JINZHOU CITY, China, Jan. 19 /PRNewswire-Asia/ -- 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 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 (HKG: 0872) ("Jinheng"). With this strategic acquisition, Wonder Auto expands into the auto parts business with tremendous growth potential in areas such as automotive safety systems and auto electronic systems.
Mr. Meirong Yuan, CFO of Wonder Auto, commented on the significance of the strategic acquisition of Jinheng:
-- Tremendous market potential benefited from government policies
The major products of Jinheng are passive safety restraint system products, such as airbags and seatbelts. Currently, passive safety restraint system products are optional to OEMs in China. Along with the maturity of China's auto industry and consumers' needs on automobile safety, the management believes that China government will push the implementation of the passive safety rules, as in developed auto industries, for OEMs to install passive safety restraint systems as a mandatory practice. It is expected that the sales revenue of Jinheng will increase exponentially, and it will bring more business growth potential to Wonder Auto.
-- Fully utilize customer base by increasing cross selling
As the first domestic company that can develop automotive engine electronic injection management systems (EMS), as well as its engine used cylinder liners and pistons, Jinheng shares a similar customer base with Wonder Auto. Therefore, Wonder Auto and Jinheng can get win-win achievement of increasing market share from cross-selling. The Company forecasts that, after this acquisition, Wonder Auto's sales channels will cover more than 90% of domestic OEMs in China.
-- Upgrading R&D capability by sharing technologies
Jinheng held the developed technologies and built the advantages of electronic components integration, controlling software development and its own algorithm, which implemented in its airbags and EMS. WATG's new business is developing electric driving motors and auxiliary motors. Consequently, WATG will benefit from upgrading its R&D capabilities after this acquisition. Furthermore, it will also establish the foundation of electronic and electric technologies to meet the requirements of development of alternative energy vehicle parts.
-- Increasing value-added services of Wonder Auto's existing products
This acquisition will establish a foundation for product improvement. For instance, Jinheng focuses on electronic products rather than electric parts, which are the main focus of WATG. Therefore, the combination of electronic and electric technologies will add value to the WATG's existing products.
About Jinheng:
Jinheng Automotive Safety Technology Holdings Limited (Jinheng), listed on Hong Kong Stock Exchange, is a high-tech automotive parts supplier. Main business covers developing, manufacturing and selling relative components of automotive passive safety restraint system (airbag and seatbelt), automotive engine electronic injection management system (EMS) and relative components of diesel engines.
Jinheng, as the first local company that provides auto safety airbag system in the Chinese market and always holds the first position in terms of output and market share of the local China brand since it was founded in 1997, owns complete R&D, production, quality assurance and service systems, as well as one National Vehicle Crash Testing Center. Jinheng has been certified with QS and TS16949 quality system and has 1300 employees, 300 of whom are engineering technicians. Jinheng has developed a multi-loop automotive passive safety product platform and automotive electronic injection management system platform to meet Euro III standards, and also matched special data analysis software for automotive passive safety and engines. Due to holding independent intellectual property of core technology, it has become an enterprise with obvious advantages in strong capacity of technology development in China regarding design, development of automotive passive safety systems and automotive engine electronic injection management systems.
Jinheng has built a complete industry chain of automotive passive safety systems including steering wheel assembly, airbag bodies, covers, electronic control units, clock springs, gas generators and seatbelts. It is also improving the industry chain of automotive engine electronic injection management systems, including electronic control units, harnesses, various sensors, and oil nozzles, as well as oil pumps.
In the Chinese market, it provides more than 40 well-known automobile manufacturers, including Chery, with products for over 58 vehicle models. Furthermore, Joint ventures such as Hainan Mazda, Shenlong Fukang and Shanghai GM are also primary customers. It started to step into the international market in 2006. It has made parts of passive safety systems for European, Southeast Asian, South Asian and West Asian markets and automotive electronic products for East Asia markets. More details on Jinheng Holdings can be found at http://www.jinhengholdings.com/en/index.asp .
Contact information of Jinheng:
Unit 605, 6/F, Beautiful Group Tower, 74-77 Connaught Road Central,
Central, Hong Kong
Tel: 00852-25420223
Fax: 00852-25420280
Email: jinheng_hk@jinhengholdings.com
Management Profile of Jinheng
Mr. Li Feng, aged 47, is the chairman of Jinheng. Mr. Li joined the Jinheng Group in 1997 and is responsible for the overall general management of the Jinheng Group. Mr. Li graduated from the Beijing University of Aeronautics and Astronautics in 1983 with a bachelor's degree in missile designing.
Mr. Xing Zhanwu, aged 46, is the chief executive officer of the Jinheng. Mr. Xing joined the Jinheng Group in 1997 and is responsible for the Jinheng Group's sales and marketing as well as the Jinheng Group's overall business development. Mr. Xing graduated from Northwestern Polytechnical University with a bachelor's degree in machinery manufacture engineering in 1984.
Mr. Foo Tin Chung, Victor, aged 41, has over ten years' experience in the finance and accounting fields. Mr. Foo is the financial controller, qualified accountant, the company secretary and compliance officer of Jinheng. Mr. Foo holds a bachelor's degree in accounting and information system in the University of New South Wales in Australia and completed his master degree in business administration in Australia Graduate School of Management. He is a member of the Australia Society of Certified Practising Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants. He is primarily responsible for the development of the Jinheng Group's financial strategies, accounting and financial reporting and internal control procedures.
About the acquisition:
Wonder Auto Limited, a subsidiary of Wonder Auto Technology, Inc., purchased 20.90% equity interest of Applaud Group Limited from Novophalt (China) Limited with the price of HK$ 62,915,086.00. Yearcity, one of the subsidiaries of Wonder Auto Technology, Inc., acquired 17.46% equity interest of Applaud Group Limited from Wonder Employee Capital Limited, held by Mr. Qingjie Zhao, CEO of Wonder Auto, with the price of HK$ 52,534,671.80. To sum up, WATG holds 38.36% equity interest (at HK$ 115,449,757.80, approx US $14.9M) of Applaud Group Limited, which held 52.2% equity interest of Jinheng. Therefore, WATG holds equity interest of Jinheng indirectly.
After the equity transaction, WATG, as the largest shareholder (holding 38.36%), and 8 other shareholders (natural persons) control Applaud Group Limited. The second largest shareholder has approx 28.5% equity interest of Applaud Group Limited. Mr. Qingjie Zhao is one of the directors of Applaud Group Limited.
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 all assumptions, expectations, predictions, intentions or beliefs 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