A vote for AsiaInfo (ASIA)

Mar.17.05 | About: AsiaInfo Holdings, (ASIA)

According to the Prudent Speculator's TechValue Report, AsiaInfo Holdings (ticker: ASIA), a provider of software and networking solutions in China, is a compelling investment. Here are the key points:


  • Played a major role
    in the construction of China's Internet infrastructure and provincial
    access networks for all of the country's largest telecom carriers.
  • Provides software and customer service solutions to
    Chinese telecom carriers.
  • Helps a variety of businesses with expertise in security, human resources, business
    intelligence, government and finance.

Diversification through acquisition in 2004:

  • With flat telecom spending, ASIA diversified its customer base.
  • Over 33% of Q4 revenue came from clients
    outside the telecom industry.
  • Those sales were generated by the
    company's new Lenovo-AsiaInfo division, which was formed from the
    non-telecom-related IT services business acquired in October 2004 from Lenovo Group, and AsiaInfo's former enterprise information solutions business.      

Q4 2004 Financials:

  • Revenue of $32.2 million, a 5% year-over-year gain.
  • This was the first quarter that included results for Lenovo-AsiaInfo.
  • EPS of $0.02, from a loss of $0.01 in Q4 2003.

CEO comment:

"During the quarter, we expanded our high-margin software
business and strengthened our strategic focus on serving enterprise
customers across a diverse range of industries."

Guidance for FY 2005:

  • Net revenue
    (revenue net of hardware costs that are passed through to customers) to increase 32% - 37% over 2004 levels to $90 - $93 million.
  • EPS of $0.06 - $0.10 after a charge of $0.02 - $0.06 per share for
    expensing non-vested stock options.

Guidance for Q1 2005:

  • Net revenue of $21 - $22
  • EPS of
    $0.01 - $0.02.

ASIA's stock market performance: