SORL Auto Parts Inc. (SORL)

[pickinstocks]

E-mail from IR, not much insight


My email:
As per the recent PR, it states that the contract with Shandong Wuzheng SORL was for 20 million RMB or about 2.93 million USD. It also says that Shandong Wuzheng is expecting 60,000 trucks in 2010. I don’t know how many of these trucks will be distributed with SORL parts, but if it was, say, 80% of them like they expect with Shandong KAMA, that’s 48,000 trucks. With a 2.93 million dollar contract, that equals about 61 USD per truck(2.93 million/48,000 trucks). Is this reasonable for a truck company? I know I just had a bearing replaced in my car and that part alone was a couple hundred dollars. Maybe if I better understand how they determine these contract costs, I can better understand the value they are getting out of this.

IR Response:
It is difficult to compare prices and costs in the US versus China. SORL does not provide a per unit breakdown of prices or costs, and each contract might be different.