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Executives

Will Davis – Chief Marketing Officer

Jeffrey Kang – Chairman and CEO

Frank Zheng – CFO

Analysts

Quinn Bolton – Needham & Company

Mark Tobin – ROTH Capital Partners

Michael Walkley – Canaccord Genuity

John Formicola – Performance Capital

JD Abouchar – GRT Capital

Cogo Group, Inc. (COGO) Q4 2011 Earnings Call March 15, 2012 4:30 PM ET

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Cogo Group Inc., 2011 Annual Earnings Results Conference Call. During today’s presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions)

At this time, I’d like to turn the conference over to Will Davis, Chief Marketing Officer of Cogo Group Inc. Please go ahead, sir.

Will Davis

Thank you and good afternoon to everyone. I'm Will Davis, Cogo’s Senior Vice President of Business Development and Chief Marketing Officer, and I'd like to thank you all for joining us today to participate in Cogo's 2011 Fourth Quarter and Annual Earnings Conference Call.

After the market closed today, Cogo issued a press release reporting unaudited financial results for the year and quarter ended December 31, 2011. This release can be accessed in the investor relations section of Cogo's website at www.cogo.com.cn and on most other financial websites.

The discussion today will be hosted by Jeffrey Kang, Chairman and CEO, who will discuss the Company’s business operations; myself, the Company’s Senior Vice President of Business Development and Chief Marketing Officer, who will also comment on aspects of the business; and Frank Zheng, our CFO, who will report on the Company’s financials.

Before we begin, I'd like to remind everyone that the call today may contain forward-looking statements regarding future events and the financial performance of the Company. We wish to caution you that such statements are at present just predictions, and actual results may differ materially as a result of the risks and uncertainties inherent in the Company's business. We refer you to documents that the Company files periodically with the SEC, specifically the most recently filed Forms 10-K and 6-K, as well as the Safe Harbor statement made in today’s press release. These documents contain important risk factors that could cause actual results to differ materially from those contained in the Company's current projections. Cogo assumes no obligation to revise the forward-looking information contained in today's call.

At this time, I'd like to turn the call over to Jeffrey. Jeffrey, the floor is yours.

Jeffrey Kang

Thank you, Will, and thanks to everyone for joining the call. Today, I will focus the vast majority of the call on my proposed asset purchase that we announced in a press release issued today at 4:10pm. You can find all the relevant financial data about our fourth quarter and annual performance in our press release that hit the wires at 4pm today.

Our press release after the market close outlined my proposal to purchase, for between $60 million to $82 million, certain entities that account for approximately 30% of Cogo’s assets, liabilities and revenue. Cogo’s Audit Committee, comprising our Independent Board Members, will oversee the entire process and we expect to close the transaction towards the end of the second quarter of 2012. The purchased entities will continue to be run in the same manner as before, and management will be promoted from within. I will continue to operate as Chairman and CEO of Cogo on a full-time basis. The sole purpose of this transaction is to demonstrate to the financial markets that the intrinsic value of both our business operations and financial assets are significantly higher than the current market value.

Let me review what drove me to make this proposal. Our stock closed at $1.83 on Wednesday, which equals a total market cap for Cogo of around $60 million while our Tangible Book Value is well over three times this amount. Additionally, Cogo has remained profitable every quarter and our Tangible Book Value grows each quarter. Many investors may disagree with parts of our business strategy, but the fact remains that we continue to generate millions of profit each quarter and we have been consistently buying back our own stock.

Not only is the marketplace not giving us credit for the income producing qualities of our business, it is significantly discounting the value of our financial assets. Using simple math, our Current Assets, which are relatively liquid,minus our Liabilities, equals over $217 million and our market cap is $60 million. Unfortunately, this obvious market discrepancy does not appear to be a temporary issue. Simply put, my proposal to purchase 30% of the company for an amount equal to or higher than the company’s total market cap is a bold strategic move intended to demonstrate the complete soundness and legitimacy of Cogo’s reported financial numbers. It is my sincere hope that this proposal, once approved and implemented, will go a long way towards shareholders achieving the intrinsic value of Cogo. This decision did not come lightly. My personal investment of such significant sums of cash in this transaction will hopefully demonstrate to everyone the true value of our company.

Will Davis

Thank you Jeffrey. Good afternoon everyone, and thank you for joining our call.

Cogo ended the year with 96 blue-chip customers, flat sequentially and up 4% from the prior year period. The Company grew its SME customer base sequentially by 138, reaching 1,771 at the end of 2011, up 8% from the prior quarter and up 17% from the prior year period. Cogo’s total customer base is now 1,867, up 17% quarter over quarter.

The ARPU for our Blue-Chip customers was about $1.31 million, up 58% year over year and up 16% sequentially. The ARPU for our SME customers was slightly over $25,000, up 1.5% sequentially and 8% from the prior year period. Total ARPU for Cogo in the fourth quarter was approximately $91,000, up about 28% from the prior year period and up 8% sequentially. Total revenue tied to Blue-Chip customers is about 75%, which continues to negatively affect our gross margins and working capital. We expect this trend to continue through 2012 as we do not see much alleviation of the credit situation for our SME customers in the near term.

In the fourth quarter, total stock comp was $1.7 million and acquisition and amortization of intangible costs in the third quarter were $839 thousand. There was a $37.7 million non-cast accounting impairment loss of goodwill.

As previously indicated in the press release, we are not providing any financial guidance.

Other than the items noted above, there are no significant differences between GAAP and Non-GAAP results. With that, I would like to turn the call over to Mr. Frank Zheng, our Chief Financial Officer.

Frank Zheng

Thank you, Will. Good afternoon everyone. Unless otherwise noted, all items are in US dollars. We ended 2011 with $23.8 million in net cash which is significantly higher than the $5.5 million reported in the third quarter. This increase in net cash is related primarily to a decrease in inventories and accounts receivables. We are maintaining our current strategy to utilize our balance sheet to fund our working capital to drive growth. Operating cash flow was approximately $23.8 million in the quarter we allocated $5.6 million in the quarter towards the MDC Acquisition.

Our cash conversion cycle decreased significantly from 128 days in the third quarter to 100 days in the fourth quarter. I would like to credit our team for the strong improvement in this area.

In the fourth quarter, the Company repurchased 550 thousand shares of its common stock at an average price of $1.80 and a total cost of $972 thousand. Cogo continues to view share buybacks as a strategic use of cash and we just announced a new buyback authorization of 10 million shares that we plan to execute on once we close the asset sale we announced today. This buyback plan is subject to approval by the shareholders.

We continue to be very pleased with our ongoing relationship with our auditors, KPMG in Hong Kong. They have been our auditors consistently since the spring of 2006.

This concludes my remarks. Thank you everyone for joining the call to discuss our 2011 Fourth quarter and Full Year 2011 unaudited results. At this time, let’s turn the call to the operator to open up the floor for questions. We will look to end this call at around 5:30. Operator?

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) And our first question is from the line of Quinn Bolton with Needham & Company. Please go ahead.

Quinn Bolton – Needham & Company

Hi, Jeffery, I guess, I’m a little confused about the nature of the transaction. You’re going to purchase approximately 30% of the assets and liabilities of Cogo. Can you give us some sense what percent of the revenue and underlying margins on that revenue stream that are associated with those assets. And to the extent that you purchase these assets, do those – will those be no longer consolidated on the books and reported financial results of Cogo? And then I’ve got a couple of follow-on questions.

Jeffrey Kang

Yes, we are – and basically the revenue is almost one-third – like a 30% of the total revenue on the posted revenue, one third, like 30% of the total company’s revenue and asset value. So, that’s the first question. And so if you do the simple math and equal our – based on the next year, for 2011 our core revenues are over 550 or something million dollars or something, so you account 30%, that’s roughly around 180 million of revenue, so that’s our revenue. Since after we – if this first year has been completed and approved by the audit committee, and so yes, that this benefit will be taken out from our consolidated reporting since, in 2012.

Quinn Bolton – Needham & Company

Okay. And can you give us some sense of what 30% of revenue is subject to this purchase, is it industrial, is it telecom, is it digital media, is it some combination, is it the contact broadband group? I mean, that you’ve got a lot of different subsidiaries. How do we get our hands around, what assets are part of this transaction?

Frank Zheng

Yes. We are actually – that the spin-off kind of you know, so the other part is the one-third of the business including an average segment of our business. So, we cut off this business based on the (inaudible) subsidiaries. So, basically on the business itself is just as normal as other business. From the 2011 our audited financial results based on better results so the sort order business actually has little bit of low margin comparing with the remaining business and also request higher – relatively higher working capital, but basically we can say, it’s just a one third of the normal business of our all (inaudible) business and after for this portion of the business we covered both telecom, wireless and industrial business.

So we didn’t sell out the business based on any specific industry yet. It just a – happen to be within that subsidiary and which including those businesses we just seen have that type of the combination.

So basically as we in our press release, the purpose of this approach, mostly we want to demonstrate the transmitter value of our financial assets which has over six donors have added even though which may be true donors for a while not by the week, we want to use this broader strategy to demonstrate to the market of Cogo, our asset at least still work over (inaudible).

Quinn Bolton – Needham & Company

Okay. But it sounds like the asset and revenue stream that remains with Cogo Group that when you take away the purchased assets, the remaining asset should actually see lower working capital intensity and higher growth and operating margins?

Frank Zheng

We – definitely, yes. If we based on the 2011, the annual result, yes.

Quinn Bolton – Needham & Company

Got you. Okay. And then lastly you are going to be making this investment through your venture Envision Global Group, does Envision Global Group today have the financing in place, whether its cash on hand or financing commitments loans from bank to other financial institution in the amount of the 60 million to 82 million, is that commitment, is that capital firmly in place, or does that – is that still subject to – yeah, do you have go out and get that financing from financial institutions?

Jeffrey Kang

Yes. I think, I’m ready to do this deal. So when we – when I propose to the bar for this strategy. So we – I think I’m already have this financial available. All this – we – all this arrangement have been done by myself.

Quinn Bolton – Needham & Company

Okay, okay. And in the current business, you guys aren’t giving guidance, I assume you see somewhat normal seasonality in the March quarter and then from a lower Q1 that you would expect revenue growth through the second, third and fourth quarter, is that sort of the right revenue pattern to be thinking about for the year?

Jeffrey Kang

Yes. We still think this year the revenue pattern is still same in the previous years, and we are saying that Q1 some factors recommend is that those stays in and all the business are going to be moving up in the next few quarters, quarter-over-quarter, and the fourth quarter is still – should be across the quarter of the whole year. So that’s – that pattern haven’t still understand as the previous years.

Quinn Bolton – Needham & Company

Okay. Thank you, Jeffrey.

Jeffrey Kang

Thanks.

Operator

Thank you. Our next question is from the line of Mark Tobin with ROTH Capital Partners. Please go ahead.

Mark Tobin – ROTH Capital Partners

Hi, Jeffrey. Thanks for taking my question. Kind of follow-up – following on from the last question, just curious why would you choose CarWale acquisition, you know it seems to me like a better vote and confidence for the entire business would just be to acquire at 30% incremental stake in the entire business so can you give us some insight into the rationale behind that?

Jeffrey Kang

Well, as I stated in my – our press release, I think this is, you know, we actually tried; we have actually internally discussed the whole kinds of the strategy available at this moment. So we think right now, that this is – this kind of strategy and approach is the best way to achieving our intrinsic and shareholder value or asset value at this. At the same time without distributing too much our normal business operation.

So that’s why you know of course we have to think about our commitment to our shareholder as well as our commitment to our business partners, suppliers and customers and employees. I think because this kind of strategy is the best strategy after our internal discussion to the combination of all our commitments to the – our shareholders, customers, suppliers and employees.

Mark Tobin – ROTH Capital Partners

And I guess. So the entity is that you’re acquiring, are they already operating independently or you having to carve them out. I guess, I’m following-up from the first question, just trying to understand what’s specific units are being purchased so we can make a judgment on how much of this value can we extrapolate to the remaining portions of the business from a value perspective?

Jeffrey Kang

Yes. You know as we are expanding to the market in the past all our operating business has been allocated into each of our operating entities. So that entity technically from the business perspective, – business in a long time that goes independently. And we are – we’re only – from the group perspective, we only give them support in terms of the finance, legal all kinds say back office supporting.

So that’s why – this kind of the – something odd will make the whole business relatively and the business as usual, even though we take them into two parts. So still each of the business can run independently as we have stated in our press release. So we just actually take a few entities, combine them together and then sell it out. But that’s the strategy we’re using. And as we have mentioned the main purpose it wants to demonstrate through those markets, we’re right now – only 30%, lower than 30% of our intrinsic asset value.

Mark Tobin – ROTH Capital Partners

Understood. That’s helpful. I’ll jump back in the queue. Thank you.

Jeffrey Kang

Thanks.

Operator

(Operator Instructions) Next question is from the line of Mike Walkley with Canaccord Genuity. Please go ahead.

Michael Walkley – Canaccord Genuity

Hi, thanks. Just following up on the business trends, was the telecom equipment big ramp in the fourth quarter. Just can you give us update on the projects you’re involved with there and how you see that business flowing, I know on a seasonal basis it’s seasonally down, but it – could it stay at these higher levels throughout 2012?

Jeffrey Kang

Well, telecom business, we are – that business – that is relatively stable to us. And we have been – has been – that’s our first business that we have done for this company. We are continuing to see relatively strong order pattern from the Tier 1 customers like ZTE, for example. So, that’s why enough to pay – enough in the fourth quarter. We were – we actually saw much stronger demand from our Tier 1 customer like ZTE. And the overall demand trend is still quite healthy at this moment.

So, in our view, this – that the industry is still – from the demand perspective, yes, that I think this year still, the demand is healthy. But the only issue to us is the demand, mostly from the Tier 1 customers, so that will have then negative impact to our working capital demand as well our gross margin. So that’s still the trend in the 2012.

I’m not going to say there are any significant trends in terms of the portion of the – blue-chip actually have a much higher portion of our business in this year. So, that’s the reason why we’re continuing to say that the trend in the fourth quarter going to be continue in the most of the time of this year.

Michael Walkley – Canaccord Genuity

Okay. Thanks, Jeffery. And any updated thoughts, just on – in digital media with the shift from 2G feature phones to 3G smartphones, some of your smaller customers have been hit. Do you see any update, may be 2012 plays out where their businesses could rebound and you could rebound – you could rebound with them and better 3G trend for the smaller players in China?

Jeffrey Kang

We actually frame this 2G to 3G last year. So as a matter of fact, if we’re talking about its total amount of the scalable numbers from the Chinese players, that number is still growing. And as I said, the problem still more and more the demand has gone to that blue-chip customers even though the customer at AT&T and Huawei because they are actually having much big order, company with one or two years ago.

But most of the SME guys and kind of the bid left behind the trend last year, so that’s why given to our Digital Media business, the scalable business by example, we still have seen the similar trend which is the Tier 1 guys continue to gain shares and their demand is increasing and they are growing their business – we are growing our business with them. And our business with – SME business actually has been impacted by this trend 2G to 3G trend as well as the macro situation in China.

So, we are – our forecast for this trend is going to continue in this year even though the SME minimize nicely, re-bounce back, but we’re not going to say this strong re-bounce back in the most of time this year. So I think this trend maybe changed later in the next year if the 3G become more mature solutions there.

Michael Walkley – Canaccord Genuity

Okay. Great. Thanks. And then just with your proposal to acquire 30% of Cogo’s tangible book – just the overall trend – transactions what are the steps that has to go through sort of just to happen – is it second quarter when you expect to this happen, I just wanted to get out the details straight?

Jeffrey Kang

We actually, we are this deal we already – I already proposed the Board and Broad has going to authorize the audit committee to look at the money for this deal, because it’s related party transaction. So if everything and – I think that – but from the legal perspective, it’s relatively easy, but we still have to waiting for the like Reliance International valuers evaluation report to finalize the evaluation stuff. So I think that will take say a couple of month. But hopefully this deal could be and is based on the progress the agreement both side and the deal should be closed we think in the second quarter of this year.

Michael Walkley – Canaccord Genuity

Okay. Good luck with the transaction and thanks for taking my questions.

Jeffrey Kang

Thanks.

Operator

Thank you. Our next question is from the line of John Formicola with Performance Capital. Please go ahead.

John Formicola – Performance Capital

Hi, Jeffrey. Hi, Bill.

Jeffrey Kang

Hi, john.

Frank Zheng

Hi

John Formicola – Performance Capital

Hi, I am the new shareholder of the company along with the couple of my clients that I manage for. It is quite hardening just to hear that where our stock is trading versus what the revenues are and all.

I don’t understand why you wouldn’t just make a tender for 30% of the company to give and it’s not that I don’t want to be your shareholder, on a contrary, I just had communications with Will, I’d love to see these things be built up over a year in the United States as far as an investment. Why pick and choose versus just making a tender, which would really show the street and show everybody that – the real value of the company. I mean, it was happening continuously. If you made a tender versus purchasing certain assets buying 30% of the outright company and the shareholders share in this tender some way.

Will Davis

As we actually in our press release, we’re talking about the business. We actually have this kind of the new – like a buyback program and already approved by the board, 10 million shares. But in our experience is based on our legal consult’s advice and this program will be – needed to – the shareholder approval. So it actually will have come through a process. That takes a couple of – I think it takes some time to go through that process.

To answer your questions internally and we discussed all kinds of solutions. Basically on the – even though our – if you look at the Cogo’s balance sheet, we have a lot of cash. But at the same time, we had a lot of the bank loan to finance our – the business operation. So from the net cash perspectives, we don’t have too much of the actually room there to the significant buyback or something like that or tender offering.

So, that’s the reason why, you know, we – basically this decision is a combination we are considering of our commitment to the shareholder and also at the same time we don’t want to, you know, disrupting our business operation. We still have commitments to our business partners, suppliers, customer, employee. So, and that’s the strategy, as I just explained, is the explanation of our all kinds of the considerations and in fact – and so internally we think it’s – right now this is – it’s a right strategy for us to demonstrate to the street our intuitive value of the asset.

John Formicola – Performance Capital

All right. Well, I understand. I just wanted to share the alternative way which I would have thought, but it’s going to interrupt with business partners and all that something that we have to think about. I apologize, what was the extraordinary loss that we had at this quarter?

Jeffrey Kang

John, we basically wrote down the goodwill. So, we took a pretty conservative accounting approach to get that out of the way. So, we work with KPMG on that. We’ve done about 37 million, given that the share price would figure that was the appropriate thing to do at this time to get there out of the way.

John Formicola – Performance Capital

I see.

Jeffrey Kang

Part of it, that’s a non-cash charge, that’s simply an accounting measure that affects shareholder equity but that doesn’t affect the business or the cash or anything else.

John Formicola – Performance Capital

Okay. Thank you.

Jeffrey Kang

Thanks John.

Operator

Thank you. Our next question is from the line of JD Abouchar with GRT Capital. Please go ahead.

JD Abouchar – GRT Capital

Hi, Jeffrey. Hi, Will, thanks for taking my question.

Jeffrey Kang

Hi, JD.

JD Abouchar – GRT Capital

First, Jeffery, you did a lot of work on the balance sheet, it looks like was getting DSOs down and generate some cash, could you maybe elaborate a little bit more on that. I know as you shift more of the bigger customers due to the constrained on SME been able to provide liquidity that DSOs go up, but maybe you can find a little bit more how DSO got better, is that something that can continue or sort of what the boundaries are there?

Jeffrey Kang

We are after since the fourth quarter we – as we mentioned in our press release, we did a lot of – we spend lot of efforts improving our cash generation and to decrease the DSO or inventory as well.

So basically we want to try and continue to push for that trend, but as I said as – if we look at it normalized business we still don’t think there’s too much of room available there in the near term if we haven’t seen significantly changing the customer a base.

Currently, you can say and that the blue-chip customer have the 75% of its revenue and SME, which actually a portion, the percentage is that actually increasing. And our SME customer actually that the revenue portion is decreasing and so we don’t think this trend will have a significant change in this year and we hope for it after this – it’s business cycle or economic cycle probably in 2012 will hit the bottom for everything and so that’s why we are going to seeing this trend might be able to improve the end of this year and/or next year.

So that’s our internal view. But I – we’re going to still push for – on management team to – so we will try moving for the direction, which hold to decrease the working capital demand in our business. But we are not going to see any significant trend in the near term. So we are trying to work hard to improve it a step-by-step in the next or few quarters.

JD Abouchar – GRT Capital

That makes sense. And on the focus to the blue chip customers, I think one of the trends that while handset are weaker in China both ZTE and Huawei are making a huge push on exporting high-end smartphone, is that going to help our multimedia business, is that trend that we should be able to participate in?

Jeffrey Kang

Yes. We actually finish the second half of last quarter particularly the fourth quarter. So we’re actually seeing most of our cell phone business are 3G business instead of the 2G or feature phone business any more. So, I think that the 3G will become the majority of the wireless business even for the SME players in China since this year.

So not only just the Huawei, ZTE we’re seeing kind of a list of the top 10 customers of Cogo among the wireless customer are involving and exporting in 3G cell phone business into the global market. So that’s why I think this trend will continue and we are going to benefit from this trend for the Chinese customer and they needed the 3G market shares in the global market. So we believe, yeah, that will be a trend.

So we will – we’re going continue to benefit from that. But I’ve just mentioned, if we don’t want to stay the real, if we – that’s from the revenue and the business growth perspectives we will benefit. But – so we are – the situation we want to stay that if we are actually more and more smaller Chinese payers involving the 3G on a global and exported business. And then in other word really help our margin perspective. So we are not going to stay that trend happen – in the near-term, but it probably in the end of this year or next year. But that’s our internal forecast a part of this business segment.

JD Abouchar – GRT Capital

Okay. And then final question on the buyback that you announced has been approved. Do you have to wait until your transaction with the company buying 30% of the assets goes through or is it something you can start and then just continue on as the cash comes in from the transaction?

Will Davis

Yes. We are – we actually have the accountable shareholder vote, because our legal counsel told us we – for this 10 million program, we need our shareholder approval, instead of just the Board approval. So we have to account with that process first. So after we finalized our shareholder approval process so we definitely we can exclude it without waiting for – for this 10 million is not, the binding condition with this – with this asset business, it’s technically the separate business decision. And so yes, once the shareholder approval is buyback, we can go to execute business at this order.

JD Abouchar – GRT Capital

And do you have any shares left on the current authorized buyback?

Will Davis

Yes. We still have some share buybacks – our progressive share buyback program haven’t been benefited yet. We still are going to use about a portion to continue buybacks after – as benefited earlier.

JD Abouchar – GRT Capital

Right. Thank you, Jeffery.

Jeffrey Kang

Thanks.

Operator

Thank you. Our next question is a follow-up from the line of Quinn Bolton with Needham & Company. Please go ahead.

Quinn Bolton – Needham & Company

Jeffery, just sort of looking through the transaction again. I guess, it looks like you are offering – I mean, as it stands now, you personally owned roughly 30% of outstanding shares. If I look at the $60 million to $82 million you’re willing to invest by these assets, you could effectively buy the remaining 70% of the shares that are premium to the closing price now on the entire business.

Why wouldn’t you consider that, especially when it sounds like you need a couple of months to go through the time associated with getting an appraisal of the assets that you’re purchasing? It would seem to me that you probably have to go through a couple of months process of making a tender, getting shareholder approval to buy the entire company and you would net up owning the entire business rather than 30% of it or an additional 30%. So can you walk me through, why that isn’t a better outcome for shareholders?

Jeffrey Kang

Basically, there are actually many and – all kinds of the proposals could be available there. So basically, we have to – order decisions are made over actually a (inaudible), what’s the best for the company? What’s the best for the business? And at the same time are we able to allocate enough finance to do there what we want. So that’s we – the decision we made today is the combination of audit factors. Yes, there could be any other better solutions or better goal there. But at this moment, it quite resemble, but we don’t have the enough financed to do the whole bunch of the deals.

At the same time, I just mentioned, I don’t have this – I don’t want this capital market restructure interrupt and disrupt our business operation to give the bad image and to make our supplier customers and the employees loose the confidence about this – our business and about this company.

So, I spend over – been at it over 10 years to build this platform. So we still believe that platform is very valuable. So I don’t want to be – this thing easily destroyed because of the just purely (inaudible) ideas. So, that’s – so, as I said, there could be any better solutions or bad in the future, but as this moment, I think that our current strategy is the best way to fit into our existing situation.

Quinn Bolton – Needham & Company

I guess – but it seems to me that by purchasing 30% of the assets, you’re effectively splitting the company, the 30% that you’re purchasing is going to be now a separate entity. And so, to your customers, your suppliers, it sounds like it is something that sort of fractions the company and may make it two entities rather than the singly entity to your customers and to your suppliers, is that not the case?

Will Davis

It’s not the case, because as I just mentioned, so we – because we actually running a lot of business. So all of the business is in – so we’re basically when we sign the contract with any customer using Cogo, while using our operating – individual operating subsidiaries. So the business itself has been allocated to the different – already being to the different operating entities there. So from that perspective, so we are not – show the true faces to the same customer.

If that’s the case is, already we should – we have the two or three different subsidiaries to deal with the same customer in the past. So that’s why from the business perspective, it now that the new strategy. So that’s – I think that’s – while facing the customer and any individual customer or individual suppliers, which you have see the same face to deal with them and as before.

Quinn Bolton – Needham & Company

Got you. Okay. Thank you.

Jeffrey Kang

Thanks.

Operator

Thank you. Our next question is follow-up from the line of John Formicola with Performance Capital. Please go ahead.

John Formicola – Performance Capital

I just wanted to share with everyone our stock looking very well, our trade in the U.S. the market in the three plus range?

Jeffrey Kang

Thank you.

John Formicola – Performance Capital

$3.40, so I guess we have ourselves a very positive Happy St. Paddy’s Day, to everybody that we got ourselves back on track here. That’s all.

Jeffrey Kang

Hi, John.

John Formicola – Performance Capital

I just wanted to share that with all. Thank you.

Jeffrey Kang

Thanks.

Operator

Thank you. And gentlemen at this time there are no further questions. I’ll turn it back to you for any closing comment.

Jeffrey Kang

Thanks everyone for this call. And I look forward to speaking with all of you soon. It’s may believe that in my proposal asset of sales once implemented, we will demonstrate it strong into the financial markets, very intrinsic value of Cogo business and model and our financial assets and assessing our view to have the shareholder value. Thank you. Hope to see you in next quarter.

Operator

Thank you, sir. Ladies and gentlemen that does conclude our conference for today. Thank you for your participation. You may now disconnect.

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Source: Cogo Group's CEO Discusses Q4 2011 Results - Earnings Call Transcript
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