RE: News..Q4 updateThis is not unexpected , but Q4 sales will still be about 95,000 units............ still a record .
For exampe, Production volumes increased to a record high of 87,000 units , grossing $24 million in sales in Q3, which was an increase of 360 % over 2007.
It was also a substantial increase in production over Q2/08.
As a consequence, gross margin increased to 11.1 % of sales , from 6.8 % in Q2. Given thelarger volumes in Q4, gross margins should continue to increase.
Net income during the third quarter amounted to a record $1.9 million or $0.03 per share..
These revised estimates for Q4 sales would push gross sales in Q4 to about $27 million, and net earnings would increase to the $0.04 .
At September 30, 2008, the Company had cash and short-term deposits including the short-term deposit with Zongshen Industrial Group totalled $41.2 million, compared to $37.1 million at December 31, 2007.
With no debt, ZPP is now worth $0.67/share in hard cash alone.
Looking ahead to 2009, the Chongqing production facility, which is expected to be operational in early 2009 will boost production to 600,000 bikes in phase 1 , and expandable to have four production lines with a total production capacity of 1.2 million units (phase 2).
Clearly, unless the Chinese stimulus kicks in early, those forecasts will not be met.
However, at the Q4 pace, 2009 sales will still be nearly double the 2008 sales of 220,000 units, and should generate net earnings in the $0.13 to $0.15/share..............more if they are able to decrease unit costs and increase sales in 2009 beyond the Q4 pace.