Qiao Xing Universal Telephone, Inc., BVI-registered manufacturer and distributor of telecommunications terminal products in PRC, announced its financial results for the year 2008, and the filing of its 2008 Annual Report. The company reported the decline of net sales revenue from Rmb3,874.1 million for the year 2007 to Rmb2,594.9 million (US$380.4 million) in 2008, due to the global economic downturn and the earthquake in the Sichuan Province of China. Gross profit of the company decreased by 10.2% from the year 2007, and made to Rmb875.9 million (US$128.4 million) in the reported year.
BVI company’s major subsidiary, Qiao Xing Mobile Communication Co., Ltd., a domestic manufacturer of mobile phone handsets in China, strategically shifted its products portfolio to target upper-middle-income customers, and by this significantly increased its gross margin from 28.2% in 2007 to 40.2% in 2008. Also, QXMC reported net income of Rmb423.8 million (US$62.1million) and basic earnings per share after extraordinary gains of Rmb7.52 (US$1.10).
Another subsidiary of Qiao Xing Universal Telephone, Qiao Xing Communication Holdings Limited,
engaged in the lower-end mobile phone handset business and indoor phone business, reported a net loss of Rmb291.0 million (US$42.7 million) for 2008. The reasons for the decrease are the economic recession and increased provisions for doubtful debts on accounts receivable in the amount of Rmb232.8 million (US$34.1 million) (compared with Rmb3.0 million in fiscal year 2007).
As a result of the material loss from Qiao Xing Communication Holdings and significant interest expenses which made Rmb146.2 million (US$21.4 million) at the parent company level, the net loss for Qiao Xing Universal Telephone in 2008 made Rmb136.8 million (US$20.0 million), and basic loss per share made Rmb4.42 (US$0.65).
The BVI company continues its diversification strategy and anticipates that its molybdenum business will generate substantial revenues, income and cash flow to the Group starting from the second half of 2009.