Wonder Auto Technology, Inc.
(NASDAQ: WATG)
February 2008
1
Safe Harbor Statement
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This presentation includes or incorporates by reference statements that constitute forward-
looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements relate to future events or to our future financial performance, and involve known
and unknown risks, uncertainties and other factors that may cause our actual results, levels
of activity, performance, or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these forward-looking
statements. These statements include, but are not limited to, information or assumptions
about revenues, gross profit, expenses, income, capital and other expenditures, financing
plans, capital structure, cash flow, liquidity, management’s plans, goals and objectives for
future operations and growth. In some cases, you can identify forward-looking statements by
the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other
comparable terminology. You should not place undue reliance on forward-looking statements
since they involve known and unknown risks, uncertainties and other factors which are, in
some cases, beyond our control and which could materially affect actual results, levels of
activity, performance or
achievements.
We do not intend or assume any obligation to update any of these forward-looking statements.
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Leading
Automotive Parts
Supplier
Established in 1996, we are now the 2nd largest alternator and starter
manufacturer in China.
China is currently the 2nd largest automotive market in the world and is
poised to become the largest market.
Customers
Our customer base is continuously expanding and includes Beijing Benz-
Daimler Chrysler, Beijing Hyundai, Nanjing Fiat, Nanjing MG, Shanghai
General Motor and Shenyang Mitsubishi.
Facilities
We have a 50, 000 square meter facility in Jinzhou City.
We operate four alternator assembly lines and four starter assembly
lines.
We increased capacity to 4.0 million total alternators and starters units
from 3.2 million in 2006.
Employees
We currently employ 513 people, of which 71 are in R&D and have
nearly 50 patents.
Company Overview
High Quality
Products
We target the mid- to small-engine market – the largest high-growth
vehicle segment in China.
We offer over 150 different models of alternators and over 70 different
models of starters.
* As of December 31, 2007
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Key Investment Highlights
Leading Market Position
Strong Collaborative Relationships with Top Tier Customers
Proven Track Record of Growth and Profitability
Experienced Management Team
Large and Growing Chinese Automotive Market Opportunity
#1
#2
#3
#4
#5
4
Attractive Industry Dynamics
China is now the 2nd largest auto market in the world.
Passenger car output in China has been growing at 37.4% CAGR from 1999 to 2006.
There were 257 million vehicles in the U.S., representing more than 650 cars per 1,000
people; while there were 37 million vehicles in China, representing less than 30 cars per
1,000 people in 2006.
Source: International Organization of Motor Vehicle Manufacturers
Passenger Car Output
5
Sustainable Long-term Growth
Growing GDP per capita
Increasing urbanization
Growth of highway
infrastructure
The developing automotive
financing system
Favorable government
policies
Source: National Bureau of Statistics of China
Note: RMB/US$ exchange rate as of the last trading day of each fiscal year
Low Vehicle Ownership is Poised for Growth
Key Market Growth Drivers
6
Focus on Higher Growth Segments
Migration from small to mid-
size Engine Market
Rapidly growing sales of mid-
sized engine passenger cars:
Better status
Better driving ability
Discount on price
Source: China Automotive Technology & Research Center
Passenger Car Market in China
Growth in mid-sized eclipsed small-sized
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Leading Market Position
Mission Statement
Same Performance with the Lower Price;
Same Price with the Better Performance
Well recognized brand name
Larger scale and critical mass
Stronger R&D capabilities
Advantages over Local
Competitors
Developed low-cost supplier
network
Competitive local cost structure
China-based R&D efforts, closer
to the end market
Advantages over Foreign
Competitors
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High power output / weight ratio
Long product service life
Durability and reliability under harsh operating
environments
Mission Critical Products
Mission critical automotive components
Over 150 models
5 different series
Over 70 models
5 different series
Starter
Alternator
9
Established Low-cost
Supply Chain Network
The majority of our suppliers are located within
300 km of our manufacturing facilities
Shorter lead times
Lower shipping costs
Ease of quality control and monitoring
Long-term relationships and exclusivity
arrangements with key suppliers
Meeting rigorous quality assurance standards
and demanding delivery schedule
Multiple sources exist for most raw materials
and components
Vertically integrate to capture key components
Sourcing Stability
Competitive Raw Materials & Components Cost
10
Automotive manufacturing
capabilities accumulated over
the last 10 years
Developed customized
assembly lines and equipment,
to provide
Manufacturing flexibility
Process optimization
Overall quality assurance
Proprietary Manufacturing
Processes
Shorter lead times
Reduced overhead and
equipment downtime
Reduced material wastage
Ability to handle frequent
product change-over
Competitive Manufacturing Cost
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Strong R&D and Customer
Relationships
1) Jinzhou
Enhance existing products
Improve manufacturing
processes and cost
reduction
Test of new products
2) Beijing
Develop new products
Explore future technologies
Achieve higher output
power, smaller size, lower
weight, longer useful life
and greater resilience in
harsh operating
environments.
2 R&D Centers
2 R&D centers with 71 professionals including 10 foreign experts
Sustainable long-term collaborative customer relationship - actively
involved in the customers’ product development cycle, from initial design to
sample delivery and mass production
Early access to customers and designs - 31 joint development programs
in 2007, up from 21 in 2006
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Expanding Customer Base
Expansion Customers
Core Customers
No. of Customers
30
2001
50
2007
13
Strengthen
R&D
Capabilities
Continue Focus
on Low-
Emission
Vehicles
Vertical
Integration
Increase
Production
Capacity
Expand Sales
into
International
Markets
New Products
to Match
Consumer
Trends
Growth Strategy
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Experienced Management Team
15
Name
Title
Age
# of Years at
Wonder
Qingjie Zhao
Chairman, CEO and President
50
10
Meirong Yuan
Director, CFO and Treasurer
36
5
Seuk Jun Kim
VP New Product Development
51
10
Robert
Forreider
VP Sales and Marketing in North America
53
1
Financial Overview
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Financial Highlights
Robust revenue growth
Improved gross margin
Industry leading operating margin
Net cash flow from operations exceeded US$12 million in
2007
Strong balance sheet providing financial flexibility
Clear visibility of future performance
2008 Revenues could exceed US$140 million
with Net Earnings over US$20 million
17
Top Line Growth
($ in Millions)
Source: Public Filings
18
Net Income Generation
($ in Millions)
Source: Public Filings
19
Balance Sheet
($ in Millions)
Source: Public Filings
31-Dec-06
31-Dec-07
Audited
Unaudited
Current Assets
56.1
99.3
Cash and Restricted Cash
13.1
34.7
Non-Current Assets
21.9
43.1
Total Assets
78.0
142.4
Current Liabilities
37.2
43.1
Secured Short-Term Debt
14.3
10.3
Non-Current Liabilities
-
-
Secured Long-term Debt
-
17.6
Shareholders’ Equity
38.2
78.4
Total Liabilities and Equity
78.0
142.4
Current Ratio
1.5
2.3
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Key Event Highlights
Acquisitions
The remaining 79.6% of Jinzhou Wanyou acquired in April 2007.
Expanding product mix by adding suspension parts and alternators
and starter subcomponents.
On January 1, 2008, acquired 50% of Jinzhou Hanhua Electric Fitting
Ltd., a manufacturer of armatures for starters.
Key Contract
On Nov. 26th, 800,000 alternators contract with an international
auto parts procurement center for three years.
Approximately US$11 million per year over the three-year contract
period.
Private Placement
On December 11, 2007, sold 3,000,000 newly issued shares of
common stock at $8.65 per share to raise gross proceeds of
US$25,950,000.
Use the proceeds for working capital and the purchase of additional
R & D equipment and production assets.
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Key Investment Highlights
Leading Market Position
Strong Collaborative Relationships with Top Tier Customers
Proven Track Record of Growth and Profitability
Experienced Management Team
Large and Growing Chinese Automotive Market Opportunity
#1
#2
#3
#4
#5
22
THANK YOU!
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