3SOF

facts will be published tomorrow morning 

Qiao Xing Universal Telephone, Inc. to Release Certain Key Financial Data for 2006 Q1 at 8:00 AM of June 30 New York Time
Thursday June 29, 9:45 am ET

HUIZHOU, Guangdong, China, June 29 /Xinhua-PRNewswire/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING - News) today announced that it would release certain key financial data for the first quarter of 2006 at 8:00 AM of June 30 New York Time.

XING chart shaping up nicely following breakout of ascending channel. Fridays Q1 release will hopefully catalyse a powerful breakout and start the longer trem revaluation of the stock price.

Qiao Xing Universal Telephone, Inc. to Release Certain Key Financial Data for 2006 Q1 at 8:00 AM of June 30 New York Time
PR Newswire - June 29, 2006 09:45

HUIZHOU, Guangdong, China, June 29, 2006 /Xinhua-PRNewswire via COMTEX/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING) today announced that it would release certain key financial data for the first quarter of 2006 at 8:00 AM of June 30 New York Time.

I wanted to share this data. It is a copy paste from Yahoo boards posted by Kevinstudio (Kevin Chen). I  read many of his posts he has a lot of in depth factual data regarding XING and seems to provide a lot of true insight into how XING success is shaping up. Only time will tell......

Quoting:
by: kevinstudio
Long-Term Sentiment: Strong Buy

So far this year, Chinese has been kept on spending more on mobile service and paying more for new cell phones as they have done in the past few years. According to articles talking about the newest price trend in 2006, the average price of new 2006 models released to the market so far is higher than the average price of released models in 2005. Major electronic chains also predict that the average price of new models coming to the market in May will keep on increasing! Amazing isn't it?

At the same time, as statistics have shown, CECT's market share and popularity has kept on exploding this year.

Let's see, assuming a 200 million units of cell phone sold in China this year (some people don't like the 400 million units sold predicted by INDUSTRY EXPERTS. So, let's chop that in half to play stubbernly conservative) and an average combined market share of 6% for CECT and Xing, Xing will sell 12 million units of phones this year.

With an average price of US$300 (2,400 yuan), we'll have a revenue of US$ 3.6 billions for 2006. Assuming 20% gross margin, Xing will get $720 millions of gross profit.

Deducting $33 millions of operating and other expenses (2004 number was $24 millions), we get a before-tax income of about $690 millions. Stripping out 30% tax and $3 million minority interest (lesss than the minority interst in 2004 due to larger ownership in CECT), the final net income is $480 millions.

So, current forward P/E basing on current market capital of around $170 millions (20M shares outstanding) stands at 0.32 !!!!!!!!!!!!!

Well, call my prediction optimistic if you want, but I don't see an obvious bias or deviation from fair probability in my calculation because my assumptions used are based on objective sales data and pricing trends published by authoritative 3rd-party agencies in China in 2005 and 2006.

Even give huge margin of errors, it is hard for 2006 net income to fall below $200 millions. In other words, Xing's current forward P/E is no more than 1 !!!

Everything is ready and waiting

Qiao Xing Universal Telephone, Inc.'s Net Sales and Gross Profit Increased 18% and 43% Respectively for the First Quarter of 2006
Friday June 30, 8:00 am ET

HUIZHOU, Guangdong, China, June 30 /Xinhua-PRNewswire/ -- Qiao Xing
Universal Telephone, Inc. (Nasdaq: XING - News) released today, on an un-audited
management account basis, certain key financial data for the first quarter of
2006. Compared with the same period of the previous year, in the first quarter
of 2006, the Company's net sales and gross profit increased 18% and 43%
respectively.


                                                1st Quarter of  1st Quarter of
                                                     2005             2006
                                                  (US$million)    (US$million)
Net sales                                         71.1            84.1
Cost of goods sold                            61.7            70.8
Gross profit                                       9.4            13.3
Operating expenses other
than share-based compensation          (3.6)           (3.9)
Share-based compensation                    --             (7.3)
Income from operations                      5.8             2.1


Net sales increased 18.4% compared with the same period a year earlier. This increase was mainly attributable to the following:

    a. Unit selling price for the 'CECT'-brand mobile phone handsets increased
       as a result of the 'High-End Product Strategy', implemented by CEC
       Telecom Co. Ltd. (CECT), one of XING's operating subsidiaries.
    b. For the 'COSUN'-brand mobile phone handsets introduced by Huizhou Qiao
       Xing Communication Industry, Ltd., another of XING's operating
       subsidiaries, sales increased as the sales network continued to expand
       and the product range moved from low-end only to a complete one
       consisting of high-end, mid-end and low-end products.
    c. For the indoor phone business segment, there were more sales to
       telecommunication operators and more export sales.

As sales revenue increased, gross profit grew US$3.9 from US$9.4 million for the first quarter of 2005 to US$13.3 million for the same period in 2006. This represented an increase of 42.5%

Operating expenses other than stock-based compensation for the first quarter increased US$0.3 million from 2005 to 2006, owing mainly to the increase in staff in research and development in CECT.

Stock-based compensation increased from nil for 2005 Q1 to US$7.3 million for 2006 Q1. In the first quarter of 2006, the Company granted to certain employees and an external consultant stock options to purchase all the 2,000,000 shares of common stock authorized and reserved for issuance under the Stock Compensation Plan set up in 2005. The fair value of the options of US$7.3 million was recorded as share-based compensation expenses.

Mr. Wu Rui Lin, Chairman of XING, said, ''Like many other listed companies, XING sets up from time to time Stock Compensation Plans to increase the ability of the Company to secure and retain highly qualified and experienced individuals to serve as officers, directors, employees or advisors of the Company by affording such individuals the opportunity to participate in the appreciation in value of the common stock of the Company upon exercise of stock options granted to such individuals under the Plans. The granting of stock options, though representing an expense in the income statement and having a dilutive effect on earnings, has the advantage of not involving any outflow of cash. In fact, for some senior employees, the lion's share of their total remuneration package is in stock options. The share-based compensation recorded for 2006 Q1 related to the 2005 Plan, and was for services rendered over a long period of time. Indeed, we have to go back to 1999 for the last time a similar plan was set up. Stock options, a portion of which were subsequently re-priced, were granted in 1999 and 2000 under the 1999 Plan, resulting in a total amount of stock-based compensation of US$6.1 million charged to the profit and loss account.

''If we take out the share-based compensation, income from operations would have increased 61.5% to reach US$9.4 million for the first quarter of 2006, compared with US$5.8 million for the same period a year earlier.''

 

This always seems to happen with this company.  Glad I sold on Tuesday.  I will never, I repeat never hold a company through earnings.  This has become one of my golden rules of trading.  It's just not worth it.  If earnings are super and the stock climbs just jump back in.

Selling the news for sure. Looks like the short termers are bailing, probably because of the stock option compensation figure. It is a sizeable figure for sure, but companies do givelots of  options. They have rewarded key personnel without having to pay out cash, options are a fantastic motivator for people.Also  XING have fully disclosed it here in this release so hats off for transparency.

Sales increase is good and XING have indicated 35% year growth 2006 (just recently so they must be super confident in the Q2 and ongoing numbers)
Lets see what the day does, no gap and breakaway as I had been looking for, but the market is yet to open and its still the amatuers at play.

Quote from: AussieTrader on June 30, 2006, 08:56:53 AM
Selling the news for sure. Looks like the short termers are bailing, probably because of the stock option compensation figure. It is a sizeable figure for sure, but companies do give options, and XING have fully disclosed it here in this release so hats off for transparency.

The expectations were obviously very high for this quarter so yes XING will most likely gap down 

But the result is not bad at all. They promised us 35% earnings growth in the next 5 years and delivered 43% before stock option compensation in the first quarter.

The fundamental case for XING is still intact so we will stay with the trading plan.

hi,
i really got caught up in the idea of this gapping up on earnings and broke my trading rule of not holding through earnings. this may yet turn into the hound of the baskervilles. a dog that doesn't bark, bites. ouch
maxi

I think the gap at $9.61 will serve as support for XING, though right now doesnt look to go that low.  I got back in at $9.9, expect a decent rebound.

Interesting to remember:

Q1 is traditionally slowest Q in China for sales XING posted +43% (before the options expense)

Q2 XING released the A1000:
HUIZHOU, Guangdong, China, June 5, 2006 /Xinhua-PRNewswire via COMTEX/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING) today announced that a new model of mobile phone named ''A1000'' created and produced by its major subsidiary, CEC Telecom Co., Ltd (CECT) had met with enthusiastic reception in the China market. Up to date, USD 62 Million worth of orders of this model have been received from CECT's distributors.

Long term is still the play.

Thanks Aussie.

As a follow up to your last post, here's what I feel to be some excellent supporting news for the strength of this company. The market's reaction differed from my view, however. Evidently the market doesn't feel as strongly as I or more likely it was just a sell the news reaction. Who knows. Personally, I think implementing a stock option plan is a clear sign of strength. I won't waste too many cycles trying to explain the 20% dip this a.m.. But whatever it was, it allowed me to pick up XING again for under 10.

Complete story:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/06-30-2006/0004390188&EDATE=


Summary:
HUIZHOU, Guangdong, China, June 30 /Xinhua-PRNewswire/ -- Qiao Xing
Universal Telephone, Inc. (Nasdaq: XING) released today, on an un-audited
management account basis, certain key financial data for the first quarter of
2006. Compared with the same period of the previous year, in the first quarter
of 2006, the Company's net sales and gross profit increased 18% and 43%
respectively.

                                                1st Quarter of  1st Quarter of
                                                     2005             2006
                                                  (US$million)    (US$million)
    Net sales                                         71.1            84.1
    Cost of goods sold                           61.7            70.8
    Gross profit                                       9.4            13.3
    Operating expenses other than share-based
     compensation                                 (3.6)           (3.9)
    Share-based compensation                   --           (7.3)
    Income from operations                      5.8             2.1
    Net sales increased 18.4% compared with the same period a year earlier.
This increase was mainly attributable to the following:
    a. Unit selling price for the 'CECT'-brand mobile phone handsets increased
       as a result of the 'High-End Product Strategy', implemented by CEC
       Telecom Co. Ltd. (CECT), one of XING's operating subsidiaries.
    b. For the 'COSUN'-brand mobile phone handsets introduced by Huizhou Qiao
       Xing Communication Industry, Ltd., another of XING's operating
       subsidiaries, sales increased as the sales network continued to expand
       and the product range moved from low-end only to a complete one
       consisting of high-end, mid-end and low-end products.
    c. For the indoor phone business segment, there were more sales to
       telecommunication operators and more export sales.

Yep I added also, long term this will move to a price in line with value.

And remember the A1000 will impact in Q2 onwards:

HUIZHOU, Guangdong, China, June 5, 2006 /Xinhua-PRNewswire via COMTEX/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING) today announced that a new model of mobile phone named ''A1000'' created and produced by its major subsidiary, CEC Telecom Co., Ltd (CECT) had met with enthusiastic reception in the China market. Up to date, USD 62 Million worth of orders of this model have been received from CECT's distributors.

It is always interesting to take a step back and look at the fundamentals of your investment on a day like this.

Lets try to remove all the once off costs and gains from the result of 2005 and Q1 2006

Net profit for 2005 was 26.4 million USD
Net profit for Q1 06 was 9.4 million USD

If we annualize the Q1 result we get a result of 37.6 million USD for 2006. (remember that this is conservative as Q1 is a slow quarter as Aussie rightly pointed out)

But with these assumptions (and ignoring dilution!) we get a trailing PE of 9 and a PE for 2006 of 6.3.

This is for a company that grew earnings before extraordinary gains with 700% in 2005 and is expected to grow earnings with 42% this year (with the above mentioned assumptions)

Well I think this is a stellar investment. I don't know how fare the market will take the stock down but I don't think this stock will trade anywhere close to this level one year from now.