SORL Auto Parts Inc (NASDAQ:SORL)
A little-known China-based auto parts company that trades on the NASDAQ Market Exchange reported their quarterly earnings on Tuesday November 14th, 2017 after the market closed for regular trading.
Instantly, the shares exploded and rocketed higher. Shares which had originally closed the day at $5.99 shot up and closed at $8.32 in the after-market session -up a whopping 39%. The company is involved in manufacturing and distributing parts that all vehicles need without question.
Those parts are brake related systems and other important safety functioning parts that without which motor vehicles and trucks and buses cannot function properly nor safely.
The Numbers
The company reported their third-quarter earnings of $0.44 a share, and this compares with $0.17 cents a share in the same quarter last year. Sales were also phenomenal coming in at $101 million dollars up from $63.7 million in the same quarter of last year.
The company has their conference call scheduled for Wednesday morning At 9 a.m. Eastern Daylight Time. Because China has different rules and regulations regarding earnings, auditing, and reporting rules, many eyes and will be on the price action Wednesday as well as listening to see what they have to say to support such a huge increase in both revenues and earnings per share.
Chinese stocks have been in the spotlight in the past for either inflating their earnings reports or using accounting methods that don’t necessarily equate to the standards held for American corporations outside of communist countries.
The Charts
The above price chart shows the weekly price action dating back to 2015. The price chart exhibits what is commonly called a bull flag breakout. This occurs when a stock moves up in price substantially, then begins a pull back on roughly a 45 degree angle(the angle can vary greatly) and then new buyers and add on buyers begin to buy the shares to take the stock higher-thus breaking out of the channel and rocketing upward.
The above price chart shows SORL in the regular session on the left in black and on the shaded area on the right in the aftermarket session. It is clear to see just when the earnings came out and the share price reacted.
Company Profile
SORL Auto Parts, Inc., together with its subsidiaries, develops, manufactures, and distributes automotive brake systems and other safety related auto parts to automotive original equipment manufacturers and the related aftermarket in the People’s Republic of China.
It operates through two segments, Commercial Vehicles Brake Systems and Passenger Vehicles Brake Systems. The company offers a range of products covering 65 categories and approximately 2000 specifications in automotive brake systems that are principally used in various types of commercial vehicles, such as trucks and buses. SORL Auto Parts, Inc. markets its products under the SORL brand through authorized distributors.
The company exports its products to approximately 104 countries and regions. SORL Auto Parts, Inc. was founded in 2003 and is headquartered in Rui’an, the People’s Republic of China