Qiao Xing Universal Telephone, Inc. Releases 2008 Unaudited First Half Consolidated Income Statement and Consolidated Balance Sheet

The Company previously only released its operating results for the second quarter because a third party valuation was being conducted for the purpose of accounting for the $70 million convertible notes issued by one of its subsidiaries in May 2008. The valuation was just completed and the Company is reporting its unaudited condensed consolidated income statement for the six months ended June 30, 2008 and condensed consolidated balance sheet as at June 30, 2008.

Net profit before extraordinary item for the six months was RMB53.9 million (US$7.6 million). This represents a 93% decrease from the first half of 2007. This was mainly due to the decrease of non-operating income and sales.

In the first half of 2007, one subsidiary of the Company, Qiao Xing Mobile Communication Co., Ltd. ("QXM"), conducted an initial public offer ("IPO") on the New York Stock Exchange. The company recognized RMB733.7 million non- operating gains during the IPO and conversion of XING convertible notes by note holders to shares of QXM thereafter. The net non-operating income for the six months ended June 30, 2008 was RMB11.9 million, compared to RMB524.0 million in the same period of 2007, represents a decrease of RMB512.1 million.

Compared to the first half of 2007, net sales decreased 32.6%, from RMB1,857.6 million to RMB1,251.9 million. This leads to a decrease of 47.1% in income from operation.

Basic earnings per share of common stock before and after extraordinary gain were both RMB1.51 (US$ 0.21).

About Qiao Xing Universal Telephone, Inc.

Qiao Xing Universal Telephone, Inc. is one ofChina's largest manufacturers and distributor of telecommunications products inChina. QXUT's product portfolio includes telecommunications terminals and related products, including fixed wireless phones, VoIP telephones, mobile handsets, PDAs and consumer electronic products, including MP3 players, cash registers and set- top-box products. The Company primarily conducts its business through its operating subsidiaries CEC Telecom Co., Ltd (CECT), and Huizhou Qiao Xing Communication Industry Co., Ltd (HZQXCI), a company engaged in R&D and distribution of indoor telephone sets and economy mobile phones under the COSUN brand. The Company Group has built a strong distribution network comprised of more than 5,000 retail stores throughoutChina and has established partnerships with major retailers inEurope,North America and Latin America, including Bellsouth and Wal-Mart. For more details, please visit http://www.cosun-xing.com .

Safe Harbor Statement

This announcement contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "intend," "is /are likely to," "may," "plan," "potential," "will" or other similar expressions. Statements that are not historical facts, including statements about Qiao Xing Universal's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward- looking statement. Information regarding these factors is included in our filings with the Securities and Exchange Commission. Qiao Xing Universal does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of November 21, 2007, and Qiao Xing Universal undertakes no duty to update such information, except as required under applicable law.

Unaudited Condensed Consolidated Income Statement
for the Six Months Ended June 30, 2007 and 2008

                                       2007            2008           2008
                                     RMB'000         RMB'000         US$'000

     Sales, net                     1,857,591       1,251,857        177,439

     Cost of sales                 (1,361,187)       (902,378)      (127,904)
     Gross profit                     496,404         349,479         49,535
     Operating expenses              (128,277)       (154,663)       (21,922)
     Income from operation            368,127         194,817         27,613
     Non-operating income less
      expenses                        523,959          11,898          1,686
     Profit (loss) before taxation
      and extraordinary items         892,086         206,715         29,300
     Current taxation                 (55,887)        (63,281)        (8,969)
     Profit (loss) after taxation     836,199         143,434         20,330
     Minority interest                (64,262)        (89,501)       (12,686)
     Profit before extraordinary
      item                            771,937          53,933          7,644
     Extraordinary items               17,586              --             --
     Profit for the year              789,523          53,933          7,644

     Allocation of profit before
      extraordinary gain
        To participatory convertible
         notes                        133,792           7,079          1,003
        To common stock               638,235          46,853          6,641

     Basic earnings per share of
      common stock before
      extraordinary gain                21.53            1.51           0.21

     Allocation of profit after
      extraordinary gain
        To participatory convertible
         notes                        136,747           7,079          1,003
        To common stock               652,776          46,853          6,641

     Basic earnings per share
      of common stock after
      extraordinary gain                22.02            1.51           0.21
     Weighted average number of
      shares outstanding -- basic  29,638,000      30,948,836     30,948,836



Unaudited Condensed Consolidated Balance Sheets
as of December 31, 2007 and June 30, 2008

                                   December 31,     June 30,        June 30,
                                      2007            2008            2008
                                     RMB'000         RMB'000         US$'000
     CURRENT ASSETS
     Cash and cash equivalents      3,033,010       3,988,329        581,465
     Pledged bank deposits            197,951         201,100         29,319
     Bills receivables (bank)         115,261          88,271         12,869
     Accounts receivable, net         941,518         555,111         80,931
     Inventories                      304,024         254,701         37,133
     Prepaid expenses                 273,881         587,692         85,681
     Other current assets           1,111,408         619,714         90,349
     Due from related parties:             27              25              4
     Deferred tax assets               13,350           7,831          1,142
     Deferred debt issuance costs
      - 4.5% Notes                     14,579           2,741            400
     TOTAL CURRENT ASSETS           6,005,009       6,305,514        919,292

     Fixed assets, net                192,601         198,945         29,004
     Land use rights                   36,106          35,706          5,206
     Intangible assets                 60,728          53,348          7,778
     Goodwill                          76,594          83,982         12,244
     Investment at cost                 7,803           7,802          1,136
     Deferred debt issuance costs                      49,606          7,232
     TOTAL ASSETS                   6,378,841       6,734,904        981,893

     CURRENT LIABILITIES
     Short term borrowings          1,471,454       1,619,558        236,118
     Accounts payable                 180,573         183,999         26,826
     Other payables                    42,009          26,605          3,879
     Deferred revenues                 26,402          10,512          1,533
     Accrued liabilities              104,984         103,428         15,079
     Deposits received                  4,539           3,436            501
     Due to related parties               608               0              0
     Taxation payable                  73,301          65,082          9,488
     Convertible notes                135,667         292,758         42,682
     CB embedded derivatives           19,004         203,442         29,660
     TOTAL CURRENT LIABILITIES      2,058,541       2,508,819        365,765

     LONG-TERM LIABILITIES
     Shareholders loans                 7,194           6,765            986
     Convertible notes                189,660         166,956         24,341
     Deferred tax liabilities           5,561           4,680            682
     TOTAL LONG-TERM LIABILITIES      202,415         178,401         26,009
     TOTAL LIABILITIES              2,260,956       2,687,220        391,774

    MINORITY INTEREST               1,095,917         876,588        127,799

    SHAREHOLDERS' EQUITY
     Share capital                        251             251             34
     Additional paid-in capital     1,737,541       1,862,536        271,542
     Cumulative translation
      adjustments                     (41,808)        (71,609)         1,323
     Retained earnings (deficits)   1,325,984       1,379,917        189,420
     TOTAL SHAREHOLDERS' EQUITY     3,021,968       3,171,096        462,320
    TOTAL LIABILITIES &
     SHAREHOLDERS' EQUITY           6,378,841       6,734,904        981,893


    (1) The accompanying unaudited condensed consolidated financial statements
        do not fully comply with U.S. GAAP due to the omission of certain
        required disclosures.


    For more information, please contact:

     Rick Xiao
     Qiao Xing Universal Telephone, Inc.
     Tel:   +86-752-2820268
     Email: rick@qiaoxing.com

SOURCE Qiao Xing Universal Telephone, Inc.

Copyright © 2009, PRNewswire
Copyright © 2009, NewsBlaze, Daily News

Tags: ,CPR,CSE,TLS,ERN,XING-1st-Half-Income