Full Transcript of AsiaInfo Holdings’ 3Q05 Conference Call — Q&A (ASIA)

Here’s the entire text of the Q&A from AsiaInfo Holdings’ (ticker: ASIA) Q3 2005 conference call. The prepared remarks are here. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.

Q&A

Operator

Operator Instructions Our first question will come from Chang Qiu.

Q - Chang Qiu

Yeah good morning Steve and Ying.

Yes, maybe can you give some detail on what the revenue run rate is for the diversity business?

A - Eileen Chu

Can you repeat the question?

Q - Chang Qiu

Yes, for the business that you just sold, what's the quarterly revenue run rate?

A - Steve Zhang

What's the revenue for the business we sold?

A - Eileen Chu

Oh, okay. For the HR and the intelligence revenues?

Q - Chang Qiu

Yes.

A - Eileen Chu

For this quarter the net revenue for them is less than $1 million.

Q - Chang Qiu

Yes.

A - Steve Zhang

I think going back to fourth quarter the average revenue per quarter is somewhere between half million to 1 million.

Q - Chang Qiu

Also, Eileen, can you give us some details? What's the composition for the impairment charge?

A - Eileen Chu

Okay, the impairment charge including the goodwill impairment charge and also the intangible assets we sold for the acquired businesses and also the net assets generated from these businesses during the past two years.

Q - Chang Qiu

Could we adjust for the human resources and BI business, or also some goodwill for other business?

A - Eileen Chu

No. The impairment, the annual impairment will apply to all of the acquisitions we did before including the telecom business we've acquired from Dokon and Bounsen and also acquired from the Pacific for the HR and the BI businesses and also for Lenovo IT Services we acquired from the Lenovo.

Q - Chang Qiu

Okay, so that's about it.

A - Eileen Chu

Including all the things and some of the businesses may not have the impairment charges because they have showed a very good business growth in the past year already and some of the newly acquired businesses probably will have some impairment charges because we are restructuring the business and disclosed some of them in order to focus our core business in line with our strategy.

Q - Chang Qiu

I see and then Steve, you know, after this fourth quarter you kind of mentioned you are quite confident or optimistic with growth in 2006. You know, in terms of the growth prospect, can you give us a little more detail, what you have in mind?

A - Steve Zhang

For year 2006?

Q - Chang Qiu

Right.

A - Steve Zhang

Well, after the restructuring we are mostly left with our telecom business and the security business. For the telecom business we expect to grow roughly 8% to 10% in 2006 compared with 2005. And for our security business we are expecting a 25% to 30% growth.

Q - Chang Qiu

So with this number what would be the 2005 base number because you never really split out what's the revenue for the security business?

A - Steve Zhang

So, what's our total revenue for year 2005?

Q - Chang Qiu

Right, in telecom and in security, in these two business lines or segments.

A - Steve Zhang

I think our total year 2005 revenue is $86 million. Our telecom business is roughly 65% of the total revenue.

Q - Chang Qiu

Okay.

A - Steve Zhang

I think our security business is about 15% to 18% of our total revenue.

Q - Chang Qiu

Yes.

A - Steve Zhang

That's for the year 2005.

Q - Chang Qiu

And the rest, do you count the hardware business or what?

A - Steve Zhang

No, the rest are the business where one part is the one we sold. The HR and some other revenues were related to the business that we have for consulting for the government.

Q - Chang Qiu

Okay, all right. Thank you. I think I will let other people ask questions.

Operator

Operator Instructions A follow up question from Chang.

Q - Chang Qiu

Yes, maybe I just ask one follow up question. Eileen, you just mentioned you have two debts, which was fully provided in earlier quarters and in the second-- in the third quarter you collected. How much is that amount?

A - Eileen Chu

About $3 to $4 million U.S. dollars, totally.

Q - Chang Qiu

Three to four million, so in that sense, which means that's all recorded in the quarterly revenues, right?

A - Eileen Chu

No, our debit provision policy is any accounts receivables over 365 days we'll do the 100% provision, so this kind projects we are within the provision previously, not necessarily last quarter, but gradually went into aging up to 360 days.

Q - Chang Qiu

Right, so in a sense if this was not-- I mean suppose if you have not received this $3 or $4 million, which means your G&A will be $3 or $4 million higher?

A - Eileen Chu

No, no, no. Because the better provision is ongoing monthly and also, the collections is also ongoing. We have bad debt provision in and we have also the collection. It's a combined numbers.

Q - Chang Qiu

Yes.

A - Eileen Chu

Yes, our G&A showed a little bit decrease-- sorry, our G&A did show increase because for last Q3 of last year we did not have the normal AsiaInfo in yet.

Q - Chang Qiu

All right.

A - Eileen Chu

But year-over-year we did have an increase, but sequentially it's quite normal.

Q - Chang Qiu

Okay, all right, thank you.

Operator

Operator Instructions And there are no further questions at this time, so I will turn things back over to our speakers for any additional or closing remarks.

Steve Zhang

This is Steve. Okay and thank you for joining us today. If you have any further questions please do not hesitate to contact myself, Ying or any of our investor relations representatives. Thank you.

Operator

And that does conclude today's conference call. Thanks, everyone, for joining us.

Related:

• The prepared remarks from this call are here.
• A list of full conference call transcripts available on the Seeking Alpha Network.

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