Company Will Use New Funding for Continued Expansion in VMI and Component Brokerage Business Lines
SHENZHEN, China, Aug. 8 /Xinhua-PRNewswire/ -- SinoHub, Inc.
(OTC Bulletin Board: SIHI) today announced that it has successfully closed a combined RMB 23 Million (US$3.4 million) Letter of Credit facility and a RMB 7 Million (US$1 million) Revolving Credit Line with the Commercial Industrial Bank of Fujian (CIB).
The Company said it will use the funds for continued expansion of its electronic component procurement, which accounts for 80% of SinoHub’s Vendor Managed Inventory (VMI), and component brokerage business lines in China. Already a leading company in the rapidly growing field of electronic component supply chain management (SCM) services in China (import/export, warehousing, logistics and other related services), SinoHub is leveraging the relationships it has with electronic component suppliers that use the Company’s SCM services to gain ground in the VMI and component brokerage businesses.
SinoHub began adding manufacturers to its customer list a few years ago after successfully building its SCM business based on customers in the electronic component distribution sector. The company’s entry point for manufacturing customers was the mobile phone design houses and factories in and around Shenzhen and Shanghai. Now, however, other verticals (e.g. network equipment) have been penetrated.
“We are happy to see SinoHub adding new manufacturing customers in several verticals,” said Le Sheng Zhang, President of Commercial Industrial Bank. “The platform they have built based on their unique MIS system, SinoHub SCM, warehouses and distribution centers in Hong Kong and Mainland China, and over 100 employees with deep electronics knowledge is propelling the SinoHub brand and resulting in a sustainable competitive advantage for the Company.”
“This new commitment from Commercial Industrial Bank provides solid backing for SinoHub to continue to ramp up our procurement and component brokerage business lines. Our new status as a public company in the United States has made it easier for banks such as CIB to lend us money,” said Harry Cochran, CEO of SinoHub. “Our business is extremely scalable, and we have the ability to deploy new funding profitably at a very fast rate. Now that we have reached the exponential part of the growth curve, I expect SinoHub to move quickly into a dominant market position.”
SinoHub Service and Software Solution Offerings
The Integrated SCM and VMI service platform provided by Sinohub is tailored to the electronic components business requirements in China. It helps electronic component industry participants reduce inventory costs, shorten purchasing lead-time and solve RMB purchasing and VAT invoicing problems.
“Commercial Industrial Bank’s strong support of SinoHub is a testament to our unique business model,” said Willa Li, SinoHub’s CFO. “Many businesses experience slower growth as they add volume, but we are in such a big market that we expect to see our rate of growth continue to increase for the foreseeable future.”
New Customer Opportunities
“With this new credit facility, SinoHub can now take better advantage of the robust platform we have built over the past seven years to offer a true one-stop-shop service experience in SCM and VMI for our customers,” commented Lei Xia, President. “As our financial resources increase, we will extend our offering to an increasing number of new customers and ultimately raise their efficiency. By continuously adding new customer- driven functionality to SinoHub SCM, we have started to become indispensable to our customers. For example, our manufacturer customers are now using the new Bill of Material management function to solve what used to be a nightmare for them when it came to synchronizing suppliers to deliver all of the components needed on time.”
About SinoHub
SinoHub Technology Company, Ltd. was founded in Shenzhen in September 2000 by veteran entrepreneur Harry Cochran and electronic component industry veteran Lei Xia to facilitate the electronics revolution in China by providing world-class services and MIS for all participants in the supply chain of electronic components. For more information, please visit our Web site at http://www.sinohub.com .
Cautionary Statement Regarding Forward-looking Information
The statements contained in this press release that are not historical facts are forward-looking statements under the federal securities laws. Such statements include, but are not limited to, the company’s ability to move quickly into a dominant market position and a continued increase in the rate of growth. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed in, or implied by, such forward-looking statements. SinoHub undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
