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SECURITITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May , 1999
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Qiao Xing Universal Telephone, Inc.
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(Translation of registrant's name into English)
Qiao Xing Building, Wu Shi Industrial Zone
Huizhou City, Guangdong, People's Republic of China
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(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- __________.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Qiao Xing Universal Telephone, Inc.
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(Registrant)
Date: May 12, 1999 By: /s/ Rui Lin Wu
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Rui Lin Wu, Chairman
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Qiao Xing Universal Telephone, Inc.
For Immediate Release
For further information
Ms. Amanda J.H. Ma Tel: 86-752-280-8188
Mr. Martin Y.F. Wai Tel: 852-2521-3328
Qiao Xing Universal Telephone, Inc. Fax: 86-752-280-3101
http:\\www.qiaoxing.com
E-mail: [email protected]
Qiao Xing Universal Telephone, Inc.
Announces Record Net Income For the Year Ended December 31, 1998
China, May 12, 1999 -- Qiao Xing Universal Telephone, Inc. (NASDAQ/NMS: XING)
announced today the audited consolidated results of the Company and its
subsidiaries (the "Group" or "Qiao Xing") for the year ended December 31, 1998.
At the same time, the Group provided a review of its operations and
developments.
Net income for the year ended December 31, 1998 was US$5,708,000, representing
an increase of 14.7% from US$4,977,000 for the year ended December 31, 1997.
Earnings per common share was US$0.720, as compared to US$0.656 for fiscal 1997,
representing an increase of 9.8%.
Net sales revenue of US$44,295,000 for the year ended December 31, 1998 compared
to US$48,336,000 for fiscal 1997, representing a decrease of US$4,041,000 or
8.4%.
Gross Profit for the year ended December 31, 1998 was US$13,868,000, a 15.6%
increase over the gross profit for the year ended December 31, 1997. Gross
profit margin increased from 24.8% in 1997 to 31.3% in 1998.
Weighted average number of shares outstanding increased from 7,595,000 in 1997
to 7,936,000 in 1998. Total shareholders' equity increased by US$6,405,000 or
47.8% to US$19,804,000.
The increase in gross profit and net income were primarily attributable to the
Group's alteration of its sales mix towards the newly introduced special
function corded telephone which carried a higher profit margin. The special
function corded telephones represented 25.9% of net sales revenue in 1998 as
compared to 2.7% of net sales revenue in 1997. Mr. R.L. Wu, President of Qiao
Xing said, "Qiao Xing has adopted the strategy of moving to higher end markets
for phones with special functions. This will reduce competition and lead to
higher profit margin."
Despite the economic crisis in Southeast Asia which weakened purchase power in
China, the Group's well-devised marketing strategies, comprehensive distribution
network and established brand name in the market minimized the impact of the
economic crisis to the Group. According to the statistical report released by
the Trade and Foreign Economy Statistics Division of National Statistic Bureau,
the Qiao Xing brand telephone ranked second by its sales volume in China in 1997
and 1998.
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During the year, the Group continues to seek new growth opportunities through
product innovation. The Group introduced more than 50 new models of telephone to
the market , and the new products brought net sales revenue of approximately
US$16,969,000 to the Group in 1998.
The Officials of the Ministry of Posts and Telecommunications and the Ministry
of Electronics Industry predicted that land-line telephone installation will
grow to 123 million sets in 2000. In other words, there will be over 50 million
telephone sets in demand between 1998 and 2000, not including the replacement of
old telephone models. Management believe that such industrial trend may benefit
the growth of the Group's revenue in the coming years. In addition, the Group
begins to place emphasis on sales in overseas market, with aim of enhancing its
global market share.
The Group will continue to invest in research and development and increase
manufacturing capacity with the objective of becoming the largest telephone
manufacturer in PRC. The Board of Directors is confident that the Group, with
the successful completion of the initial public offering in February 1999, will
achieve favourable returns in the coming years. Mr. Wu said, "we will continue
with the strategy of being the market leader in the telephone industry in China.
Qiao Xing brand name is always remembered as a name of quality."
The Group is principally engaged in the manufacturing and sales of
telecommunication terminals and equipment, including corded and cordless
telephone sets, in China. Qiao Xing currently produces 165 corded models and 25
cordless models. The Group's annual production capacity of telephone sets has
increased from 0.3 million to an estimated 4.5 million within the last six
years, and the Group has an extensive nationwide sales network that comprises
over 1,000 retail outlets in China. Qiao Xing is also the first telephone
manufacturer in China to receive the ISO 9001 Accreditation.
The functional currency of the Group is Renminbi. The amounts reflected in
United States dollars (``US$'') in this announcement are translations from
Renminbi into US$ for the convenience of readers, and has been made at the noon
buying rate in New York City for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York on
December 31, 1998 of US$1.00 = RMB8.28.
This Press Release contains "forward-looking statements" regarding to future
revenues and operating information and their impact on future results. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
actual results may differ materially from those expressed in any forward-looking
statements made by or on behalf of the Group. These risks and uncertainties
include, but and not limited to, those relating to economic, political, legal
and social conditions in the People's Republic of China, dependence upon key
management personnel, competition, material factors relating to the operations
of the business, and domestic and global general economic conditions.
