Tag - Watg

Manufacturer of automotive electrical and suspension parts in China Wonder Auto Technology, Inc. (Nasdaq:WATG) said today that its subsidiary, Jinzhou Halla Electrical Equipment Co., Ltd., secured a 4-year supply agreement and received supply orders for its starter and alternator products from a major North American OEM automotive manufacturer.  Shares gained 4.6%, or $0.37, to $8.50 in pre-market trading.

For detailed price information and recent news stories about China Wonder Auto Technology, click WATG.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are deep in the red amidst recession fears and an interest rate cut.
 
At 10:19 a.m. ET, the small-cap index had fallen 8.88 points, or 1.32%, to 664.30. The Dow Jones Industrial Average (INDU) was down 230.13 points, or 1.90%, to 11,869.17.

Stocks small and large are posting declines due to fears of a U.S. recession and sell-offs on some overseas exchanges.

Increased worries of an economic recession motivated the U.S. Federal Reserve to make an emergency cut in the federal funds rate to 3.50% from 4.25%.

The Fed has not moved to lower its target rate between meetings since September 2001, in the wake of the terrorist attacks. Its next regularly scheduled meeting is on Jan. 29 and 30.

“The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth,” the Fed said in a statement. “While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.”

The Russell 2000 opened with a large drop, losing more than 3% right of the bat, with the Dow posting a slightly smaller loss. But stocks trimmed those numbers and the roles reversed, the Dow now posting a deeper decline.

Wonder Auto Technology, Inc. (Nasdaq: WATG) shot to a 52-week high after investment bank Brean Murray reiterated a “buy” rating on the China-based maker of electrical auto parts. The investment firm also raised its price target on Wonder Auto to $16 from $13 to reflect increased demand and international market penetration.

Analyst Alex Xu said Wonder’s 2008 revenue guidance of $140 million is achievable and has room for upside.

In Thursday’s trading, WATG shares rose 8.05%, or $0.89, to $11.94. Over the last 52 weeks, shares have ranged from $4.50 to $12.21.

The Russell 2000 (NYSE: IWM) futures are little changed but the small-cap index might move up slightly.

Stocks posted large gains on Friday, when shoppers flocked to U.S. retailers for holiday shopping and post-Thanksgiving Day bargains. Sales on “Black Friday,” as it has come to be known, were 8.3% higher than a year ago, according to ShopperTrak, a provider of shopper traffic counting information software.

However, the National Retail Federation said that sales per individual shopper were down.

That tells us that the discounts offered by retailers succeeded in enticing more shoppers to visit the stores, but individual consumer spending was lower due to the effects of the slump in the U.S. housing sector, high energy prices and a credit squeeze.

No major economic releases are scheduled for today.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• Cyclacel Pharmaceuticals Inc. (CYCC), up 9%.
• Wonder Auto Technology, Inc. (WATG), up 8% on news that the company expects annual profit to increase more than 60%.
• China Fire & Security Group, Inc. (CFSG), up 6% on news it was awarded a $31 million contract.

Biggest percentage losers:

• Cardiome Pharma Corp. (CRME), down 7% on news that it will delay drug trial results.
• NGAS Resources, Inc. (NGAS) down 0.2%.
• Radiation Therapy Services, Inc. (RTSX) down 0.1%.

The rapidly growing demand for motor vehicles by Chinese consumers is putting a charge in Wonder Auto Technology, Inc. (Nasdaq: WATG), a parts maker whose shares have doubled this year.

Shares hit a 52-week high of $9.05 on Thursday Oct. 11, rising in a relatively short period from the 52-week low of $5.10, struck on Aug. 16.

Wonder Auto’s specialty is vehicle electrical systems, specifically alternators and starters. The company—with operations and manufacturing based in Jinzhou City and research-and-development facilities in Beijing—ranked second in sales in the China market for auto alternators and starters last year. The main focus of Wonder Auto is on supplying alternators and starters for autos, especially those with engines with a displacement of less than 1.6 liters. Wonder Auto also makes suspension parts through its subsidiaries.

Sentiment of the analysts who follow Wonder Auto is generally favorable about the company’s outlook, especially since Wonder’s stock moved from over-the-counter to the Nasdaq Global Market on Aug. 9.

The potential for vehicle sales in China is huge. According to the China Automotive Information Net, vehicle sales volume reached 7.22 million units in 2006, including 5.23 million passenger cars. More than two million of the vehicles sold were small cars, with engine displacement in the 1.0- to 1.6-liter range. Vehicle sales are expected to exceed 8.5 million this year—and Wonder Auto appears ready to tap into the demand.

Wonder Auto’s biggest customers have been Beijing Hyundai Motor Co., Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd., Harbin Dongan Automotive Engine Manufacturing Co. Ltd., and Tianjin FAW Xiali Automotive Co. Ltd.

Founded in 1996, Wonder Auto has seen its sales grow from $15 million in 2001 to $72.2 million last year. For 2006, Wonder Auto reported net income of $8.2 million, or $0.40 per share, up from $6.4 million, or $0.37, in 2005.