8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): May 14, 2007 (May 10, 2007)

WONDER AUTO TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Nevada	0-50883	88-0495105
(State of Incorporation)	(Commission File No.)	(IRS Employer ID No.)

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

(Address of Principal Executive Offices)

Registrant’s Telephone Number, Including Area Code: (86) 0416-5186632

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 10, 2007, Wonder Auto Technology, Inc., a Nevada Corporation (the “Company”) issued a press release reporting its financial results for the quarter ended March 31, 2007 and on the same day the Company conducted a conference call to discuss those results. A copy of the press release and the transcript of the conference call is hereby furnished as Exhibits 99.1 and 99.2, respectively and incorporated herein by reference.

The conference call may be accessed by replay by dialing (888) 286-8010 or (617) 801-6888 (for international caller) and requesting information from conference ID 11929842. The replay will be available for playback from 11:00 a.m. eastern time, May 10, 2007 through May 17, 2007.

The press release and the transcript furnished as Exhibits 99.1 and 99.2 hereto contains certain statements that may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, are “forward-looking statements,” including statements regarding the Company’s business strategy, plans and objective and statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as “should,” “believes,” “expects,” “anticipates” or similar expressions, and involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of their respective dates. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with and available from the SEC. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

The information contained in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall such information or such exhibits be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d)     Exhibits.

99.1	Press release dated May 10, 2007
99.2	Transcript of May 10, 2007 conference call

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WONDER AUTO TECHNOLOGY, INC.
Date: May 14, 2007	By:	/s/ Qingjie Zhao
		Qingjie Zhao
		Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated May 10, 2007
99.2	Transcript of May 10, 2007 conference call

EX-99.1

Exhibit 99.1

Investor Relations Contact:	Company Contact:
Mark Collinson, Partner	Xie Yuechun, CEO Assistant
CCG Investor Relations	Wonder Auto Technology, Inc.
310-477-9800, ext. 117	416-266-1186
Mark.collinson@ccgir.com	wondergrp2006@yahoo.com.cn

FOR IMMEDIATE RELEASE

Wonder Auto Technology, Inc.

Reports First Quarter 2007 Results

JINZHOU CITY, China, May 10, 2007 - Wonder Auto Technology, Inc., (OTCBB: WATG) (“Wonder Auto” or “the Company”), a China-based manufacturer of automotive electrical parts, predominantly, starters and alternators, today announced its financial results for the first quarter 2007.

Q1 Highlights

·     Revenues increased to a record $21.6 million, up 45.8% year-over-year

·     Net income increased 92.5% year-over-year to $2.7 million

·     Export sales increased to 4.8% of total revenue

Revenue increased to a record $21.6 million, up 45.8% from revenue in the first quarter 2006 of $14.8 million. The increase in revenue was primarily due to the continued increase in demand from existing customers for alternators and starters. Gross profit for the quarter increased 78.5% to $5.3 million from gross profit of $3.0 million in the comparable period a year earlier. Net income increased to $2.7 million or 92.5% for the first quarter 2007 from $1.4 million in the first quarter 2006. Fully diluted earnings per share for the quarter were $0.11.

“We are very pleased to announce another quarter of record revenues and profits. We have been able to take advantage of the rapid growth of the automotive components industry in China, propelled by the strong growth of the auto market, especially for cars with small and mid size engines. In addition to increasing domestic revenues, our export sales increased to 4.8% of revenues during the quarter, indicating our emerging ability to penetrate and compete in international markets,” said Chairman and CEO, Mr. Qingjie Zhao.

For the first quarter of 2007, gross profit was $5.3 million, for a year-over-year increase of 78.5% from $3.0 million in the first quarter of 2006. Gross margin was 24.6% for the quarter compared to 20.1% for the same period a year earlier. Gross margin was favorably impacted by the consolidation of the acquired interest in the business of Jinzhou DongWoo Precision Co., Ltd. (“Jinzhou DongWoo”), one of Wonder Auto’s suppliers. Gross margin also benefited from more efficient cost control management and improved technology which allowed the Company to reduce raw material consumption per unit of production. In addition, Wonder Auto has been able to mitigate the effect of higher commodity prices on gross margin through customer pricing and product redesign, however margin levels are likely to be slightly lower during the remainder of the year.

Administrative expenses for the quarter were $0.7 million, or 3.1% of revenue, compared to $0.3 million for the same quarter a year ago, or 2.1% of revenue. The increase of administrative expenses is due to expenditures for improvement of the Company’s internal cost control systems to ensure compliance with SOX 404, the inclusion of Jinzhou DongWoo and the increased cost of being a U.S. publicly traded company.

In the first quarter of 2007, research and development expenses were $0.3 million, or 1.2% of revenue, compared to $0.1 million, or 0.7% of revenue, for the same period last year. The increased research and development expense is attributed to the Company’s continued efforts to maintain its technological competitiveness.

Selling expenses were $0.7 million for the first quarter 2007, or 3.0% of revenue, compared to $0.7 million, or 4.7% of revenue, in the comparable quarter a year earlier. The lower selling expense as a percent of revenue is due to the improvement in quality of the Company’s products which reduced the costs of after-sales services. In addition, the increased sales volume allowed the Company to benefit from economies of scale and reduced the per unit selling expenses.

Income from operations increased to $3.7 million for the first quarter 2007, up 99.3% from $1.9 million in the first quarter 2006. Operating margin for the quarter was 17.3% compared to operating margin of 12.7% in the same period a year ago. Operating margin benefited from improvement in gross margin and operating efficiencies.

Net income for the first quarter 2007 increased to $2.7 million, up 92.2% from the first quarter 2006 of $1.4 million. Fully diluted earnings per share for the quarter 2007 were $0.11.

Financial Condition

As of March 31, 2007, Wonder Auto had $10.0 million in cash and cash equivalents (including $3.9 million restricted cash), working capital of $30.4 million and $10.9 million long-term debt. Shareholders’ equity stood at $41.3 million, up from $38.2 million from December 31, 2006.

Subsequent Event

On April 2, 2007, Wonder Auto, through its subsidiaries, acquired approximately 80% of the shares in Jinzhou Wanyou Mechanical Parts Co., Ltd. (“Wanyou”). Wonder Auto already owned approximately 20% of the shares of Wanyou which combined with the additional 80% gives the Company and its subsidiaries 100% ownership in Wanyou. The shares were purchased from two separate parties for a total of $16.42 million, subject to certain net income targets.

Business Outlook

The auto industry in China continues to grow rapidly and Wonder Auto expects to continue to participate in that growth through increased orders from current customers and by developing new products through its joint development program. In July 2007, Wonder Auto expects to begin production from its new starter and alternator lines which will enable the Company to continue to improve its manufacturing capability and operating efficiencies. Moreover, the recent acquisition of Wanyou enhances the Company’s expertise and network in the export market, which Wonder Auto intends to leverage as it increases its international presence. The Company reaffirms its previous guidance for the full year of revenues of $100million and net income of $13.5 million.

“The Chinese automotive market remains robust after taking over from Japan as the world’s second largest market in 2006. With a current market share of about 15% in China, we are focused on aggressively expanding our presence in both domestic and international markets by maintaining our competitiveness through technological superiority and internal controls. We expect this progress will result in Wonder Auto achieving a growth rate higher than the industry average this year,” concluded Mr. Zhao.

Conference Call

Wonder Auto will host a conference call on Thursday, May 10^th at 10:00 am ET to discuss results for the first quarter of 2007. Joining Mr. Qingjie Zhao, Chairman and CEO, will be Ryan Yuan, CFO, and Mark Collinson, Partner of CCG Investor Relations. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (888) 419-5570. International callers should dial (617) 896-9871. When prompted by the operator, mention Conference Passcode 90877975.

If you are unable to participate in the call at this time, a replay will be available on Thursday, May 10, at 11:00 a.m. Eastern Time, through Thursday, May 17, 2007. To access the replay dial (888) 286-8010 and enter the conference passcode 11929842. International callers should dial (617) 801-6888.

The conference will be broadcast live over the Internet and can be accessed by all interested parties at Wonder Auto’s website at www.watg.cn. To listen to the call please go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

About Wonder Auto Technology, Inc.

Wonder Auto Technology, Inc., through its subsidiary, Jinzhou Halla Electrical Equipment Co., Ltd., designs, develops, manufactures and sells automotive electrical parts and is the second largest seller of automotive alternators and starters in China. The Company’s products are suitable for various types of automobiles and industrial vehicles. Wonder Auto’s customers include Beijing Hyundai, Shenyang Aerospace Mitsubishi, Harbin Dong’an Mitsubishi, and Dongfeng Yueda Kia Motor Co., Ltd. Wonder Auto Technology, Inc. is a Nevada corporation with its manufacturing subsidiary Jinzhou Halla and its corporate headquarters located in Jinzhou City, Liaoning, China.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Wonder Auto’s management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China, weather and natural disasters, changing interpretations of generally accepted accounting principles; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which Wonder Auto is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of auto components; timing approval and market acceptance of new product introduction; general economic conditions; geopolitical events and regulatory changes, as well as other relevant risks not included herein. The information set forth herein should be read in light of such risks. Wonder Auto does not assume any obligation to update the information contained in this press release.

Financial Tables Below

Wonder Auto Technology, Inc.

Condensed Consolidated Statements of Operations

For the three months ended March 31, 2007 and 2006

(Stated in US Dollars)

	Three months ended
	March 31
	(Unaudited)
	2007			2006
Net sales	$	21,566,796		$	14,793,221
Cost of sales		(16,251,790	)		(11,815,898	)
Gross profit		5,315,006			2,977,323
Operating expenses
Administrative expenses		666,566			306,908
Research and development costs		263,446			100,558
Selling expenses		651,616			696,431
Total operating expenses		1,581,628			1,103,897
Income from operations		3,733,378			1,873,426
Interest income		16,709			12,861
Other income		23,795			-
Finance costs		(419,392	)		(258,401	)
Equity in net income of an unconsolidated affiliate		34,147			-
Income before income taxes		3,388,637			1,627,886
Income taxes		(466,814	)		(218,653	)
Minority interests		(209,371	)		-
Net income	$	2,712,452		$	1,409,233
Other comprehensive income
Foreign currency translation adjustments		367,329			93,226
Comprehensive income	$	3,079,781		$	1,502,459
Earnings per share: basic and diluted	$	0.11		$	0.08
Weighted average number of shares outstanding:
basic and diluted		23,959,994			17,227,198

Wonder Auto Technology, Inc.

Condensed Consolidated Balance Sheets

As of March 31, 2007 and December 31, 2006

(Stated in US Dollars)

	March 31,		December 31,
	2007		2006
	(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	6,065,302	$	8,203,699
Restricted cash		3,919,971		4,876,879
Trade receivables (net of allowance of doubtful accounts
of $38,023 in 2007 and $32,150 in 2006)		26,042,474		24,696,982
Bills receivable		8,100,371		3,098,314
Other receivables, prepayments and deposits		1,445,086		1,254,209
Inventories		15,535,997		13,689,374
Amount due from a related company		70,249		69,561
Deferred taxes		217,693		237,570
Total current assets		61,397,143		56,126,588
Know-how		1,482,617		1,468,089
Trademarks and patents		11,182		11,418
Property, plant and equipment, net		14,469,688		13,945,846
Land use right		1,202,302		1,203,256
Deposit for acquisition of property, plant and equipment		2,864,978		1,740,548
Investment in an unconsolidated affiliate		567,130		527,627
Goodwill		3,115,227		2,771,293
Deferred taxes		221,744		205,475
TOTAL ASSETS	$	85,332,011	$	78,000,140

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade payables	$	12,411,172	$	9,631,537
Bills payable		6,717,565		8,628,078
Other payables and accrued expenses		2,833,675		3,121,533
Provision for warranty		980,551		1,049,344
Income tax payable		446,084		398,768
Amount due to an unconsolidated affiliate		100,136		37,492
Dividend payable to minority stockholders		691,152		-
Dividend payable to Winning		343,934		-
Secured short-term bank loans		6,459,198		14,326,831
Total current liabilities		30,983,467		37,193,583
Secured long-term bank loans		10,916,984		-
TOTAL LIABILITIES		41,900,451		37,193,583
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS		2,124,794		2,579,572
STOCKHOLDERS’ EQUITY
Preferred stock: par value $0.0001 per share; authorized
10,000,000 shares, none issued and outstanding		-		-
Common stock: par value $0.0001 per share; authorized
90,000,000 shares, issued and outstanding 23,959,994
shares in 2007 and 2006		2,396		2,396
Additional paid-in capital		22,140,143		22,140,143
Statutory and other reserves		3,148,265		3,148,265
Accumulated other comprehensive income		1,819,467		1,452,138
Retained earnings		14,196,495		11,484,043
TOTAL STOCKHOLDERS’ EQUITY		41,306,766		38,226,985
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	85,332,011	$	78,000,140

Wonder Auto Technology, Inc.

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2007 and 2006

(Stated in US Dollars)

	Three months ended March 31
	(Unaudited)
	2007			2006
Cash flows from operating activities
Net income	$	2,712,452		$	1,409,233
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation		445,132			328,740
Amortization of trademarks and patents		347			87
Amortization of land use right		12,811			6,681
Deferred taxes		7,454			28,485
Provision for doubtful debts		5,533			-
Recovery of obsolete inventories		(22,720	)		(12,873	)
Equity in net income of an unconsolidated affiliate		(34,147	)		-
Minority interests		209,371			-
Changes in operating assets and liabilities:
Trade receivables		(1,102,316	)		(2,796,781	)
Bills receivable		(4,951,887	)		(968,729	)
Other receivables, prepayments and deposits		(187,937	)		(340,268	)
Inventories		(1,677,966	)		(1,405,824	)
Trade payables		2,673,792			3,882,703
Bills payable		(1,988,059	)		-
Amount due to an unconsolidated affiliate		62,029			-
Other payables and accrued expenses		104,787			(207,189	)
Provision for warranty		(78,866	)		213,991
Income tax payable		43,200			(83,400	)
Net cash flows (used in) provided by operating activities		(3,766,990	)		54,856
Cash flows from investing activities
Payments to acquire and for deposit for acquisition of
property, plant and equipment		(1,932,319	)		(645,405	)
Decrease in restricted cash		956,907			36,326
Installment payments for acquisition of Dong Woo		(400,000	)		-
Net cash flows used in investing activities	$	(1,375,412	)	$	(609,079	)

Cash flows from financing activities
Dividend paid to stockholders	$	-		$	(1,704,206	)
Repayment of bank loans		(7,977,971	)		-
New bank loans		10,874,139			-
Net cash flows provided by (used in) financing activities		2,896,168			(1,704,206	)
Effect of foreign currency translation on cash and cash equivalents		107,837			31,947
Net decrease in cash and cash equivalents		(2,138,397	)		(2,226,482	)
Cash and cash equivalents - beginning of period		8,203,699			4,368,757
Cash and cash equivalents - end of period	$	6,065,302		$	2,142,275
Supplemental disclosures for cash flow information:
Cash paid for:
Interest	$	222,702		$	228,022
Income taxes	$	416,161		$	273,567

# # #

EX-99.2

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 1

WONDER AUTO LIMITED

May 10, 2007

10:00 a.m. EDT

Coordinator	Good day, ladies and gentlemen. Welcome to the Wonder Auto First Quarter Earnings conference call. At this time all participants are in a listen-only mode. We will be conducting a question and answer session towards the end of this conference. I would now like to turn the call over to Ms. Leslie Richardson from CCG Elite. Please proceed, ma’am.
L. Richardson	Good morning, ladies and gentlemen. Good evening to those of you joining us from China. I’m Leslie Richardson from CCG Elite, the company’s investor relations firm. Welcome to Wonder Auto Technology’s First Quarter 2007 Earnings call. With us today are Wonder Auto’s Chairman, Mr. Qingjie Zhao and CFO, Mr. Ryan Yuan; both join us from China. Also, Mark Collinson, a Partner of CCG Elite. Also joining us is Mabel Zhang from CCG Elite who will provide translations for the Q&A section.
	I would like to remind our listeners that in this call, management’s prepared remarks contain forward-looking statements such as forecast of future revenue and earnings, expected activities, and other financial and business results. These statements are based on current expectations, but are subject to risks and uncertainties. Actual results may differ materially from those contained in forward-looking statements. Management may make additional forward-looking statements in response to your questions and we can make no assurance that anticipated events or actual results will comport with forward-looking statements made on this call.
	Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that are contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today due to risk, such as but not limited to fluctuation in customer demand, management of rapid growth, intensity of competition from other providers of auto components, timing of approval or market acceptance of new product introductions, general economic conditions, geopolitical events, regulatory changes, and other factors detailed from time to time on the company’s filings and future filings with the United States Securities Exchange Commission.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 2

	Accordingly, although the company believes the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. In addition, any projections as to the company’s future performance represent management’s estimates as of today, May 10, 2007. Wonder assumes no obligation to update these projections in the future as market conditions change.
	For those of you unable to listen to the entire call at this time, a recording will be available via Web cast for 90 days. The Web link is available in the press release that we issued earlier today. Now I will turn the call over to Mark Collinson who will provide further management discussion on behalf of Wonder Auto’s Chairman and CEO, Mr. Qingjie Zhao.
M. Collinson	Thanks, Leslie. Good morning, everyone. We believe our business model of high quality backed by leading technology, flexible delivery, and competitive pricing is serving us well in 2007. Our revenue for the first quarter of $21.6 million illustrates very strong demand for our products, stronger than we’d expected, in fact, for a quarter in which there’s a major Chinese holiday. According to the China Association of Automobile Manufacturers, sales of Chinese made vehicles rose more than 22% in the quarter compared to the same quarter of 2006. Typically, the demand for automotive components increases more than the demand for vehicles themselves, and this proved to be true in Q1. Revenues from both our alternators and starters were up strongly, driven almost entirely by an increase in volume.
	Our existing customers were the main source of revenue growth in this quarter with the contribution to revenue from our three largest customers, Beijing Hyundai, … and … Aerospace Mitsubishi increasing 49%, 21% and 188% respectively compared to the same quarter last year. While our relationships with our current customers remain strong, our sales to new clients also increased during the quarter as Wonder Auto’s brand … continues to gain market recognition for high quality, competitively priced components.
	We expect to experience continued growth from both current customers and new customers as the domestic environment for small and mid-sized automobiles remains very favorable driven by a combination of high affordability for first time buyers and the Chinese government’s support for more energy efficient vehicles.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 3

As we’ve mentioned before, starting in April of last year the government implemented a consumption tax of up to 20% on cars with engines of four liters or more while decreasing the consumption tax on cars with one to one-and-a-half liters to 3%. It’s also pleasing to report that we continue to make headway in penetrating the export market. Our export sales were approximately $900,000 greater for the quarter than in the same quarter last year, increasing from 1% in revenue to almost 5%. This represents encouraging progress towards our goal of generating 30% of our revenue from overseas markets within the next three to five years.

Profitability in the business remains strong with our gross profit increasing 78.5% to $5.3 million in the first quarter of 2007 from the same quarter last year. Our gross margin for the quarter was 24.6% compared to a gross margin in the same period a year ago of 20.1%. I’ll go into more details about this in the financial section. However, I will say that our increase in the margin is attributable to our commitment to be selective in the business that we take on and to the consolidation of Jinzhou DongWoo for the full quarter.

Jinzhou DongWoo is proving to be a profitable acquisition. Its own gross margins are about 50% and the consolidation of this business for a full quarter has improved our gross margins by approximately 450 basis points. DongWoo currently supplies exclusively within Wonder and not to outside parties.

During the quarter Jinzhou DongWoo has also had some success in reducing its own cost of goods sold, improving gross margins still further. As to our operations, we remain on target for our new plan starter line of 520,000 units, our upgrade to a second starter line that will increase capacity by 80,000 units, and our 600,000 unit alternator line, all to begin production in July.

The additional starter and alternator capacity will not only increase our output, but enable us to produce more efficiently without running suboptimal shift patterns. Overall then we had a very good quarter in which we performed financially above the run rate which we’ve been expecting, proving that the value of our quality, our technology, and our manufacturing practices are being recognized in the market and that we can take advantage of this stronger demand for our products while still maintaining gross margins and moderate levels of operating expenses.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 4

Let me turn now to the financial results in more detail. Our revenue for the quarter, as I said, increased to a record $21.6 million, or 45.8% from revenue in the first quarter of 2006 of $14.8 million. Our revenue was also up 13% sequentially over the fourth quarter, whose revenue was $19 million, which was also a much larger increase than we’d budgeted. … increased revenue was primarily the result of increase in demand from existing customers for alternators and starters, which we feel demonstrates the strong customer relationships we’ve established.

Our gross profit for Q1 was $5.3 million for a year-over-year increase of 78.5% from $3 million in the first quarter of 2006. Gross margin was 24.6% for the quarter compared to 20.1% for the same quarter last year. As I mentioned earlier, the gross margin was favorably impacted by the consolidation of our acquired interest in the business of Jinzhou DongWoo Precision Company. The gross margin also benefited from the combined effects of business with more favorable margins and some innovative design initiatives to reduce the use of copper in our components. However, we would say that we believe that margin levels are likely to be slightly lower during the remainder of the year due to continuing commodity and customer pricing pressures.

Our administrative expenses for the quarter were $0.7 million, or 3.1% of revenue compared to $0.3 million, or 2.1% of revenue for the same quarter a year ago. The increase of administrative expenses is due to expenditures for improvement of the company’s internal control systems to ensure compliance with SOx 404, the inclusion of Jinzhou DongWoo, and increases in other costs of being a publicly traded company in the U.S.

Research and development expenditure for the first quarter was $0.3 million, or 1.2% of revenue compared to $0.1 million, or 0.07% of revenue in the same quarter last year. The increased research and development expense is attributable to continued efforts to maintain our technological competitiveness.

Our selling expenses for Q1 were $0.7 million, or 3% of revenue compared to $0.7 million, or 4.7% of revenue in the comparable quarter a year earlier. The lower selling expense as a percent of revenue is due to our ability to improve the quality of our products, which reduced our cost of after-sales service. In addition, the increased sales volume allowed us to benefit from economies of scale, which reduced our per unit selling expenses.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 5

Income from operations increased to $3.7 million for the first quarter of 2007, up 99.3% from $1.9 million in the first quarter of 2006. Our operating margin was 17.3% compared to 12.7% from the same period a year ago. The increase in operating margin is mainly attributable to the improved gross margins from the Jinzhou DongWoo acquisition and to operating efficiencies.

Net income for Q1 increased to $2.7 million, up 92.5% from the first quarter of 2006 of $1.4 million. Our fully diluted earnings per share for the quarter were $0.11.

Looking at our balance sheet we had $10 million in cash and cash equivalents, working capital of $30.4 million, and $10.9 million in long-term debt as of March 31, 2007. Days sales outstanding declined to 106 from 122 in the fourth quarter of 2006, the decline being the result of our improved collection efforts. Our shareholders equity stood at $41.3 million up from $38.2 million on December 31, 2006.

Touching on our business outlook, as we look forward to the rest of the year we’re comfortable that the three aspects of our growth strategy are on track. Our sales to existing customers are growing strongly with the market. Having seen government statistics recently, we have a higher level of confidence that our market share in China is about 15%. We remain in the strong number two position. We expect sales of new products to existing customers and export sales to be boosted following the closure of our acquisition of the remaining 80% of Jinzhou Wanyou mechanical parts that we did not own for a total cost of $16.4 million.

That company, Wanyou, makes piston rods, vibration dampers, and shock absorber rods for motor vehicles. We believe that this will be an accretive acquisition as it will broaden our product lines, customer base, and our geographic reach. The terms of the acquisition also have met our net income targets for the 12-month periods ending April 1^st of approximately $2.99 million for 2008 and $3.87 million for 2009. We’ll finance the acquisition from drawings under existing credit lines. The $16.42 million acquisition price is payable over two years contingent on results.

As a result of strong markets, a solid competitive position, and our recent acquisitions, we are reaffirming our belief that for the full year of 2007 our revenues should be approximately $100 million and our net income should be approximately $13.5 million. With that I’ll conclude management’s prepared remarks. Thanks very much for your interest in Wonder Auto Technology.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 6

	As we go to questions, a reminder that Mabel Zhang from CCG Elite will provide translations for those of you who wish to ask your questions in English. She’ll also provide English translations of management’s answers. For those of you who wish to ask your questions in Chinese, please do so. Please also ask the question in English as well or bear with us while Mabel translates both your question and management’s response. Thank you again. With that, management is ready for your questions. Operator?
Coordinator	Thank you. Our first question comes from John May from Roth Capital Partners. Please proceed.
J. May	Good morning, gentlemen. Congratulations on the first quarter. It’s a very, very strong number. I have a couple of questions for the management team. One is about the export business. You mentioned that your export proportion will grow from 1% to 5%. My question is, how do you … when you will help you expand the market? My second question is if the management team can provide us a better picture of the OEM new contract wins. I will translate for myself.
	(Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	To answer your first question, actually, in Q1 the contribution from … in the … business was not … Actually, we just owned 20% of his shares in the fourth quarter. Right now we just finished the acquisition a few weeks ago. Actually, in Q1 that exponent business could largely contribute to the … which is … significant products to them.
M	(Comments in Chinese)
M. Zhang	I also want to say that we have been working our exporting business plan and executing it very well. We expect that this type of growth will be continued and steady in the rest of the year.
M	(Comments in Chinese)

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 7

M. Zhang	We are right now in the negotiation phase with our new customers. In Q1 we … of any new important customers. We will definitely share this news with you once new contracts are formed.
J. May	I just want to be more specific on the product export. I happen to have met with the Wanyou company at an auto show and they produce these piston rods. My question is, will you use the Wanyou international market to export your starter and alternator or are you more focused on just exporting your own product?
	(Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	We are starting this possibility and believe that it could be possible for both parts. As you know, Wanyou is … exporting their … products to OEM and after market in the United States, so that could be a promising distribution channel for us to distribute our Wonder Auto products.
J. May	Thanks.
Coordinator	Our next question comes from Alex Harbin from Wonder Auto. Please proceed.
A. Harbin	Hello. Congratulations on the great quarter, guys. I’m just wondering if you’ve heard back anything from the NASDAQ or if they’ve given you any feedback on your application to the GM there.
M. Zhang	(Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	As you know, we had submitted our application and we also recently received the first round of feedback from NASDAQ. We have made our answers to them, so we’re still waiting to see if we can get the second round of feedback or updates.
A. Harbin	Great. Thanks.
Coordinator	Our next question comes from Michael Coleman from Stern … Please proceed.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 8

A. Tamala	Good morning. This is actually Anita Tamala. Michael regrets that he can’t be on the call this morning. Congratulations on the excellent results this quarter. My question is in regard to Beijing Hyundai. They represented 20% of your sales last year. Did the shift in customer mix this quarter positively affect first quarter results?
M. Zhang	I’m sorry. Could you repeat your question?
A. Tamala	Yes. Did the shift in your customer mix this quarter, how did it positively affect results?
M. Zhang	(Comments in Chinese)
Q. Zhao	(Comments in Chinese)
M. Zhang	To answer your question, Mr. Zhao said actually the customer mix is still quite the same to last year, but Beijing Hyundai is doing some … adjustment of their marketing or production in China. They will be … expansion. In terms of the customer mix with Beijing Hyundai and other customers, this quarter still remains in the same situation.
A. Tamala	What would you say Beijing Hyundai represented as a percentage of your total sales this quarter?
M. Zhang	(Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	The company didn’t release this number, but Beijing Hyundai still is one of the major customers.
A. Tamala	I see. One last question. Going forward do you view the percentage of the total to remain stable or do you see it decreasing?
M. Zhang	(Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	We foresee this percentage will remain the same, at least if the company shifts to the smaller sized engine. At this point we don’t foresee any change.

Exhibit 99.2

WONDER AUTO LIMITED

Moderator: Melissa Kong

May 10, 2007/10:00 a.m. EDT

Page 9

A. Tamala	Great. Thank you so much. Congratulations again on the great quarter.
M. Zhang	Thank you. (Comments in Chinese)
M	(Comments in Chinese)
M. Collinson	Mabel, this is Mark Collinson. Can I just say that based on the numbers we released in our 10-Q, investors can calculate the percentage of sales from Beijing Hyundai. We calculated it to be about 19%.
A. Tamala	Thank you so much.
Coordinator	I would now like to turn the call over to Mark Collinson for closing remarks.
M. Collinson	Thank you, everyone, for your interest in Wonder Auto Technology. We are very pleased to have provided you with excellent results for the first quarter and we look forward to reporting our progress to you through the remainder of the year. Thank you again.
M. Zhang	Thank you. (Comments in Chinese)
M	(Comments in Chinese)
M. Zhang	Bye-bye.
M. Collinson	Thank you.
Coordinator	Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.