Portfolio Update: Qiao Xing Universal
Qiao Xing Universal Telephone (Nasdaq: XING), one of China’s largest manufacturers and distributors of telecommunications products, announced on April 19 that its subsidiary Qiao Xing Mobile Communications has filed an F-1 registration statement with the SEC for the purpose of an initial public offering on the NYSE.
The press release notes, “Qiao Xing Mobile Communication Co., Ltd. ('QXM' or the 'Company'), a British Virgin Islands incorporated company that owns a 93.4% equity interest in CEC Telecom, Co., Ltd. (CECT), has publicly filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission ('SEC') for a proposed initial public offering of ordinary shares ('IPO') on the New York Stock Exchange ('NYSE'). The proposed offering will consist of a primary offering by the Company and a secondary offering by the selling shareholders. When the IPO is consummated, Qiao Xing Universal will still maintain a majority stake (more than 51%) in QXM. The proposed price range per ordinary share will range from USD11.00 to USD 13.00.”
The press release adds, “The proceeds to be received by the Company from the proposed IPO will be used to repay shareholder loans to Qiao Xing Universal, to fund CECT working capital requirements in connection with its planned mobile phone production capacity expansion, and to purchase equipments for CECT's new manufacturing facility.”
We reiterate our Buy rating and price target of $21.75, which represents a pricing multiple of 9X the current year consensus analyst estimate of $2.53 per share.
Note: This portfolio update is from the Growth Report, a leading independent investment advisory focusing on uncovering small cap stocks with substantial growth potential. Growth Report provides individual investors with proprietary research and analysis on small cap companies that have yet to be picked up by Wall Street radar. Growth Report is published monthly with weekly updates and periodic special reports. For more information visit www.GrowthReport.com
