3SOF

XING: Closes $40M PIPE: Convertible Debentures
Wednesday, June 14, 2006 11:17 ET

Qiao Xing Universal Telephone, Inc. (nasdaqnm:XING) announced that it has closed the highly anticipated USD 40 Million Convertible Bond transaction with two strategic investors on June 13. Proceeds are to be used for the company's 3G expansion and to fuel the rapid growth extending from 2005.The unique debenture is convertible into common stock of either Qiao Xing Universal Telephone, Inc. or their 80% owned subsidiary Qiao Xing Mobile Communication Co. Ltd. QXMC, a BVI company, in turn owns 90% of the Sino-Foreign JV CEC Telecom Co., Ltd. (CECT), which has been Qiao Xing Universal Telephone, Inc.'s key earnings driver. CECT's market share has become the fastest growing among domestic brands, rising to seventh place overall. The funds will be used to continue the innovation that has led to such market share gains.

"Finally XING" ... what's a joke: yesterday I was stopped and today we've got a news and very nice run:
http://biz.yahoo.com/ap/060614/qiao_xing_results.html?.v=1

Is it wise to re-enter now?

stopped out yesterday, back today 

1)
XING: Closes $40M PIPE: Convertible Debentures
Wednesday, June 14, 2006 11:17 ET

Qiao Xing Universal Telephone, Inc. (nasdaqnm:XING) announced that it has closed the highly anticipated USD 40 Million Convertible Bond transaction with two strategic investors on June 13. Proceeds are to be used for the company's 3G expansion and to fuel the rapid growth extending from 2005.The unique debenture is convertible into common stock of either Qiao Xing Universal Telephone, Inc. or their 80% owned subsidiary Qiao Xing Mobile Communication Co. Ltd. QXMC, a BVI company, in turn owns 90% of the Sino-Foreign JV CEC Telecom Co., Ltd. (CECT), which has been Qiao Xing Universal Telephone, Inc.'s key earnings driver. CECT's market share has become the fastest growing among domestic brands, rising to seventh place overall. The funds will be used to continue the innovation that has led to such market share gains.

2)

XING: Shares Spiking on EPS Guidance
Wednesday, June 14, 2006 10:51 ET

Qiao Xing Universal Telephone Inc (XING) shares, up 15%, are spiking on news that the company expects to report basic earnings per share before gains of more than $1 for 2005, up sharply from 17 cents in the year-ago period. With a $1 in EPS the shares would only be trading at a P/E of 8.4.

So what is the value of XING based on current information?

Looking at XING's history, its PE ratio has been over 50 (currently at 45) -- I am sure that much of that is priced into XING based on the anticipation of some of the things that are now occurring.  However, I would say a reasonable PE going forward would be at least 25.

That puts the stocks fair price around $25-30 per share based on their next earnings release.

I can't find any reason why XING should not reach $20 per share.

Can anyone else see any reason why XING would not support a P/E ratio of at least 20?

Quote from: Loffigus on June 14, 2006, 02:04:53 PM
So what is the value of XING based on current information?

Looking at XING's history, its PE ratio has been over 50 (currently at 45) -- I am sure that much of that is priced into XING based on the anticipation of some of the things that are now occurring.  However, I would say a reasonable PE going forward would be at least 25.

That puts the stocks fair price around $25-30 per share based on their next earnings release.

I can't find any reason why XING should not reach $20 per share.

Can anyone else see any reason why XING would not support a P/E ratio of at least 20?

Hi Loffy,

I don't know if the PE should be 15, 25 or 35. What I do know is that the company grew earnings in 2005 with at least 600% and expects to grow earnings with 35% in average for the next 5 years.

I also have to admit that I don't know if they will be able to grow earnings with 35% for the next 5 year but based on the sales figures and Market shares for 2006 it certainly seems like earnings this year will grow with significantly more that 35%.

What I do know is that this stock is one of the most undervalued stocks that I have stumbled over for a very long time and that is good enough for me

Let's be very conservative here and assume that XING will report 1.1 USD earnings this year and grow earnings with 35% over the next 5 years. A little magic with excel tells me that earnings 5 years from now will be 4.93. Let's also say that the PE 5 years from now will only be 15 and you have a share price of 74 USD. That is good enough for me (wouldn't complain if the PE would be 25 though  )

Quote from: Michael on June 14, 2006, 04:02:02 AM

Quote from: AussieTrader on June 14, 2006, 01:56:46 AM
Sometimes Mr Market cares not if you are undervalued or overvalued. XING got hammered today and broke the 200MA closing below in fact. I stopped out of my position just below $8.
XING long term is still one I want to own, but not right now.

Different investors - different trading strategies  You certainly made a smart move selling at 8 - Congrats. I wouldn't stay out too long though if you like the fundamentals.

Tuesday my stop on XING looked OK and protected my capital in a shaky market, today though that STOP took me out the wrong time But I worry not I trade with STOPS all the time to protect my long term survival in the market. Anyways I Stopped back in XING today a little higher than I got out, I am OK with that, but I take on board what happened, normally my trade rules mean I am a buyer of stocks I want at the 200MA, on XING the selling market made me overide that rule. That's what happens though.

Good Trading

Talk about a bad time to get stopped out.  You could not have asked for a worse scenario for a stop to get triggered.  Anyone buy back in?

hi,
it is sitting right on the ema 50 at 887, good place to get in?
the ma50 is 850which it bounced off this morning.
maxi

Quote from: AussieTrader on June 14, 2006, 08:59:38 PM

Quote from: Michael on June 14, 2006, 04:02:02 AM

Quote from: AussieTrader on June 14, 2006, 01:56:46 AM
Sometimes Mr Market cares not if you are undervalued or overvalued. XING got hammered today and broke the 200MA closing below in fact. I stopped out of my position just below $8.
XING long term is still one I want to own, but not right now.

Different investors - different trading strategies  You certainly made a smart move selling at 8 - Congrats. I wouldn't stay out too long though if you like the fundamentals.

Tuesday my stop on XING looked OK and protected my capital in a shaky market, today though that STOP took me out the wrong time But I worry not I trade with STOPS all the time to protect my long term survival in the market. Anyways I Stopped back in XING today a little higher than I got out, I am OK with that, but I take on board what happened, normally my trade rules mean I am a buyer of stocks I want at the 200MA, on XING the selling market made me overide that rule. That's what happens though.

Good Trading

My only concern is that usually when a stock with this much value is staying depressed, it is because some dilution is on the horizon...  Just like what happened to NVAX - it's run got killed when they decided to announce an additional 100,000,000 shares being issued.
Stuff like that is always what happens to these stocks with great stories.  Not trying to be negative, just cautious.

TA very positive IMO   

Quote from: la-onda on June 15, 2006, 02:46:00 PM
TA very positive IMO

So much so that this pattern has its own name: "The Hound of The Baskervilles" 

We have a very clear positive divergence with MACD (where is Terliso!!!). This pattern was identified and named by Dr. Alexander Elder as one of the strongest reversal signals in his book: Come in to my Trading Room.

The theory is that everybody is taken by surprise by the sudden change in direction (nobody heard the dog barking) so all the people who believed in the stock but sold during the downtrend will rally to buy the stock back in competition with new buyers. The pattern is confirmed when the MACD turns positive which happened yesterday.

We also had another confirmation, which is the increased volume on the second day of the reversal. It seems like this break out has a lot of fuel to catapult it higher.

haha Mike, funny to hear the Hound dog mentioned again by someone, ive never heard it mentioned here before. I posted an analysis of the $COMPX earliar this morning with a potential hound creeping upon us So if  anyone is confused what "The hound of Baskervilles" is, I explained it here. here

Will be interesting to see how this pattern plays out for both XING  and the NAsD.



-fous

up 20%!! pre market


Qiao Xing Universal Reports 2005 Financial Results
Tuesday June 20, 9:05 am ET 
--Company's Revenue Rise 42.4% and Net Income Increase by over 900%


HUIZHOU, Guangdong, China, June 20 /Xinhua-PRNewswire-FirstCall/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING - News) announced that today it files its 2005 annual report on Form 20-F with SEC. For the fiscal year 2005, the Company recorded:

    -- Net sales of US$ 356 million, increasing by 42.4% over that for 2004,
    -- Gross margin ratio of 17.0% versus 11.1% for 2004
    -- Income from operations increased by around 400% to US$ 45 million,
       compared with US$ 8 million for 2004
    -- Net income of US$ 31 million, compared with US$ 3 million for 2004, an
       increase of 987%.

The Company achieved a positive operating cash flows and that the Basic and Diluted EPS before extraordinary gain should increase in excess of 700% to US$1.44 on stellar performance from subsidiary CEC Telecom Co., Ltd. Basic earnings per share, as well as diluted earnings per share, after extraordinary gain for 2005 for the Company was US$ 1.68 compared with US$ 0.17 for 2004.

Mr. Wu Rui Lin, Chairman of XING, said, ''We are pleased that the Company's financial results have improved significantly over past years, indication that we have found our place in this fiercely competitive business sector in which we operate. Among our many competitive advantages, one is our devoted emphasis on research and development, with our strong team who are capable of continuously coming up with innovative ideas and turning them into products. Being a local player with an extensive sales network has allowed us to develop a deep understanding of consumer needs and tastes. This knowledge, updated constantly and shared freely among those involved, is put to use without delay especially by our product development people. This explains why our new products follow closely the latest trends and are invariably met with warm reception in the market.''

Mr. Wu Zhi Yang, Chairman of CECT and Vice-chairman of XING, said, "Only a few years after it became a member of XING, CECT's sales revenue has grown sevenfold to become one of the major local players in China's mobile handset market. Not only is it fast growing, it has outstanding profit numbers as compared with its local rivals. Its winning business model, consisting of high-end product strategy, product differentiation, continuous business process improvement and vigorous cost control, is at the heart of this stellar performance.''


    2005 income statement follows:


                               Income Statement

             QIAO XING UNIVERSAL TELEPHONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE INCOME (LOSS)FOR THE

                 YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005



                        Note    2 0 0 3    2 0 0 4            2 0 0 5
                                Rmb'000    Rmb'000     Rmb'000      US$'000
                               (Restated) (Restated)               (Note 3)

    Net sales                1,843,282  2,019,081   2,874,336      356,166
    Cost of goods sold      (1,598,615) (1,795,482)  (2,385,287)  (295,567)

    Gross profit                 244,667    223,599     489,049       60,599

    Operating expenses:
    Selling expenses             (74,885)   (27,873)    (29,227)      (3,622)
    General and
    administrative
     expenses                    (78,814)  (100,062)    (61,503)      (7,621)
    Research and
     development                  (6,649)   (10,449)    (20,694)      (2,564)
    In process research
     and development             (21,826)        --          --           --
    Amortization of
    acquired intangible
     assets                      (27,425)   (11,044)    (10,159)      (1,259)
    Impairment of
    acquired intangible
     assets                           --         --      (3,852)        (477)

    Income from
     operations                   35,068     74,171     363,614       45,056

    Interest income                3,045        492       7,130          883
    Exchange loss, net                --         --      (2,659)        (329)
    Interest expense      32     (18,985)   (27,060)    (41,752)      (5,174)
    Gain on disposal of
     subsidiary           29.f        --         --      10,307        1,277
    Gain on disposal of
     equity investee      12          --     41,465       1,579          196
    Gain on disposal of
     other equity
    investments                       --         --       5,035          624
    Other income, net              2,088      1,597         640           79

    Income before income
     tax                          21,216     90,665     343,894       42,612

    Provision for income
     tax                  23          --    (10,404)    (27,813)      (3,446)

    Income before
     minority interests           21,216     80,261     316,081       39,166

    Minority interests           (35,748)   (56,763)   (102,870)     (12,747)
    Equity in earnings
     of equity investees  12       6,802       (624)         --           --

    Net (loss) income
     before
    extraordinary gain            (7,730)    22,874     213,211       26,419

    Extraordinary gain
     on acquisition of
    minority interests  29.f          --         --      35,486        4,397

    Net (loss) income             (7,730)    22,874     248,697       30,816

    Other comprehensive
     (loss) income
    Translation
     adjustments                    (746)        70       1,821          226

    Comprehensive (loss)
     income                       (8,476)    22,944     250,518       31,042

    Basic (loss)
    earnings per common
     share
    Before extraordinary       Rmb        Rmb         Rmb         US$
     gain                 25   (0.50)     1.39        11.64       1.44
    Extraordinary gain                                Rmb         US$
                          25      --        --        1.94        0.24

    After extraordinary        Rmb        Rmb         Rmb         US$
     gain                 25   (0.50)     1.39        13.58       1.68

    Diluted (loss)
    earnings per common
     share
    Before extraordinary       Rmb        Rmb         Rmb         US$
     gain                 25   (0.50)     1.38        11.64       1.44
    Extraordinary gain                                Rmb         US$
                          25      --        --         1.94       0.24

    After extraordinary        Rmb        Rmb         Rmb         US$
     gain                 25   (0.50)     1.38        13.58       1.68

    Weighted average
     number of shares
    outstanding
    - Basic               15,420,000  16,443,000   18,319,000  18,319,000
    - Diluted             15,420,000  16,559,527   18,320,000  18,320,000

The accompanying notes are an integral part of these consolidated financial statements.

much better as expected:
The Company achieved a positive operating cash flows and that the Basic and Diluted EPS before extraordinary gain should increase in excess of 700% to US$1.44 on stellar performance from subsidiary CEC Telecom Co., Ltd. Basic earnings per share, as well as diluted earnings per share, after extraordinary gain for 2005 for the Company was US$ 1.68 compared with US$ 0.17 for 2004.



awesome !
Oliver