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Investor Assesses China Techfaith Wireless' Weak Stock Performance (CNTF)

I have come up with a theory as to why CNTF is tanking and eps have been revised down. It seems that the Chinese govt. is delaying the issuance of 3G licenses. See this article:
tinyurl.com/dekcj

Obviously, pushing out the approval process for 3G licenses will hurt design shops like CNTF that rely on the introduction of new technology for design work. However, this seems like a short term problem as the long run trends are still intact. Plus, if CNTF is successful at getting more outsourcing work from some major international cellphone companies, they could still show decent growth in FY06. I see the 3G design work as an additional catalyst for growth, albeit further out than expected.

I guess the key question is at what point will the stock fully reflect the 3G delay issue. At its current price of $9 and with $3 cash on the balance sheet, I'd say pretty soon but who knows in the current news vacuum??