Wonder Auto Technology, Inc. (NASDAQOTH:WATG)

Fraud!

This is a tracking portfolio of all CAPS-ratable tickers in the Chinese RTO/SPAC space (i.e., companies that listed without filing an IPO).

Wonder Auto Technology, Inc. went public via a reverse merger in 2006. The company is based in China.

High Public Opinion with High Relative Strength

Recent acquisition of safety belt manufacture will help with revenue growth in a fast growing auto industry in China and safetly regulations bound to increase if market forces doesn't already drive it up in time.

Earning estimates are up and Wonder is at the right price right now. Decent P/E makes it a good buy. Getting in on a dip and expecting good things to eventually happen here. The fundamentals alone show that this is a good prospect.

Nice dip following good earnings and run-up.

All those potential customers will have to spend money, cars will probaly become status symbol for some, and the more cars sold the betterfor Wonder

WATG may be in a good position to grow and increase earnings as an auto parts supplier in the rapidly expanding China auto market. Now the largest auto market in the world.

Great fundamentals. Upward earnings estimates.

Smart board, right segment of the market,balancesheet fine, profit upward revised.
Targetprice 12$ by the end of 2010!

This is a brief outline of how and why I selected WATG to outperform:

(1) WATG appears maintained a floor at $7 since May and has otherwise clearly oscillated in the $7 to $9 range, maintaing an equilibrium about $8.

(2) WATG almost reached $16 a year ago and was above $12 last May.

(3) WATG broke out of its $9 ceiling in September.

(4) WATG's has a relatively low P/E ratio at about 11.

(5) WATG's revenue is growing at a rate of about 40% and income is growing at about 23%.

(6) WATG is part of the nascent Chinese automotive industry, which is expect to grow significantly with the Chinese middle class's demand for cars that is already the largest market in the world.

(7) WATG has expanded its automative parts portfolio significantly with the recent acquisition of a leading Chinese airbag and seatbelt maker.

(8) Some 11% of WATG's sales occur outside of China and they are growing at about 17% per year.

In short, the Chinese automotive industry appears to be a very good place to invest. WATG's is available well under $9, while it can be expect to approach $10 with months.

Great growth, good fundamentals, pretty low now.

low cost electric cars for chinese market

Their website says China's auto industry grew 55% in February. WATG is quickly growing company in a quickly growing industry in a quickly growing country.

It also has a high percentage of shares held by insiders, and a good IBD rating.

Electric cars are the future. This industry is not going away.

Great growth potential and reasonable valuation in the fastest growing auto market.

Wonder Auto is the number 2 alternator and starter manufacturer in China. Wonder Auto's main customers include Beijing MOBIS Auto Parts & Components Co., Ltd, Harbin Dongan Automotive Engine Co., Ltd, Shenyang Xinguang Huachen Auto Engine Co., Ltd, SWT, Shenyang Aerospace Mitsubishi Motors Engine Co., Ltd., Shanghai VW and Weifang Diesel Engine. They are currently trading at 2.7x tangible book (with manageable debt), 11.9x trailing earnings, and 8.2x forward earnings. China is now the largest car market in the world so this is pretty much a no-brainer. Many of the companies in this sector are not priced attractively any more, but engine manufacturer China Yuchai (CYD) and gas station chain China Integrated Energy (CBEH) still look cheap.

Recent news:
Thursday, 11 Feb 2010 07:03am EST
Wonder Auto Technology, Inc. announced that for the first quarter of 2010, it expects sales revenue to be approximately $58.0 million.

Thursday, 28 Jan 2010 08:00am EST
Wonder Auto Technology, Inc. announced that for fiscal 2009, it expects to exceed its previous guidance of $208 million in sales revenue and $23 million in net income.

Tuesday, 19 Jan 2010 08:00am EST
Wonder Auto Technology, Inc. announced that the Company closed an acquisition recently. After this acquisition, Wonder Auto becomes the largest shareholder of Applaud Group Limited, who is the controlling shareholder of Jinheng Automotive Safety Technology Holdings Limited (Jinheng).
http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=WATG.O&timestamp=20100211120300

Looks very promising as a good growth play out of China. Small cap with plenty of running room could bring about good returns in the coming year or so.

high growth