Wednesday, September 23, 2009

Wonder Auto Tech puts cash to good use (WATG)

AlphaNinja - I'll come back if I can find some more info on this purchase.

Chinese auto supplier Wonder Auto Technology (WATG) spent $12 of its $31million in unrestricted cash on Friend Birch, a road and shaft maker. It adds to WATG's capacity in this segment, which is currently strained. And to my liking, it appears to be a 17% return annually based on the purchase price:

Mr. Qingjie Zhao, Chairman and CEO of Wonder Auto Technology, Inc. commented: "This acquisition will bring us about five million in extra capacity, which will greatly ease the pressure of our limited capacity at the moment for our rods and shafts. It is forecasted that this acquisition will provide us with an extra net income of two million dollars in the next 12 months. What's more, we achieved this acquisition by our own capital and this currently demonstrates that we have a healthy cash flow that satisfies the capital needs for our daily operating and expansion activities."

No comments:

Post a Comment