HK TCL communication exposed 113 million receivables unsecured and interest free

TCL Communication Technology Holdings Limited (2618.HK) announced yesterday, November 30, 2005 management accounts show, the group formed a sum of up to HK $113 million accounts receivable, and its market value in January 16th was only HK $670 million, the sum of accounts receivable has exceeded its value of 8%.

Announcements, the accounts receivable from a Mexico and Latin American telecommunications operators - Integracion de Servicios y Corporativos S.A. de C.V Empresariales. TCL Communications said that the accounts receivable is entirely in the normal course of business to the customer to form a mobile phone sales, the average payment period of 60 ~ 90 days. However, the "daily economic news" notice, TCL communication to the customer of the pen advances, even without any collateral, but is free.

Dr. Liu Chunyan, chairman of the research center of the same Sheng securities market believes that such a huge amount of trade, there is no collateral, the risk is high. Under normal circumstances will take international factoring and other means of risk control. At the same time, the amount of accounts receivable at least in November 30, 2005 has been formed, there are more than two months, may be questioned and sustained profitability TCL communication management ability, risk control ability, have an adverse impact on the stock price.

Another industry also believes that overseas business is one of the key TCL communications losses, risk control is particularly important. Third quarterly show, TCL total sales of 2 million 400 thousand mobile phones, sales revenue of $1 billion 108 million, of which the domestic market sales of 904 thousand units, down by 44%, gross margin was -19.49%.