). Jinheng BVI, through its Chinese subsidiaries, is primarily engaged in the manufacturing of automobile airbags, safety belts and steering wheels.
On September 10, 2010, Vital Glee completed the acquisition of Jinheng BVI pursuant to the terms of the Conditional Disposal Agreement. Under the Conditional Disposal Agreement, Vital Glee paid HK $339 million (approximately US$43.66 million) in cash and issued three non-interest bearing promissory notes in the respective amounts of HK $169.5 million (approximately US$21.83 million), HK $169.5 million (approximately US$21.83 million) and HK $452 million (approximately US$58.22 million) to Jinheng Holdings, which are payable at the 30th, 90th and 180th days after September 14, 2010, respectively.
From January 18, 2010 through July 10, 2010 the Company had an approximately 20.02% equity interest in Jinheng Holdings through its strategic investment in the Applaud Group Limited (the "Applaud Group"). The Company disposed of its interest in the Applaud Group on July 10, 2010."
On January 18, 2010, through two separate transactions, we acquired an aggregate of 38.36% of equity interest in Applaud Group
Limited which is a British Virgin Islands corporation and has no assets other than its ownership of 52.2% of equity interest in Jinheng
Automotive Safety Technology Holdings Limited (“Jinheng Holding”). As a result of the acquisition of an aggregate of 38.36% of
Applaud, we will become the largest shareholder of Applaud and, thereby, owner of 20.02% of Jinheng Holdings. Jinheng Holdings is a
high-tech automotive parts supplier that is primarily engaged in developing, manufacturing and selling components of automotive
passive safety restraint systems (airbag and seatbelt), automotive engine electronic injection management systems, and components of
diesel engines. Jinheng Holdings is listed on the Main Board of Hong Kong Stock Exchange. Our CEO and chairman, Qingjie Zhao, is
an executive director of Jinheng Holdings.
benduan: The latest 10Q states that the acquisition of 100% equity interest (not 20%!) in Jinheng BVI from Jinheng Holdings constituted a related party transaction.
WATG is on the hook for $105.9 million due Jinheng Holdings. A "contract" won't change that.
CEO Mr Zhao's ownership in Jinheng offers him additional share, but is does not negate the fact that WATG owns 20% of Jinheng BVI. This has been stated again and again in 2009 10K, and 2010 10-Q's. You should see it reflected in the corporate structure diagram in the 2010 10K soon.
Back on Nov. 30th WATG announced a contract from a "World Class Customer (WCC)" for Airbags. Has anyone seen any more information about this contract like what is the name of the WCC?? how large is the contract, etc.??? Press releases like these without details only fuel speculation and embolden the shorts.
I'd love to know that too, but my guess is that the OEM doesn't want this information disclosed. If you were Audi, Mercedes, BMW, or VW, would you want it announced that you are using Chinese airbags in your cars? I'm okay with not knowing who the OEM is if the money comes in and if PWC doesn't find anything amiss.
I must say, though, that it's painful to see the stock sink more and more each day. I'm not going to sell because that locks in a loss but a litle recovery would be nice to see, and some more insider buying would help too. One way the company can move the stock price is to show confidence, and to let it be known that the price is too low. You do that with insider buying. Another way to move the stock price is to buy back shares, and during the conference call yesterday they held out that possibility after they take part of Halla public in about a year.
Other than insider buying, the only 2 events on the horizon that can help the pps are Wonder's appearance at an investor conference in NYC on 1/10 and 4th quarter earnings coming up in February.
WATG needs to act as well. Their investment communication is really bad and they need to work on that. Tell the story well and you build trust, don't tell it well and you feed the shorts.
I've seen this before. I just closed a 500%+ gain position in Europe, where the shorts were also celebrating their victory when I moved in.
Patience is the name of the game. Build your position slowly.
hffnl: Can you explain something for me? If management truly believed they could get 6 billion RMB for Halla ($900 million), why haven't they taken WATG private at a 100% premium yesterday (WATG's current mktcap is just about $250 million)? That would have generated a nice 80%+ return for them with little risk, no? Or do they think that ALL US investors are imbeciles?