What's this about a possible spin-off after HK listing?
ASIINFO MAY POST LOSS AFTER NEW INVESTMENT
biz.yahoo.com
HONG KONG, Aug 8 (Reuters) - Internet infrastructure and software provider AsiaInfo Holdings Inc may suffer losses in the second half of this year as the company invests in new business, Beijing-based chief executive officer James Ding said on Tuesday.
AsiaInfo is planning to invest US$2-3 million over the next 12-months to offer application infrastructure provider (AIP) services in China. It has also earmarked another US$5 million for the AIP venture in the year after, Ding told reporters.
``With the potential new investment in (AIP) we will probably see a loss in the next two quarters,'' he said.
AsiaInfo in July reported second quarter earnings of US$430,000 to June 30, down from US $1.25 million a year ago, on gross revenues of US$51.09 million, up from US$19.55 million in the second quarter of 1999.
Ding attributed the profit decline on the year to more aggressive research and development efforts during the quarter and said he expects his company to return to profitability in the second half of 2001.
The high-end network solution provider had cash reserves of US$1.5 million at the end of the second quarter, Ding said.
He also said the company was contemplating a secondary listing on Hong Kong's Growth Enterprise Market (GEM). ``We realize (there are) lots of benefits to listing in Hong Kong. We have multiple business lines, if there is a need to spin-off, that's possible,'' he said.
The Delaware-registered company listed on the Nasdaq at an initial public offering price of US$24 per share in March. The counter closed at US$30-1/2 on Monday.
AsiaInfo said it was responsible for building all four of China's existing national Internet backbones. The company also has outstanding backbone contracts with three Chinese telecom operators, China Telecommunications (Group) Co, China United Telecommunications Corp and China Network Communications Corp (China Netcom).
After AsiaInfo's number one client China Telecom reorganized last year, local competition drove down AsiaInfo's market share in China's high-end network solution market to 60 percent from 100 percent, Ding said.
Ding has a 15 percent stake in AsiaInfo and Edward Tian controls 16 percent, according to the company's initial public offering prospectus in March.
Tian, who is China Netcom's president and chief executive offer, is also a founder and current board director of AsiaInfo. |
