Tongxin International Ltd. (PINKSHEETS: TXIC)

Dear Fellow Shareholders:

Warm greetings as we embrace the opportunities of the New Year! I have just returned from China where I visited Tongxin's facilities and met with the Hunan Tongxin management team. I am pleased to tell you that despite the past year's challenges, our Company continues to meet expectations laid out in my previous CEO Letter to you in August. I believe you will find our company is much stronger and well positioned for greater growth than it was just a year ago.

Entering New Commercial Vehicle Market As we begin 2012, we are about to enter an additional new market, further expanding our position as China's largest independent supplier of EVBS (Engineered Vehicle Body Structures). Working with a new group of customers, we have designed a cab specifically for agricultural equipment -- particularly rice and wheat combines. Agricultural equipment plays an increasing role in China's vast and rapidly modernizing agricultural production. Addressing this market -- estimated at more than US$200 million annually -- are more than 15 agricultural equipment manufacturers. Till now, combine manufacturers have primarily imported their cabs and cab components into China, adding substantial costs to their equipment. By manufacturing cabs locally, Tongxin can reduce the costs substantially for these customers and uniquely position our Company to grow rapidly in this market.

We will be installing stamping and assembly capacity for this product in our Zhucheng facility, which till now has been dedicated to commercial vehicle cab assembly. We expect to start production of these cabs in Q2 2012, and we are funding this development internally.

New Paint Line in Changsha In my letter to you last August, I mentioned we would be installing a new paint line for Medium Duty and Heavy Duty cabs in our Changsha facility. I can now report that the building is completed and the equipment installation is scheduled to begin shortly after the first of the year. Again, we are funding this expansion internally.

Revenue Growth We continue to benefit from management decisions made in late 2010 and early 2011 -- most specifically the decision to increase our production of Medium Duty cabs and the successful development and sales of the highly popular Tianriu cab model. This, combined with our efforts to sell higher value added cabs, has resulted in increased average revenue per cab. As you know, our unaudited interim results for the nine-month period ended September 30, 2011, issued last month, showed our Gross Profit for the period more than doubled that of the 2010 period. We attributed that growth to steel price reductions and, most importantly, to the increase in our Medium Duty cab sales. In 2010, the overall market demand in China for Medium and Heavy Duty truck market segments reached approximately 1 million cab units and $3.7 billion in sales in 2010. By 2012, the market is expected to grow to approximately 1.4 million cab units and $5.2 billion in sales. Moreover, the increase in these sales led to improved unit sales prices and, accordingly, reduced the variable cost, enabling the Company to achieve lower production unit costs.

We believe our current production and product decisions will also positively impact the Company's gross profits and revenue.

Tongxin's business continues to thrive and we continue to maintain our leadership position in China's vibrant commercial automotive industry. We appreciate the patience and loyalty of so many of our shareholders and investors during this period of transition. We are confident that the Company will emerge from this period stronger than ever and well positioned for growth in China's expanding economy. If you would like to know more about the Company, I encourage you to visit our Websites: www.txicint.com and www.hntx.com.

Sincerely yours,

William Zielke Chief Executive Officer, Tongxin International Ltd.

Forward-Looking Statements Statements contained in this letter, which are not historical fact, constitute Forward-Looking Statements. Actual results may differ materially due to numerous important factors that are described in Tongxin International Ltd.'s reports to the SEC, which may be revised or supplemented in subsequent reports to the SEC. Such factors include, among others, the cost and timing of implementing restructuring actions, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Tongxin International Ltd. does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Add to Digg Bookmark with del.icio.us Add to Newsvine

Investor Relations Contact: Stanley Wunderlich Consulting For Strategic Growth 1, Ltd. Tel: 1-800-625-2236 ext. 7770 Email: info@cfsg1.com Website: www.cfsg1.com Tongxin Corporate Headquarters, U.S. Tongxin International, Ltd. 199 Pierce Street, Suite 202 Birmingham, MI 48009 www.txicint.com www.hntx.com

Tongxin (CE) (USOTC:TXIC)
Historical Stock Chart
From Jan 2025 to Feb 2025 Click Here for more Tongxin (CE) Charts.
Tongxin (CE) (USOTC:TXIC)
Historical Stock Chart
From Feb 2024 to Feb 2025 Click Here for more Tongxin (CE) Charts.