Sorl Auto Parts, Inc. (NASDAQ:SORL)

ZHEJIANG, China, May 08, 2020 (GLOBE NEWSWIRE) -- SORL Auto Parts, Inc. (NASDAQ: SORL) (“SORL” or the “Company”), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that at the Company’s special meeting of stockholders earlier today, the stockholders of the Company approved, among others, the Company’s acquisition by Ruili International Inc. (“Parent”), a Delaware corporation, through a merger of the Company with Ruili International Merger Sub Inc., a wholly-owned subsidiary of Parent, as contemplated by the Company’s previously announced Agreement and Plan of Merger (the “Merger Agreement”), dated as of November 29, 2019.

As of the record date of April 2, 2020, the Company had 19,304,921 shares of common stock outstanding that are entitled to vote, of which 15,876,170 or 82.24% were present in person or by proxy at the meeting. 15,393,221 shares, representing approximately 79.74% of the outstanding shares entitled to vote, voted in favor of the proposal to adopt the Merger Agreement. Specifically, 4,033,818 shares, representing approximately 50.77% of the outstanding share of common stock entitled to vote owned by the unaffiliated stockholders, voted in favor of the proposal to adopt the Merger Agreement, satisfying the majority of unaffiliated stockholders voting requirement set forth in the Merger Agreement.

The parties currently expect to complete the merger on May 15, 2020 pursuant to the terms and conditions set forth in the Merger Agreement. If and when completed, the merger would result in the Company becoming a privately held company and its common stock would no longer be listed on the NASDAQ.

ZHEJIANG, China, March 23, 2020 (GLOBE NEWSWIRE) -- SORL Auto Parts, Inc. (SORL) (“SORL” or the “Company”), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that it would hold its special meeting of stockholders (the “Meeting”) at 10 a.m. (Beijing time) on May 8, 2020, at its principal executive office located at No. 2666 Kaifaqu Avenue, Rui’an Economic Development District, Rui’an City, Zhejiang Province, People’s Republic of China, to consider and vote on, among other things, the proposal to authorize and approve the previously announced Agreement and Plan of Merger (the “Merger Agreement”), dated as of November 29, 2019, by and among the Company, Ruili International Inc., a Delaware corporation (“Parent”), and Ruili International Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), the plan of merger, and the transactions contemplated by the Merger Agreement, including the Merger (as defined below).

Under the terms of the Merger agreement, Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Following and as a result of the Merger, shares of Company common stock will no longer be listed on the NASDAQ Global Market, and price quotations with respect to shares of Company common stock in the public market will no longer be available. Immediately following the consummation of the Merger, Parent will be beneficially owned by Mr. Xiao Ping Zhang, the Company’s Chairman and Chief Executive Officer, Ms. Shu Ping Chi and Mr. Xiao Feng Zhang, directors of the Company, and Ruili Group Co., Ltd. (collectively, the “Consortium”).

The Company’s board of directors, acting upon the unanimous recommendation of the special committee formed by the board of directors that consist of independent directors unaffiliated with any of the members of the Consortium, approved the Merger Agreement, and the transactions contemplated thereby, including the Merger, and resolved to recommend that the Company’s stockholder vote to authorize, approve and adopt the Merger Agreement, the plan of merger, and the transactions contemplated thereby, including the Merger.

Stockholders of record as of the close of business on April 2, 2020 New York time, will be entitled to vote at the Meeting and any adjournment thereof (if any).

Additional Information and Where to Find It

Additional information regarding the Meeting and the Merger Agreement can be found in the transaction statement on Schedule 13E-3 and the definitive proxy statement, which will be filed with the U.S. Securities and Exchange Commission (the “SEC”) on or about April 2, 2020, and can be obtained, along with other filings containing information about the Company, the proposed Merger and related matters, without charge, from the SEC’s website (www.sec.gov). STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED MERGER AND RELATED MATTERS.

Participants in Solicitation

The Company and certain of its directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be “participants” in the solicitation of proxies from our stockholders with respect to the proposed Merger. Information regarding the persons who may be considered “participants” in the solicitation of proxies will be set forth in the definitive proxy statement and Schedule 13E-3 transaction statement relating to the proposed Merger. Further information regarding persons who may be deemed participants, including any direct or indirect interests they may have, by security holdings or otherwise, will be set forth in the definitive proxy statement and other relevant materials to be filed with the SEC in respect of the proposed transaction when they become available. These documents can be obtained free of charge from the sources indicated above.

No Offer or Solicitation

The information in this communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.  No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

ZHEJIANG, China, Nov. 29, 2019 (GLOBE NEWSWIRE) -- SORL Auto Parts, Inc. (NASDAQ: SORL) (“SORL” or the “Company”), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that it has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ruili International Inc. (“Parent”), a Delaware corporation and formed on behalf of a consortium consisting of Mr. Xiao Ping Zhang, the Company's Chairman and Chief Executive Officer, Ms. Shu Ping Chi and Mr. Xiao Feng Zhang, directors of the Company, and Ruili Group Co., Ltd. (collectively, the “Consortium”), and Ruili International Merger Sub Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of Parent.

Pursuant to the Merger Agreement, subject to the satisfaction or waiver of all of the conditions to closing:

• Merger Sub will merge with and into the Company, with the Company will thereafter continue as the surviving corporation and a wholly-owned subsidiary of Parent (the “Merger”); and
  
  
• at the effective time of the Merger, each share of common stock of the Company issued and outstanding immediately prior to the effective time will be automatically canceled and converted into the right to receive US$4.72 in cash (the “Merger Consideration”), without interest, except for (i) shares of common stock beneficially owned by members of the Consortium or their affiliates, which will be cancelled for no consideration, and (ii) shares of common stock owned by stockholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger pursuant to Section 262 of the General Corporation Law of the State of Delaware, which will be cancelled at the effective time of the Merger for the right to receive the fair value of such shares determined in accordance with the provisions of Section 262 of the General Corporation Law of the State of Delaware.

The Merger Consideration of US$4.72 per share of common stock represents approximately a 26.2% premium over the closing price of the Company’s common stock as quoted by NASDAQ Global Select Market (the “NASDAQ”) on April 24, 2019, the last trading day prior to the date that the Company received a non-binding “going private” proposal from the Consortium. The Merger Consideration also represents an increase of approximately 10.8% over the US$4.26 per share initially offered by members of the Consortium in their initial “going-private” proposal on April 25, 2019 and a premium of approximately 39.2% over the Company’s closing price of US$3.39 per share of common stock on November 27, 2019, the last trading day prior to this announcement.

As of the date of the Merger Agreement, the members of the Consortium other than Ruili Group Co., Ltd., beneficially own in the aggregate approximately 58.83% of the total outstanding common stock of the Company and have agreed to vote the shares of common stock beneficially owned by them in favor of the Merger.

The Board of Directors of SORL, acting on the recommendation of a special committee of independent and disinterested directors (the “Special Committee”), unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and resolved to recommend that the Company’s stockholders vote to authorize and approve the Merger Agreement and the and the transactions contemplated by the Merger Agreement, including the Merger. The Special Committee, which is composed solely of independent directors of the Company who are unaffiliated with any member of the Consortium or management of the Company, exclusively negotiated the terms of the Merger Agreement with the Consortium with the assistance of its independent financial and legal advisors.

The Merger, which is currently expected to close during the second quarter of 2020, is subject to various closing conditions, including the adoption of the Merger Agreement by the Company’s stockholders. Pursuant to the Merger Agreement, adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, by the Company’s stockholders requires the affirmative vote of (i) the holders of at least a majority of the Company’s outstanding shares of common stock and (ii) the holders of at least a majority of the Company outstanding shares of common stock other than the shares of common stock held by members of the Consortium. The Company will call a meeting of stockholders for the purpose of voting on the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement as soon as practicable. If completed, the Merger will, under laws of the State of Delaware, result in the Company becoming a privately-held company and the Company Common Stock would no longer be listed on the NASDAQ.

Third Quarter 2019 Financial Results

• Net sales for the third quarter of 2019 were $112.2 million, the highest sales for any third quarter in the Company’s history, compared with $108.6 million in the third quarter of 2018. Revenues from the Company's domestic OEM customers were $48.6 million compared with $50.3 million in the third quarter of 2018. Sales from China's domestic aftermarket increased 25.3% year-over-year to $45.6 million from $36.4 million in the third quarter of 2018.
• Net income attributable to stockholders was $4.2 million and basic and diluted income per share were $0.22 in the third quarter of 2019; Due to the impact of US tax reform, net loss attributable to stockholders was $5.6 million and basic and diluted loss per share were $0.29 in the third quarter of 2018. Excluding the impact of the one-time accrued taxes related to U.S. tax reform, net income attributable to stockholders for the third quarter of 2018 would have been $5.4 million, or $0.28 per basic and diluted share.

Mr. Xiaoping Zhang, SORL's Chairman and Chief Executive Officer, stated, “2019 remains a challenging market environment for the Chinese automotive sector as the Chinese economy is experiencing deceleration along with the intensified trade war.  During the quarter, our strong product portfolio and balanced sales channels between OEM and aftermarket enabled us to weather the economic slowdown in China. While our domestic OEM business was affected by the slow commercial vehicle sales in the third quarter of 2019, the growing regionally tiered sales network continued to pace the market share expansion of our aftermarket business. We continued to maintain a high gross margin as our technology content remains strong.”  

Business Outlook

Management has reiterated its fiscal year 2019 guidance for net sales of approximately $515 million and net income attributable to common stockholders of approximately $22 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

ZHEJIANG, China, May 23, 2019 (GLOBE NEWSWIRE) -- SORL Auto Parts, Inc. (SORL) (“SORL” or the “Company”), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that, in response to a preliminary non-binding proposal letter (the “Proposal”), dated April 25, 2019, from Mr. Xiaoping Zhang, the Chairman and Chief Executive Officer of the Company, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company, and Ruili Group Co., Ltd. to acquire all of the outstanding shares of the Company not owned by them or their affiliates, the Company has increased the size of  its board of directors (the “Board”) from seven (7) to nine (9) and appointed Mr. Xiao Lin and Mr. Binhua Feng as independent directors to fill newly created vacancies.  Thereafter, the Board formed a special committee of independent directors (the “Special Committee”) consisting of Mr. Xiao Lin and Mr. Binghua Feng to review, evaluate and negotiate the Proposal and any alternative thereto and to make a recommendation with respect to the Proposal and any alternative thereto.

The Special Committee is in the process of retaining its independent financial advisor and independent legal counsel to assist it in its review, evaluation and negotiation of the Proposal and any alternative thereto.

The Company cautions its shareholders and others considering trading in its securities that neither the Special Committee nor the Board has set a definitive timetable for the completion of its evaluation of the Proposal or to make any decision with respect to the Company’s response to the Proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that the Proposal or any other transaction will be approved or consummated.

ZHEJIANG, China, April 26, 2019 (GLOBE NEWSWIRE) --  SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that its Board of Directors (the "Board") has received a non-binding preliminary proposal letter, dated April 25, 2019, from Mr. Xiaoping Zhang, its Chairman and Chief Executive Officer (“Chairman Zhang”), Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company, and Ruili Group Co., Ltd. (together, the “Consortium”) to acquire all of the outstanding shares of common stock of the Company not already owned by the Consortium for US$4.26 per share of common stock in cash.  Ms. Chi is the wife of Chairman Zhang and Mr. Xiaofeng Zhang is the brother of Chairman Zhang.

The $4.26 per share price of the proposal represents a 13.9% premium over the Company’s last closing price on April 24, 2019, a premium of approximately 35.64% to its average closing price during the last 30 trading days, and a premium of approximately 36.93% to its average closing price during the last 60 trading days.

The members of the Consortium currently beneficially own in the aggregate approximately 58.9% of the issued and outstanding shares of common stock of the Company on a fully diluted basis. The Consortium has engaged O’Melveny & Myers LLP as their legal advisor and Huatai United Securities Co., Ltd. as their financial advisor for the proposed transaction.  The Consortium intends to fund the proposed transaction with cash on hand and the proposed transaction will not be subject to a financing condition. A copy of the proposal letter is attached hereto as Exhibit A.

The Board intends to form a special committee consisting of independent directors to consider the proposal. The Board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process.

The Company cautions that this proposal constitutes only a preliminary indication of the Consortium’s interest and does not constitute any binding commitment with respect to the transaction proposed or any other transaction. No agreement, arrangement or understanding between the Company and the Consortium relating to any proposed transaction, will be created until such time as definitive documentation has been executed and delivered by the Consortium to the Company and all other appropriate parties.

The Board cautions the Company’s shareholders and others considering trading the Company’s securities that the Board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made by the Consortium,  that any definitive agreement will be executed relating to the proposal or any other transaction, or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Fourth Quarter 2018 Financial Results

• For the fourth quarter of 2018, net sales were $123.3 million compared to $122.9 million in the fourth quarter of 2017.
• Net income attributable to stockholders for the fourth quarter of 2018 was $3.3 million, or $0.17 per basic and diluted share, compared with $2.9 million, or $0.15 per basic and diluted share a year ago.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, “We are pleased to report robust growth in sales to Chinese OEM market in the fourth quarter and another record top line in 2018, especially in the weakening economy in China. While we grew sales and expanded our market shares in all our three lines of business in 2018, we remained profitable and generated strong free cash flow.”

Ms. Jinrui Yu, SORL’s Chief Operating Officer, added, “Our broad range of advanced braking products enabled us to expand our customer base and grow our market share in China and abroad. We also invested over $55.4 million in property, plant and equipment in 2018 to enhance our production capacity and productivity. Our strengthened research and development program continues to develop technologies positioning us for ongoing growth in the future.”

ZHEJIANG, China, Sept. 17, 2018 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced it was selected by China Custom to enter into the "Longteng Intellectual Property Protection Program" ("Longteng Program").

Started in 2017, the Longteng Program is the Chinese government's initiative to protect the intellectual properties of the leading Chinese companies against domestic Chinese copycats. China Custom leads the enforcement to oversee a wide array of products that have infringed intellectual properties and to stop them from shipping to international destinations. China Custom in Hangzhou has shortlisted 26 manufacturing companies ranging from home appliances to machinery for its submission into the Longteng Program. SORL is the only auto parts producer from the Wenzhou area selected by the Longteng Program. Since its inception, the Longteng Program has completed over 250 investigations and detained millions of illegal products.

"International markets are a vital part of our business. We are investing more into R&D to strengthen our core competences. We were recently awarded a patent, number EP 2787199 B1, for an exhaust brake valve for automobiles from the European Patent Office, which will help improve SORL's development within the European markets and it has already been introduced into the European automotive markets," Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman commented.

Mr. Zhang further stated, "As a leader in braking systems and components in China, we are committed to developing our intellectual properties and brand name. SORL has registered its brand with Madrid -- The International Trademark System and won many awards at the municipal, provincial and national levels in China. We currently hold over 600 patents. This is the reason why we have been selected by Longteng Program."

First Quarter 2018 Financial Results

• For the first quarter of 2018, net sales increased by 44.1% year-over-year to $107.7 million from $74.7 million in the 2017 first quarter.
• Net Income attributable to stockholders rose 19.5% to $8.3 million, or $0.43 per diluted share, compared with $6.9 million, or $0.36 per diluted share in the first quarter of 2017.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to report strong sales growth across the board in the first quarter of 2018. We have been consistently outperforming the commercial vehicle market in China as our advanced products with high technology content continue to capture market shares. Our sales growth combined with strict cost controls and higher efficiency in our new production has created earnings growth as well."

Business Outlook

Management has reiterated its fiscal year 2018 guidance for net sales of $450 million and net income attributable to common stockholders of $28 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"Our growing broad line of advanced products with their higher performance and reliability is providing the growth stimulus to enhance our market position in key markets. We are now better positioned in our markets than any time in our history," stated Ms. Jinrui Yu, SORL's Chief Operating Officer.

Fourth Quarter 2017 Financial Results

• Net sales for the 2017 fourth quarter rose 43.4% to $123.0 million from $85.5 million in the 2016 fourth quarter.
• Net income attributable to stockholders for the fourth quarter of 2017 was $2.9 million, or $0.15 per basic and diluted share, compared with $8.3 million, or $0.43 per basic and diluted share a year ago.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to close out 2017 with another quarter of top line growth, making it two consecutive years of record setting annual sales.  All three lines of our businesses registered strong growth in the fourth quarter. As the Chinese economy regained growth momentum in 2017, increased infrastructure and residential property development together with the positive effects of supply-side reform and heightened policies of emission control, propelled strong demand for new trucks."

Ms. Jinrui Yu, SORL's Chief Operating Officer, added, "Our growth significantly outperformed the on-road commercial vehicle market as our advanced commercial vehicle braking products continued to enable us to expand our customer base and grow our market share in China and abroad.  For 10 consecutive years, we generated profits and our earning power has improved in 2017.  With $33.8 million in net cashflow from operations, we achieved a significant increase from last year."

 "We also invested over $26 million in property, plant and equipment in 2017 to further enhance our productivity and prepare ourselves to meet the growing demand for our products. As the market leader of braking products for on-road commercial vehicles in China, and braking systems are one of the most critical vehicle safety related components, we are well positioned for future growth," Ms. Yu concluded.

Business Outlook

For the fiscal year 2018, management expects net sales to be approximately $450 million and net income attributable to stockholders to be approximately $28 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

ZHEJIANG, China, Nov. 29, 2017 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today it has recently won major supply contracts from the Shanghai Municipal Transportation Commission.

SORL is the exclusive supplier of electric air compressors to all buses for Shanghai's municipal bus route 71. SORL is also the exclusive supplier of electric air compressors to all buses for Shanghai's first Bus Rapid Transit ("BRT") system.

In addition to the BRT contract, there are over 2,000 public buses in Shanghai's municipal transportation system currently using electric air compressors made by SORL.

Mr. Xiaoping Zhang, SORL's Chairman and Chief Executive Officer, stated, "We continue to dominate the Chinese bus market whether from an OEM or from an aftermarket perspective. Since Shanghai is China's window to the world, we are proud that our products are among the most trusted products for Shanghai's municipal transportation. As the largest braking system provider to the Chinese commercial vehicle market, we are well positioned to benefit from ongoing urban planning and vehicle upgrades."

Third Quarter 2017 Financial Results

• Net Sales increased by 59.0% to $101.3 million in the third quarter of 2017 compared to $63.7 million in the third quarter of 2016.
• Basic and diluted earnings per share were $0.44 in the third quarter of 2017 compared with $0.17 in the third quarter of 2016.

Mr. Xiaoping Zhang, SORL's Chairman and Chief Executive Officer, stated, "We are excited to report that our sales growth in all three segments accelerated during the quarter. We continue to capture market share in the Chinese commercial vehicle braking market with our new advanced products and attractive pricing. Our OEM sales soared 70.6% compared with a 28.0% increase in overall commercial vehicle sales and a 31.8% sales growth in trucks. Our aftermarket sales in China grew at an even faster rate of 76.0% in the third quarter."

"Demand for our innovative products has increased as we provide technologically advanced solutions to meet the evolving needs of our customers.  Our stringent cost controls and production efficiencies have enhanced our profitability during the third quarter of 2017," Mr. Zhang concluded.

Business Outlook

Management has increased its fiscal year 2017 guidance for net sales from $315.0 million to approximately $370.0 million and net income attributable to common stockholders from $27.5 million to approximately $30.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

Second Quarter 2017 Financial Results

• Net sales increased 22.7% to $90.2 million compared with $73.5 million in the second quarter last year.
• Net income attributable to stockholders for the second quarter of 2017 decreased to $5.9 million, or $0.31 per basic and diluted share, compared with $7.2 million, or $0.37 on per basic and diluted share, in the second quarter of 2016.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated," We achieved solid growth in all three business lines led by a 28.8% increase in the segment of our China domestic OEM market. We continued to gain market share as our growth outperformed the overall commercial OEM vehicle market."

Business Outlook

For the fiscal year 2017, management has reiterated its expectation for annual net sales to be approximately $315 million and net income to be approximately $27.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

 First Quarter 2017 Financial Results

• Net sales for the 2017 first quarter increased by 37.4% to $73.9 million from $53.8 million in the first quarter of 2016.
• Net Income attributable to stockholders was $6.9 million, or $0.36 per diluted share, compared with $0.4 million, or $0.02 per diluted share in the first quarter...

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to announce another quarter of robust performance as we posted growth in all lines of our business and achieved margin expansions from top to bottom. Since the Chinese government introduced rigorous regulations on overloading in the truck market to reduce emissions and improve safety, we have been gaining market share with our advanced new products and superior performance. On the cost side, we continued to exceed our goals due to significantly improved economy of scale, strengthened receivables collections and better-than-expected cost control results."

Business Outlook

For the fiscal year 2017, management has increased annual guidance of net sales to be approximately $315 million and net income to be approximately $27.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We continue to roll out new advanced braking products which immediately gain traction in the market due to their enhanced performance, added features and improved reliability. We have implemented stricter cost controls, purchased more advanced machinery and moved into new facilities to improve our efficiency and increase our profitability," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

Fourth Quarter 2016 Financial Results

• Net sales for the 2016 fourth quarter rose 45.7% to $82.9 million from $56.9 million.
• Net Income attributable to stockholders was $8.3 million, or $0.43 per diluted share, compared with $5.9 million, or $0.31 per diluted share in the fourth quarter of 2015.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We closed out the year on a high note as we achieved strong growth in the fourth quarter. As we are the market leader in China, we decided to take some strategic pricing adjustments to place greater pressure on some of the low-margin or low-quality smaller companies. As a result, our gross margin temporarily declined in the fourth quarter. However, with improved economies of scale, successful receivables collections and effective cost control programs, our operating margin remains attractive."

Ms. Jinrui Yu, SORL's Chief Operating Officer, added, "We are excited about the compound effect from the growth in both the Chinese truck market and SORL products' traction in the marketplace. Our technology and quality leadership in the braking system market in China places us in the most favorable position as OEMs and large aftermarket distributors tend to turn to reputable and large-scale brake system producers to meet their surging demands."

Business Outlook

For the fiscal year 2017, management expects net sales to be approximately $300 million and net income attributable to stockholders to be approximately $21.0 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We are experiencing increased orders in the first half of the year. As the Chinese government is determined to tackle the air pollution problems, we expect the ongoing anti-overloading regulation campaign and new National 5 emission standard will increase the market size of trucks and accelerate the replacement of old trucks. We believe that we are well positioned to capture these market opportunities," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

ZHEJIANG, China, Dec. 21, 2016 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced increased guidance for the fiscal 2016 year to net sales of approximately $269 million from $255 million with net income attributable to common stockholders of approximately $15.4 million from $14.5 million.

Ms. Jinrui Yu, SORL's Chief Operating Officer, stated, "We are increasing our guidance due to better-than-anticipated demand for our braking products. The automotive market in China continues to expand in the fourth quarter of 2016, especially demand for heavy- and medium-duty trucks which are key markets for our advanced braking products.  Additionally, operating initiatives are increasing production efficiencies. We also note that the net income attributable to common stockholders for the fourth quarter of 2015 was $5.9 million which included a one-time tax refund as we renewed our High-Tech Enterprise status in the 2015 fourth quarter.  As a High-Tech Enterprise, we were rewarded with a reduced corporate tax rate of 15% and prior quarters' higher taxes were proportionately refunded."  

Third Quarter 2016 Financial Results

• Net Sales increased by 23.0% to $61.9 million in the third quarter of 2016 compared to $50.3 million in the third quarter of 2015.
• Basic and diluted earnings per share were $0.17 in the third quarter of 2016 compared with $0.11 in the third quarter of 2015.

Mr. Xiaoping Zhang, SORL's Chairman and Chief Executive Officer, stated, "We are pleased to report strong third quarter results with continued growths in both top line and bottom line, despite the ongoing slower growth of the Chinese economy. Led by renewed growth in Chinese truck OEM segments, our sales to OEM, aftermarket and international markets all posted growths as our broad portfolio of advanced products is driving higher volumes. We expanded market share as our growth outpaced the 14.1% rise in commercial vehicle production and 6.1% increase in commercial vehicle sales during the third quarter."

"Our successful new product roll-out, stringent cost controls, improved inventory balancing and increased production efficiencies enabled us to maintain our market leading gross margins at 30%. Our ongoing focus on innovative products whether in the traditional truck segment or in the electric vehicle area, continues to propel our growth and set us apart in an industry experiencing technological change, and customers are increasingly demanding more advanced products," Mr. Zhang concluded.

Business Outlook

Management has increased its guidance for fiscal year 2016 to net sales of approximately $255 million and net income attributable to common stockholders of approximately $14.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

Second Quarter 2016 Financial Results

• For the second quarter of 2016, net sales increased by 24.0% to $73.5 million from $59.3 million for the second quarter of 2015.
• Net income attributable to stockholders for the first six months of 2016 was $7.7 million, or $0.40 per basic and diluted share, compared with $5.3 million, or $0.28 per basic and diluted share, in the same period in 2015.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased that our sales growth accelerated in the OEM and aftermarket in China despite the continuing slow growth of the Chinese economy. Our sales growth outperformed overall commercial vehicle market in the second quarter of 2016 as we significantly increased our market share."

"We continue to benefit from our ongoing development of new products and systems to capture new market opportunities and win new customers. To augment our growth, we have been investing in products for the end markets that will benefit from the Chinese Government's policies, such as public housing, transportation, and railways," Mr. Zhang concluded.

Business Outlook

For the fiscal year 2016, management has reiterated its expectation for annual net sales to be approximately $200.0 million and net income to be approximately $11.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

First Quarter 2016 Financial Results

• Net sales for the 2016 first quarter was $53.8 million, a 3.1% increase over the first quarter of 2015;
• Net income attributable to stockholders for the first quarter of 2016 was $0.4 million, or $0.02 per basic and diluted share, compared with $3.1 million, or $0.16 per basic and diluted share a year ago.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "Despite Chinese economic growth continuing to decelerate in 2016, our domestic sales increased in the OEM and aftermarket markets. During the first quarter, the commercial vehicle sector in China demonstrated a sign of recovery. While overall truck sales increased by 1.1% in the first quarter of 2016, heavy-duty truck sales rose by 7.0%. Our new, more advanced products continued to generate sales and led our growth. Our growing portfolio of more advanced and higher-margin products enables us to maintain our leadership position in the commercial vehicle braking market. In addition, we are maintaining our gross margin, among the highest in the industry, through differentiating product offerings, strict cost controls and enhanced production techniques."

"We believe that the worst time for Chinese commercial vehicle market is now behind us as we see a number of OEMs are back on growth track. We are moving into larger facilities to accommodate our future growth and enhance our productivity through a more efficient facility layout." Mr. Zhang concluded.

Business Outlook

For the fiscal year 2016, management reiterates that it expects net sales to be approximately $200 million and net income to be approximately $11.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"The growth in the overall commercial vehicle business and especially the important heavy-duty truck segment, provides optimism for the future. We are adding more advanced braking products to provide more solutions to fulfill our customers' needs and attract more customers. With our new facility, we are adding capacity and the ability to better control our costs," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

ITEM 1.01 Entry into a Material Definitive Agreement.

On May 5, 2016 SORL Auto Parts, Inc. (the “Company”), through its principal operating subsidiary, Ruili Group Ruian Auto Parts Co., Ltd. (the “Subsidiary”), entered into a Purchase Agreement (the “Purchase Agreement”) with Ruili Group Co., Ltd., a related party under common control with the Company (the “Ruili Group”), pursuant to which the Company agreed to purchase the land use rights and factory facilities located at No. 2666 Kaifaqu Avenue, Rui’an Economic Development Zone, Rui’an City, Zhejiang Province, the People’s Republic of China (the “Development Zone Facility”).

In exchange for the Development Zone Facility, the Company will transfer to the Ruili Group the land use rights and factory facilities located at No. 1169 Yumeng Road, Rui’an Economic Development Zone, Rui’an City, Zhejiang Province, the People’s Republic of China (the “Dongshan Facility”) that the Subsidiary currently owns, plus RMB501 million in cash. The cash consideration in the amount of RMB481 million will be paid to the Ruili Group before June 30, 2016, and the remaining RMB20 million will be paid within 10 days of completion of the required procedures for transferring the title of the facilities and the land use right as specified in the Purchase Agreement.

The total floor area of the Dongshan Facility is 58,714 square meters, which the Company purchased from the Ruili Group in 2007. The total floor area of the Development Zone Facility is 157,619 square meters, which will provide more manufacturing and service capacity to support the Company’s future growth. The Company is currently leasing 89,229 square meters of the Development Zone Facility from Ruili Group for its brake systems business, which lease will expire on December 31, 2017. This lease will be terminated upon the completion of the purchase. The Company plans to transfer its operations from the Dongshan Facility to the Development Zone Facility as soon as practical after the completion of the purchase. The purchase of the Development Zone Facility would allow the Company to acquire full ownership and control over these important production facilities.

The transaction was approved by a committee of independent directors of the Company based on the valuation reports of the Development Zone Facility and the Dongshan Facility provided by DTZ/Cushman & Wakefield, an independent real estate appraisal firm. According to such valuation reports, the market valuations of the Development Zone Facility and Dongshan Facility are RMB626 million and RMB125 million respectively.

Fourth Quarter 2015 Financial Results

• Net sales for the 2015 fourth quarter was $56.9 million.
• Net Income attributable to stockholders was $5.9 million, or $0.31 per diluted share, compared with $4.3 million, or $0.20 per diluted share in the fourth quarter of 2014.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We once again outperformed the overall commercial vehicle market in China by maintaining profitable operations and increasing operating cash flow generation in a challenging environment. Chinese economic growth deceleration in 2015 negatively impacted commercial vehicle sector. While overall commercial vehicle sales declined by 9.97% in 2015, the medium- and heavy-duty truck markets sustained double digit reductions in sales. The decline in real estate development and infrastructure projects has reduced the demand for new trucks and aftermarket parts."

"In this environment, we have continued to build our portfolio of more advanced and higher-margin products to maintain our leadership position in the commercial vehicle braking market. Strict cost controls and enhanced production techniques are helping us maintain our gross margin, among the highest in the industry," Mr. Zhang concluded.

Business Outlook

For the fiscal year 2016, management expects net sales to be approximately $200 million and net income to be approximately $11.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We remain cautiously optimistic, although the recent strength in the heavy-duty truck and excavator markets may signal the beginning of higher construction spending which will increase the need for our products. We continue to build our product portfolio to capture market share in China, the second largest commercial vehicle market globally, even as we expand overseas. We also continue to focus on reducing our costs to ensure we are cost leaders in a competitive market environment," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

ZHEJIANG, China, Jan. 8, 2016 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that the Special Committee of its Board of Directors has received a letter from Mr. Xiaoping Zhang, Chairman and Chief Executive Officer of the Company, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company (collectively, the "Consortium Members") that they have determined to withdraw the non-binding going private proposal dated October 30, 2015.  The Consortium Members stated in the letter that due to concerns over recent market conditions, they had determined to not to proceed with the Proposal.

Item 8.01. Other Events

On January 8, 2016, stockholders (collectively, the “Stockholders”) of SORL Auto Parts, Inc. (the “Company”) owning approximately 58.8% of the Company’s outstanding common stock, sent a letter (the “Withdrawal Letter”) to the Special Committee of the Board of Directors of the Company withdrawing the preliminary non-binding proposal which the Stockholders had made on October 30, 2015 (the “Proposal”) to acquire all of the shares of the Company’s common stock not owned by the Stockholders for $2.84 per share in cash. The Withdrawal Letter stated that due to concerns over recent market conditions, the Stockholders had determined not to proceed with the Proposal.

ZHEJIANG, ChinaDec. 22, 2015 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that, in response to a preliminary non-binding proposal letter (the "Proposal"), dated October 30, 2015, from Mr. Xiaoping Zhang, Chairman and Chief Executive Officer of the Company, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company, to acquire all of the outstanding shares of the Company not owned by them or their affiliates, the Company's board of directors (the "Board") has formed a special committee of independent directors (the "Special Committee") consisting of Yuhong Li, Huilin Wang, Jinbao Liu and Jianghua Feng to review, evaluate and negotiate the Proposal and any alternative thereto and to make a recommendation  with respect to the Proposal and any alternative thereto.

The Special Committee has retained Roth Capital Partners, LLC as its independent financial advisor and both Sullivan & Worcester LLP and Jun He Law Offices LLC as its legal counsel to assist it in its review, evaluation and negotiation of the Proposal and any alternative thereto. The Special Committee will also be advised by Richards, Layton & Finger, LLP.

The Company cautions its shareholders and others considering trading in its securities that neither the Special Committee nor the Board has set a definitive timetable for the completion of its evaluation of the Proposal or to make any decision with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that the Proposal or any other transaction will be approved or consummated.

• Net Sales were $50.3 million in the third quarter of 2015 compared to $58.7 million in the third quarter of 2014;
• Net income attributable to stockholders for the third quarter of 2015 was $2.0 million, or $0.11 per basic and diluted share, compared with $2.9 million, or $0.15 on per basic and diluted share, in the third quarter of 2014.

Ms. Jinrui Yu, SORL's Chief Operating Officer, stated, "Our broad portfolio of innovative products and strong network have enabled us to weather ongoing challenges in the domestic and international markets. Heavy-duty trucks sales continued to suffer a decrease of 26% for the third quarter, mainly due to reduced volume in the construction of real estate development and infrastructure projects in China. Weak truck sales not only negatively affected OEM sectors, but also resulted in a decline in the demand for replacement auto parts in the aftermarket segment. Similarly, an overall decline in production and sales of commercial vehicles in developed countries and other developing nations impacted our international sales." 

"We continue to focus on the development of new, higher-margin products and upgrading our traditional brake products to capture greater market share and position us for future growth. In the meantime, we are controlling our costs, lowering inventory levels to match market demand, and optimizing our production capabilities to enhance efficiencies and improve our cost per unit. As a result of these efforts and the strong value proposition provided by our innovative products, we were able to increase our gross margin during this difficult quarter and maintain our position as a margin leader in the industry.

"Looking ahead, we believe that recent actions taken by the Chinese government to stimulate the economy through lower interest rates, a reduced bank reserve ratio and increased investments in infrastructure should increase demand for commercial vehicles and our braking systems." Ms. Yu concluded.

Business Outlook

In light of weak third quarter results, management has decided to reduce its previous guidance for fiscal year 2015 to net sales of approximately $217 million and net income attributable to common stockholders of approximately $11.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

ZHEJIANG, China, Oct. 30, 2015 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts inChina, today announced that its board of directors (the "Board") has received a preliminary non-binding proposal letter, dated October 30, 2015, from Mr. Xiaoping Zhang, Chairman and Chief Executive Officer of the Company, Ms. Shuping Chi and Mr. Xiaofeng Zhang, directors of the Company (collectively, the "Consortium Members"), to acquire all of the outstanding shares of the Company not owned by them or their affiliates for US$2.84 in cash per share.  The Consortium Members currently own in the aggregate approximately 58.8 percent of the total outstanding common shares of SORL.  A copy of the proposal letter is attached hereto as Exhibit A.

The Board intends to form a special committee consisting of independent directors to consider the proposal. The Board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process.

The Board cautions the Company's shareholders and others considering trading the Company's securities that the Board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Second-Quarter Financial 2015 Results

Sales were $59.3 million compared with $65.7 million in the second quarter last year;

First Quarter 2015 Financial Results

• Revenues for the first quarter of 2015 increased by 4.4% to $52.2 million;
• Net income attributable to stockholders for the first quarter of 2015 was $3.1 million, or $0.16 per basic and diluted share, compared with $2.8 million, or $0.14 per basic and diluted share, in the first quarter of 2014.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to report revenue and net income growth in a very difficult market for commercial vehicles during the first quarter of 2015. The production and sales of commercial vehicles declined by 18.4% and 19.5% year-over-year respectively in the first quarter of 2015. Truck production and sales were down a deeper 21.8% and 22.7% year-over-year, respectively for the 2015 first quarter. Our strong positions in the aftermarket and growing international customer base offset weakness in the Chinese OEM market. Truck sales were especially impacted by the 'pre-buy' of less expensive National III emission standard trucks in the year ago same quarter and before the January 1, 2015 nationwide enforcement of the stricter National IV emission standards."

"Our growing portfolio of advanced products, strong customer relationships and more efficient production positions us well to capture additional market share," Mr. Zhang concluded.

Business Outlook

For the fiscal year 2015, management reiterates that the net sales will be approximately $256.0 million and net income to be approximately $15.0 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"Our higher sales and net income in the first quarter of 2015 reflect both our new cost controls and pricing to gain additional market leadership in a difficult environment. We are maintaining our strong cash and financial position to provide the resources to develop new products and support further growth," commented Ms. Jinrui Yu, SORL's Chief Operating Officer.

Fourth Quarter 2014 Financial Results

• Net sales for the fourth quarter increased by 14.4% to a fourth quarter record high of $63.2 million;
• Net Income attributable to stockholders was $4.3 million, or $0.20 per diluted share from $0.8 million, or $0.05 per diluted share in the fourth quarter of 2013;

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are very pleased to have achieved record sales for the fourth quarter and the year in an extremely challenging sales environment for commercial vehicles. The enforcement of the National IV emission standard on commercial vehicles in the second half of 2014 resulted in a reduction in the sale of 'pre-buy' commercial vehicles that are not in compliance with the National IV emission standard, especially trucks sales. However, we continued to capture market share in 2014 as our 14.4% quarterly sales growth surpassed the 2.3% decline in the commercial vehicle sales market and the 5.9% lower truck sales in the fourth quarter of 2014. Our annual sales growth of 13.9% far exceeded the 6.5% decline in total commercial vehicles and the 8.9% reduction in truck sales in the 2014 year. All three of our market segments achieved annual sales growth for the 2014 year led by a 31.9% increase in aftermarket sales and followed by a 12.5% increase in international sales."

"Our expanded product line of advanced braking systems led to several new contracts. We were contracted to supply our three-pedal braking system to the new model M3000 heavy-duty vehicles produced by the Shaanxi Automotive Group. We are also supplying our first advanced braking products to Sichuan Hyundai Motor Company for its Chuanghu brand premium heavy-duty truck."

"We have also made a breakthrough in the end user market and expanded beyond our traditional commercial vehicle markets as we have become a qualified supplier to Changchun Railway Vehicles (also known as China North Railway or CNR) in early 2015 for its CRH3 bullet trains. We are supplying our energy absorbing systems, and providing repair and replacement services for certain pneumatic valve modules used throughout the train. We are also supplying repair and replacement services for certain pneumatic valve modules for the CRH5 bullet trains. The expanding railway system in China provides additional growth opportunities for our products. We continue to be focused on increasing the technology in our products to capture market share and sustain our high gross margins," Mr. Zhang concluded.

Business Outlook

For the fiscal year 2015, management expects net sales to be approximately $256.0 million and net income to be approximately $20.3 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We continue to capture market share as our investment in R&D builds our portfolio of advanced braking products for the commercial vehicle market. The higher technology our products provide the better performance our products deliver for our customers, which also creates a challenge for our competitors in China. In addition, our advanced products and our growing production efficiency help sustain our higher margins. The bus market is stable and we are gaining more shares in the Chinese aftermarket and further building our international customer base. We are also beginning to penetrate the railroad vehicle transportation system. We welcome the merger between China North Railway (CNR) and China South Railway (CSR) which will further increase the competitiveness of Chinese trains in the global market. We believe that we are well positioned for future growth opportunities," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

ZHEJIANG, China, February 11, 2015 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) (SORL or the Company), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that it became a qualified supplier to Changchun Railway Vehicles Co., Ltd., (Changke).

For Changke's CRH3 series of bullet trains, SORL is supplying energy absorbing systems, and repair and replacement services for certain modules of the pneumatic valve system used throughout the train. In addition, the Company is also supplying repair and replacement services for certain modules of the pneumatic valve system for Changke's CRH5 series bullet trains.

The energy absorbing systems are designed to increase the crashworthiness of a train in the unlikely event of a crash. Pneumatic valve systems on bullet trains in China have traditionally been supplied and repaired exclusively by a major international competitor. However, Changke determined SORL's repair service for certain modules was quicker, more cost effective, and with the same high quality.

Changchun Railway Vehicles Co., Ltd., it is a subsidiary of China North Railway (CNR). CNR directly holds 26 subsidiaries established in the PRC and three subsidiaries incorporated in Hong Kong, South Africa and the U.S respectively. CNR focuses primarily on the manufacturing and refurbishment of rolling stock, including high-speed MUs, locomotives, passenger coaches, freight wagons, rapid transit vehicles, railway engineering machinery and equipment and core system and components of rolling stock. CNR is also engaged in the manufacturing of mechanical and electric products and clean energy and environmental protection equipment.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "China has the world's largest population and efficiently moving people is a high priority. During the year, especially for public holidays such as the Spring Festival, many people travel long distances. The Chinese government has made large investments into building a modern railway system using high-speed bullet trains. SORL has sold approximately RMB 5 million of products to the railway system in 2013 and sales doubled to RMB 10 million in 2014. We estimate our railway sales will again expand to approximately RMB 20 million in 2015. Our sales to the railways further diversifies the markets we serve, expands our customer base and provides another growth market for the future of SORL."

• Net Sales increased 7.7% to $58.7 million in the third quarter of 2014 year-over-year;
• Net income attributable to stockholders for the third quarter of 2014 was $2.9 million, or $0.15 per basic and diluted share, compared with $3.3 million, or $0.17 on per basic and diluted share, in the third quarter of 2013.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We continue to capture market share in the domestic Chinese market as we grew by 16.4% in the 2014 third quarter compared with a decline in commercial vehicle sales of 13.2% and with trucks sales declining by 21.3%. Our OEM and aftermarket sales continued to increase as our growing portfolio of advanced products address the needs of a greater range of vehicles. This expanding competitive advantage positions us to capture additional domestic market share in the future through greater penetration of current markets and expansion into new market segments."

"The advanced features, high quality and low cost of our products developed by our research and development program, are increasingly recognized through greater sales in the domestic aftermarket and OEM markets. We continue to focus on areas with government public transportation support such as increased sales into the domestic bus market, infrastructure projects and the ongoing expansion of the highway and railway systems. Exports are growing in certain markets, but slow economic growth in Europe, especially in the Ukraine, caused an overall decline in our exports. We remain well positioned to take advantage of any strength in the European markets."   

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We maintain a strong balance sheet to provide the resources to support our current operations and finance our future growth. Our investment in research and development has provided the upgrades and new products to enhance our customer relationships with a large portfolio of advanced products.  New production equipment enhances our productivity to keep unit costs under control.  More efficient manufacturing of advanced products will help maintain gross margins and cash flow."

Second Quarter 2014 Financial Results

• Sales increased 14.3% year-over-year to a second-quarter record high of $65.7 million;
• Net Income attributable to stockholders was $4.1 million, or $0.21 per diluted share the same as last years quarter.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to report an outstanding quarter with the highest sales for any second quarter in our history. We believe customers in all three of our business segments - OEM, aftermarket and international - recognized the superior value of our products through higher purchases."

"Our investment in new products is having a positive result, as our growing portfolio of advanced innovative products is expanding the vehicle models we supply. In June and July of 2014, we began shipping our new braking products to two new models of commercial vehicles - Sichuan Hyundai Motor Company's Chuanghu brand premium heavy-duty truck, and Shaanxi Automotive Group's new model M3000 heavy-duty vehicles. These new orders further acknowledge the high performance and reliability of SORL's advanced safety-related braking products. As the technological and performance standards increase, the barriers to entry in the commercial braking market grow higher."

"We continue to position ourselves in markets where the Chinese government's policies and spending increases demand for commercial vehicles such as the ongoing expansion of highways and railways, as well as other infrastructure projects. Our goal is to become a leader in each sector by leveraging our products and technologies to penetrate deeper in each market. Government programs also continue to support urban and regional public transportation. We are benefitting from expanded bus service, and advanced emission standards that require new buses to improve air quality in China's many cities. We continue to seek opportunities in adjacent markets where our products or technologies can be applied."

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We are committed to provide our customers with products that strengthen their competitiveness through advanced technologies, high quality and low cost. We have enhanced our research and development with new technologies to supply a steady stream of state-of-the-art products. Our large product portfolio provides a competitive advantage especially in the Chinese aftermarket, to expand our market share. Advanced production equipment has improved product quality, controlled unit costs and combined with our new products, maintained our industry-leading gross margin. We remain focusing on capturing market share in our domestic market as we build our international operations."

Business Outlook

For the fiscal year 2014, management expected the sales to be approximately $225.0 million and net income to be approximately $12.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

ZHEJIANG, China, July 7, 2014 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that the Company entered into an agreement to supply its braking products to Sichuan Hyundai Motor Company ("SHMC").

SHMC recently held a formal launch of its Chuanghu brand premium heavy-duty truck. SORL developed customized brake products for this truck over the last two years.

SHMC is a joint venture owned equally by Ziyang Nanjun Automobile Co., Ltd. (CNJ Motors) and Hyundai Motor Group in South Korea. The joint venture mainly designs, sells and services commercial vehicles, engines and engine parts.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We are pleased to have won this agreement to supply our advanced braking products to Sichuan Hyundai's premium new truck. This agreement is a result of the high performance and global quality of our products, and our wide-ranging service. Hyundai Motor conducted extensive due diligence on our quality controls and production capability. We look forward to capturing orders from other domestic and international OEM customers as our products continue to demonstrate their value."

ZHEJIANG, China, June 4, 2014 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that it is supplying its three-pedal braking system to the new model M3000 heavy-duty vehicles produced by the Shaanxi Automotive Group ("Shaanxi").

The new braking system required conjoined frame molds, a challenging procedure, using a highly-complex die-casting process. The brake master valve and the clutch master cylinder were required to meet national standards. Two versions of the braking system were designed. One system is electronically based and the other uses mechanical processes. All the sample products passed inspection and testing by Shaanxi. This success demonstrates the Company's ability to quickly design and manufacture high-quality, intricate new products.

Shaanxi was recently ranked as the 5^th largest heavy-duty truck seller in China and was in 23^rd place of the Top 500 Machine Manufacturers of China. Shaanxi commercial vehicles are world class and are found in over 80 countries in 5 continents.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We are pleased to have met the vigorous quality and performance requirements that Shaanxi demanded for their new, key heavy-duty vehicles. We seek to further expand our market share by capturing additional vehicle models and OEM customers utilizing our ability to quickly design and deliver complicated new braking systems."

First Quarter 2014 Financial Results:

• Revenues for the first quarter of 2014 increased by 21.1% to $50.0 million, compared to $41.3 million last year.
• Net Income increased by 124.6% to $2.8 million, or $0.14 per diluted share, compared to $0.06 per diluted share last year.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are pleased to report strong revenue growth in a slow season, with higher profitability in the first quarter of 2014. Our market share grew in the first quarter of 2014 and the revenues for our three market segments (OEM market, aftermarket, and international market) all increased in the first quarter of 2014 compared with the first quarter in 2013, respectively. With our growing market share, new products, many OEM relationships in China and financial strength, we are well positioned for future growth."

Business Outlook

For the fiscal year 2014, management expected the net sales to be approximately $225.0 million and net income to be approximately $12.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"Our results in the first quarter of 2014 are a direct outcome of our new product development, investment in advanced production equipment and our leading position in the Chinese OEM market for commercial braking systems. We have maintained a strong financial condition with $35.8 million in cash and cash equivalents and a 3.9 to 1 current ratio to support our expanding operations as our OEM business, aftermarket and international sales continued to post solid growth. Market share expansion and gross margin remain as our top priorities," commented Ms. Jinrui Yu, SORL's Chief Operating Officer. 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 20, 2014, Mr. Jung Kang Chang resigned as a director of the Board of SORL Auto Parts, Inc. (the “Company”). His resignation did not result from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

On April 1, 2014, the Company announced that Board of Directors of the Company elected Ms. Shuping Chi as director of the Board. Ms. Chi will not be on any committees, and she will not receive any compensation.

Ms. Chi is the wife of Mr. Xiaoping Zhang, Chief Executive Officer and Chairman of Board of the Company. Ms. Chi’s related party transactions as related to her husband, Mr. Xiaoping Zhang are described in the Proxy Statement in 2013 as follows:

RELATED PERSON TRANSACTIONS

Ruili Group

Mr. Xiao Ping Zhang and Mr. Xiao Feng Zhang are the principal stockholders of the Ruili Group which was the owner of the assets contributed to Ruili Group Ruian Auto Parts Co., Ltd., a sino-foreign joint venture, in the reverse acquisition. The Company continued to purchase packaging materials from the Ruili Group Co., Ltd. The Ruili Group Co., Ltd., is the minority shareholder of Ruian and is controlled by the Zhang family, who is also the controlling party of the Company. The Company sold certain automotive products to Guangzhou Kormee Vehicle brake technology development Co., Ltd., which is controlled by the Ruili Group Co., Ltd.

The following related party transactions occurred for the year ended December 31, 2012 and 2011:

The Company believes that the prices charged and payments made between the parties in connection with the foregoing transactions are at least as favorable to the Company as would be obtained from a third party.

Ms. Chi is a shareholder of the Company, holding 5.9% of the outstanding common stock. Ms. Chi is familiar with the operation of the Company and has more than 30 years of experiences in the auto parts industry. Ms. Chi is also one of the founders of Ruili Group Co., Ltd., a related company, and Ms. Chi has served as the Vice Chairman of the Board of Ruili Group Co., Ltd. since July 1979.

Fourth Quarter 2013 Financial Results

• For the fourth quarter of 2013, net sales increased by 13.3% to $55.3 million from $48.8 million for the fourth quarter of 2012.
• Net income attributable to stockholders for the fourth quarter of 2013 was $0.8 million, or $0.05 per basic and diluted share, compared with $4.1 million, or $0.21 on per basic and diluted share, in the fourth quarter of 2012.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "2013 was another lukewarm year for the commercial vehicle market in China, as the new administration continued to put major infrastructure projects under review, tighten monetary policies and cool the real estate market. All these partially offset the growth of truck sales benefiting from the replacement cycle of large on-road fleets and the pre-buy effect prior to the highly anticipated National IV emission standard. In such a market environment, we continue to focus on increasing our market share and maintaining our industry-leading gross margin through our strategy of differentiating products. As a result, our sales growth accelerated to 13.3% in the fourth quarter, while overall Chinese commercial vehicles sales only grew 4.8%. We continue to introduce new advanced products with more robust features to enhance the technology content and enrich total solutions for our customers. In addition, our undivided focus on better product quality has brought us a number of awards and increased orders from our OEM customers, including Dongfeng Liuzhou, Dongfeng Dana Axle and Qingte Group most recently. On the aftermarket front, our growth was moderate in 2013, as our focus remained on both higher market share in the Chinese OEM segment and further international expansion where margins are better. However, new products we introduced in the OEM market paved the way for a stronger foothold in the Chinese aftermarket segment in the future. Braking systems are safety-related components with high barriers to entry. We remain optimistic on our presence in the highly recurring aftermarket business, as we added more sub-distributors and broaden our coverage to service more and more vehicles coming off warranty every year."

Business Outlook

For the fiscal year 2014, management reiterates its outlook for net sales to be approximately $225.0 million and net income to be approximately $12.5 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"The Chinese macroeconomic environment is uncertain in the near term as the central government seeks to change the economic priority to building national consumption of domestic goods rather than exports and fixed asset investments. We believe commercial vehicle inventory levels remain positive for continuing growth and the pre-buy before the strict enforcement of the National IV emission standards will continue over the near term. We remain optimistic that our international sales will contribute more to our sales growth over the next few years as customers in local foreign markets recognize the value in performance and quality our products provide," Ms. Jinrui Yu, SORL's Chief Operating Officer, stated.

ZHEJIANG, China, March 10, 2014 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that the Company has received supplier awards from three of its major customers, Dongfeng Liuzhou Automobile Co., Ltd., Dongfeng Dana Axle Co., Ltd. and the Qingte Group.

Dongfeng Liuzhou Automobile Co., Ltd. is a premiere designer and manufacturer of over 200 types of light-, medium- and heavy-duty commercial vehicles and multi-purpose vehicles (MPVs).

Dongfeng Dana Axle Co., Ltd., the largest axle manufacturer in Asia, is a joint venture between Dongfeng Motor and Dana USA.

Qingte Group manufactures special vehicles, axles and auto parts. Qingte has received a number of accolades including as a "Top 100 Enterprise of China Auto Parts", and "Top 10 Independent Brand Enterprise of China Auto Parts".

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We are proud to be acknowledged by these leading companies in the automotive industry. SORL's innovative products, manufacturing excellence, stringent quality control and superior service have made valuable contributions to our customers' success. We expect to be rewarded with additional orders and improved terms by these customers. We continue to work closely with our customers to provide the products and services that make us a preferred supplier."

ZHEJIANG, China, Nov. 19, 2013 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today that SORL entered into a supply agreement to exclusively supply the Company's Clutch Master Cylinders and Clutch Cylinders to SAIC-GM-Wuling ("SGMW") for its Wuling Hongguang S vehicles. Based on current order rates, the initial contract is expected to contribute approximately $7.0 million in sales over the next two years.

SGMW's Wuling Hongguang brand is the best selling Multi-Purpose Vehicle ("MPV") in China. As an important upgrade to the original Hongguang model, the Wuling Hongguang S is manufactured in accordance with General Motors Global Manufacturing System. No other terms of the supply agreement were disclosed.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "The new Wuling Hongguang S vehicles are manufactured based on the advanced global manufacture and technology standards of GM. As the exclusive supplier for brake clutches, this agreement with a major OEM further recognizes the high performance and quality of our products." 

Based in Liuzhou, China, SGMW is a joint venture between SAIC Motor, GM China and Liuzhou Wuling Motors specializing in the manufacture, sales and services of commercial and passenger vehicles. The Company employs approximately 20,000 workers and sold approximately 1.4 million vehicles in 2012. SGMW exports to South America, Middle East, Africa and other regions.

Third Quarter 2013 Financial Results

• Sales increased 16.7% year-over-year to a third-quarter record high of $54.5 million;
• Net income attributable to stockholders for the third quarter of 2013 was $3.3 million, or $0.17 per basic and diluted share, compared with $3.4 million, or $0.17 on per basic and diluted share, in the third quarter of 2012.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We are excited to report a new record high sales for any third quarter in our history. All three of our business segments achieved growth. With our growing portfolio of new advanced products offering significant value to customers and our growing production efficiency, we are capturing market share domestically and abroad.

"Our sales also benefitted from the continuing demand for heavy-duty trucks, primarily from the pre-buy before the strict enforcement of the new National IV emission standards and the re-stocking due to low inventory levels. Aftermarket sales grew as the warranties on the many newer vehicles sold over the past few years are expiring, brakes need maintenance and repair, and we increased promotional activity during the third quarter. We continued to diversify our customer base with our sales to the bus and construction equipment markets. With the Chinese GDP growth rate increased to 7.8% in the third quarter, the central government is revising its policies to put greater economic focus on increasing domestic consumption. The continued Chinese government support for urban public transportation creates the prospect for SORL to gain from increased bus production."

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We have strengthened investment in our operations to capture more market share through enhanced research and development and we added new advanced production equipment to create greater economies of scale to support current and future growth even as we pay down our bank debt. We expect to maintain or improve our industry-leading gross margin with improved economies-of-scale, increased sales of our growing portfolio of new products with higher margins, and more efficient production."

Business Outlook

For the fiscal year 2013, management reiterates its outlook for net sales to be approximately $207 million and net income to be approximately $13.7 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"The Chinese macroeconomic environment is uncertain in the near term as the central government seeks to change the economic priority to building national consumption of domestic goods rather than exports and fixed asset investments. We believe commercial vehicle inventory levels remain positive for continuing growth and the pre-buy before the strict enforcement of the National IV emission standards will continue over the near term. We remain optimistic that our international sales will contribute more to our sales growth over the next few years as customers in local foreign markets recognize the value in performance and quality our products provide," Ms. Yu concluded.

ZHEJIANG, China, Aug. 27, 2013 /PRNewswire/ -- SORL Auto Parts, Inc. (SORL) ("SORL" or the "Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, announced today the Company was selected as the exclusive developer for all air-operated valves for the new-generation, model N211 medium-duty truck introduced by Anhui Jianghuai Automobile Co., Ltd. ("JAC").

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "By selecting SORL as the exclusive developer, JAC acknowledges our superior design capabilities, excellent quality control and advanced manufacturing processes for products requiring higher technology content. JAC required very stringent performance and quality standards for products used in this premium vehicle.

Second Quarter 2013 Financial Results

• Revenues increased 10.4% year-over-year to $57.5 million;
• Gross margin increased to 28.3% in the second quarter of 2013 from 27.2% in the same period of 2012;
• Net Income attributable to stockholders increased 34.7% year-over-year to $4.0 million, or $0.21 per diluted share;
• Net income attributable to stockholders for the second quarter of 2013 increased by 34.7% to $4.0 million, or $0.21 per basic and diluted share, compared with $3.0 million, or $0.16 on per basic and diluted share, in the second quarter of 2012.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "Thanks to the recovery of the Chinese truck market in the second quarter of 2013, which is mostly attributed to the higher demand for commercial vehicles before the new National IV emission standards became effective nationwide on July 1^st, we achieved$57.5 million in sales in the second quarter, which is the second highest sales quarter in our history. Our OEM sales grew by 19.5% and aftermarket sales increased by 9.4% in the second quarter. Apart from industry growth, our sales increase is also due to the new products we developed and our advanced products with greater technology to meet our customers' increasing technological demands. In the first six months of 2013, we received excellent supplier awards from a number of customers for providing high-quality and high-performance products. Aftermarket sales are improving with a growing line of products for our customers. We also continue to penetrate the bus and construction equipment markets as we seek further diversification to build our customer base. Our expanding international network is set to further penetrate targeted foreign markets and to react to an improving global economy.

"We remain cautiously optimistic although the outlook for heavy-duty trucks is unclear over the second half of 2013. We can respond quickly to changes in the domestic market as we have close relationships with many Chinese OEM vehicle manufacturers."

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We were able to improve our industry-leading gross margin to 28.3% in the second quarter of 2013. This margin increase was from higher sales creating greater economy-of-scale combined with our efficient production, and the increased sales of our more profitable, advanced new products. We have invested our financial resources in new products, advanced production equipment and our sales network to position SORL for future growth and to build shareholder value."

Business Outlook

For the fiscal year 2013, management reiterates its outlook for net sales to be approximately $207 million and net income to be approximately $13.7 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We remain cautiously optimistic due to the uncertainty of Chinese macroeconomic environment. However, we also notice the replacement cycle of trucks in China due to the national-level emission standard change and ongoing provincial-to-municipal-level implementation. We continue to take strategic steps through new product development, product certifications, and investing in advanced production equipment to improve our competitive position and maintain our leadership in the domestic markets, and to promote the quality and performance value of our products globally," Ms. Yu concluded.

ZHEJIANG, China, July 22, 2013 /PRNewswire/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading manufacturer and distributor of automotive brake systems as well as other key safety-related auto parts in China, today announced that it has engaged MaloneBailey, LLP ("MaloneBailey") as the Company's new principal independent registered accounting firm with immediate effect. The appointment of MaloneBailey was made by the Company's Audit Committee, acting on behalf of the Company's board of directors, on July 18, 2013.

MaloneBailey is a full-service global public accounting firm that provides accounting, audit and tax services, as well as advisory services under the rules and regulations of the IRS, the AICPA, the SEC, the PCAOB and the CPAB. Representing more than 150 publicly traded companies, MaloneBailey is one of only nine firms world-wide that require an annual inspection by the PCAOB (Public Company Accounting Oversight Board). The "INSIDE Public Accounting" newsletter named MaloneBailey as an 2012 IPA All-Star Firm.

In China, MaloneBailey employs more than 20 accountants and auditors who possess the necessary language, technical, and cultural expertise to provide services in accounting, tax and audits in China and the United States. The professionals employed by MaloneBailey in China are educated and trained in the United States and are familiar with the U.S. Generally Accepted Accounting Principles (GAAP) and U.S. Generally Accepted Auditing Standards (GAAS). MaloneBailey's China offices are located in Beijing and Shenzhen. Additionally, as a member of Nexia International, a worldwide network of independent, high quality accounting and consulting firms with 590 offices in over 100 countries, MaloneBailey collaborates with its Nexia business partners to provide high-quality services incorporating MaloneBailey's expertise in local regulations, customs and culture.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "MaloneBailey's professionals and its well-known experience in China as well as its focus on manufacturing and technology industries, make it well qualified to become our principal independent registered accounting firm."

Item 4.01 Changes in Registrant’s Certifying Accountant

On July 1, 2013 (the “Resignation Date”), EFP Rotenberg, LLP (“EFP”) resigned as the principal independent registered public accountant of Sorl Auto Parts, Inc. (the “Company”).

The report of EFP on the Company’s financial statements for the years ended December 31, 2011 and 2012 did not contain adverse opinions or disclaimers of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles.

For the years ended December 31, 2011 and 2012 and the subsequent interim period through July 1, 2013, there were no disagreements between the Company and EFP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to EFP’s satisfaction, would have caused them to make reference to the subject matter of the disagreements in connection with its report. For the years ended December 31, 2011 and 2012 and the subsequent interim period through July 1, 2013, there were no "reportable events" as that term is described in Item 304(a)(1)(v) of Regulation S-K.

The Company requested that EFP review the disclosures contained herein and asked EFP to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements the Company made in this Current Report and, if not, stating the respects in which it does not agree. A copy of EFP’s letter dated July 1, 2013 is filed as Exhibit 16.1 to this Form 8-K.

First Quarter 2013 Financial Results

• Net sales were $41.3 million, compared to $44.6 million for the first quarter of 2012.
• Gross profit for the first quarter of 2013 was $11.2 million, which is a slight decline compared with $12.2 million for the first quarter of 2012.
• Net income attributable to stockholders for the first quarter of 2013 was $1.2 million, or $0.06 per basic and diluted share, compared with $2.3 million, or $0.12 on per basic and diluted share, in the first quarter of 2012.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We continue to focus on increasing our market share and maintaining our margin through our product strategy even in a sluggish commercial vehicle market. We achieved good first quarter sales despite continued weakness in construction and real estate development activities in China. Our sales in the first quarter of 2013 were solid even though they declined by 7.4%, as compared with a 10.9% reduction in heavy-duty truck sales as released by the China Automobile Industry Association. On the product front, we introduced a series of new products with high technology content and advanced functionalities. As a result of all these strategic initiatives, we were able to maintain an industry-leading gross margin inChina. We are positioning SORL to strengthen its core competencies to build our shareholders' long-term value.

"As we prepare for an expected rebound in market growth, especially heavy-duty trucks, we are also making headway in both the bus and construction equipment markets. Our aftermarket business is stable due to the large number of vehicles in operation. Our international sales increased as the overseas markets began to respond to our marketing initiatives despite currency fluctuations, uncertain growth prospects in Europe and instability in the Middle East. In the first quarter of 2013, several of our products received certification by T�V Rheinland, a global leader in independent inspection and certification services. This world-class certification endorses our products' suitability for international markets. We look forward to further building our customer base, as we believe international sales represent a significant opportunity for future growth of the Company."

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We have maintained our gross margin and generated positive cash flow from operating activities. We expect to further invest in our operations to maintain our domestic market leadership."

Business Outlook

For the fiscal year 2013, management expects the net sales to be approximately $207 million and net income to be approximately$13.7 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"Our investments in R&D and advanced production equipment will continue to enable us to roll out products' with high quality and stronger performance at a reasonable price to meet or exceed our customers' requirements. By maintaining close relationships with our customers, we expect to benefit from increased sales as the markets improve," Ms. Yu concluded.

ZHEJIANG, China, November 5, 2012 /PRNewswire-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL)("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced the Company received a 400-unit order for its new electric air compressor from Shen Zhen Wuzhoulong Motors Group. Released in July 2012, the new electric air compressor is selling at 8,000 RMB per unit. In addition to Wuzhoulong, the Company has also received indication of purchasing interest for the same products from other large bus manufacturers in China.

Air brake compressors used in traditional vehicles are powered by an internal combustion engine. SORL's new generation of electric air brake compressors are powered by an electric motor, thereby increasing fuel conservation and reducing pollution. The new compressors have an extended life span as it is far easier to make them start or stop working. An electric air compressor is a necessity for all electric buses with an air brake system.

ZHEJIANG, China, September 24, 2012 /PRNewswire-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced that it has won a new contract from Shaanxi Auto Group Co., Ltd. ("Shaanxi Auto") to supply 90% of the re-card spring brake chambers for the Delong F3000 heavy-duty truck models.

The Delong F3000 series is one of the heavy-duty truck models from Shaanxi Auto and it possesses the versatility to be used in logistics, heavy loads, construction and bridge building, ore transportation, municipal sanitation and the transportation of dangerous goods. The new F3000 provides superior quality for its customers.

The Shaanxi Auto Group Co., Ltd. was founded in 1968 and is headquartered in Xi'an, Shanxi Province, with total assets of RMB 29.2 billion and 33,000 total employees. In 2011, Shaanxi Auto produced and sold 120,000 units of various vehicles, with sales revenue of RMB 31 billion. Its heavy-duty truck sales volume reached 100,000 units and it exported 10,000 vehicles. It is mainly engaged in the development, production and sales of commercial vehicles and auto parts, and it is the largest new energy commercial vehicle production enterprise. It is China's leading manufacturer of natural gas heavy-duty trucks with more than a 50% market share.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "We are very pleased that our relationship with Shaanxi Auto has made substantial progress. Shaanxi Auto is one of China's top five heavy-duty truck manufacturers. This new relationship is a further recognition of our products' high quality, advanced technology, and excellent service to the OEM market. Even as we expand globally, we continue to further increase our market share in China. We will continue to strengthen our innovation and product quality control to achieve more extensive cooperation with our customers and provide them with even more cost-effective products."

Second Quarter 2012 Financial Highlights

• Revenues for the second quarter of 2012 were $52.1 million; 
• Gross margin was 27.2% in the second quarter of 2012, up from 27.1% in the second quarter of 2011;
• Net Income attributable to shareholders was $3.0 million, or $0.16 per diluted share, in the second quarter of 2012 compared to $0.26 in prior year quarter.
• In the first six months, cash flow from operating activities was $10.2 million and free cash flow of $9.8 million was generated.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We produced a strong quarter in a very difficult global commercial vehicle market. While our revenue in the domestic OEM, domestic aftermarket and international market all experienced different levels of year-over-year declines, we managed to hold our market shares and protect our gross margin. Despite the negative sentiment in the marketplace, there is also a bright side to the story. The large and increasing base of commercial vehicles in operation in China, stricter safety measures and the expiration of OEM warranties helped SORL's aftermarket sales, as braking systems are one of the most critical controls of a vehicle's safety. In addition, the continuing growth of China's many large urban centers, new school bus regulations and the Chinese government's increased support for public transportation supports the bus aftermarket and OEM markets. Internationally, we also see opportunities as Chinese-made product quality has reached the same level of global counterparts, but with a better pricing advantage, especially in the standard product category."

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "In a market with excess capacity, our balanced revenue sources enable us to stay competitive financially and operationally. We continue to execute our product strategy by introducing new products with new features, which helped to stabilize sales in the OEM market and aftermarket and defend our gross margin. Our penetration into the bus and light-duty vehicle OEM markets helped offset the sales decline in the medium-duty and heavy-duty OEM truck market in the second quarter of 2012. We increased our receivables and inventory management and improved our balance sheet through much stronger free cash flow generation in the quarter. Due to our improved cash flow in the first half of 2012, we have also significantly reduced our bank loans and lowered our financial expenses."

Business Outlook

For the fiscal year 2012, management revised their expectations for net sales to be approximately $198 million and net income to be approximately $11.1 million. The net income guidance is currently based upon 25% tax rate which is subject to change upon the renewal approval of High-Tech Enterprise status. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"Going into second half of the year, there remains uncertainties in many markets. However, we remain confident that we will increase our market share domestically and internationally. With our improved understanding of global market coupled with an increased number of SKUs, we will continue to increase our penetration into more developed and emerging markets. On the cost control side, we will reduce headcounts and continue to focus on productivity improvement by utilizing more automated equipment. We also expect to continue to generate solid free cash flow. We believe that with our strong financial discipline, solid product execution and invaluable experience throughout the 2008-2009 periods, we are well positioned to weather another storm and build strength for the next wave of growth in coming years." Ms. Yu concluded.

ZHEJIANG, China, July 20, 2012 /PRNewswire-Asia-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced that a large retail auto parts and service retail chain in the U.S. is now offering SORL hydraulic replacement brake parts to its customers.

In 2011, SORL's international sales increased by 17.7% as its products were sold into more than 104 countries and regions in the world and accounted for 26.3% of sales. Three of the top 7 international customers in 2011 were located in the United States.

Ms. Jinrui Yu, Chief Operations Officer, commented, "We are very pleased to have our hydraulic braking products offered by this large auto parts retail chain. The purchase and offering of our products by this retail chain is another testament to our products' quality and performance. We are the leading air brake company for commercial vehicles in China and we continue to expand our aftermarket products into the U.S. market, the second-largest automotive market in the world."

ZHEJIANG, China, July 18, 2012 /PRNewswire-Asia-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced that the Company has launched a new generation of electric air brake compressors to be used in electric buses.

Huaping Wang, chief engineer of SORL, commented: "Our recent research and development efforts have been focused on developing specialized systems for new energy vehicles mandated by the Chinese government. We believe that our innovations position us well as a leader in this emerging segment and will enable us to meet the evolving demands of our customers. SORL supports the State initiative to reduce emissions and drive the shift to more environmentally friendly new energy vehicles."

Air brake compressors used in traditional vehicles are powered by an internal combustion engine. SORL's new generation of electric air brake compressors are powered by an electric motor, thereby increasing fuel conservation and reducing pollution. The new compressors have an extended life span as it is far easier to make them start or stop working. An electric air compressor is a necessity for all electric buses with an air brake system.

ZHEJIANG, China, July 2, 2012 /PRNewswire-Asia-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced that the Company has recently qualified as a supplier to Beijing Foton Daimler Automotive Co., Ltd. ("BFDA") after passing a number of rigorous on-site inspections and evaluations.

In May 2012, BFDA's assessment panel conducted a two-day, on-site inspection at SORL to determine the Company's qualifications to become a potential domestic supplier. The assessment process included various elements such as evaluations of the Company & Management, Project & Supplier Management, Engineering, Quality, Production, and Supply & Logistics. SORL successfully met all requirements, and entered into BFDA's supplier system to become a potential supplier.

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "The joint venture between Beiqi Foton and Daimler AG was a milestone event for Chinese domestic automakers, signifying that the quality and technology of Chinese commercial vehicle manufacturers is being recognized by international industry leaders. As an excellent supplier to Beiqi Foton, SORL leverages its industry-leading position, consistent quality and reliable technology to win this supplier certification from BFDA. We believe the value of our products will attract more international customers."

First Quarter 2012 Financial Highlights

• Revenues for the first quarter of 2012 were $44.6 million;
• China domestic aftermarket sales rose 14.0% year-over-year;
• Gross margin was 27.4% in the first quarter of 2012;
• Net Income was $2.3 million, or $0.12 per diluted share, in the first quarter of 2012;
• Cash flow from operating activities was $4.3 million and free-cash-flow was generated.

Mr. Xiaoping Zhang, SORL's Chief Executive Officer and Chairman, stated, "We experienced severe headwinds from the domestic OEMs to international markets in this quarter. However, we outperformed the heavy duty truck market, as we benefited from our solid performance in our domestic aftermarket segment and through our continued efforts in fostering relations with our distributors and introducing new products to end customers. After the automotive market experienced a weak year in 2011, the sales decline in the Chinese truck OEM market continued to widen during the first quarter of 2012. Higher fuel price and slower construction activities continued to depress downstream customer demand for new trucks. We remain focused to expand our market share with OEMs through our broadened product offerings. As a result, our sales to the bus and construction equipment markets increased. For the first time in many years, our international sales suffered a sequential double-digit decline. While the unstable environment in the Middle East negatively impacted our sales in the region, we see good volume growth inEurope. "

Ms. Jinrui Yu, SORL's Chief Operating Officer, commented, "Our investments in higher- graded production equipment and new product development over the past two years started to generate positive outcomes. In an inflationary environment where labor costs are rising, we are proud to have maintained one of highest gross margins in the industry with our strengthened production efficiency and improved pricing power across all market segments. Our continued positive cash flows resulted from operating activities coupled with reduced capital expenditures, which enabled us to book solid free-cash-flow of nearly $4 million. We have significantly reduced short-term debt with increased receivable collections and expanded customer prepayments. With our improved financial standings, new products and enhanced operational fundamentals, we are well positioned to generate stronger earnings when market regains its growth momentum."

Business Outlook

For the second quarter of fiscal year 2012, management expects net sales to be approximately$225million and net income to be approximately $14.6million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

"We will continue to benefit from the opportunities in the Chinese domestic aftermarket where the safety requirement bar has been raised. We are confident to maintain our OEM customer base and market position while penetrating new markets and earning new customers. Internationally, we plan to enhance SORL brand image through attendance of more industry exhibitions. More specifically, we will build a stronger international marketing network focused on exploring high-value foreign markets, and actively marketing to the large automotive chain stores that directly sell to end users," Ms. Yu concluded.

Fourth Quarter 2011 Results

• Record net sales were $56.1 million;
• Aftermarket and international market revenues increased 13.6% and 26.5%, respectively, versus the fourth quarter of 2010;
• Gross margin was 28.1%, compared with 27.5% in the same quarter of 2010 and 27.5%; in the third quarter of 2011;
• Net income attributable to stockholders for the fourth quarter of 2011 was $3.3 million, or $0.17 per diluted share.

Mr. Xiaoping Zhang, SORL Auto Parts' Chief Executive Officer and Chairman, stated, " 2011 was a difficult year for the Chinese commercial vehicle market due to the macro business environment and government monetary policies. We are very proud that we defended our OEM market share, further consolidated our leadership in the domestic aftermarket and strengthened our expansion in the international market segments. Over the years, our consistent delivery of products with excellent quality has further strengthened our relationships with OEMs as they remain highly selective of suppliers of safety-related auto components. In the aftermarket segment, we benefited from higher safety measures introduced by the Chinese government and our ongoing effort in building relationships with end customers through our robust nationwide distribution and marketing network. In the international markets, we continued to implement our globalization strategy by further expanding our global sales network. At the same time, our highly cost-effective products and newly developed, innovative products are helping us to further gain share in the international markets. Our continuing R&D investments started to bear fruit. The successful introduction of innovative products has earned us new customer wins and helped improve our profitability. Also, our further investment in modern machinery equipment has enabled us to offset the pressure from rising labor costs and raw material increases. Going forward, we will continue to diversify our product offerings and further the integration of our sales network and end markets. We are confident of our ability to maintain steady progress despite the uncertain market conditions."

Business Outlook

We project approximately $234 million of sales revenue and $18.7 million of net income attributable to our common stockholders for the full year ending December 31, 2012. "We remain cautiously optimistic as Chinese OEM market still awaits catalyst. We will continue to increase production efficiency and improve product mix. Our success in maintaining domestic OEMs sales in 2011 has proven SORL's resilience and competitiveness in a soft OEM market. We continue to execute our international expansion strategy and build a stronger international foothold in 2012, as we expect more new customer wins in many emerging markets." Mr. Zhang concluded.

ZHEJIANG, China, March 8, 2012 /PRNewswire-Asia-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ: SORL) ("SORL" or "the Company"), a leading supplier of brake and control systems to the global commercial vehicle industry, today announced the appointment of Ms. Jinrui Yu as the Company's Chief Operating Officer, effective immediately. Mr. Baojian Tao, who served as the Company's Chief Operating Officer, resigned from his position as such for personal reasons, effective March 3, 2012.

Ms. Yu, age 37, has more than 15 years of experience in the auto parts industry. Ms. Yu has served as the Company's Production and Export Vice President since August 2009. From 2004 to 2009, Ms. Yu served as the Company's Export Department Manager. From 1999 to 2004, Ms. Yu served as International Sales Manager of Ruili Group Co., Ltd, which specializes in manufacturing auto parts, and from 1997 to 1999, Ms. Yu worked in the OEM market sales department of Ruili Group Co., Ltd.

Mr. Xiaoping Zhang, Chief Executive Officer and Chairman of the Board of the Company, said, "We thank Baojian Tao for his leadership and many contributions during an important growth period in SORL's history. We wish him well in his future endeavors. Ms. Yu has demonstrated that her capabilities and extensive knowledge of our operations will ensure a smooth succession. We look forward to Ms. Yu's continuing contributions to the Company as our new Chief Operating Officer.

Third Quarter 2011 Results

Rodman and Renshaw on SORL                        8/17/2011

SORL: 2Q11 Earnings Update; Lowering PT to $10.00

2Q11 Results: SORL reported 2Q11 revenue, earnings, and diluted EPS of $61.1 MM, $5.0 MM, and $0.26, compared to our estimates of ~$63.7 MM, $5.7 MM and $0.29, respectively. Top-line grew by 10.8% y-o-y from $55.2 MM in 2Q10 and 17.5% sequentially from $52.0 MM in 1Q11. Gross profit of $16.6 MM represented a 1.3% y-o-y increase or gross margin of 27.1%, compared to $16.4 MM or 29.7% margin in 2Q10 and $14.6 MM or 28.1% margin in 1Q11. Bottom-line was recorded at $5.0 MM, a 12% decline from $5.6 MM of earnings in 2Q10. Diluted EPS was down 16.7% from last year at $0.26 per share. The company ended the quarter with cash balance of $14.2 MM, $71.8 MM in A/R, and $42.1 MM in inventories.

Revenue Mix: During 2Q, by market segments, China OEM, China Aftermarket, and International Sales contributed $32.6 MM, $12.7 MM, and $15.7 MM in revenue, accounting for 53.4%, 20.8%, and 25.7% of total quarterly sales. The three market segments each grew by (6.1%), 84.1%, and 15.4% y-o-y. By vehicle types, commercial vehicle brake systems contributed 78.9% of 2Q11 sales up 12.1% y-o-y, while passenger vehicle brake systems accounted for 21.1%, growing by 4.9% y-o-y.

Margins In-line, but Pressure Remains: Gross margin came in at 27.1% versus our expected 27.5% and 2Q10’s 29.7%, and net income margin of 8.1% compared to our estimate of 8.9% and lower than 2Q10’s 10.2%. The decrease in margins reflects the inflation in raw materials and labor costs. According to management, cost of purchasing steel and aluminum parts each increased by ~7.9% and ~1.5% y-o-y.

3Q11 Guidance Weaker: The company provided 3Q11 guidance with revenue of $45 MM and net income of $3.6 MM, indicating a y-o-y decline of 11.4% and 28%, respectively. This is driven by management’s weaker expectation for SORL’s OEM segment. Management aims to offset this near term weakness by continuing it efforts in R&D to launch higher margin products and maintain strategic relationship with its OEM customers.

Revising Estimates: Given the headwinds in SORL’s OEM business, we are lowering our 3Q11 estimates for revenue, net income, and EPS to $45.8 MM, $3.5 MM, and $0.18, respectively. For full year FY11, we are revising estimates to $212.7 MM, $17.6 MM, and $0.91. We are also introducing our FY12 estimates of $243.2 MM, $19.6 MM, and $1.02, respectively.

Lowering PT to $10.00: We also believe investors will look for improvements in balance sheet and cash flow metrics before being comfortable in assigning the company a higher valuation multiple. In line with our lowered financial projections we are also lowering our price target on SORL from $18.00 to $10.00. Our new price target translates into a P/E multiple of ~10x with respect to our EPS estimates for FY12. At current levels the stock is trading at ~3.85x and ~3.44x to our new FY11 and FY12 EPS estimates.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINRA.

Rodman and Renshaw SORL                            5/16/2011

SORL: 1Q11 Earnings Update

1Q11 Results: SORL reported 1Q11 revenue, earnings, and diluted EPS of $52 MM, $4.9 MM, and $0.25, compared to our estimates of ~$49.7 MM, $4.9 MM and $0.26, respectively. Top-line grew by 34.6% y-o-y from $38.6 MM in 1Q10 but down 5.1% sequentially from $54.8 MM. Gross profit of $14.6 MM represented a 25.6% y-o-y increase and a 28.1% in gross margin, compared to $11.6 MM or 30.1% margin in 1Q10 and $15.6 MM or 28.5% margin in 4Q10. Selling expenses were up 27.2% y-o-y from $2.4 MM to $3.1 MM, accounting for 5.9% of total revenue compared to 6.2% in 1Q10. Bottom-line was recorded at $4.9 MM, a 34% increase from $3.6 MM of earnings in 1Q10. Diluted EPS was up 31% from last year at $0.25 per share.

Revenue Mix: During 1Q, by market segments, China OEM, China Aftermarket, and International Sales contributed $32.0 MM, $8.6 MM, and $11.4 MM in revenue, accounting for 61.5%, 16.5%, and 21.9% of total quarterly sales. The three market segments each grew by 39.7%, 32.3%, and 23.9% y-o-y. By vehicle types, commercial vehicle brake systems contributed 78.9% of 1Q11 sales up 39.2% y-o-y, while newly acquired passenger vehicle brake systems accounted for $10.9 MM, or 21%, a 20.2% y-o-y increase.

Potential Margin Headwind: Overall gross margin was down in the quarter to 28.1% from 30.1% a year ago due to a higher raw material price and labor cost. By vehicle types, commercial vehicle brake systems generated 26.1% in margin, compared to 35.4% for passenger vehicle brake systems. During the conference call management acknowledged the margin pressure going into the second half of the year, but expects offset it by efficient production and continued introduction of new higher margin products. The company indicated that they are able to partially pass on the rising raw material cost to its domestic and overseas aftermarket customers while it remains difficult to pass on costs to OEM majors.

2Q11 Guidance: Management is guiding for revenue and earnings of ~$65 MM and ~$6.1 MM, which came in line with our expectations. SORL is cautiously optimistic on its outlook for 2011 given that it is well positioned in medium/light truck market, which grew decently by ~28% y-o-y, while revenue from heavy truck market was down by 21% y-o-y. The company expects approximately $5.0 MM in CapEx throughout FY11.

Our Estimates: For 2Q11, we are now projecting $63.7 MM for top-line, $5.7 MM for bottom-line, and $0.29 for diluted EPS. For full year numbers, our estimates are $251.7 MM, $22.7 MM, and $1.18 per share, respectively. This includes an overall gross margin and EBIT margin expectations of 27.6% and 11.9%.

Valuation: At current levels the stock is trading at 4.9x to our FY11 EPS estimates. We are comfortable maintaining our price target of $18.00 for SORL, which translates into a P/E multiple of ~15x with respect to our EPS estimates for FY11.

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Rodman and Renshaw on SORL                         3/30/2011

SORL: 4Q10 Earnings Update

4Q10 Beat: SORL reported 4Q10 revenue, earnings, and diluted EPS of $54.8 MM, $5.9 MM, and $0.31, beating our estimates of ~$51.4 MM, $4.6 MM and $0.24, respectively. Top-line grew by 19.4% y-o-y from $45.9 MM in 4Q09 and 7.8% sequentially from $50.8 MM. Gross profit of $15.6 MM represented a 4.3% y-o-y increase and a 28.5% in gross margin, compared to $15.0 MM or 32.7% margin in 4Q09 and $14.5 MM or 28.6% margin in 3Q10. Selling expenses were up 30.2% y-o-y from $3.2 MM to $4.1 MM, accounting for 7.5% of total revenue compared to 6.9% in 4Q09. Bottom-line was recorded at $5.9 MM, a 5.6% increase from $5.6 MM of earnings in 4Q09. Diluted EPS was flat from last year at $0.31 per share.

Key Takeaways: SORL’s stock has been impacted by downgrades and price target cuts post its fourth quarter earnings announcement. We were pleased with company’s overall performance, which was partly driven by efforts undertaken over the past twelve months to diversify into the passenger vehicle market, export opportunities and improvements in the after-markets business. The company has also demonstrated margin stability in a very competitive environment. We believe SORL remains well positioned for 2011. The company’s ability to launch more technology intensive products will determine margin integrity in the business.

Margin Outlook: Gross margin was slightly down in FY10 from 30.4% to 29.2% due to higher raw material cost and pricing pressure from intense competition. Currently 59% of revenue is generated from SORL’s OEM customers, in which SORL has a relatively lower pricing power compared to aftermarket. Headwinds in margins include (1) slower end user demand growth due to high oil price (2) raw material cost (3) increasing labor cost across China. Going into FY11, SORL expects a gross margin range of 27.5% ~ 28%. The company intends to maintain its margin by launching new, higher-margin products to domestic customers and faster expansion in international sales.

1Q11 Guidance: SORL is guiding for revenue and net income of $50.0 MM and $4.6 MM for 1Q11. We revised our estimates for top-line, bottom-line, and diluted EPS of $49.7 MM, $4.9 MM, and $0.26, respectively. For full year FY11, our projections are now $249.4 MM, $25.2 MM, and $1.30.

Valuation: We believe that SORL should benefit from a) new product introductions, b) government’s extensive road projects, c) increased urbanization and heavy reliance on public transport, d) acquisition / partnership opportunities and e) healthy balance sheet. At current levels the stock is trading at 4.9x to our FY11 EPS estimates. We are comfortable maintaining our price target of $18.00 for SORL, which translates into a P/E multiple of ~14x with respect to our EPS estimates for FY11. This compares to an average forward FY11 P/E multiple of ~16.8x for similar companies listed in China and ~13.4x for those listed in the US.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Fourth Quarter Results:

• SORL's consolidated net sales were $54.8 million, an $8.9 million or 19.4% increase over the $45.9 million in the same quarter of 2009
• SORL's consolidated gross profit was $15.6 million for the fourth quarter of 2010, a 4.3%  increase or $0.6 million, from $15.0 million for the fourth quarter of 2009.
• SORL's consolidated net income attributable to stockholders for the 2010 fourth quarter was $5.9 million, or $0.31 per diluted share, a 5.6% gain over the $5.6 million, or $0.30 per diluted share, in the year ago fourth quarter.

Mr. Xiaoping Zhang, SORL Auto Parts' Chief Executive Officer and Chairman, stated, "Our 2010 fourth quarter continued our growth trend as the Chinese economy continued to expand.  We benefited from higher demand for commercial vehicles due to the investment in infrastructure by the Chinese government, the expansion of the highway system allowing for more goods to shipped longer distances, and greater bus production to move people.  Additionally, through SORL's acquisition of certain assets of the auto parts business of the Ruili Group, we now are selling into the passenger vehicle market and offer a broader line of products."

We project approximately $50.0 million of sales revenue and $4.6 million of net income attributable to our common stockholders for the first quarter ending March 31, 2011.

Rodman & Renshaw on SORL                                      01/18/2011

SORL Auto Parts, Inc.


SORL: Fundamentals Remain Intact; Maintaining Outperform 

No News Around Last Week’s Pull Back: SORL’s stock pulled back ~7.7% last Friday. We don’t believe this pull back was driven by any news or fundamental changes to the company’s business. However, small cap Chinese companies that have undertaken M&A transactions have been facing investor scrutiny recently for deal transparency. The pull back in SORL may have occurred in sympathy with these developments. Management has disclosed that the valuation and asset appraisal on SORL’s recent $25 MM acquisition of the passenger vehicle related business from the Ruili Group was undertaken by DTZ Debenham Tie Leung Limited ("DTZ"). Management indicates that valuation was driven by asset appraisal vs. earnings. However, if we consider the expected $35 MM and $4 MM revenue and net income contribution from this acquisition in 2011, the valuation appears to be in line with that being assigned to small cap Chinese auto component names trading in the US and a significant discount to averages in China. We also believe this acquisition is a step towards reducing related party transactions in SORL’s business. At current levels the stock remains attractive to us and we maintain our 4Q10 revenue, net income and EPS estimates of ~$51.4 MM, $4.6 MM and $0.24.

Valuation: At current levels the stock is trading at 8.2x and 6.0x to our FY10 and FY11 EPS estimates. We are comfortable maintaining our price target of $18.00 for SORL, which translates into a P/E multiple of ~19x and ~14x with respect to our EPS estimates for FY10 and FY11. This compares to an average forward FY11 P/E multiple of ~15.8x for similar companies listed in China and ~17.2x for those listed in the US. We believe SORL deserves an in-line valuation to its peers as the company is proactively introducing higher margin products, expanding internationally and has now entered the passenger vehicle market. These drivers should allow the company to sustainably exceed industry growth rates over the next two years.

Risks

Lower aftermarket demand, b) Production concentrated at single site, and c) Cyclical nature of the commercial vehicles industry

Notice Regarding Privacy and Confidentiality: 


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

ZHEJIANG, China, Dec. 21, 2010 /PRNewswire-Asia/ -- SORL Auto Parts, Inc. , announced today that the Yutong Group, Asia's largest bus manufacturer, has agreed to purchase disc spring chambers exclusively from SORL in 2011, replacing imported products that Yutong had previously purchased.

The new orders are expected to increase SORL's 2011 sales to the Yutong Group by 100%. Sales to the entire bus market in 2011 are expected to reach RMB 50 million, more than a 100% increase compared with bus sales in 2010. The Company's market share in the bus market is expected to rapidly expand with these new orders.  

SORL entered the bus market in 2007 and has already established long-term relationships with leading domestic bus original equipment manufacturers ("OEMs), mainly supplying air brake products for buses in intra-city long-haul transportation. New orders for disc brake products received in November 2010 will also help the Company further expand in the long-distance bus market.

Mr. Baojian Tao, Chief Operating Officer of SORL, commented, "We are very pleased to achieve this new breakthrough in the growing Chinese bus market as disc brake products are a new growth area for the Company. As one of our leading markets, the bus market has achieved rapid growth in recent years. Successfully replacing imported products demonstrates the increasing quality and higher technology content of our products to meet global safety standards. We are continuing to enhance our technological innovation, further improve our product quality, and introduce more new, advanced products to expand our market share and increase our earnings."    

Rodman & Renshaw on SORL                                       12/21/2010

SORL: An Import Substitution Option; Sales To Yutong Double in 2011 

Yutong’s Orders: SORL announced that it has signed exclusive supply agreement with Yutong Group (the parent company of Zhengzhou Yutong Bus Co., Ltd: 600066-SHG, Not Rated) for SORL’s disc spring chamber products. Yutong is the largest bus manufacturer in Asia and also the biggest producer of mid/large sized buses in the world. Sales to Yutong are expected to double in FY11, while the company’s bus component sales for FY11 are set to grow at least 100% to approximately RMB 50 MM (~$7.5 MM). These new orders from Yutong will make SORL its sole supplier of disc spring chambers, entirely replacing imports.

Key Takeaways: We are not entirely surprised by this announcement given that SORL’s market share gain story continues to play out. The company is very well positioned to evolve into an alternative quality play to more expensive imported auto parts given its cost advantage, quality assurance, and R&D efforts. With the recognition from well established majors like Yutong we expect similar wins at other OEMs in the future. We continue to maintain that investors looking at auto component opportunities in China should prioritize SORL as an option.

Valuation: At current levels the stock is trading at 9.0x and 6.6x to our FY10 and FY11 EPS estimates. We are comfortable maintaining our price target of $18.00 for SORL, which translates into a P/E multiple of ~19x and ~14x with respect to our EPS estimates for FY10 and FY11. This compares to an average forward FY11 P/E multiple of ~17x for similar companies listed in China and ~16.8x for those listed in the US. We believe SORL deserves an in-line valuation to its peers as the company is proactively introducing higher margin products, expanding internationally and has now entered the passenger vehicle market. These drivers should allow the company to sustainably exceed industry growth rates over the next two years.

Risks: Lower aftermarket demand, b) Production concentrated at single site, and c) Cyclical nature of the commercial vehicles industry

Notice Regarding Privacy and Confidentiality:


This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Rodman & Renshaw on SORL

Overview: SORL reported its 3Q10 revenue net income and EPS of $50.8 MM, $5.0 MM and $0.26, beating our expectations of $45.3 MM, $4.0 MM, $0.21, respectively. The result also came in better than the street consensus of $46.1 MM, $4.1 MM, and $0.21. Total revenue (including sales to related parties) grew by 31.2% Y-o-Y from $38.7 MM in 3Q09 and 1.8% sequentially from $49.9 MM in 2Q10, driven by strong OEM business and export market. Gross profit was recorded at $14.5 MM, or 28.6% in margin, compared to $11.0 MM or 28.3% in 3Q09 and $13.5 MM or 27.0% in 2Q10. The company delivered a net income of $5.0 MM, compared to $4.2 MM in 3Q09 and $5.4 MM in 2Q10. Diluted EPS was $0.26, on a fully diluted share count of 19.3 MM. SORL ended 3Q10 with a total of $2.2 MM in cash, accounts receivable of $52.3 MM, inventory of $28.0 MM, and short-term bank loans of $9.4 MM. 

Strong Organic Growth: Excluding the revenue contribution from newly acquired Ruili Group, the organic SORL revenue was $47.9 MM for the quarter, growing by 40.6% Y-o-Y from $34.0 MM in 3Q09. By business segments, Domestic OEM, Domestic Aftermarket, and Export segment each contributed $25.0 MM, $9.4 MM, and $13.4 MM in revenue, accounting for 52%, 20%, and 28% of total sales, respectively. Top-line growth was mainly fueled by a strong China OEM sales and export sales, growing by 43.7% and 71.8% Y-o-Y, respectively. 

Higher Gross Margin: Overall gross profit for the quarter reached $14.5 MM, or 28.6% in margin, compared to $11.0 MM or 28.3% in 3Q09 and $13.5 MM or 27.0% in 2Q10. The gross margin improvement was attributable to the company’s continued efforts in adding high margin products and a larger contribution from exports. 

Continues To Spend On R&D: R&D expenses were $1.8 MM for the quarter, up from $0.6 MM in 3Q09 and $1.7 MM in 2Q10. Excluding Ruili Group acquisition, R&D spending was $1.6 MM. The company is investing in new product development, including upgrading traditional valves and developing electronic products. We believe the company’s continued efforts on new product launches should support its gross margin in mid/long-term horizon. 

Guidance & Estimates: Management is guiding for full year revenue and net income of $183 MM and $18 MM. For 4Q10 we expect the company to generate revenue, net income, and diluted EPS of $51.4 MM, $4.6 MM, and $0.24, implying full year numbers of $186.2 MM, $18.1 MM, and $0.95, respectively. For FY11 our estimates are $238.7 MM, $25.0 MM, and $1.30. We believe SORL should be the ‘go to’ Chinese auto component for investors given the company’s relatively higher margins, acquired exposure to passenger segment, positioning in the after markets space and ramp in international sales. 

Valuation: At current levels the stock is trading at 9.9x and 7.2x to our FY10 and FY11 EPS estimates. We are comfortable maintaining our price target of $18.00 for SORL, which translates into a P/E multiple of ~19x and ~14x with respect to our EPS estimates for FY10 and FY11.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Third Quarter Financial Highlights

• SORL Net sales rose 40.8% from the third quarter of 2009;

• SORL OEM sales were up 43.7% year-over-year;

• SORL Export sales were up 71.8% year-over-year;

• SORL Gross margin was 28.0% up from 27.1% in the preceding quarter;

• SORL Net income rose 27.8% year-over-year; with diluted EPS of $0.25 vs. $0.21;

• SORL Net cash flows from operating activities were $19.3 million, up from negative $2.2 million in the third quarter of 2009.

Mr. Xiaoping Zhang, SORL Auto Parts' Chief Executive Officer and Chairman, stated, "We are very pleased with our financial performance in the third quarter of 2010.We benefited from the robust growth of China's economy and especially the automotive industry. Sales of our new model products, applicable to both OEM and aftermarket also grew in the third quarter of 2010. OEM sales rose as we promoted our integrated systems and modular supplies to them. Export sales growth reflects more confidence in a global economic recovery. We will continue with our strategies to further optimize our international sales network to help further penetrate into new markets. Also, we are enhancing investment in new product development to create higher-margin advanced products to increase both our OEM and aftermarket sales."

Business outlook:

We project approximately $183 million of sales revenue and $18 million of net income attributable to our common stockholders for the full year ending December 31, 2010.

   Second Quarter Financial Highlights:

• Revenues rose 67.8% year-over-year to a quarterly record of $49.9 million.
  
• Gross profit rose 60.0% year-over-year to a quarterly record of $13.5 million Net income increased 79.7% year-over-year to a quarterly record of $5.4 million.
  
• Fully diluted earnings per share were a quarterly record of $0.28 compared with $0.16 in the 2009 second quarter.
  
• OEM sales rose 121.3% year-over-year to $31.2 million and internationalmarket sales rose 42.9% to $12.0 million.
  
• The Company was awarded five patents during the quarter, including one invention patent from the United States Patents and Trademark Office.

Mr. Xiaoping Zhang, SORL Auto Parts' Chief Executive Officer and Chairman, stated, "We are very excited about our second quarter results as we exceeded our guidance. Our strong momentum in the OEM business, especially in the more profitable heavy-duty truck segment, substantially outpaced overall market growth, showing the effectiveness of our branding strategy and customer relationship efforts. We strive to continue to improve our products' quality and safety. On the product development front, the new products we introduced have been well received by our domestic and international customers. Despite cost pressure from raw materials and payroll growth, we continue to optimize our product mix by rolling out more value-added new products to maintain an attractive margin."

Business outlook

For the third quarter of fiscal year 2010, management is expecting net sales to be approximately $45 million and net income to be approximately $4 million. These targets are based on the Company's current views on the operating and market conditions, which are subject to change.

Mr. Zhang commented, "Entering into second half of 2010, we remain bullish, particularly about our domestic aftermarket business, as more and more trucks on the road need high-quality replacement brake systems, and as our OEM business continues to enhance our brand recognition in the replacement market. We expect that our OEM business growth will stabilize in the second half of 2010, after experiencing rapid growth in the first half. We expect cash flow to improve in the second half of 2010, because our capacity expansion is ahead of schedule and the majority of capital expenditures for 2010 already occurred in the first half of 2010, and because a significant amount of short-term receivables are due shortly. On the cost side, we anticipate that steel and aluminum prices will ease, relieving margin pressure. Overall, growth in the second half of 2010 will be solid as we also launch new products with higher price points, and, combined with improved material costs, should allow us maintain high profitability."

Mr. Xiaoping Zhang, SORL Auto Parts' Chief Executive Officer and Chairman, stated, "We are very pleased with our financial performance in the first quarter of 2010. Higher transportation needs for supplies and resources due to rapid urban expansion in interior mainland China caused surging demand for trucks in the first quarter. While commercial vehicle OEMs are ramping up production as they are reaching the limits of their current capacities, they keep auto parts suppliers, especially safety-related components and system producers, on a tight production schedule. We have carefully increased our production and continue to focus on quality assurance. As the truck replacement cycle approaches, under stricter government emission control measures, we also introduced a series of new products into the marketplace. These new products feature new functionalities, not only targeted at fuel-efficiency-conscious customers, but to strengthen driver safety and comfort. As a result of our product mix shift toward high-value-added products, our margin improved."

For the second quarter of fiscal year 2010, management is expecting:

• Net sales to be approximately $47.0 million
• Net income to be approximately $4.3 million, compared with net sales of $29.7 million and net income of $3.0 million for 2009 second quarter.

These targets are based on the Company's current views on the operating and market conditions, which are subject to change.