Announces Completion of Reverse Merger
- Company Expects 2007 Revenue To Increase 44% to $18.4 Million -
GUANGZHOU, China, May 18 /Xinhua-PRNewswire/ -- Guangzhou Global
Telecom Inc. (OTC Bulletin Board: GZGT), a mobile phone handset and pre-paid
calling card distributor and mobile handset value-added services provider in
People's Republic of China, today discussed its year end 2006 financial
results.
Financial Results from Fiscal Year 2006 Include:
-- Revenue increased 91% to $12.84 million
-- Gross profit up 84% to $1.4 million, gross profit margin was 11.2%
-- Income from operations of $243,213
-- Net income of $220,373
For the fiscal year ended December 31, 2006, Guangzhou Global Telecom
reported revenue of $12.8 million, an increase of 91% from $6.7 million in
2005. The increase in revenue was driven by growth of the Company's client
base and expanded offerings related to mobile handset and pre-paid calling
card distribution.
Gross profit totaled $1.4 million, or 11.2% of revenues, in 2006 compared
to $783,197, or 11.6% of revenues, in 2005. Total operating expenses in 2006
increased to $1.2 million compared to $462,200 in the prior year period,
resulting in a 24% decline in come from operations. The increase in general
and administrative expenses for the year largely reflects more marketing
efforts and additional sales outlets expenses incurred in 2006. The Company
ended the fiscal 2006 year with $220,373 in net income, or $0.005 per diluted
share on a pro forma basis.
Ms. Yankuan Li, Chief Executive Officer of Guangzhou Global Telecom
commented, "We continued to see strong growth in the telecommunication sector
in 2006 as a record 48 million new mobile phone subscribers were added in
China. We focused our strategy on enhancing our overall client base and are
expanding our offering with value-added products and services to cater to
customers seeking high quality, innovative mobile phone solutions."
Ms. Li concluded, "As we advance through 2007, we believe we will continue
to capitalize on China's booming telecommunications market, which has become
the world's largest with nearly 500 million mobile phone users as of the end
of 2006."
The Company expects total revenue in 2007 to increase to $18.4 million, up
44% compared to 2006. In addition to existing hardware distribution and sales
partnerships, the company will focus on identifying and developing new
software and value-added services through an expanded network of regional and
neighborhood service centers, along with virtual stores. Through these new
initiatives, the Company aims to target more customers with additional value-
added services products and enhance its position as a leading provider of
mobile phone services in China.
Completion of Reverse Merger
In March 2007, Avalon Development Enterprises issued 39,817,500 shares of
its restricted common stock to the shareholders of Global Telecom Holdings Ltd.
("GTHL"), Guangzhou Global Telecom's parent company, in exchange for 100% of
the issued and outstanding common stock of GTHL. As a result of the merger,
the name of the Company changed to Guangzhou Global Telecom. Yankuan Li was
appointed its Chief Executive Officer. Guangzhou Global Telecom's shares are
listed on the Over-the-Counter Bulletin Board under the symbol, "GZGT."
"We are pleased to have completed the merger process," said Ms. Li. "We
believe that this transaction provides us with access to the U.S. capital
markets, with the intent of capitalizing on significant growth opportunities
in China's telecommunication sector."
About Guangzhou Global Telecom
Guangzhou Global Telecom Limited Company is a national mobile phone
handset and pre-paid calling card distributor and provider of mobile handset
value-added services. The Company distributes mobile handsets for
manufacturers and also maintains and operates the largest prepaid mobile phone
card sales and distribution center in Guangdong Province, maintaining
cooperative prepaid card distribution relationships with China Telecom, China
Mobile and China Unicom. GTL plans to introduce new software and services
through an expanded network of regional and neighborhood service centers,
shops and virtual stores.
Additional information on the Company can be found at
www.GuangzhouGlobalTelecom.com
