JINZHOU, China, Nov. 9 /PRNewswire-Asia-FirstCall/ -- Wonder Auto Technology, Inc. (Nasdaq: WATG; "Wonder Auto" or "the Company"), a leading manufacturer of automotive electric parts, suspension products and engine components in China, today announced that its subsidiary Jinzhou Halla Electrical Co., Ltd. ("Jinzhou Halla") has signed a joint venture agreement with Korean Teawon Dianzhuang Corporation ("Teawon Dianzhuang") under which the parties will establish a joint venture named Jinzhou Wonder Teawon Dianzhuang Co., Ltd. ("Wonder Teawon") around December 1, 2009 at the West Sea Development Zone Auto Parts Industrial Park of Jinzhou City, Liaoning Province. Wonder Teawon is expected to start operation in June 2010 and its main products will include solenoid switches for automotive starters, alternator collector rings, starter commutators and other automobile parts. Jinzhou Halla will make a cash contribution of US$2 million in exchange for a 75% equity interest in Wonder Teawon and Teawon Dianzhuang will contribute technology in exchange for a 25% equity interest in Wonder Teawon.
Solenoid switches are a key component of starters, the production of which requires a number of key technologies. Solenoid switches and commutators generally account for more than 25% of the total material cost of a starter.
With an operating history of several decades, Teawon Dianzhuang is one of the leading electromagnetic switch manufacturers in South Korea. Teawon Dianzhuang’s main customers include internationally renowned suppliers of automotive alternators and starters, and its products are exported to the United States, Mexico, India and Bulgaria, as well as other European and American regions. Teawon Dianzhuang holds a number of patents related to electromagnetic switch products. Teawon Dianzhuang will provide full technical support to Wonder Teawon.
"The joint venture with Teawon Dianzhuang marks Wonder Auto’s continuous effort to enhance operational margin, cost performance and market competitiveness," Wonder Auto’s Chairman and CEO Mr. Zhao, Qingjie, commented. "We believe that Wonder Teawon’s products will bring further performance and cost-efficient advantages to Wonder Auto’s starter and alternator products in the market competition. At the same time, our company is also actively looking for opportunities to partner with other national and international major auto part manufacturers and suppliers in order to maintain Wonder Auto’s rapid growth in the future."
About Wonder Auto
Based in Jinzhou City, Liaoning, China, Wonder Auto Technology, Inc., through its Chinese subsidiaries, designs, develops, manufactures and sells automotive electrical parts, suspension products and engine components. Wonder Auto ranked second and third in sales revenue in the Chinese market for automobile alternators and starters in 2008, respectively. Wonder Auto’s products are used in a wide range of passenger and commercial automobiles with special focus on the fast-growing small- to medium-engine passenger vehicle market. For more information, please log on http://www.watg.cn .
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, our future operating results, our expectations regarding the market for our products and our new joint venture to be formed with South Korea Teawon Dianzhuang Corporation (which may not produce the desired benefits as contemplated or at all), as well as all assumptions, expectations, predictions, intentions or beliefs about our relative strength and about future events. Forward-looking statements can be identified by the use of forward-looking terminology such as "will," "believe," "expect," "may," "should," "potential," "continue," "anticipate," "future," "intend," "plan," "believe," "is/are likely to," "estimate" or similar expressions. Such information is based upon assumptions and expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions and expectations are inherently subject to uncertainties and contingencies beyond our control and based upon premises with respect to future business decisions, which are subject to change. We do not undertake to update the forward- looking statements contained in this press release, except as required under applicable law. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"), and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC’s electronic data gathering analysis retrieval system at http://www.sec.gov . All information provided in this press release and in the attachments is as of the date of this press release.
For more information, please contact:
Patrick Sun
Investor Relations Manager
Tel: +86-10-8478-5339
Cell: +86-153-1161-1742
Email: ir@watg.cn
