China auto logistics revenues rose 35.4% in Q1

Reporting continuing strong growth in the Company's first quarter ended March 31, 2009, China Auto Logistics Inc. said today that revenues in the period increased 35.4% to $45,127,141 compared with $33,336,374 in the first quarter last year.

Net income attributable to the Company in the quarter rose 10.09% to $1,161,183 or $0.06 per share on 18.1 million weighted average shares outstanding, compared with $1,054,761, or $0.09 per share on 11.7 million weighted average shares in the same quarter last year.

One of China's leading importers of luxury automobiles, originator of three of China's leading automobile websites, and a top provider of one-stop auto related logistics services and dealer financing, the Company said it recorded a large jump in luxury car sales in the quarter, as well as higher vehicle costs. This generated an approximately 15% increase in gross profits compared with the same period last year, with somewhat smaller gross margins.

Luxury Auto Sales Buck Predicted Decline

Accounting for approximately 98% of the Company's first quarter revenues, luxury imported auto sales grew 37.19% compared with the same period last year, as the number of units sold in the quarter climbed roughly 24% to 559 vehicles compared with 451 car sales in the prior year quarter. Further, the average selling price per unit increased nearly 11% from $71,244 to $78,858, indicative of the continuing strong preference among affluent Chinese consumers for bigger cars, especially SUVs, despite the economic environment and higher prices.

While auto sales grew in the quarter, the cost of revenue also grew nearly 37%. Noting that auto prices are solely determined by suppliers, the Company explained it continuously aims to improve gross margins through better relationships with suppliers, batch orders and other measures. Nevertheless, it sees the greatest opportunity for future margin improvement in the continuing expansion of the Company's high margin services businesses.

Services Businesses Contributed 43% of 2009 First Quarter Operating Income

Despite contributing only 2.3% of total sales, the Company's website, financing and auto related services businesses contributed 43% of first quarter income from operations. Impacted by the economy, sales of Automobile Import Value Added Services decreased compared to the first quarter last year, but rose compared with the final quarter of 2008. Financing services sales were similarly affected in the quarter, but rose slightly compared with the same quarter in 2008 and were more than double the sales achieved in the preceding fourth quarter of 2008. The sales growth in web-based advertising services was much stronger, advancing nearly 34% over the same quarter last year and contributing 26% to 2009 first quarter income from operations.