Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2017

 

 

Commission File Number: 000-51242

 

 

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

 

 

Tower D, Mfox Plaza, Ke Chuang 12th Street

Beijing Economic-Technological Development Area (Yi Zhuang)

Beijing 101111

People’s Republic of China

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
By:  

/s/Yuping Ouyang

Name:   Yuping Ouyang
Title:   Chief Financial Officer

Date: August 24, 2017


EXHIBIT INDEX

 

Exhibit
No.

  

Description

99.1    Press Release
EX-99.1

Exhibit 99.1

 

LOGO

TechFaith Reports First Half 2017 Financial Results

Beijing, China, August 23, 2017 – China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) (“TechFaith” or the “Company”) today announced its unaudited condensed financial results for the first half period ended June 30, 2017.

For the first half of 2017, TechFaith reported total net revenues of US$24.6 million compared to US$34.5 million in the same period of last year. Gross profit for the first half of 2017 was US$4.5 million compared to US$5.5 million in the same period of last year. Gross margin for the first half of 2017 was 18.1% compared to 15.9% in the same period of last year.

Operating expenses for the first half of 2017 were US$9.4 million compared to US$5.7 million in the same period of last year. The first half of 2017 includes a charge of US$1.8 million for the write-off of impairment of acquired intangible assets. Net loss attributed to TechFaith for the first half of 2017 was US$2.6 million, or US$0.24 per basic and diluted weighted average outstanding ADS, compared to net loss of US$1.2 million, or US$0.11 per basic and diluted weighted average outstanding ADS, in the same period of last year.

Miss Ouyang Yuping, TechFaith’s Chief Financial Officer, said, “We were able to maintain revenue in our mobile phone business at a healthy level but our efforts were impacted by softness in the overall China handset market. Separately, we expect to further strengthen our balance sheet over the coming quarters as we execute on our business strategy and deliver a greater return to our shareholders. Earlier this year we announced the share transfer agreement to sell our Beijing real estate portfolio for a total consideration of RMB1 billion (approximately US$144 million). We have already received approximately RMB 400 million of the proceeds as of Jun 30, 2017 and expect to receive approximately RMB 400 million by the end of the third quarter 2017, with the balance of RMB 200 million to be received upon final construction and transfer of relevant ownership certificates.”

Mr. Deyou Dong, Chief Executive Officer of TechFaith, said, “We continue to build upon our positive operating position, with a stabilized gross margin and lower cost structure. We are also pleased with the ongoing successful development of our real estate business, led by the announced agreement to sell our Beijing real estate portfolio. We continue to execute on the buildout of our other real estate assets in Hangzhou and Shenyang, which we expect to serve as additional catalysts for our revenue and profit growth, and our success will allow us to build greater value for our shareholders. We believe our actions will benefit our long term business growth based on China’s real estate market, help to further improve our cash flow, and reduce potential operational challenges. Overall, we will continue to focus on delivering an improved return on investment to the company and our shareholders, as we optimize our existing resources and infrastructure, and work to keep operating expenses under tight control to avoid any unnecessary risks and costs.”

Investor Conference Call / Webcast Details

TechFaith will hold a conference call on Wednesday, August 23, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Wednesday, August 23, 2017 in Beijing) using the following dial-in numbers: +1-866-519-4004 or +1-845-675-0437. The conference call passcode is 66054251. A live webcast of the conference call will also be available on TechFaith’s website at www.techfaithwireless.com.

A replay of the call will be available approximately 2 hours after the conclusion of the live call by telephone at +1-646-254-3697, with passcode 66054251. A webcast replay will also be available at www.techfaithwireless.com.

 

Page 1


About TechFaith

TechFaith (NASDAQ: CNTF) is a developer, owner and operator of commercial real estate properties across China as well as a China-based mobile solutions provider for the global mobile handsets market. TechFaith continues to maintain a team of professional engineers focused on the development of ruggedized smart devices for both its consumer and enterprise segments, although it started investing in the construction of buildings and facilities in 2009 as part of its growth and business diversification strategy, gradually shifting away from its traditional focus on the mobile solutions and handset markets. The Company currently focuses on developing office space that can serve as anchor bases in areas with developing economies, as it meets the needs of both established businesses and innovative start-up companies in China. For more information, please visit www.techfaithwireless.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “outlook” and similar statements. Among other things, the business outlook and strategic and operational plans of TechFaith and management quotations contain forward-looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, among others, and in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in TechFaith’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

CONTACTS:     

In China:

Jay Ji

China TechFaith Wireless Communication Technology Limited

Tel: +86-10-5822-8866

ir@techfaith.cn

    

In the U.S.:

David Pasquale

Global IR Partners

Tel: +1-914-337-8801

cntf@globalirpartners.com

 

Page 2


CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(In Thousands of U.S. Dollars, except share and per share/ADS data)

 

     Six Months Ended
June 30
 
     2016     2017  

Revenues:

    

Mobile phone business

    

Third parties

   $ 29,165     $ 23,249  

Related party

     3,536       190  

Real estate

     1,796       1,165  
  

 

 

   

 

 

 

Total net revenues

   $ 34,497     $ 24,604  
  

 

 

   

 

 

 

Cost of revenues:

    

Mobile phone business

    

Third parties

   $ 25,145     $ 19,478  

Related party

     3,313       149  

Real estate

     552       527  
  

 

 

   

 

 

 

Total cost of revenues

   $ 29,010     $ 20,154  
  

 

 

   

 

 

 

Gross Profit

   $ 5,487     $ 4,450  

Operating expenses:

    

General and administrative, including real estate operating expenses

   $ 2,047     $ 3,374  

Research and development

     3,303       3,665  

Selling and marketing

     398       649  

Impairment of long-lived assets

     —         1,750  
  

 

 

   

 

 

 

Total operating expenses

   $ 5,748     $ 9,438  

Government subsidy income

     93       —    
  

 

 

   

 

 

 

Loss from operations

   $ (168   $ (4,988

Interest expense

     (901     (606

Interest income

     22       23  

Other expenses, net

     —         (16

Change in fair value of put option

     (90     (1,800
  

 

 

   

 

 

 

Loss before income taxes

   $ (1,137   $ (7,387

Income tax expenses

     —         —    
  

 

 

   

 

 

 

Net loss from continuing operations

   $ (1,137   $ (7,387

 

Page 3


     Six Months Ended
June 30
 
     2016     2017  

Net income from operations disposed

   $ 275     $ 3,837  

Net loss

   $ (862   $ (3,550

Less: net income (loss) attributable to the noncontrolling interest

     337       (963
  

 

 

   

 

 

 

Net loss attributable to TechFaith

   $ (1,199   $ (2,587
  

 

 

   

 

 

 

Net (loss) income per share attributable to China Techfaith Wireless Communication Technology Limited-Basic and Diluted:

    

Continuing operations

   $ (0.00   $ (0.01
  

 

 

   

 

 

 

Operations disposed

   $ 0.00     $ 0.01  
  

 

 

   

 

 

 

Net loss per share attributable to China Techfaith Wireless Communication Technology Limited-Basic and Diluted

   $ (0.00   $ (0.00
  

 

 

   

 

 

 

Net (loss) income per ADS attributable to China Techfaith Wireless Communication Technology Limited-Basic and Diluted:*

    

Continuing operations

   $ (0.14   $ (0.60
  

 

 

   

 

 

 

Discontinuing operations

   $ 0.03     $ 0.36  
  

 

 

   

 

 

 

Net loss per ADS attributable to China Techfaith Wireless Communication Technology Limited-Basic and Diluted

   $ (0.11   $ (0.24
  

 

 

   

 

 

 

Net loss

   $ (862   $ (3,550

Other comprehensive income (loss), net of tax

    

Foreign currency translation adjustment

     (7,730     3,827  
  

 

 

   

 

 

 

Comprehensive (loss) income

     (8,592     277  

Less: Comprehensive loss attributable to noncontrolling interest

     (314     (1,527
  

 

 

   

 

 

 

Comprehensive (loss) income attributable to TechFaith

   $ (8,278   $ 1,804  
  

 

 

   

 

 

 

Weighted average shares outstanding

    

Basic

     794,003,193       794,003,193  
  

 

 

   

 

 

 

Diluted

     794,003,193       794,003,193  
  

 

 

   

 

 

 

 

* Giving retroactive effect to the 1-for-5 reverse ADS split effected on March 1,2016

 

Page 4


CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands of U.S. Dollars)

 

     June 30,
2017
     December 31,
2016
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 5,554      $ 6,363  

Restricted cash

     —          2,881  

Accounts receivable, net of allowances of $3,637 and $2,184 as of June 30, 2017 and December 31, 2016, respectively

     28,643        25,459  

Accounts receivable due from a related party

     2,134        2,247  

Amount due from a related party

     1,081        950  

Inventories, net

     264        4,646  

Prepaid expenses and other current assets

     97,531        40,914  

Assets held for sale

     —          3,352  
  

 

 

    

 

 

 

Total current assets

   $ 135,207      $ 86,812  
  

 

 

    

 

 

 

Property, plant and equipment, net

   $ 48,412      $ 49,145  

Construction in progress

     96,620        69,792  

Land use rights, net

     1,987        1,966  

Acquired intangible assets, net

     1,089        3,785  

Other non-current assets

     28,988        19,126  

Other long-term receivable

     29,502        —    

Other assets held for sale

     —          152,904  
  

 

 

    

 

 

 

Total assets

   $ 341,805      $ 383,530  
  

 

 

    

 

 

 

Liabilities and equity

     

Current liabilities:

     

Accounts payable

     4,221        6,120  

Notes payable

     —          5,761  

Short-term loans

     4,345        7,816  

Accrued expenses and other current liabilities

     21,477        22,597  

Advance from customers

     7,984        10,136  

Deferred revenue

     3,803        5,138  

Income tax payable

     916        896  

Put option liability

     4,260        2,460  

Liabilities held for sale

     —          27,644  
  

 

 

    

 

 

 

Total current liabilities

   $ 47,006      $ 88,568  

Long-term loans

     12,165        12,605  
  

 

 

    

 

 

 

Total liabilities

   $ 59,171      $ 101,173  
  

 

 

    

 

 

 

Equity

     

Ordinary shares ($0.00002 par value; 50,000,000,000,000 shares authorized; 794,003,193 and 794,003,193 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively)

   $ 16      $ 16  

Additional paid-in capital

     144,836        144,836  

Accumulated other comprehensive income

     19,422        16,159  

Statutory reserves

     21,567        22,258  

Retained earnings

     73,881        75,777  
  

 

 

    

 

 

 

Total Techfaith shareholders’ equity

   $ 259,722      $ 259,046  
  

 

 

    

 

 

 

Noncontrolling interest

   $ 22,912      $ 23,311  
  

 

 

    

 

 

 

Total equity

   $ 282,634      $ 282,357  
  

 

 

    

 

 

 

Total liabilities and equity

   $ 341,805      $ 383,530  
  

 

 

    

 

 

 

 

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