Mobile handset provider China TechFaith Wireless Communication Technology's (CNTF) unaudited financial results for the fourth quarter and fiscal year ended December 31, 2006 show net revenue for the quarter of 2006 was US$29.1 million, as compared to US$24.1 million for the same period in 2005.

Defu Dong, TechFaith's Chairman and CEO, said, "Quarterly sequential revenue growth has resumed and we expect the growth to continue. Looking into 2007, we expect steady growth on a quarterly basis in our smartphone business now that we have successfully addressed most procurement and logistic problems. Our feature phone solution started to contribute with contracts from regional distributors and the recently announced new international carrier contracts. On the customer diversification front, we successfully expanded globally beyond Japan and the historic base of domestic Chinese companies."

Design fee revenue for the fourth quarter of 2006 was US$4.3 million, as compared to US$14.8 million for the same period in 2005. Royalty income in the fourth quarter of 2006 was US$1.9 million, as compared to US$4.1 million for the same period in 2005.

Revenue from products sales was US$23.0 million in the fourth quarter of 2006, as compared to US$5.3 million in the same period in 2005. In the fourth quarter of 2006, approximately 56.8% of revenue from products sales was from sales of smart phones, 17.6% from sales of wireless modules, 14.1% from sales of PCBAs and 11.5% from sales of other component products.

Net loss for the fourth quarter of 2006 was US$6.7 million or US$0.15 per weighted average outstanding ADS, compared to net income of US$10.5 million or US$0.24 per weighted average outstanding ADS in the same period in 2005. Results for the fourth quarter include a one-time expense of approximately US$1.4 million related to the write-off of leasehold improvement and an expense of US$1.2 million foreign exchange currency loss due to the appreciation of the CNY against the U.S. dollar.

Net revenue for the fiscal year 2006 was US$80.8 million, as compared to US$90.1 million for the fiscal year 2005. Design fee revenue for the full year 2006 was US$29.9 million, as compared to US$63.0 million for the full year 2005. Royalty income for the full year 2006 was US$7.7 million, as compared to US$15.7 million for the full year 2005. Revenue from products sales was US$43.3 million for the full year 2006, as compared to US$11.4 million for the full year 2005.

For the full year 2006, approximately 41.7% of revenue from products sales was from sales of smart phones, 29.9% from sales of wireless modules, 15.1% from sales of PCBAs and 13.3% from sales of other component products.

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