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    Sorl Auto Parts Inc. - No Stopping Here

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    sommer_ronald5741
    SORL AUTO PARTS, INC. Develops, manufactures and distributes automotive air brake valves and related components. The company has received delegations from Brazil, india, Russia and the United States. The average of the 1, 3, and 5 year EPS (basic) growth rates is a healthy 29.2%.

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    Sorl Auto Parts Inc. - No Stopping Here

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    sommer_ronald5741
    106 views2 pages
    SORL AUTO PARTS, INC. Develops, manufactures and distributes automotive air brake valves and related components. The company has received delegations from Brazil, india, Russia and the United States. The average of the 1, 3, and 5 year EPS (basic) growth rates is a healthy 29.2%.

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    SORL AUTO PARTS, INC. Develops, manufactures and distributes automotive air brake valves and related components. The company has received delegations from Brazil, india, Russia and the United States. The average of the 1, 3, and 5 year EPS (basic) growth rates is a healthy 29.2%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    106 views2 pages

    Sorl Auto Parts Inc. - No Stopping Here

    Uploaded by

    sommer_ronald5741
    SORL AUTO PARTS, INC. Develops, manufactures and distributes automotive air brake valves and related components. The company has received delegations from Brazil, india, Russia and the United States. The average of the 1, 3, and 5 year EPS (basic) growth rates is a healthy 29.2%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Measured Approach

    SORL AUTO PARTS, INC. (NASDAQ:SORL) Data as of: January 8, 2010


    Industry: Auto & Truck Parts

    Current Data
    Current Price $10.31 PEG 0.9
    Market Cap ($M) $188.5 EPS TTM ($) $0.52
    Shares Outstanding (M) 18.2 P/E TTM 19.8X
    Institutional Holdings % 6.9% EPS Estimated 2009 ($) $0.59
    Insider Holdings % 62.1% P/Estimated EPS 17.6X
    Beta 2.35 MA Value ($) $22.0
    0
    Latest Quarter Reported 09/30/200 Dividend Yield % 0.0%
    9

    Based on filings with the Securities and Exchange Commission (SEC),


    through its 90% ownership of the Ruili Group Ruian Auto Parts Co.,
    Ltd., a sino-foreign joint venture (the "Joint Venture"), SORL Auto Parts,
    Inc. (the "Company") develops, manufactures and distributes
    automotive air brake valves and related components to automotive
    original equipment manufacturers, or OEMs, and the related
    aftermarket both in China and internationally. Installed on the chassis,
    air brake valves include a collection of various air brake components
    using compressed air and functioning as the execution device for
    service braking and parking braking. The Company's products are
    principally used in commercial vehicles weighing over three tons, such
    as trucks and buses.

    The company has an established sales network of 28 authorized


    distributors throughout China selling to companies such as FAW
    Qingdao Automobile Works, First Auto Group, Dongfeng Axle, Beiqi
    Foton Motors, Zhucheng Automobile Works, and Liuzhou Special Auto
    Manufacturing. The company’s major international customers include
    Golden Dragon Auto Spare Parts, ITM, LIL/MILA, Makrotech, Polmo and
    Fota.

    Sorl seeks to expand its international customer base and has received
    delegations from Brazil, India, Russia and the United States. The
    company has four authorized sales centers in Australia, United Arab
    Emirates, India and the United States with additional offices slated to
    open. Sorl projects exports will increase by 30% in 2010.

    By The Numbers

    • The PEG ratio for SORL (0.97) is favorable. SORL seems valued
    at a discount with one of the lowest PEG ratios in the Auto &
    Truck Parts industry

    Please visit http://measuredapproach.wordpress.com for important disclosures.


    © Copyright 2009 Ronald Sommer. All Rights Reserved.
    • The average of the 1, 3, and 5 year EPS (basic) growth rates is a
    healthy 29.2%
    • Debt to Equity is 0.0%
    • The average of the 1,3, and 5 year Revenue growth rates is a
    string 23.83% and in line with the EPS growth rate
    • Quarterly net Revenues are accelerating
    • Quarterly EPS is accelerating
    • Long-term debt ($0.00) is less than net current assets
    • Both the Quick Ratio and the Current Ratio indicate financial
    strength
    • Inventory to sales grew to 14.59% in FY08 from 7.08% in FY07
    (This is a negative)
    • ROE declined to 10.3% in the TTM ending 9/2009 from FY08
    15.2%
    • SORL is doing a good job in comparison to its peers with a
    Return on Assets, Return on Equity, and Revenues Per Employee
    • SORL is one of the more profitable companies in the Auto &
    Truck Parts industry with a net margin of 8.8%. Its operating
    margin and net margin are among the strongest of any peer
    while its gross margin is above the industry median

    Conclusion
    Sorl Auto Parts, Inc. is a strong candidate to play the industrial
    expansion in China. Air brakes are a niche product but essential in the
    manufacture of trucks and busses. The company is already the leading
    manufacturer of air brakes in China. We rate SORL a buy at current
    price levels.

    Disclosure: Author has a long position in SORL.

    Please visit http://measuredapproach.wordpress.com for important disclosures.


    © Copyright 2009 Ronald Sommer. All Rights Reserved.

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