SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

March 29, 2010 08:00 ET

China Auto Logistics Reports a Near Doubling of 2009 Automobile-Related Website Sales Fueled 39% Growth in Full Year Net Income; Continued Leadership in Imported Auto Sales Contributed to 13.4% Top Line Gain for the Year

Investor Conference Call to Be Held Tuesday, March 30, at 8:15am ET

TIANJIN, CHINA--(Marketwire - March 29, 2010) - China Auto Logistics Inc. ("the Company") (NASDAQ: CALI), one of China's leading developers of websites for buyers and sellers of imported and domestic automobiles, a top seller in China of imported luxury cars, and a leading provider of auto-related services, announced today that, in line with expectations, full year profits in 2009 grew approximately 39% compared with results in 2008, paced by the continuing rapid growth of the Company's high margin auto-related websites and financing services.

Mr. Tong Shiping, CEO and Chairman of the Company, stated, "Our full year 2009 results provide further evidence that we have chosen the right path to continuing future growth and expansion with a strategy focused on transforming the Company from one of China's leading auto traders to its top provider of automobile-related web-based services and logistics."

2009 Revenues Exceeded $215 Million; Net Income Grew to $5.55 Million

For the year ended December 31, 2009, the Company reported that revenues increased 13.4% to $215,188,081 from $189,725,878 in 2008.

Net income in 2009 grew 39.16% to $5,548,686 or $0.31 per share from $3,987,363 in 2008. Per share results in 2009 are based on 18,100,000 shares outstanding as of December 31, 2009. In 2008, the weighted average number of common shares used to calculate the per share figure was 12,629,315 reflecting the timing of the Company's reverse merger, resulting in $0.32 per share. If calculated on the basis of shares outstanding as of December 31, 2009, EPS for 2008 would have been $0.22.

The Company attributed the increase in 2009 revenues primarily to a 12.6% increase in sales of imported luxury automobiles, which accounted for approximately 97.5% of total revenues compared with 98.2% in 2008. Although impacted by the global financial crisis in early 2009, unit sales of luxury autos grew to 2,744 automobiles in 2009 compared with 2,523 in the prior year. The average selling price of imported vehicles increased slightly by 3.64% per unit to $76,474.

In line with its growth strategy, the Company anticipates further slowing in the rate of growth in auto sales over time, while sales of high margin auto financing services and automobile websites are expected to continue to grow rapidly. Nevertheless, the Company has and expects to continue to maintain its leading position as a luxury automobile trader in Tianjin while focusing on improving the profitability of the business.

Website Revenues Up 97.48% and Operating Income Increased 152.33%

During 2009, the Company continued to see rapid growth in its website for imported autos, -- China's only national website for imported auto dealers and consumers -- and its more recently launched (May, 2009) site for domestic auto dealers and consumers. Revenues from these sites -- generated to date almost entirely from advertising and subscriptions -- increased 97.48% to $3,459,098 in 2009, up from $1,751,660 in 2008 and operating income increased 152.33% to $2,770,840, as compared to $1,098,121 reported in 2008. "Achieving our biggest gains in our website sector is very exciting," stated Mr. Tong who added, "we expect to see continuous growth from this sector with the further expansion of to 35 cities this year and increasing numbers of paid subscribers and advertisements."

Financing Services Revenues Up By a Third and Operating Income Grew 67.22%

In 2009, auto dealers throughout China seeking to grow their businesses continued to rely on the Company for short term financing, particularly in connection with the sale of imported vehicles. Revenues from the Company's financing services grew 35.37% to $1,217,727 in 2009 from $899,538 a year earlier while operating income generated from financing services increased 67.22% to $916,442 in 2009 from $548,046 in 2008.

During the year, the Company continued to build its relationships with many of China's major banks in order to sustain its competitive advantage in providing financing services to auto dealers. It began the year with a credit line of approximately $28 million which, as recently announced, it expanded to approximately $39 million as of March 10, 2010. The Company believes it will be able to expand this facility line as needed to support further financing services growth in 2010, providing such services as letter of credit issuance, purchase deposits and import duty advances. In late 2009, the Company began an expansion of its financial services to include domestic auto dealers, and sees this as a growing contributor to profits going forward. Additionally, the Company is putting effort into expanding its high margin "one-stop" automobile import value added services, which experienced a small decline in 2009 (8.75%) due to the world financial crisis at the start of the year, but continues to provide significant value-added to imported auto dealers.

Margin Expansion

Reflecting the Company's efforts to expand profitable automobile related services to build overall profits and grow them consistently, during 2009 the Company's gross profit margins improved from 4.40% of sales in 2008 to 4.76%. While only approximately 2.50% of revenues, 2.41% of the margin was contributed by the Company's expanding website and auto-related services businesses. The contribution to 2009 operating profit from the Company's website business increased to 33.58% of the Company's total operating profit, and the combined contribution of the website and auto related services businesses to 2009 operating profit was $4,198,054 or 50.88% of operating income.

Other Key Accomplishments in 2009

In a year filled with numerous significant accomplishments, the Company pointed to these additional highlights in 2009:

--  While continued to dominate the imported car market, the
    number of viewers of the Company's domestic automobile site,, also rose rapidly during the year as it became the 178th
    most viewed website in China from among more than 3 million websites
    operating in China, and the third place website focused exclusively on
    domestic auto sales  (according to

--  Combined daily visitors to the Company's websites exceeded 1 million;
    subscribers grew to more than 160 and the number of advertisers
    exceeded 1,000.

--  The Company recently announced that it agreed to become manager of the
    Tianjin FTZ International Automobile Exhibition & Sales Center, the
    only imported auto mall in Tianjin which, in 2008, was the source for
    nearly 12% of total imported car sales in China.  The Company will
    continue to review other opportunities where it may apply its
    experience and skill in auto-related services and logistics.

--  Toward year end, the Company initiated small scale tests of web-based
    financing services for consumers, directing them to banks that meet
    their auto financing needs.  It expects to expand this service in 2010
    and is also focusing on other web-based services that it plans to
    initiate over time such as assistance in obtaining driving licenses,
    used cars, insurance, and other related services.

--  The Company reaffirmed plans to expand its site to 20
    additional cities in 2010, and to be in a total of 60 cities by the
    end of 2011, reaching approximately 70% of the car buying public in

--  As of year end 2009, the Company had no long term debt and
    approximately $2,255,058 million in cash and cash equivalents
    (excluding $4,296,368 in restricted cash).


"2010 will be another very strong year of growth and expansion," stated Mr. Tong, "as we take our websites from 15 cities across China to 35, in what we see as another good year for the Chinese economy and for auto sales." He added, "The penetration and growth of the Internet into all corners of our country also will continue to be an increasingly key factor in shaping how consumers shop for autos while helping auto dealers plan for profitable growth. We expect to be an even more significant company in this space, providing up to date essential information in an exciting format, and a widely viewed and respected platform for marketing and advertising. Working hand in hand with dealers, banks and other key players in the auto-related space, we also plan to provide new online automobile-related services that we believe will be embraced by consumers and dealers and become a growing component of our bottom line."

Conference Call Invitation

China Auto Logistics will host a conference call to discuss 2009 results on Tuesday, March 30, 2010 at 8:15am ET.

To participate in the call, interested participants should call 1-888-549-7704 when calling within the United States or 1-480-629-9860 when calling internationally. Please ask for the China Auto Logistics Inc. 2009 Year-End Earnings Conference Call, Conference ID: 4276714. There will be a playback available until 4/6/2010. To listen to the playback, please call 1-800-406-7325 when calling within the United States or 1-303-590-3030 when calling internationally. Use the Replay Pin Number: 4276714.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link or at ViaVid's website at

Description of China Auto Logistics Inc.

With 2009 sales of approximately $215 million, China Auto Logistics Inc. is one of China's top sellers of luxury imported cars as well as one of the country's leading developers of websites for buyers and sellers of imported and domestic automobiles. It is also China's leading "one stop" provider of logistical services and financing to imported car dealers nationwide. The Company has made the strategic decision to de-emphasize imported auto unit sales in favor of expanding its new, highly profitable domestic auto websites which are accessible through its national website,, launched in May 2009. Its subscription and advertising based is the number one site for imported car dealers and consumers. Already contributing significantly to profits, the Company believes further expansion of its websites, including the addition of new web-based auto-related services, will drive future growth. For additional information:

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.


                                                Year Ended December 31,
                                                 2009            2008
                                            -------------    -------------

Net revenue                                 $ 215,188,081    $ 189,725,878
Cost of revenue                               204,953,584      181,372,628
                                            -------------    -------------
    Gross profit                               10,234,497        8,353,250
                                            -------------    -------------

Operating expenses:
  Selling and marketing                           630,021          881,038
  General and administrative                    1,353,198        1,318,350
                                            -------------    -------------
    Total operating expenses                    1,983,219        2,199,388
                                            -------------    -------------

Income from operations                          8,251,278        6,153,862

Other income (expenses):
  Interest income                                  10,776           85,100
  Interest expenses                              (198,306)        (294,589)
                                            -------------    -------------
    Total other expenses                         (187,530)        (209,489)
                                            -------------    -------------

Income before income taxes                      8,063,748        5,944,373

Income taxes                                    2,145,073        1,530,386
                                            -------------    -------------

Net income                                      5,918,675        4,413,987

Less: Net income attributable to
 noncontrolling interests                         369,989          426,624
                                            -------------    -------------

Net income attributable to shareholders
 of China Auto Logistics Inc.               $   5,548,686    $   3,987,363
                                            =============    =============

Earnings per share attributable to
 shareholders of China Auto Logistics Inc.
  - basic and diluted                       $        0.31    $        0.32
                                            =============    =============

Weighted average number of common
 share outstanding
  - basic and diluted                          18,100,000       12,629,315
                                            =============    =============

Contact Information

  • Contacts:
    US Investors
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642
    Ken Donenfeld
    Tel: 212-425-5700
    Fax: 646-381-9727