I am a newbie to Silicon Investor and want to find out more about XING. I recieved the following e-mail last night:
LA GUARDIA GFS ISSUES STRONG BUY AND HOLD RATING FOR QAIO XING UNIVERSAL TELEPHONE, INC. (NASDAQ: XING)
WWW.QIAOXING.COM
Qiaoxing Universal Telephone, Inc. (NASDAQ: XING) is widely recognized as the second largest Manufacture of telecommunication terminals and equipment in China, which is the fastest growing telecommunication market in the world. The company is principally engaged in the design, manufacturing and sales of consumer telecommunication terminals and equipment, including both corded and cordless telephone sets under the trademark of Qiaoxing.
As the financial audit for 1998 is being wrapped up, Qiaoxing expects total sales to be in excess of $60mm (US) or $.62/share EPS on 9.6mm shares vs. 8mm shares outstanding for 1997. The additional 1.6mm shares are the result of a successful IPO underwritten by Baron Chase Securities, which were released on February 22, 1999, and fully subscribed at $5.50/share.
If XING, like other companies in the global telecommunications industry, such as CellStar (NASDAQ: CLST) and Comverse Technology (NASDAQ: CMVT) trading at average P/E ratios of 40 times earnings, the proper valuation for this stock would be upwards of $25/share ($6mm profit x P/E 40 = $240mm Market Capitalization divided by 9.2mm shares outstanding = $26.08/share).
We feel that this company is HIGHLY undervalued, due to lack of exposure and lack of adequate Investor Relations. When the Underwriting firm filed the F-1 (foreign entity equivalent of a S-1) they choose not to file electronically under an exemption from the SEC. Subsequently, their financial information is not currently available on-line via the EDGAR database. We feel that this lack of information has kept XING in a low trading range. La Guardia GFS has been in direct contact with the legal counsel for XING, and we anticipate that this information will be available on EDGAR within the next 15 days. La Guardia is currently negotiating to be Qiaoxing's Investor Relations counsel, and we have confirmed with XING that they will post audited financials for the past 3 years on their web site (www.qiaoxing.com) immediately and 1998 numbers as soon as they are released (please see “Excerpts from the Prospectus” below for further explanation).
CORPORATE BACKGROUND
Established in April 1992, Qiaoxing has grown rapidly to become the market leader in China's domestic telephone market. The company was founded by Mr. Ruilin Wu and his family, who established the corporate headquarters in Huizhou, China. Qiaoxing started off as a sole proprietorship in the original design manufacturing (ODM) of corded telephones, whereby products are designed and manufactured according to customer specifications and marketed under the customers' designated brand names. The company had only 100 employees and two production lines during its start up phase.
In October 1992, the president of the company, Mr.Wu, realized that the success of the company lies in the establishment of a strong brand name. Therefore, the company began developing its own product line with the "Qiaoxing" name, and by the end of the year, five different models were successfully developed. With continual dedication and efforts, Qiaoxing introduced its very popular telephone series-HA 8188 in 1994. The series consists of 20 different models of corded telephones, and remains to be the "best seller" in the telephone industry. The company had already expanded to 20 production lines and over 1000 employees by the end of 1994.
In 1996, the company made a tremendous break through by launching a line of cordless telephone sets. Qiaoxing had responded swiftly to market demand and created five different models of cordless products by the end of the year. Extensive marketing efforts coupled with high quality products have enabled Qiaoxing to grasp the biggest market share of cordless telephones in China.
According to the management's best estimates and internal research information, Qiaoxing had obtained about 13.41% of the overall telephone market in 1996. The company is now producing and selling 98 corded models, 24 cordless models and 9 special function corded phones. With record sales and rapid growth, the name of Qiaoxing has been widely established in the China consumer market.
Although short in history, Qiaoxing's performance and achievements are overwhelming. Sales in 1997 was more than 3 times of 1994 and net income in 1997 doubled the 1994 figure. The Company had grown from 100 staff to over 2,300, expanding from 2 production lines to 40 by the end of 1997. The plant area has also expanded to around 175,000 square feet. The company is now on the rapid growth highway and it is in the foreseeable future that Qiaoxing will become a legend as an international brand.
EXCERPTS FROM THE PROSPECTUS (dated February 16, 1999):
EXPERTS
The audited consolidated financial statements of the Company and its subsidiaries as of December 31, 1997 and 1996 and for each of the three years ended December 31, 1997 included in this Prospectus have been audited by Arthur Andersen & Co., Certified Public Accountants, Hong Kong, as indicated in their report with respect thereto, and are included in reliance upon the authority of said firm as experts in auditing and accounting.
ADDITIONAL INFORMATION
The Company has filed with the Commission, in Washington, D.C., a Registration Statement on Form F-1 under the Securities Act with respect to the shares of Common Stock being offered in this Offering. This Prospectus does not contain all the information set forth in the Registration Statement, certain portions of which have been omitted as permitted by the rules and regulations of the Commission. Statements in this Prospectus as to the contents of any contract or other document is an exhibit to the Registration Statement. Although all material terms of the respective contracts or other documents are set forth with such statements, each statement is qualified in its entirety by reference to the relevant exhibit.
Upon the effectiveness of the Registration Statement with the Commission, the Company will become subject to the informational requirements of the Exchange Act as the apply to a foreign private issuer, and in accordance therewith will be required to file reports and other information with the Commission. As a foreign private issuer, the Company is exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements and annual reports to shareholders and the Company's officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions set forth in Section 16 of the Exchange Act. In addition, the Company will not be required under the Exchange Act to file periodic reports and financial statements with the Commission as frequently or as promptly as United States companies whose securities are registered under the Exchange Act.
(end of Excerpts from the Prospectus)
Due to the nature of our negotiations, it would not be proper for La Guardia GFS to purchase shares of XING on the open market, but it is our objective to sign said Agreement as readily as possible, and to begin to acquire shares of XING immediately thereafter. La Guardia GFS anticipates compensation of 75k to 150k shares of restricted stock, and no less than $15k cash retainer. Said stock will be held for no less than 12 months from the signing of said contract, and will be registered at such time pursuant to SEC rule 144.
As always, we encourage and recommend highly that any investor do their own due diligence prior to making any investment, and we do not advocate purchasing shares in any company based on this recommendation and/or technical analysis alone.
PLEASE CONTACT LA GUARDIA GFS AT 800.292.1361 OR COMERCIO@RIOGRANDE.NET.MX
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Can someone help me with more information????
Thanks,
BrownGirl |
