China TechFaith Stock Tanks 35% on Revenue Decline, Disappointing Loss
Shares in the company, which provides services in mobile solutions and develops real estate, declined to $1.07 apiece after the company posted its financial results for the first six months.
Shares in China TechFaith Wireless Communication Technology Ltd. (Nasdaq: CNTF) tanked 35 percent Thursday to $1.07 per share after the company posted its financial results for the first half, saying revenue and gross profit both declined.
The company, which provides solutions for mobile handsets, as well as develops and operates commercial real estate properties, said its revenue was $13.6 million during the first six months this year, down 42 percent year-over-year.
Gross profit during the same time was $2.4 million compared with $3.9 million a year ago. Gross margin was 17.3 percent compared with 16.4 percent, the company reported.
TechFaith said after the sale of its subsidiary, Charm Faith Ltd., the company recognized impairment from discontinued operations for the first half of the year, which resulted in a higher loss. Net loss was $109.5 million, or $10.3 per American depositary share, compared with a net loss of $2.6 million, or 24 cents per ADS, a year ago.
"There has been a further weakening of China's domestic property market and valuations due macro-economic weakness, a tighter domestic credit market and overall heightened caution," TechFaith's chief financial officer, Ouyang Yuping, said in a statement today. She added that the company's mobile solutions business suffered from the trade tensions while its real estate rental line has been hurt by uncertainty and lower visibility.
"Understanding we cannot control the broader environment, we remain focused on operational efficiencies, further lowering costs where possible and working to improve gross margin on a lower revenue base," Yiping said.
She concluded, "We have also taken steps to consolidate our balance sheet, including taking provisions for doubtful accounts and bad debt as required under standard accounting practices."
TechFaith's chairman and chief executive, Deyou Dong, added, "We have navigated many challenging market cycles over the Company's history and are applying that experience as we work to emerge in a stronger position."