Profile: Qiao Xing Mobile Communication Co., Ltd. (QXM)

Qiao Xing Mobile Communication Co., Ltd., incorporated on January 31, 2002, is a domestic manufacturer of mobile handsets in China. The Company manufactures and sells mobile handsets based primarily on global system for mobile communications (GSM) global cellular technologies. As of December 31, 2008, the Company was in the process of developing third generation (3G) mobile handsets based on the wideband code division multiple access (WCDMA) and time division synchronous code division multiple access (TD-SCDMA) technologies. The Company operates its business primarily through CEC Telecom Co., Ltd. (CECT), its 96.6%-owned subsidiary in China. Its products have been primarily sold under the CECT brand name and it launched the VEVA brand in May 2008. The Company develops, produces and markets a range of mobile handsets, with focus on differentiated products.

On March 5, 2009, the Company incorporated Beijing VEVA Technology Co., Ltd. (BVT) in Beijing, China to engage in the sales of mobile phones and accessories. Its interest in BVT is held through CECT, which owns a 100% interest in BVT. In January 2008, the Company incorporated a subsidiary, Huizhou CEC Telecom Co., Ltd. (HCECT) in Huizhou City, Guangdong Province, China to engage in the manufacture of molds, cast components and other handset products. Its interest in HCECT was held through CECT, which owned a 100% equity interest in HCECT. The Company disposed of its interest in HCECT, in September 2008, to an independent third party.

The Company’s in-house handset development teams are based in its two research and development centers in Beijing and Huizhou. The Company’s Beijing research center focuses on developing higher-end and differentiated products, while its Huizhou research center concentrates on developing handsets targeted at the mid-range and economy markets based on existing technologies. The Company’s in-house research and development teams developed a number of handset designs and certain technologies used in producing its handsets, such as mobile phone application software, product interfaces and printed circuit board designs, including baseband designs and radio frequency circuit designs. It also sources certain software and hardware designs used in producing its handsets from third-party designers to complement its in-house development capabilities.

Qiao Xing Mobile Communication Co., Ltd. has one manufacturing facility in Huizhou, Guangdong Province, China. This facility is equipped with three Surface Mount Technology (SMT) lines and seven assembly and testing lines. The Company sells its products primarily to its national and provincial distributors that resell its products to end customers through their own distribution networks, which are composed of local distributors and retail outlets. As of June 12, 2009, the Company’s distribution network included five national distributors, 66 provincial distributors, 15 television direct-sales distributors and one Internet distributors. These distributors sell its products to approximately 300 local distributors, over 3,600 retail outlets and directly to end users in China. In addition, certain of its distributors and other third parties provide repairs and other after-sales services to the Company’s end customers through over 200 after-sales service centers located throughout China. In November 2008, the Company also began the online retail sale of its VEVA-branded handsets directly to end customers through the Website, www.vevago.com. In 2009, the Company also started to build and operate its own specialty retail stores to market and sold its VEVA branded handsets directly to end customers. As of June 12, 2009, it operated six VEVA retail stores in Beijing, China.

The Company competes with Bird Ningbo Co., Ltd., Konka Group Co., Ltd., Beijing Tianyu Communication Equipment Co. Ltd., Gionee Communication Co., Ltd., Haier (Qingdao) Telecom Co., Ltd., Nokia Corporation, Motorola, Inc., Samsung Electronics Co., Ltd., Sony Ericsson Mobile Communications (China) Co. Ltd., and LG Electronics (China) Ltd.