SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

November 15, 2010 07:30 ET

China Auto Logistics Reports 2010 Third Quarter Net Income Grew 38% Year Over Year on a 28% Increase in Revenues

90% Gain in Year Over Year Q3 Web-Based Advertising Profits Reflects Growing Popularity of Auto-Related Sites; Investor Conference Call to Be Held Tuesday, November 16, at 8:00am ET

TIANJIN, CHINA--(Marketwire - November 15, 2010) - Primarily reflecting the growing popularity of the Company's auto-related websites and recently introduced "CALI" portal, China Auto Logistics Inc. (the "Company") (NASDAQ: CALI), a leading developers of destination 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, today announced continuing strong results in its third quarter and nine months ended September 30, 2010.

Financial Highlights:

--  Third quarter net income advanced 38.3% to $2,223,418 or $0.12 per
    share compared with $1,607,646 or $0.09 per share in the 2009 quarter.
--  Web-based advertising operating profits grew 90% year over year to
    $1,575,814 in the 2010 third quarter, and contributed 51% of operating
    income in the period.
--  Revenues grew 28% to $67,475,209 in the 2010 third quarter compared
    with $52,826,034 in the 2009 three month period.
--  In the first nine months of 2010, on a 23.33% increase in revenues to
    $176,445,062 from $143,063,820 in the year ago period, net income
    increased 37% to $5,613,062, or $0.31 per share, compared with
    $4,094,056 or $0.23 per share in the prior year period.

On Track for Continuing Growth and Another Record Year

Mr. Tong Shiping, CEO and Chairman of the Company, stated, "In the 2010 third quarter our broad spectrum 'auto living' websites again led the strong growth we achieved and, in fact, all of our auto-related services posted higher results in the quarter, which led to another sequential improvement in our overall gross margin." He added, "With our recently completed acquisition of and plans to expand coverage of our sites to 35 cities by year end on track, I'm very confident of continuing strong growth in this segment going forward, and another record year for the Company in 2010."

Expanding Web-based Advertising Contribution

During the quarter the Company expanded coverage of its auto-related websites to nine additional cities, bringing the total number of cities now covered in China to 29. The Company plans to expand to 35 cities by year end and 60 cities by the end of 2011, at which time it expects it will reach about 70% of China's auto-buying public.

In July, the Company reported that, aimed at buyers of and dealers in domestic autos, grew from an average of 2 million daily unique hits at the start of the year to an average of 6.5 million daily unique hits, with up to 8 million daily viewers. This make it the 125th most popular site in China out of the country's more than 3 million websites, according to, China's leading site for ranking website growth and popularity. Additionally, the Company's website, serving imported auto purchasers and dealers throughout China, continued as the number one site in this category. Overall, the Company reported its sites have attracted more than 1200 advertisers.

Further boosting the Company's Internet presence was the launch in April this year of its portal, through which visitors may access all of its automotive sites including, one of China's most popular consumer Internet destinations. Visitors to the site are attracted by discount cards offered for a variety of automotive services and purchases, including its highly popular 5% discounts on gas purchases. Earlier this month, the Company announced it has completed the purchase of "Goodcar" for $5.9mm in cash and stock, and brought on board as a key new member of its senior management team "Goodcar" CEO, Mr. Yuan Guohua. Mr. Yuan's track record of success in building and managing e-commerce platforms is expected to further advance the Company's plans for the significant expansion of its Internet platforms and e-commerce development. The Company reiterated that plans to rapidly expand "Goodcar" discounts to consumers in additional cities are being implemented in cooperation with China's leading gas distributors.

Well Positioned for Growth

"We clearly have developed a solid core of popular sites aimed at a broad audience, from dealers and purchasers of domestic and imported autos to China's new automobile drivers whose numbers are growing daily," stated Mr. Tong. "Further," he said, "we are operating in the world's number one auto market where the growth in auto purchases is expected to continue at a very rapid pace. Additionally, China's population continues to turn to the Internet in increasing numbers for information and shopping, already catapulting the country into first place worldwide in the number of Internet users, with considerable room for continuing growth."

He concluded, "While we fully anticipate rapidly expanding our leadership in the automotive space with continuing advertising growth, we remain focused on developing new web-based auto-related services with a continuing goal of seeing 50% of web-related revenues coming from these services and 50% from local and national advertising growth."

Other Financial Highlights

The Company reported that imported luxury auto sales continued to grow in the third quarter, increasing to $64.87mm from $51.39mm in the same period last year, and reached $170.04mm at the end of nine months compared with $139.34mm in the nine month period a year ago. Net income in the 2010 third quarter from auto sales was $1.08mm and $3.45mm at the end of nine months in 2010. The Company noted that, in the third quarter, auto unit growth decreased to 670 units from 697 in the same quarter a year ago, but the average price per unit grew 31.87% to $96,853 from $73,443. This reflected the Company's focus on importing high-end luxury autos, where it believes there is a better opportunity for increasing profit margins.

The Company reported further that as the contribution to net income in the third quarter from web-based advertising services increased to 2.5% of revenue, and the combined contribution of advertising services and all other auto-related services increased to 3.85% of total revenue, overall gross margins in the quarter grew 39 basis points year over year to 5.55% from 5.16% in the year ago quarter.

Web-based advertising services led growth in the third quarter as operating income grew from $.83mm to $1.58mm year over year on revenues that grew from $.93mm to $1.69mm. Through the first nine months of 2010, web-based advertising revenues grew 73% year over year to $3.92mm, producing $3.62mm in operating income, compared with $2.0mm in the year ago period.

During the third quarter, the Company's newest service, Auto Mall Management, contributed $188,696 to operating income on $239,475 in sales. Financing Services added $373,811 to operating income in the quarter, an increase from $297,868 in the prior year, on revenues that grew 35% to $461,007. The Company noted that its aggregate credit lines to support its Financing Services business grew from $36mm at year-end 2009 to $51mm as of September 30, 2010. The contribution to revenues from Automobile Import Value Added Services in the third quarter of 2010 was $198,831, a year over year gain of 27.54%, and operating income from this service business increased to $175,022 from $130,432 in the third quarter last year.

Conference Call Invitation

The Company will discuss third quarter results during a live conference call and webcast on Tuesday, November 16, 2010, at 8:00am ET.

To participate in the call, interested participants should call 1-877-941-4778 when calling within the United States or 1-480-629-9763 when calling internationally. Please ask for the China Auto Logistics 2010 Third Quarter Earnings Conference Call, Conference ID: 4385117. There will be a playback available until November 23, 2010. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4385117.

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


About China Auto Logistics Inc. (CALI)

With 2009 sales of approximately $215 million, China Auto Logistics Inc. operates, which rapidly has become one of the leading automobile portals for car dealers and consumers of vehicles and auto-related services throughout China. The Company 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 125 most visited sites in China. Recently, the Company completed the acquisition of, a highly popular internet destination for auto drivers attracted by the discount cards offered on the site for a variety of automotive products and services including 5% discounts on gas purchases. 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 visit

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         Nine Months Ended
                            September 30,             September 30,
                      ------------------------  --------------------------
                          2010         2009         2010          2009
                      -----------  -----------  ------------  ------------
Net revenue           $67,475,209  $52,826,034  $176,445,062  $143,063,820
Cost of revenue        63,730,308   50,107,679   166,930,262   135,604,333
                      -----------  -----------  ------------  ------------
   Gross profit         3,744,901    2,718,355     9,514,800     7,459,487
                      -----------  -----------  ------------  ------------

Operating expenses:
  Selling and
   marketing              236,707      171,590       622,234       475,737
  General and
   administrative         389,487      270,883     1,074,159       858,487
                      -----------  -----------  ------------  ------------
    Total operating
     expenses             626,194      442,473     1,696,393     1,334,224

Income from
 operations             3,118,707    2,275,882     7,818,407     6,125,263

Other income
  Interest income           5,279        4,824        43,446         8,585
  Interest expenses       (64,787)     (45,690)     (132,529)     (152,107)
  Miscellaneous            (7,151)           -        (1,223)            -
                      -----------  -----------  ------------  ------------
    Total other
     expenses             (66,659)     (40,866)      (90,306)     (143,522)

Income before income
 taxes                  3,052,048    2,235,016     7,728,101     5,981,741

Income taxes              794,136      573,941     2,029,386     1,572,244
                      -----------  -----------  ------------  ------------

Net income              2,257,912    1,661,075     5,698,715     4,409,497

Less: Net income
      attributable to
      interests            34,494       53,429        85,645       315,441
                      -----------  -----------  ------------  ------------

Net income
 attributable to
 shareholders of
 China Auto Logistics
 Inc.                 $ 2,223,418  $ 1,607,646  $  5,613,070  $  4,094,056
                      ===========  ===========  ============  ============

Earnings per share
 attributable to
 shareholders of
 China Auto Logistics
  basic and diluted   $      0.12  $      0.09  $       0.31  $       0.23
                      ===========  ===========  ============  ============

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

Contact Information

  • Contacts:
    US Investor
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-520-8741

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