This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Lentuo International Inc. Reports Third Quarter 2010 Financial Results

Third Quarter 2010 Financial Performance

Revenues in the third quarter 2010 increased by 56.0% to RMB945.9 million ($141.4 million) from RMB606.3 million in the same period of 2009. The revenue growth was driven by the increased sales volume of new vehicles and increased average unit price, as well as the increased volume of automobile repair and maintenance services.

For the third quarter 2010, we sold 4,871 vehicles, representing a 29.5% increase from 3,761 in the same period of 2009. The average unit price for the third quarter 2010 was RMB176,000, a 23% increase from RMB143,000 in the same period of 2009. In addition, we serviced approximately 32,210 vehicles at our dealerships in the three months ended September 30, 2010, representing a 15.4% increase over the third quarter of 2009. The growth was primarily driven by the increased market demand and our enhanced sales efforts, consistent with the trend in recent quarters.

Cost of goods sold increased by 64.6% to RMB851.8 million ($127.3 million) in the third quarter of 2010 from RMB517.4 million in the same quarter of 2009, primarily as a result of increased sales of new vehicles, as well as automobile repair and maintenance services. As a percentage of revenues, cost of goods sold increased to 90.1% in the third quarter of 2010 from 85.3% in the third quarter of 2009.

Gross profit increased by 5.8% to RMB94.1 million ($14.1 million) from RMB88.9 million for the third quarter of 2009. The increase in gross profit was primarily due to the increase in revenues both from new vehicles sales and automobile repair and maintenance services.

Gross margin for the third quarter of 2010 decreased to 9.9% from 14.7% for the third quarter of 2009 for a number of reasons. Firstly, new vehicle sales as a portion of total revenues increased in the third quarter of 2010 to 90.9% from 89.2% in the same period of 2009. Secondly, gross margin of automobile repair and maintenance services decreased in the third quarter of 2010 to 54.6% from 65.1% in the same period of 2009 due to discounts on repair and maintenance we offered to existing customers.

Selling, marketing and distribution expenses increased by 4.1% to RMB10.2 million ($1.5 million) in the third quarter of 2010 from RMB9.8 million in the same quarter of 2009, primarily as a result of the increased performance-related bonuses paid to our salespersons in line with our increased revenues. As a percentage of our revenues, selling, marketing and distribution expenses decreased to 1.1% in the third quarter of 2010 from 1.6% in the third quarter of 2009.

General and administrative expenses decreased by 5.9% to RMB8.4 million ($1.3 million) in the third quarter of 2010 from RMB8.9 million in the same quarter of 2009, primarily due to our stricter expense controls. As a percentage of our revenues, general and administrative expenses decreased to 0.9% in the third quarter of 2010 from 1.5% in the third quarter of 2009.

Operating Income for the third quarter 2010 increased by 7.4% to RMB75.4 million ($11.3 million) from RMB70.2 million in the same period in 2009.

Operating margin in the third quarter of 2010 was 8.0%, compared to 11.6% in the same quarter of 2009. The decrease of the operating margin was mainly attributable to the decrease in gross margin as well as the increased selling, marketing and distribution expenses discussed above.

Income tax expenses in the third quarter of 2010 were RMB18.0 million ($2.7 million), representing an effective tax rate of 28.5%, increasing from 27.9% in the same period of 2009.

Net income was RMB45.0 million ($6.7 million), an increase of 2.6% from RMB43.9 million in the comparable period of 2009.

Diluted earnings per ADS were RMB1.06 ($0.16) in the third quarter of 2010 compared to RMB1.11 in the third quarter of 2009.

As of September 30, 2010, the Company had cash and cash equivalents of RMB266.9 million ($39.9 million), compared to RMB72.1 million as of December 31, 2009. Net cash provided by operating activities was RMB165.3 million ($24.7 million) in the nine months ended September 30, 2010, compared to RMB193.1 million in the nine months ended September 30, 2009.

Initial Public Offering

On December 10, 2010, Lentuo’s ADSs began trading on the New York Stock Exchange under the ticker symbol “LAS.” Lentuo issued 6,500,000 ADSs, each representing two ordinary shares, at a price of $8.00 per ADS and received total proceeds of US$52.0 million.

2 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs