SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

May 17, 2010 14:02 ET

China Auto Logistics 2010 First Quarter Earnings Rose 31.63% on 20% Increase in Revenues Compared to Same Period Last Year

Web-Based Advertising Was the Largest Contributor to Earnings as Year Over Year First Quarter Revenues Grew 70.13%; Contributions to Profits Increased From All of the Company's Service Businesses; Investor Conference Call to Be Held, Thursday, May 20, at 8:00am ET

TIANJIN, CHINA--(Marketwire - May 17, 2010) - China Auto Logistics Inc. ("the Company" or "CALI") (NASDAQ: CALI), which owns and operates one of the leading automobile portals in China for auto dealers and consumers of vehicle services and products, and is one of the top sellers in China of luxury imported automobiles, today announced continuing strong advances in revenues and earnings in its first quarter ended March 31, 2010, led by substantial contributions from the Company's web-based advertising and automobile import value added services.

Record Results

Net revenues in the 2010 first quarter increased to $54,149,272, a 20% increase over revenues of $45,124,014 in the same period last year. Net income attributable to shareholders of China Auto Logistics Inc. increased 31.63% to $1,528,446 or $0.08 per share, compared with $1,161,183 or $0.06 per share in the first three months of 2009, based on 18.1 million average weighted fully diluted shares outstanding in both periods.

Recent Exciting Developments

Mr. Tong Shiping, CEO and Chairman of the Company, stated, "We were very pleased to get the year off to a strong start, led by the growth in our website and services businesses, especially in view of the exciting developments since the end of the quarter which further strengthen our future outlook. As recently announced, we introduced our new portal at the Beijing Auto Show where it generated considerable excitement, especially with the inclusion on the site of the fast growing, highly popular consumer site,, which, as also announced, we expect to acquire before the end of August. With the launch of our new portal, on a single site we are bringing together and meeting the needs of the full spectrum of China's dynamic automotive public, ranging from dealers and suppliers to auto purchasers and drivers of both foreign and domestic automobiles. As we help to enhance the auto buying and driving experience through our new portal, improve the businesses of dealers and suppliers and begin to provide new web-based services, the building blocks we are putting in place will lead to very dynamic growth and expansion."

Luxury Imported Autos

In the 2010 first quarter, the largest contribution to revenues continued to come from the Company's lower margin legacy imported auto sales business. Sales grew 18.84% in the period to approximately $52.38 million compared with approximately $44.08 million in the first quarter last year, and contributed 96.74% of the revenues in this year's first quarter and approximately 40.81% of operating income, or $875,586. Unit sales grew 11.99% from 559 automobiles in the prior year period to 626 units in the 2010 first quarter. Average selling prices per unit rose 6.12% over the same period last year to $83,681 in the 2010 first quarter.

Web-Based Advertising Services Continue Rapid Growth

Web-based advertising services continued to be the Company's fastest growing segment in the first three months of 2010, with revenues from the domestic automobile site and the site for imported auto buyers and dealers growing a combined 70.13% to $1,077,331, compared with $633,250 in the same period in 2009. All revenues in this segment were from the sites' more than 160 subscribers and 1000 advertisers. With its high margins, the website segment also became the largest contributor to operating income in the 2010 first quarter, exceeding the contribution from the imported auto sales business. In this period, it contributed $964,773, or 44.97% of total operating income, up 79.29% from $538,107 in the first quarter last year.

In subsequent periods, with the Company's launch in late April this year of its automobile portal, covering the full spectrum of the automotive public in China, the Company anticipates further strong growth for its existing websites which can be accessed via the new portal, which already has begun to attract growing attention from such national advertisers as auto manufacturers and others. The Company also continues to plan to expand its domestic sites to 60 cities by 2012, at which time it will reach approximately 70% of the car buying public.

Automobile Import Value Added Services Growth Renewed

The second fastest growing business segment in this year's first quarter was automobile import value added services, primarily as a consequence of the improving economy. Revenues in this business grew 85.67% to $284,694 in the quarter compared with $153,333 in the first quarter last year and it contributed 10.69%, or $229,274, to total operating income in the 2010 first quarter, up from $135,969 in the first quarter last year.

Financing Services

In 2010, the Company has continued to expand its dealer financing services to domestic dealers as well as dealers in imported autos. First quarter revenues in this segment grew 24.85% over the same period last year, from $255,981 to $319,583, and operating income increased slightly from $212,192 in the first quarter last year to $217,255 in the current year first quarter. Significantly, while there has been some tightening of credit in China, principally aimed at curbing real estate speculation, the Company was able to increase its credit line as of March 31, 2010 to approximately $38.82 million. Further, it believes it can readily obtain additional credit on an "as needed" basis to support the growth of this business, which is welcomed by auto dealers who in many cases are undercapitalized. In the 2010 first quarter, the Company also continued to explore further development of a consumer finance service, which unlike its dealer financing business, essentially is an online referral service, in cooperation with auto dealers and various banks, for individual auto buyers seeking purchase financing.

The Newest CALI Service - Auto Mall Management

Effective March 1, 2010, for an aggregate fee of $1 million annually, the Company agreed to provide services to manage the Tianjin FTZ International Automobile Exhibition and Sales Center, which in 2009 accounted for approximately 12% of all imported autos sold in China. In the one month since this agreement was in effect during the first quarter this year, on revenues of $83,222, the contribution to operating income from this new business was $54,549. The Company believes there are additional opportunities in this business sector where it can capitalize on its logistical management and marketing skills, as well as its well established national network of approximately 3000 auto dealers.

China Auto Sales Continue To Set New Records

In the first quarter of 2010, the growth in China's automobile market continued to set new records.

China's National Bureau of Statistics reported that in January, February, and March of 2010, automobile sales and production in China exceeded 1.5 million units each month. This resulted in record first quarter vehicle production and sales of 4.55 million (+77%) and 4.61 million (+72%) units, with high growth recorded for nearly all types of vehicles.

Additionally, according to China Customs, in the first quarter of 2010, there also was very strong growth achieved by imported automobiles -- exceeding the gains for domestic autos. Specifically, the total import volume in the 2010 first quarter was 179,000 vehicles, and 140,000 were plated in this period, representing 176% and 85.5% growth from the first quarter of 2009 respectively. Further, reflecting an improved economy, the number of luxury imported autos grew 132.5% in the first quarter this year, compared with the same period in 2009.

"I have had a strong belief in China's automobile market and the continuously rapid growth has proven this out it," Mr. Tong said. He further commented that, for the full year, he anticipates automobile sales in China will exceed 16 million units, which would be growth of 17.65% from 2009, which he noted "will maintain China's position as the number one automobile market this year."


Commenting on the outlook for the remainder of the year, Mr. Tong stated, "On the heels of our pending acquisition of, and our very successful introduction at the end of April of the CALI portal -- which we have followed with a major media campaign still in progress -- the excitement and optimism about the unique space we are carving in what is now the world's largest automobile market pervades our entire management team. We are still at the very earliest stage of effecting our growth strategy, and the results are exceeding our expectations. On our agenda for the year, we continue to anticipate adding and growing new web-based services, utilizing the growing scope of our sites and new portal. We do not anticipate any effect from a possible slowdown in the Chinese auto market where we see continuing growth at a healthy level. I am very confident this will be another year of substantial progress on many fronts and new records in sales and earnings."

Description of China Auto Logistics Inc. (NASDAQ: CALI)

With 2009 sales of approximately $215 million, China Auto Logistics Inc. operates, which is expected to rapidly become one of the leading automobile portals for car dealers and consumers of vehicles and auto-related services throughout China. CALI also 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. Recently initiating auto-related services for dealers and purchasers of domestic autos, it is China's leading "one stop" provider of logistical services and financing to imported car dealers nationwide and manager of the large imported auto mall in Tianjin. Its subscription and advertising based is the number one site for imported car dealers and consumers. Its site, focused on the domestic auto market, has climbed rapidly to become one of the top domestic auto websites and ranks among the top 200 most visited sites in China. The Company believes the integration of these wide ranging sites and services in a single portal serving a broad spectrum of China's "auto living" public, as well as the addition of new web-based auto-related services for businesses and consumers, will drive future growth. For additional information:

Conference Call Invitation

China Auto Logistics will host a conference call to discuss 2010 first quarter results on Thursday, May 20, 2010 at 8:00 am ET.

To participate in the call, interested participants should call 1-877-941-4776 when calling within the United States or 1-480-629-9761 when calling internationally. Please ask for the China Auto Logistics Inc. 2010 First Quarter Earnings Conference Call, Conference ID #:4304417. There will be a playback available until 05/27/2010. 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: ID #:4304417.

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


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.

                        CHINA AUTO LOGISTICS INC.

                                                    Three Months Ended
                                                         March 31,
                                                    2010          2009
                                                ------------  ------------
Net revenue                                     $ 54,149,272  $ 45,124,014
Cost of revenue                                   51,413,280    42,745,140
                                                ------------  ------------
     Gross profit                                  2,735,992     2,378,874
                                                ------------  ------------

Operating expenses:
  Selling and marketing                              198,400       160,829
  General and administrative                         392,310       370,982
                                                ------------  ------------
     Total operating expenses                        590,710       531,811
                                                ------------  ------------

Income from operations                             2,145,282     1,847,063

Other income (expenses):
  Interest income                                     32,585         1,363
  Interest expenses                                  (39,551)      (60,581)
                                                ------------  ------------
     Total other expenses                             (6,966)      (59,218)
                                                ------------  ------------

Income before income taxes                         2,138,316     1,787,845

Income taxes                                         584,516       495,102
                                                ------------  ------------

Net income                                         1,553,800     1,292,743

Less: Net income attributable to noncontrolling
 interests                                            25,354       131,560
                                                ------------  ------------

Net income attributable to shareholders of
 China Auto Logistics Inc.                      $  1,528,446  $  1,161,183
                                                ============  ============

Earnings per share attributable to shareholders
 of China Auto Logistics Inc. - basic and
 diluted                                        $       0.08  $       0.06
                                                ============  ============

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

Contact Information

  • Contacts:

    US Investors
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642

    Ken Donenfeld
    Tel: 212-425-5700
    Fax: 646-381-9727