One of the fastest-growing and most profitable China-based telecommunication terminal companies.
Qiao Xing Universal Telephone, Inc (NASDAQ: XING), a company incorporated in the British Virgin Islands, is one of China's largest manufacturers and distributors of telecommunications terminal products. The Company has grown its net sales from approximately $46.4 million in 1997 to $531.1 million in 2007.

The Company currently conduct its business through two major subsidiaries: (1).CEC Telecom Co., Ltd (CECT), one of the leading domestic manufacturers of mobile handsets in China in terms of unit sales volume and a company that develops, produces and markets a wide range of mobile handsets, with increasing focus on differentiated products that generally generate higher profit margins (2).Qiao Xing Communication Industry Co., Ltd (HZQXCI),one of the largest local indoor telephone players in China and an emerging mobile phone player in the China market, with its focus on higher-end indoor phones and economy mobile phones.

XING first started its original design manufacturing (ODM) in corded fixed line telephones in 1992 in Huizhou, Guangdong Province, China. Through the years, it has expanded its products lines to cover telecommunications terminals and related products, including conventional fixed line telephone, fixed wireless phones, ADSL, mobile phones, and consumer electronic products, including cash registers and payment terminals.

The Company takes it top priority to maintain sustained profitability growth. Subsequent to a record-high profitability in 2007, the Company's income from operations and net income increased to USD22.6 million and USD6.6 million respectively, compared to an income from operations of USD18.8 million and net loss of USD12.6 million for the same period of 2007. By contrast, quite a few mobile phone companies, domestic and international, were recently reported to have suffered a large decline in profitability in the China market (from outside recourses).

The Company has been able to maintain sustained profitability by continuously launching differentiated products and efficiently utilizing differentiated distribution channels. By implementing this differentiation strategy, we have seen significant increases in both shipment of handsets (both mobile phone and indoor phone handsets) and gross margin. Our subsidiary CECT’s gross margin increased from 23.2% for 2007 Q1 to 31.4% for 2008 Q1, which is much higher than the average level for the whole industry. In XING's indoor phone business, gross profit increased 13.0% from the first quarter of 2007 to reach RMB10.1 million (USD1.4 million) in the same period this year.

XING and its subsidiaries have powerful in-house research and development capacity that put priority to innovation. its subsidiary CECT's research and development team has developed a number of distinctive handset designs and certain product and process technologies used in producing its handsets, including mobile phone application software, user-friendly product interfaces, printed circuit board designs, such as baseband and radio frequency circuit designs, production technology designs and production testing systems, that contribute to its ability to produce differentiated products. It also designed the ultra-long standby batteries used in our products, which are produced by a third-party. The CECT YAMI II wristwatch mobile phone received 'China's consumer electronics appliances -- Best Industrial Design Innovation Award' for the first half of 2008 from the China International Consumer Electronics Show (SINOCES) and China Electronic News.

We have strengthened our product development capabilities in recent years. With our accumulated knowledge and experience, we have been able to increasingly shorten our product development cycles. Currently, our product development cycle, from product concept defining to mass production, is typically six to nine months.

Our research and development efforts concentrate on developing higher-end and differentiated products. Our research and development expenditures have been, and will continue to be, directed primarily at enhancing our ability to design and develop mobile handsets tailored for the PRC market and differentiated from the products of our competitors. As part of our cost reduction efforts, we also direct part of our research and development resources to increase the percentage of locally sourced raw materials and components used in producing our handsets.

XING and its subsidiaries have
---- 82 national and provincial agents that cover 300 local distributors and 4000 retail outlets for its CECT brand mobile phones.
-------700 agents at the national level, provincial level and municipal level in 31 provinces in China and 184 after-sales service centers for sales of its COSUN-branded mobile phones.
--------- established strategic relationships with leading telecommunications operators and distributors of telecommunications terminal products in North America, Latin America, Southeast Asia, South Asia, Europe, the Middle East and Russia.

Recently, the Company achieved success in implementation of its differentiation strategy in distribution channels. We have strategic relationships with Joyo Amazon and Beidou Communication & Equipment Co., Ltd. The strategic relationships with those TV direct sales Company and e-commerce Companies have, to large extent, contributed to the increase of our sales volume and then enhancement of our brand recognition.

Our manufacturing facility is located in Huizhou, Guangdong Province.

As of December 31, 2007 and giving effect to the staff of CECT, our indirectly majority-owned subsidiary, we had a total of 1,338 full time employees, of which 10 are key management staff, 287 are engaged in sales and marketing, 103 are engaged in finance and administration, 690 are engaged in production and 248 are engaged in research and development. None of our employees is represented by a labor union and we believe that our working relationship with our employees is good.