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): November 2, 2009

Wonder Auto Technology, Inc.

(Exact name of registrant as specified in its charter)

Nevada	001-33648	88-0495105
(State of Incorporation)	(Commission File No.)	(IRS Employer ID No.)

No. 16 Yulu Street

Taihe District, Jinzhou City, Liaoning Province

People’s Republic of China, 121013

(Address of Principal Executive Offices)

(86) 416-2661186

Registrant’s Telephone Number, Including Area Code:

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):

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

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

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

¨ 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.

ITEM 7.01.          REGULATION FD DISCLOSURE.

On November 2, 2009, Wonder Auto Technology, Inc. (the “Company”) issued a press release announcing its third quarter 2009 earnings.  The Company will conduct a conference call to discuss these results on November 2, 2009.  A copy of the press release, which the Company is furnishing to the Securities and Exchange Commission, is attached as Exhibit 99.1 and incorporated by reference herein.

The information contained in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or such exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act.

ITEM 9.01.          FINANCIAL STATEMENTS AND EXHIBITS.

(d)     Exhibits.

Exhibit No.	Description
99.1	Press release dated November 2, 2009

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: November 2, 2009

/s/ Qingjie Zhao

Chief Executive Officer and President

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated November 2, 2009

EX-99.1

Exhibit 99.1

Wonder Auto Reports Its Third Quarter 2009 Financial Results

JINZHOU CITY, China, November 2, 2009  — Wonder Auto Technology, Inc. (Nasdaq: WATG) (“Wonder Auto” or “the Company”), a leading manufacturer of automotive electric parts, suspension products and engine components in China, today announced its financial results for the third quarter ended September 30, 2009.

Highlights:

· $59.0 million sales revenue for the third quarter of 2009, an increase of 50.2% from the same quarter of last year; $41.0 million organic sales revenue in China, an increase of 24.1% on year-over-year basis excluding acquisition contribution.

· $6.5 million net income, or $0.24 per share on a basic and diluted basis, for the third quarter of 2009, an increase of 2.4% from the same period of last year;

· On a non-GAAP basis, net income for the third quarter of fiscal 2009 increased 25.8% to $6.9 million, or $0.26 per share, on a basic and diluted basis, as compared with a non-GAAP net income of $5.5 million, or $0.20 per share, for the third quarter of fiscal 2008. Non-GAAP net income excludes non-cash exchange gain/loss in connection with a loan denominated in Euro.

Business outlook

We project approximately $208 million sales revenue and $23 million net income attributable to our common stockholders for the whole year ended December 31, 2009.

Financial performance

Sales Revenue.  Sales revenue increased by approximately $19.7 million, or 50.2%, to approximately $59.0 million for the three months ended September 30, 2009, compared with $39.3 million of the same period last year. This increase was mainly attributable to the $12.9 million in additional revenues generated in the third quarter of 2009 by recently acquired subsidiary, Jinan Worldwide and increased sales volume of starter and alternator products in the third quarter of 2009 due to the high market demand.

Gross Profit. Gross profit increased by approximately $3.8 million, or 37.8%, to approximately $14.0 million for the three months ended September 30, 2009, compared with approximately $10.1 million for the same period in 2008 as a result of increased demand for and sales of alternator and starter products and the consolidation of the operating results of Jinan Worldwide which contributed $3.7 million to gross profit. Gross margin was 23.7% for the three-month period ended September 30, 2009, as compared to 25.8% of the same period in 2008.  Such decrease was mainly due to a larger portion of sales revenue was generated from alternators and starters for small-to-mid displacement engine vehicles which generally have a lower margin than alternators and starters for large displacement engine vehicle.

Total Operating Expenses.  Total operating expenses increased by approximately $1.8 million, or 54.3%, to approximately $5.2 million for the three months ended September 30, 2009, compared with approximately $3.3 million for the same period in 2008.  As a percentage of sales revenue, total expenses increased to 8.8% for the three months ended September 30, 2009, compared from 8.5% for the same period in 2008.

Net finance cost. Net finance cost was $1.5 million for the three months ended on September 30, 2009 as compared to a net finance income of $139,381for the same period last year. The Company has an outstanding loan of EUR8.3 million from DEG - - Deutsche Investitions - und Entwicklungsgesellschaft mbH, (the “DEG Loan”). Since the DEG Loan is denominated in Euro, with the depreciation of RMB against Euro, the Company incurred a $439,746 non-cash exchange loss during the three months ended September 30, 2009. In contrast, the Company had a non-cash exchange gain of approximately $1.0 million for the same period of 2008.

Income Taxes. Income taxes increased $307,503 to $939,622 during the three months ended September 30, 2009 from $632,570 during the same period in 2008. The income taxes increase is mainly due to the increase in income and the change in tax rate for the Company’s subsidiary Jinzhou Wanyou. Jinzhou Wanyou was exempted from the PRC enterprise income tax in 2008 and its EIT rate increased to 12.5% in 2009.

Net Income. Net income increased by $153,483, or 2.4%, to approximately $6.5 million during the three months ended September 30, 2009 from approximately $6.4 million during the same period in 2008. 

Events overview

On September 28, 2009, Wonder Auto’s subsidiary Jinzhou Halla entered into a joint development agreement with Shenzhen BYD Auto Company Limited (“Shenzhen BYD”) to design and develop alternator prototypes for Shenzhen BYD’s F3/F3R sedan models, which have engine sizes between 1.3 liter and 1.5 liter, and are among the top ten best-selling models in China in the first nine months in 2009. Sample deliveries are expected to start in November 2009 for testing.

On September 22, 2009, Wonder Auto’s subsidiary Jinzhou Wanyou Mechanical Parts Co., Ltd. acquired Friend Birch Limited and its China-based operating subsidiaries, Jinzhou Jiade Machinery Co., Ltd. and Jinzhou Lida Auto Parts Co., Ltd. Jinzhou Jiade Machinery and Jinzhou Lida Auto Parts manufacture and sell gas spring shafts and other thin mechanical shafts products, automotive springs and gas springs, and prior to the acquisition were among Wonder Auto’s key suppliers of those products. As part of the transaction, Jinzhou Wanyou also acquired all proprietary technologies of Friend Birch Limited’s rods and shafts technology center in Brazil.

Wonder Auto recently entered into an investment option agreement with the shareholders of Jinzhou Wonder Alternative Energy Vehicle Technology Co., Ltd. (“Jinzhou AEV”), which allows Wonder Auto to acquire a 10% ownership interest in Jinzhou AEV by the end of 2009 and grants the Company a right of first refusal to acquire a greater ownership interest in Jinzhou AEV. In addition, Wonder Auto will be the preferred supplier of motors to Jinzhou AEV. Jinzhou AEV is a manufacturer of electric and alternative energy vehicles, including electric sedans, taxis, minivans, pick-ups, freight cars, tourist coaches, golf carts and motorized bikes. Wonder Auto’s CEO and chairman, Mr. Qingjie Zhao, is a 60% owner of Jinzhou AEV.

Mr. Qingjie Zhao, Chairman and Chief Executive Officer of Wonder Auto commented, “In the process of fighting against the world economy recession, significant changes have taken place in the auto industry. As the 10 million sales target has achieved in China auto market during October, people begin to turn their focuses to China’s economy recovery. We have achieved our preliminary goals for adjustments to response to the financial crisis, thus reinforced our competitiveness in the markets.”

Conference call

The company will host a conference call on Monday, November 2 at 8:00 a.m. U.S. Eastern Daylight time. A question and answer session will follow management's presentation. Mr. Qingjie Zhao (Chairman & CEO), Mr. Ryan Yuan (CFO), Mr. Patrick Sun (Investor Relations Manager) and Mr. Rui Wang (Assistant CFO) will be the primary speakers for the call.

To participate, please call the following numbers ten minutes before the call start time:

Phone number:	+1 866 242 1388	(United States)
Phone number:	+852 800 968 831	(Hong Kong)
Phone number:	+86 10 800 264 0084	(China, China Telecom)
Phone number:	+86 10 800 640 0084	(China, NetCom Users)
Phone number:	+44 08082347860	(United Kingdom)
Conference ID:	38225903

A live webcast of the conference call will be available on the investor relations page of Wonder Auto's web site at http://www.watg.cn.

Non-GAAP Financial Measures and Related Reconciliation

To supplement the Company’s financial results presented in accordance with GAAP, the Company provides non-GAAP net income and non-GAAP net income per share data on a basic and diluted basis. The presentation of these non-GAAP financial measures should be considered in addition to the Company’s GAAP results and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The Company’s non-GAAP measures may be different from non-GAAP measures used by other companies. The Company’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain exchange gains and losses that may not be indicative of the Company’s business operating results. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance. These non-GAAP financial measures also facilitate comparisons to the Company’s historical performance and its competitors' operating results. The Company includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Non-GAAP measures are reconciled to comparable GAAP measures in the table below:

	Three Months Ended September 30,
	2009			2008
Calculation of non-GAAP net income:
GAAP net income	$	6.5 mil		$	6.4 mil
Foreign exchange (loss) gain:	$	(0.4 mil	)	$	1.0 mil
Non-GAAP net income	$	6.9 mil		$	5.5 mil
Basic and diluted non-GAAP net income per share	$	0.26		$	0.20
Shares used in the calculation of non-GAAP net income per share – basic and diluted		26,959,994			26,959,994

About Wonder Auto

Based in Jinzhou City, Liaoning, China, Wonder Auto Technology, Inc., through its Chinese subsidiaries, designs, develops, manufactures and sells automotive electrical parts, suspension products and engine components. Wonder Auto ranked second and third in sales revenue in the Chinese market for automobile alternators and starters in 2008, respectively. Wonder Auto’s products are used in a wide range of passenger and commercial automobiles with special focus on the fast-growing small- to medium-engine passenger vehicle market. For more information, please log on http://www.watg.cn.

Safe harbor statement

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, our future operating results, our expectations regarding the market for our products, as well as all assumptions, expectations, predictions, intentions or beliefs about our relative strength and about future events. Forward-looking statements can be identified by the use of forward-looking terminology such as “will,” “believe,” “expect,” “may,” “should,” “potential,” “continue,” “anticipate,” “future,” “intend,” “plan,” “believe,” “is/are likely to,” “estimate” or similar expressions. Such information is based upon assumptions and expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions and expectations are inherently subject to uncertainties and contingencies beyond our control and based upon premises with respect to future business decisions, which are subject to change. We do not undertake to update the forward- looking statements contained in this press release, except as required under applicable law. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system at http://www.sec.gov. All information provided in this press release and in the attachments is as of the date of this press release.

Wonder Auto Technology, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

For the three and nine months ended September 30, 2009 and 2008

	Three months ended						Nine months ended
	September 30,						September 30,
	(Unaudited)						(Unaudited)
	2009			2008			2009			2008
Sales revenue	$	58,961,604		$	39,265,821		$	148,588,838		$	107,041,424
Cost of sales		45,007,159			29,139,968			112,320,802			79,238,857
Gross profit		13,954,445			10,125,853			36,268,036			27,802,567
Operating expenses
Administrative expenses		2,594,285			1,676,857			7,662,331			4,444,210
Research and development expenses		487,572			459,804			1,408,479			1,128,026
Selling expenses		2,080,438			1,209,170			4,811,601			2,912,020
		5,162,295			3,345,831			13,882,411			8,484,256
Income from operations		8,792,150			6,780,022			22,385,625			19,318,311
Other income		149,146			107,023			827,043			520,349
Government grants		397,277			-			749,815			-
Net finance (costs)/income - Note 3		(1,481,640	)		139,381			(3,511,726	)		(1,380,951	)
Equity in net income of an unconsolidated affiliate		-			567,802			-			792,924
Income before income taxes and noncontrolling interests		7,856,933			7,594,228			20,450,757			19,250,633
Income taxes - Note 4		(939,622	)		(632,570	)		(2,492,651	)		(1,859,813	)
Net income before noncontrolling interests		6,917,311			6,961,658			17,958,106			17,390,820
Net income attributable to noncontrolling interests		(410,290	)		(608,120	)		(903,823	)		(1,785,599	)
Net income attributable to Wonder Auto Technology, Inc. common stockholders	$	6,507,021		$	6,353,538		$	17,054,283		$	15,605,221
Net income before noncontrolling interests	$	6,917,311		$	6,961,658		$	17,958,106		$	17,390,820
Other comprehensive income
Foreign currency translation adjustments		167,348			185,858			112,056			4,448,672
Comprehensive income		7,084,659			7,147,516			18,070,162			21,839,492
Comprehensive income attributable to noncontrolling interests		(421,159	)		(623,982	)		(904,590	)		(2,372,767	)
Comprehensive income attributable to Wonder Auto Technology, Inc. common stockholders	$	6,663,500		$	6,523,534		$	17,165,572		$	19,466,725
Earnings per share attributable to Wonder Auto Technology, Inc. common stockholders: basic and diluted	$	0.24		$	0.24		$	0.63		$	0.58
Weighted average number of shares outstanding: basic and diluted		26,959,994			26,959,994			26,959,994			26,959,994

Wonder Auto Technology, Inc.

Condensed Consolidated Balance Sheets

As of September 30, 2009 and December 31, 2008

	September  30,		December  31,
	2009		2008
	(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	21,419,751	$	8,159,156
Restricted cash		21,283,623		24,181,645
Trade receivables, net		50,640,997		46,571,619
Bills receivable		21,351,329		8,388,926
Other receivables, prepayments and deposits		9,225,466		16,408,304
Inventories - Note 5		46,916,547		44,016,192
Amount due from Hony Capital		-		7,637,216
Income tax recoverable		-		289,000
Deferred taxes		1,204,625		1,075,766
Total current assets		172,042,338		156,727,824
Intangible assets - Note 6		22,097,408		22,062,560
Property, plant and equipment, net - Note 7		71,883,262		69,131,579
Land use rights		10,206,638		10,391,527
Deposit for acquisition of property, plant and equipment		2,554,387		3,845,774
Deferred taxes		628,382		870,500
TOTAL ASSETS	$	279,412,415	$	263,029,764

`

Wonder Auto Technology, Inc.

Condensed Consolidated Balance Sheets (Cont’d)

As of September 30, 2009 and December 31, 2008

	September  30,		December 31,
	2009		2008
	(Unaudited)		(Audited)
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities
Trade payables	$	30,633,985	$	21,616,932
Bills payable		31,161,376		31,247,100
Other payables and accrued expenses		13,540,880		20,465,014
Provision for warranty - Note 8		2,581,872		2,377,620
Payable to Hony Capital		-		10,187,216
Income tax payable		602,290		-
Secured borrowings - Note 9		54,010,768		44,055,803
Early retirement benefits cost		371,247		419,301
Total current liabilities		132,902,418		130,368,986
Secured borrowings - Note 9		18,577,971		16,054,478
Deferred revenue - government grants		3,382,726		2,806,777
Early retirement benefits cost		519,895		798,115
TOTAL LIABILITIES		155,383,010		150,028,356
COMMITMENTS AND CONTINGENCIES - Note 10
STOCKHOLDERS’ EQUITY
Preferred stock: par value $0.0001 per share; authorized 10,000,000 shares in 2009 and 2008; none issued and outstanding		-		-
Common stock: par value $0.0001 per share Authorized 90,000,000 shares in 2009 and 2008; issued and outstanding 26,959,994 shares in 2009 and 2008		2,696		2,696
Additional paid-in capital - Note 2		67,711,999		71,349,599
Statutory and other reserves		7,944,120		7,628,541
Accumulated other comprehensive income		9,609,908		8,424,270
Retained earnings		31,708,870		14,654,587
TOTAL WONDER AUTO TECHNOLOGY, INC. STOCKHOLDERS’ EQUITY		116,977,593		102,059,693
NONCONTROLLING INTERESTS		7,051,812		10,941,715
TOTAL EQUITY		124,029,405		113,001,408
TOTAL LIABILITIES AND EQUITY		279,412,415	$	263,029,764

Wonder Auto Technology, Inc.

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2009 and 2008

	Nine months ended
	September 30,
	(Unaudited)
	2009			2008
Cash flows from operating activities
Net income attributable to Wonder Auto Technology, Inc. common stockholders	$	17,054,283		$	15,605,221
Adjustments to reconcile net income attributable to Wonder Auto Technology, Inc. common stockholders to net cash provided by operating activities:
Depreciation		4,239,790			2,248,751
Amortization of intangible assets and land use rights		297,888			85,162
Deferred taxes		111,617			(208,858	)
Loss (gain) on disposal of property, plant and equipment		59,490			(1,205	)
Provision for doubtful debts		303,738			(4,020	)
Provision of obsolete inventories		26,149			43,671
Exchange loss (gain) on translation of monetary assets and
liabilities		387,701			(828,205	)
Equity net income of a non-consolidated affiliate		-			(792,924	)
Share-based payment compensation		-			109,772
Noncontrolling interests		903,823			1,785,599
Deferred revenue amortized		(193,408	)		-
Changes in operating assets and liabilities :
Trade receivables		(4,366,425	)		(15,303,061	)
Bills receivable		(11,649,801	)		6,302,977
Other receivables, prepayments and deposits		1,694,880			(1,860,072	)
Inventories		(2,926,673	)		(6,365,418	)
Trade payables		9,010,565			3,254,639
Other payables and accrued expenses		(4,604,814	)		(1,584,738	)
Amount due from a related company		-			78,516
Early retirement benefit costs		(325,977	)		-
Provision for warranty		203,981			542,873
Income tax payable		886,176			(9,835	)
Net cash flows provided by operating activities	$	11,112,983		$	3,098,845

See the accompanying notes to condensed consolidated financial statements

Wonder Auto Technology, Inc.

Condensed Consolidated Statements of Cash Flows (Cont’d)

For the nine months ended September 30, 2009 and 2008

	Nine months ended September 30,
	(Unaudited)
	2009			2008
Cash flows from investing activities
Payments to acquire intangible assets	$	(146,600	)	$	(7,080	)
Payments to acquire and for deposit for acquisition of property, plant and equipment and land use right		(6,463,215	)		(11,776,593	)
Proceeds from sales of property, plant and equipment		29,125			100,988
Proceeds from sales of Money Victory Limited		5,950,000			-
Net cash paid to acquire Jinzhou Hanhua Electrical Systems Co., Ltd.		-			(3,042,676	)
Net cash paid to acquire Money Victory Limited		-			(5,000,000	)
Net cash paid to acquire Jinzhou Karham Co., Ltd.		-			(703,712	)
Net cash paid to acquire Fuxin Huirui Mechanical Co., Ltd.		-			(140,990	)
Net cash paid to acquire Yearcity		(9,936,057	)		-
Net cash paid to acquire Jinzhou Wanyou Mechanical Parts Co., Ltd.		(1,705,437	)		-
Net cash flows used in investing activities		(12,272,184	)		(20,570,063	)
Cash flows from financing activities
Dividend paid to Winning		-			(384,500	)
Government grants received		769,006			-
Decrease in bills payable		(1,381,350	)		(4,819,593	)
Decrease in restricted cash		2,888,474			4,011,467
Proceeds from secured borrowings		64,274,001			15,631,122
Repayment of secured borrowings		(52,193,550	)		(9,196,570	)
Net cash flows provided by financing activities		14,356,581			5,241,926
Effect of foreign currency translation on cash and cash equivalents		63,215			980,483
Net increase (decrease) in cash and cash equivalents		13,260,595			(11,248,809	)
Cash and cash equivalents - beginning of period		8,159,156			26,102,993
Cash and cash equivalents - end of period	$	21,419,751		$	14,854,184
Supplemental disclosures for cash flow information:
Cash paid for:
Interest	$	3,382,425		$	1,346,694
Income taxes	$	1,489,450		$	1,656,577
Non-cash investing and financing activities:
Settlement of amount due to Hony Capital II, L.P. (“Hony Capital”) by offsetting with amount due from Hony Capital	$	7,626,804		$	-

For more information, please contact:

Patrick Sun

Investor Relations Manager

Tel:   +86-10-8478-5339

Cell:  +86-153-1161-1742

Email: ir@watg.cn