China's Qiao Xing Sees Higher Handset Sales - Lower Average Prices

China's Qiao Xing Mobile has reported that its Q4 2007 revenues were RMB747 million (US$102.4 million), representing a decrease of 1.4% from RMB757.5 million in the fourth quarter of 2006 and a decrease of 10.2% from RMB831.7 million in the third quarter of 2007. Compared to last year, the decrease was primarily due to a lower average selling price (''ASP'') of handset products shipped in the fourth quarter of 2007 and was partially offset by higher unit shipments. The decrease from the third quarter of 2007 mainly resulted from lower handset shipments, which was partially offset by an increase in the ASP of products sold in the fourth quarter of 2007.

Net income was RMB142.7 million (US$19.6 million) in the fourth quarter of 2007, compared to RMB38.2 million in the fourth quarter of 2006 and RMB138.3 million in the third quarter of 2007.

Commenting on the results, Dr. David Li, the Chief Executive Officer of Qiao Xing Mobile said, "I am pleased with our results in the fourth quarter of 2007. We were able to significantly increase our gross margins and overall profitability on both sequential and year-over-year basis as we achieved continued success in developing and marketing high quality differentiated mobile handsets. Overall, the quarter capped an extremely successful 2007. We broke records for revenue, unit shipments and net income by successfully expanding our product mix to include a larger number of unique handsets. We believe our performance validates our strategy of building a highly profitable business by developing innovative, differentiated and high-margin handsets."

Handset shipments in the fourth quarter of 2007 were 862,000 units, representing an increase of 22.4% compared to 704,000 units in the fourth quarter of 2006 and a decrease of 24.8% compared to 1,146,000 units in the third quarter of 2007.

The decrease in handset shipments compared to the third quarter of 2007 was primarily because newer handset models sold in the fourth quarter of 2007, such as the W100 (a wrist watch phone) and the C6000 (a full metal casing ultra-long standby handset that comes with stock trading functions), were higher-priced products, and because there was a slow-down in the shipments of older handset models. The Company sold 194,000 units of the C6000 model and 101,000 of the W100 model in the fourth quarter of 2007. Shipments of the Company's older lower-priced C1000 series ultra-long standby handsets (including C1000, C1000+ and C1200) were 344,000 units in the fourth quarter of 2007 compared to 593,000 units in the third quarter of 2007.

Posted to the site on 21st April 2008