Piper Jaffray & Co. Downgrades Wonder Auto Technology (WATG) to Neutral
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Piper Jaffray & Co. downgrades Wonder Auto Technology (Nasdaq: WATG) from Buy to Neutral. Price target lowered from $8 to $5.
Piper analyst says, "Downgrading to Neutral on heightened end market uncertainty. We believe the combination of global auto market turmoil, weakened economic activity in China, and falling commodity prices is resulting in increased market uncertainty for Wonder Auto. While we continue to believe that small-engine passenger cars will outperform larger engine sizes in China, broader market uncertainties are likely to lead to choppy, inconsistent order activity from OEMs over the next 6-12 months. Falling commodity prices in this weakened order backdrop are resulting in increased price competition in Wonder Auto's key markets, which is likely to pressure margins in the coming quarters. As a result of these factors, we are lowering our investment rating from Buy to Neutral. We believe WATG's discounted valuation provides support to the shares at current levels, though lacking a positive catalyst in these uncertain market conditions we believe a more cautious stance is appropriate."
Wonder Auto Technology, Inc. (WATG) is a holding company, whose business operations are conducted, through its operating subsidiaries, Jinzhou Halla Electrical Equipment Co., Ltd., Jinzhou Dongwoo Precision Co., Ltd. and Jinzhou Wanyou Mechanical Parts Co., Ltd.
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Top on May 4, 2009 02:37 PMPRESS RELEASE: Wonder Auto Awarded Competitive Bid Contract to Supply Starters to a Top Three Domestic Auto Maker in China - Dongfeng Automotive Co., Ltd. JINZHOU CITY, China, Feb. 3 /PRNewswire-Asia-FirstCall/ -- Wonder Auto Technology Inc. (Nasdaq: WATG; "Wonder Auto"), a leading manufacturer of automotive electrical and suspension parts in China, today announced that one of its subsidiaries-Jinzhou Halla Electrical Equipment Co. Ltd.("Jinzhou Halla"), has won the bid to supply starters to Dongfeng Passenger Vehicle Company ("DFPV"), an affiliate branch of Dongfeng Automotive Co. ,Ltd (´DFAC"). Upon receipt of this acceptance notice, Jinzhou Halla has now become the sole qualified starter supplier to DFPV, which will launch an independent brand passenger vehicle in China by the end of 2010. According to this agreement, 35 sample starters will be delivered to DFPV for laboratory examination and testing on April 25, 2009, and a small batch of starters will be sent from Jinzhou Halla for road testing in the second half of 2009. The total estimated sales volume to DFPV under this agreement will be approximately $20 million, progressively from 2011 to 2015. According to DFPV, the total estimated amount for this emerging passenger vehicle will be up to 1.8 million units for the period 2011 to 2019. Dongfeng Automotive Co., Ltd ("DFAC") is one of the top-three national automakers in China, with the famous brand names of "Dongfeng", "DF-Citroen" and "Yueda-Kia" for its commercial and passenger vehicle products. The emerging passenger vehicle will have a 1.6 L engine, adding to DFAC´s low emission vehicle family. Mr. Qingjie Zhao, chairman and chief executive officer of Wonder Auto commented: "Winning this contract has fully demonstrated our accumulated experience and fame in the low emission vehicle focus, and the outstanding competitiveness of our R&D capability, quality control and cost reduction amongst the tenders. This successful tendering, together with the newly-added contracts from existing customers in 2009, will further strengthen our ability to achieve continuous revenue growth for Wonder Auto for future years."