BVI Company Financial News

Yucheng Technologies Limited, the BVI-registered company providing IT and outsourced services to the Chinese banking industry, reported its financial results for the fourth quarter and fiscal year 2009. According to Chairman and CEO of Yucheng Weidong Hong, the year brought great achievements and challenges for the company, and the shifts in the banking industry were the reason for a revenue shortfall in the last quarter of 2009.

The banking environment changes in the fourth quarter of 2009 impacted the sales of the BVI company in this period. Company’s gross profit was $4.0mln as compared to $12.2mln in the fourth quarter of 2009, caused by the fall of revenues in the reported period. Sales, General and Administrative Expenses remained flat and were $7.8mln in Q4 2009 as compared to $7.5mln in the same period of 2008, – as a result of strict SG&A controls implemented in the third quarter of 2009.

In the fourth quarter of 2009, non-GAAP net income of the company was $-4.9mln, compared to $4.7mln in the same period of 2008, and net income on a GAAP basis was -$5.2mln, compared to $4.4mln in the fourth quarter of 2008. Company’s earnings per share (fully diluted) made USD-0.26 (non-GAAP) and USD -0.28 (GAAP), compared to USD 0.26 (non-GAAP) and USD 0.24 (GAAP) in the fourth quarter of 2008. Although expense controls gave positive effect on the fourth quarter financials, the costs related to unsigned contracts and lower revenues caused Yucheng to generate a loss.

By the end of 2009, cash position of Yucheng was $36.3mln, compared to $35.1mln for the same period last year. Total net revenues of the company for the year 2009 totaled $54.8mln, while in 2008 they were $54.8mln. Total assets in the end of the reported year were $130.54mln, compared to $136,27mln in 2008.

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.

Deswell Industries, Inc., a manufacturing company incorporated in the British Virgin Islands, announced its financial results for the fourth quarter and year ended March 31, 2009.

For Q4 of the year, net sales made $27.4 mln, – a 13.2% decrease compared to the same period of 2008. The reason is the continuing decline of demand from the professional audio and instrument equipment market. Also, the company reported a decline in the operating income, which was $0.21 mln in the fourth quarter of 2009 compared to $0.65 mln in the same period of 2008.

In Q4 2009, net income was $0.59 mln ($1.04 mln in the quarter ended March 31, 2008). In this period, gross profit in the plastic segment decreased to 18.9% of net sales for the fourth quarter, from 21.4% of net sales in the same quarter of last year. This became mainly the effect of an increase in material cost. Gross margin in the electronic and metallic segment increased to 12.4% of net sales for the fourth quarter ended March 31, 2009, due to the decrease in raw materials cost and in labor cost due to headcount reduction.

For the year period ended March 31, 2009, Deswell reported net sales of $131.7 mln, – a decrease of 8.4% compared to $143.8 mln in 2008. Operating income decreased from $8.7 mln in the previous year to $0.75 mln this year. Net income decreased to $1.20 mln ($8.86 mln for the year ended March 31, 2008). In 2009, basic and diluted net income per share fell to $0.08, compared to $0.57 in the previous year. Company’s working capital totaled $51.6 mln as of March 31, 2009, compared to $54.8 mln as of March 31, 2008. Also, by the end of this year period the company has no long-term or short-term borrowings.