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Interviewer: Matthew Cooper from Wallst.net
Interviewee: Christina Yu(Secretary of the Board of China VoIP & Digital Telecom Inc.)
Ms. Yu, interviewed by Wallst.net, was on behalf of the CEO and Chairman of the Board, Mr. Li Kunwu, of China VoIP & Digital Telecom Inc.
The following is the transcript of the entire interview..
1. Can you give us a brief overview of the Company, what you do, and your target markets?
China VoIP & Digital Telecom Inc. (CVDT.OB), a U.S. public company listed on NASDAQ OTCBB, is a leading provider of IP communications services in China through our wholly owned subsidiary – Jinan Yinquan Technology Co., Ltd. Specializing in research, development and commercialization of IP communication network communications system, call center systems and virtual telecom operations, Yinquan is one of the most innovative hi-tech software enterprises supported by China’s State Development and Reform Commission, and Ministry of Science and Technology. It also has been certified as a “High-Tech Innovation Enterprise” and “Software Authentication Enterprise” by Shandong Provincial Office of Technology and Provincial Office of Information Industry, respectively.
We,
- Develop IP communications products and systems
- Market high quality, cost-saving IP communications products and services in various areas of China
- Engineer customized IP communication solutions applicable to varying scales of business users, governments and public institutions
We have several strong telecommunications partners in China, including China TieTong Group, and China Netcom.
We serve individual, business and government users.The typical business customers we target have branch offices in various regions and overseas, with high internal and external telecommunications expenses. We also target the retail sector, government agencies, and education and research institutions.
2. What are some trends in the market that you think bolster your Company’s prospects for near-term growth? (6-12 months)And has the Company laid the groundwork for long-term growth?
China is probably the largest market in the world for VoIP.There is tremendous growth potential in the Chinese VoIP market.We, as a market leader in China, will continue to develop new products and offer value-added services to our customers in order to maintain our competitive advantage.
The followings are the current market trends that should fuel our growth:
- Increasing demand for WiFi.WiFi coverage in China is expanding, and demand for WiFi and other network communications services will increase.
- More and more small to medium sized enterprises (SMEs) are trying to reduce their operating expenses in order to compete more effectively.Our solutions can help them cut telecom costs by more than 50%.We see increasing numbers of companies using our VoIP platform and services to achieve cost savings.
- Tremendous demand for telecom value-added services in the market, especially the call center, which has already been included in our new business plan.
We have more than 7 years of history in the VoIP market, and achieved strong growth in the past year. In 2008, we will continue to expand our business operations in China, and will also launch the WiFi project, promoting “wireless city” nationwide with local governments in different provinces.
With the funds we raised through private placement, we have a strong capital base to support our business expansion.Our proprietary technology and extensive experience in this industry should help us achieve long-term growth.
3. What do you think gives your Company a competitive edge in the market place?
We differentiate ourselves in the market as follows: 1) we offer lower prices and equivalent services compared with the traditional telephone providers; 2) we offer more convenient devices and lower prices compared with other local VoIP service providers; 7 years of industry experience and a good reputation make it possible for us to provide professional communications services to large-scale enterprises and institutions; 3) we provide quality services between internet communications and traditional PSTN communications compared with Skype and other pure international online VoIP service providers. We offer real telephone numbers and unique devices. Our proprietary technology, which breaks through regional restrictions that traditional telecom services have, provides customers high quality communications services, lowers customers telecom expenses, and creates good profits for us.
4. What are some milestones over the next 12-18 months that investors should watch for?
There are several milestones we would like to achieve in the next 12 to 18 months.
- Strong business and financial growth
As we indicated in our 4Q07 press release, we expect to reach $16 million in revenue in 2008 and $4.6 million of EBITDA.
- Professional capital management
I believe 2008 will be a critical year for CVDT and its shareholders. In addition to organic growth, we will also try to expand our business and increase profitability through acquisitions.We have identified several good acquisition targets and are proactively evaluating them.We expect to complete a few acquisitions throughout the year and these acquisitions should help expand our business operations as well as increase our profitability.
Our goal is to be listed on Nasdaq.We will do the best we can to accomplish this as soon as possible.
5.How does the company enhance shareholder value?
We value our shareholders tremendously and sincerely appreciate their support.We will maximize the company’s value by expanding our business and scale, improving profitability, prudently managing our capital, strengthening corporate governance, and setting up a superior corporate image in order to enhance shareholder value.
CVDT has quality products and services.It is a well-managed high-tech company.In the past, we neglected investor relations as we focused on our business operations.We have recognized the problem and proactively addressed the issue.In 2008, we will actively inform the investment community about our operations and financial conditions in a timely manner so that the market will be able to acknowledge our performance and fairly value our company.At the end of 2007, we reevaluated our IR strategy and are in the process of implementing a new strategy.We believe along with strong company performance and with the right IR mechanism in place, the company as well as our shareholders will be rewarded.
We intend to grow our business and execute our long-term development strategy both organically and through acquisitions.Our goal is to be listed on Nasdaq as soon as possible.
Maximizing shareholder value is our responsibility. We hope our investors can be patient with us.We will do our best to return value to our shareholders.
6. Have the recent global economic problems adversely affected the company? What is the outlook?
The global economic issues have not and will not impact our company.We are very optimistic about our growth prospects in 2008.While the GDP growth in several developed countries will slow down in 2008, emerging markets offer better growth prospects.The Chinese economy is expected to grow close to 10% this year.In addition, analysts project that appreciation against the dollar for the full year of 2008 could reach 7-10%.As you know, most of our operations are in China.Thus, the currency appreciation should certainly help our financial results in 2008.We believe the domestic business environment is very favorable to us.With our business growing organically and through acquisitions, we expect much higher revenues and earnings in 2008 compared with 2007.
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