Qiao Xing Universal to get out of telecom business
By Hua Jinglei
Shanghai. July 30. INTERFAX-CHINA - Qiao Xing Universal Telephone Inc., the Nasdaq-listed arm of Chinese telecom manufacturer Qiao Xing Group Co. Ltd., will sell off its low-end telecom equipment subsidiaries and concentrate exclusively on its mining business, a company employee told Interfax on July 30.
Qiao Xing Universal is currently discussing the sale of its low-end telecom equipment manufacturing subsidiaries, Qiao Xing Communication Holdings Ltd. and Huizhou Qiao Xing Communication Industry Co. Ltd., Rick Xiao, an employee from Qiao Xing Universal's investor relations department, said. Huizhou Qiao Xing is the manufacturer of the Cosun brand of telecom equipment.
However, Qiao Xing Group will retain Qiao Xing Mobile Communications Co. Ltd., its high-end telecom equipment manufacturing subsidiary under Qiao Xing Universal, Xiao said.
"Qiao Xing Group is completely restructuring its subsidiaries to eliminate competition," Xiao said. "Although Qiao Xing Mobile focuses on the high-end market and Qiao Xing Communication focuses on the low-end market, there is still competition between the two companies, as there have been instances of overlap in the past," Xiao said.
The restructuring will leave Qiao Xing Mobile as Qiao Xing Universal's only subsidiary focusing on the manufacture and distribution of mobile phones.
Unfavorable market conditions since the onset of the global economic downturn have significantly impacted Qiao Xing Universal. The company earned a net profit of RMB 903.9 million ($132.31 million) in 2007, but recorded a net loss of RMB 136.8 million ($20 million) in 2008, according to financial figures released on July 15.
This was primarily attributable to the RMB 291 million ($42.7 million) net loss that its subsidiary, Qiao Xing Communication, recorded in 2008.
Qiao Xing Group produced 710,000 mobile phones in China during the first five months of this year, according to Interfax research figures.