Operator: Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the Comtech Group, Incorporated Annual Audited Results and 2008 Guidance Conference. During today’s presentation all participants will be on a listen only mode. Following the presentation the conference will be open for questions. If you have a question please press the star followed by the one on your touchtone phone. If you’d like to withdraw your question, please press the star, followed by the two. If you are using speaker equipment, please lift the handset before making your selection. This conference is being recorded March 13th, 2008.

I would now like to turn the conference over to Wanyee Ho, Investor Relations Director. Please go ahead Ma’am.

Wanyee Ho: Thank you Nicole and good afternoon to everyone. I’m Wanyee Ho, Comtech’s Investor Relations Director and I’d like to thank you all for joining us today to participate in Comtech Group’s 2007 annual earnings conference call.

After the bell today, Comtech issued a press release reporting final audited financial results for the period ended December 31st 2007. This release can be accessed in the investor relation section of Comtech’s website at www.comtech.com.cn and on most other financial websites.

The discussion today will be hosted by Mr. Jeffrey Kang, President, Chairman and CEO and who will discuss the company’s business operation, and our CFO, Mr. Frank Zheng, who will report the company’s financials.

Before we begin, I’d like to remind everyone that the call today may forward-looking statements regarding future events and financial performance of the company. We wish to caution you that such statements are just predictions and actual results may differ materially as a result of the risks and uncertainties inherent in the company’s business. We refer you to documents that the company files periodically with the SEC, especially the company’s Form S-1 and the most recent filed Forms 10-Q and 10-K, as well as the Safe Harbor statement made in today’s press release. These documents contain important risk factors that could cause actual results to differ materially from those contained in the company’s current projections. Comtech assumes no obligation to revise the forward-looking information contained in today’s call.

At this time, I’d like to turn the call over to Jeffrey Kang, President, Chairman and CEO of Comtech. Jeffrey, the floor is yours.

Jeffrey Kang: TThank you Wanyee, thanks to everyone for joining this earnings call. I am delighted to report that which the best quarter in the company’s history, delivering the highest quality revenue and profit ever. We have done this while continuing to improve the growth and operating margins of our business and drive the profit growth faster than the top line.

During the fourth quarter […2007], our revenue grew by 46% year-over-year to a rate $70.9 million US and a non-GAAP EPS by about $0.22 representing a growth of 38% from last year. This enabled us to deliver revenue of $228.5 million US and a non-GAAP EPS diluted of $0.73 for the full year 2007, representing a more than 35% year-over-year increase. Revenue exceeded guidance and preliminary announcement.

The revenue breakdown in the fourth quarter is as follows:

Mobile handsets comprised 40% of the total sales and delivered an increase of 22% quarter-over-quarter growth and 50% year-over-year growth.

Digital media made up of 25% of the total sales. It grew 32% quarter-over-quarter and 64% year-over-year.

Telecom infrastructure represented a 30% of the total sales. The increase was 31% quarter-over-quarter, and 34% year-over-year.

Service business represented 4% of total sales, increased 7% quarter-over-quarter and 24% year-over-year.

Now, let me provide some highlights from this quarter and a business outlook for the rest of the 2008. We continue to experience robust revenue growth with above expectation performance across all of our key business areas during the quarter.

We are very confident that we will achieve the 25 to 30% growth target in this year, which we provided in this February. At this early stage in the year, based on existing visibility and the new business in the pipeline, management is providing 2008 full year guidance of $285 million in revenue, and a non-GAAP EPS of $0.90. We will be able to achieve this aggressive goal despite the down-turn in the US economy because our business mainly targets the Chinese domestic and newly emerging markets, which we expect to continue on a robust, upward trajectory that offer, offset any negative news from the US.

We believe the handset market’s outlook for 2008 will remain strong with around 25% growth in the Chinese domestic market and 50% in exports. As we begin in this first quarter of 2008, contrary to the investment community concern over the inventory problems, we have observed that inventory is quite healthy across the industry and its demand is better than expected. We believe industry performance and our own business will exceed expectations in this first quarter.

Let’s turn to our digital media business, the fastest growing end market for COGO. It contributed around 25% of our total business in 2007, driven by the robust business expansion of server box, GPS and other new solutions. We feel confident regarding the projected growth in the digital media business and forecast an increase of 40% in this sector for 2008.

Next, let’s review COGOs traditional market; the telecom equipment business comprised 31% of the total business. Here we estimate our major customers; Huawei and ZTE, will demonstrate more than 40% annual growth in 2008. We project a stable 15% growth for this segment in 2008, as we plan to focus especially on growing the business with a meaningful margin in this sector. We have excluded most of the 3G business in China from our existing forecast, although we believe Chinese 3G will certainly come this year and when it does, it will add a significant boost to the company’s growth next year.

While COGO strives to deliver strong performance in the existing key markets, in 2008 we also expect to generate revenue from the new industries such as the auto electronics and green energy. We estimate this new business will contribute over 5% of total revenues in 2008, and become another long term growth driver for COGO.

Next, the service segment. It made up around 4% of our revenue and experienced an increase of 26% year-over-year for the full year 2007. We continue to be confident that this will be a high growth, high margin proportion for Comtech and will deliver over 30% growth in the sector in 2008.

Finally I’d like to elaborate on our M&A development. Over the last […] few months, Keen Awards, a company we acquired last year was awarded a service major design win to provide display panel solutions to a few major OEMs in China. Already the fastest growing business unit in the company, KA will continue to experience explosive growth this year, fueled by this design win and achieve over 10% revenue of our total business in 2008. We have a few acquisition deals in our pipeline and we are coming to the final stage of due diligence and business integration process and expect to close at least one deal in the second quarter of this year.

Our principle with M&A is that we place integration ahead of closing a deal and consequently we usually spend a significant amount of time ensuring a smooth transition prior to concluding an agreement. Although the deal process may take longer than some investors expected, these quality and synergy driven acquisitions have provided a solid foundation for COGOs strong organic expansion and long term growth. We expect accretive acquisition to accelerate growth in the next few years.

On this Monday we announced a stock buy-back program to affirm our belief in the company’s continued growth. Because of Comtech’s strong financial position we believe we will still have an abundance of cash after the buy-back program to (audio gap¬) [execute our planned acquisitions this year].

With that, I would like to turn the call over to Mr. Frank Zheng our Chief Financial Officer to report audited results, Frank.

Frank Zheng: Thank you Jeffrey. Good afternoon everyone. For clarity all the figures I’m discussing here unless otherwise noted, will be in US dollars. As Jeffrey mentioned earlier, we achieved another record quarter in our company’s history.

Now, let me review the line items for the fourth quarter. Revenue will be $70.9 million US, an increase of 26% quarter-over-quarter and 46% year-over-year.

Gross margins were 19.5% compared to 18.8% reported during the same period last year, due to more favorable product mix, mainly the growth in higher margin product offerings, such as digital media and service market during the quarter.

[Operating] expenses was 11.7% of total revenue for the fourth quarter. Research and development expense was 2.2% of total revenue. Selling, general and administration expense was 9.5% of total revenue.

[Operating] margin for the fourth quarter was 7.8%, versus 9.2% for the same quarter in 2006. However, excluding the effects of stock based compensation and acquisition related costs, including amortization of purchased intangible assets; non-GAAP operation margin would have been 11.6%

Net income for the fourth quarter was $6.1 million US, representing GAAP EPS diluted of $0.15 compared to $0.13 in the same quarter of 2006. Non-GAAP EPS diluted was $0.22. The weighted average number of shares used in the calculation of EPS diluted was 40.3 million.

Annually: For the full year 2007, the company reported audited revenue of $228.5 million US, an increase of 34.7% compared to the 169.6 million reported during 2006 and, total revenue, normalized by adding the four quarters together was $222.1 million US, higher than the guidance we provided, as well as our preliminary announcement. Because the Chinese Yuan appreciated significantly against the US dollar over the last year, our full year, audited revenue was $6.4 million US, higher than the sum of the four quarters reported revenues. Being conservative, we encourage investors to add up the four quarters’ results to measure the company’s operating performance and growth. We expect the Chinese Yuan to continue to appreciate against the US dollar in 2008 and improve our business performance this year.

Gross margin was 19.4% of sales, compared to 18.6% for the same period last year. The operation margin was 8.8% as compared to 9.7 last year. Excluding stock-based compensation and acquisition related costs, including amortization of purchased intangible assets, non-GAAP operation margin would have been 11.9%. The company had an effective tax rate of 8.4% and net income was $0.55 per diluted share. Excluding the effects of stock-based compensation expense and acquisition related costs, including amortization of purchased intangible assets and recognized deferred taxation, the company would have reported non-GAAP EPS of $0.73 for the full year.

The Balance Sheet. We have maintained a healthy balance sheet. Comtech completed the quarter with $126 million US in cash and bank borrowings only 1.2 million. It continues to be in a strong financial position with a current ratio of 4.3 to 1. Shareholder equity at the end of 2007 was $199.5 million US. Inventory turnover days have shortened to 29 days. Days of receivables was 75 days. Operating cash flows was a positive 7.3 million.

We are confident we will continue to deliver strong performance with strong organic growth and accretive acquisitions.

This concludes our remarks. Thank you everyone for joining the call to discuss our 2007 audited results. I would like to turn the call over to the operator to open the floor for questions

Operator: ThThank you sir. We will now begin the question and answer session. As a reminder, if you have a question, please press the star followed by the one on your touchtone phone. If you’d like to withdraw your question, please press the star followed by the two. If you are using speaker equipment, you will need to lift the handset before pressing the numbers.

Our first question is from the line of Charles John with Piper Jaffray. Please go ahead.

Charles John: Good evening Jeffrey and Hope. I’m sitting in for Mike Walkley.

Hope Ni: Hello, Charles.

Charles John: Hi, congratulations on the quarter. Just two quick questions. In terms of your alternative energy, the revenue line in your business, can you give us some more color on how you expect to get to the 5 to 10% of overall revenue? If you could give us some more color on customers and how this might ramp in 2008.

Jeffrey Kang: As we discussed in our last call, we expect potentially 5% of our total revenue from this new business in 2008. In the auto electronics business, we already get some certain revenue from our existing organic business. So the customer base [are] those auto electronics vendors in China, so we already have over 20 customer base in this area.

In terms of the green energy business is another industrial application for us in this segment. So right now we have a couple deals in this segment, so I think that the new acquisition will help us move into this new high growth business. So we expect in the first half of this year, so we are going to see a small portion of the business from this new business. But we are going to see some revenue ramp-up in the second half of this year in this new business.

Charles John: Okay, great, thanks. In terms of restructuring, hearing a lot of rumors about the Chinese Legislature and the fact that they might come out with an announcement, the question we have is, will there be a cost in cap-ex if this restructuring is announced before or after the Olympics, and how that might impact COGO?

Jeffrey Kang: As we explained in this call, in our press release, we are very confident and very optimistic about our capital expenditure for the new 3G business bidding off in China. So after the carrier restructuring we are going to, we are expecting the 3G license granting in the next couple of months. But either before or after Olympics and we are expecting to [see] the capital expenditure of the 3G building is going to come; even though in our current guidance [..] we have not included our 3G in the revenue in our guidance yet, but we certainly believe it will come. So once it comes, it will be become another strong catalyst to COGO because we are so well positioned in this business. We have the solution that goes to the 3G infrastructure equipment business. We are in the same time; we have a strong business in the 3G mobile handset business. So we pretty much covered all the major players in the infrastructure side as well as the cell phone side. So once it comes […] certainly COGO will be [ready and] it will give COGO another catalyst to boost our business in this year.

Charles John: Okay great, and one last housekeeping question. If you could give us the breakout of stock-based compensation for the cost of goods sold, SG&A and R&D. I didn’t find that in the press release.

Jeffrey Kang: Oh I think usually on our compensation breakdown is roughly in R&D is like 30 to like 30 to 40% and the sales marketing and SG&A is like 60% of total cost from the segment.

Charles John: Okay, perfect, all right, thank you and good luck.

Jeffrey Kang: Thank you.

Operator: Thank you. Our next question is from the line of Brian White with Jefferies. Please go ahead.

Brian White: Yes, Jeffrey, it sounds like the hedge and inventory issue is behind the industry and you said the March quarter should do a little better than expected for handsets. So what type of seasonal declines should we expect in the handset business for the March quarter?

Jeffrey Kang: Yes, even though, you know, investment community is still worrying about the inventory building up in China, or the slowing demand in China, but from what we are observing is the inventory, it is not unusual at all. So we believe currently, the inventory issue in the value chain is only around one or two weeks at this moment and we’re seeing the demand is quite strong, after the Chinese New Year. And we’re seeing the whole market has rebounced back. So from that angle, so we are going to say, you know, the overall market for mobile handsets market in China is around like, this year, as I just discussed in our press release, we think about, is like a whole market in China is going to have 25 to, 25% in market growth. So in the first quarter, even though the first quarter is seasonally down compared to Q-4, but our view is only down like 15% versus the last quarter, which is quite normal, it quite a normal amount, the normal seasonality. So that’s why we believe that over all, end market performance will be better than what people anticipated.

Brian White: Okay, and Jeffrey on the 3G, you participated last year, you know, I guess the 10 cities were really built out last year, so what does it really mean if licenses are given out? Are you under the assumption that more cities will be covered this year, maybe before the Olympics or after, or the penetration in existing cities will be deeper? Just give us some details on what it really mean if the licenses are given out for you guys.

Jeffrey Kang: I just want to add a point that because we, you know, we are actively seeking acquisition targets and apparently the cash, even though right now is sitting there, but there is a purpose for the cash, so we will have to consider our cash management and how much proceeds we need [to use] in the coming few months.

Brian White: Okay. And just going back to the handset market, you know there are some chip suppliers that have voiced concerns of meaningful inventory in China, Mediatech being one having some problems in the December quarter, one of the power amplifier companies in the US having some problems, Jeffrey what dynamic is happening that they’re seeing such a very different market from maybe what you’re seeing, and actually some of the other Chinese handset vendors there?

Jeffrey Kang: You know, if, this is more macro in the market space, so if the government grants the 3G license to the carrier, the restructured carriers, so what we are going to see, in the existing 10 cities, so that certainly we’re going to see more capital expenditure, more deeper investments. And in these existing 10 cities, and which have, you know, will probably before the Olympics. And [..] further what we are going to see is the government or the carriers certainly will expect their TDSCDMA coverage across all the other major cities in China. So given that and a huge potential in this TD business in the second half, but we believe that will happen after the Olympics, so probably in the fourth quarter of this year. But it will certainly give a big capital expenditure in this segment that will help the all the 3G players, equipment vendors, cell phone vendors, chip set vendors and module designer like ours, all of us will benefit from this strong capital expenditure in this year.

Brian White: And today Jeffrey we really had China Mobile is the only one that has started to build up the network and that could expand?

Jeffrey Kang: You know in our understanding, once the restructuring has been done, so probably all carriers will be granted the 3G license. So for the TD currently China Mobile already is on it, but we are still believe as other carriers like say, you know, they probably will also expand into this TD 3G business in China.

Brian White: Okay. And just finally, what was the operating cash flow in the quarter, and also if we had depreciation, cap ex?

Jeffrey Kang: We are, our operating cash flow in the quarter is $7.3 million US positive.

Brian White: Okay, do we have depreciation and cap ex for the quarter, and then what you think for ’08?

Jeffrey Kang: In terms of the, I think in terms of the acquisition, this, you mean, amortization or even capital expenditure, or what?

Brian White: Yeah, just cap ex expenditure and depreciation.

Jeffrey Kang: I think this capital expen — you mean projection in 2008 or ’07?

Brian White: For the quarter and then for 2008.

Jeffrey Kang: We actually, we haven’t give this 2008 projection yet. But what we, the capital expenditure is a very, very small in the fourth quarter, so I actually don’t have this number Brian, I can send you after the call.

Brian White: Okay, that’s fine, thank you.

Operator: Thank you. Our next question is from the line James Faucepte, from Pacific Crest Securities. Please go ahead.

James Faucepte: Thank you very much. I had just a few questions related to the assumptions behind your guidance. Firstly, is it correct that your guidance that you’ve basically reiterated today, does not include the impact from any share buy-back and planned acquisitions?

Jeffrey Kang: Yes, so, in terms of the guidance… in most the revenue and especially for the EPS, so which events haven’t (audio interference) stock buy-back program. So we just use the normal outstanding share accounts this year. So as we discussed in our press release, if we started execute our buy-back program we certainly are going to see the EPS accelerating because of the stock buy-back program.

In terms of the acquisition, in this guidance we only included acquisition which already in our pipeline, probably one or two deals. But we certainly believe in this year, given the situation, we have a lot of cash in our balance sheet and have a couple of deals in, already in our pipeline; we certainly believe we have more acquisitions coming this year. So this guidance haven’t fully reflected our acquisition we are going to do this year.

James Faucepte: But it does include at least a couple of acquisitions that you plan to close over the next one or two quarters, is that right?

Jeffrey Kang: Yes, correct.

James Faucepte: Okay. Great and then finally, just as far as your longer term business development and the like, where do you see the most opportunities, I mean, it sounds like you’re targeting obviously automotive and clean tech? Should we anticipate that that will be the focus for you and your acquisitions for the foreseeable future, and how should we think about the relative margins in that, in those segments, or in those businesses? Thank you.

Jeffrey Kang: In terms of the territory or industry we are looking at for our acquisition targets, so we think about, you know, we targeting both the digital media segment as well as the new industries such as the auto and green energy solutions. So in terms of the gross margin structure for this new industries, so we expect the margin structure is similar or slightly higher than our existing digital media business, which is 20 to 30% gross margin business. So that’s, so internally when we look at this acquisition target, so we usually, we always target those business which have the gross margin over 20, over 20 to 30% of the gross margin business.

James Faucepte: Great and I’m sorry, back to the acquisitions. How much would you expect of your revenue guidance this year, how much are you expecting your acquisitions to contribute that you have included, and how much of the EPS are you expecting them to contribute this year?

Jeffrey Kang: Frankly you know our acquisition is not just purely acquiring new numbers in, because we put this in how we are able to get incremental value, incremental revenue as the key to evaluate our acquisition target. So for example, like a Keen Awards the business, this year in the 10% of total revenue. But most, you know, the revenue is not generating from the older customers. Almost all the major revenue we generated this year is from our existing customer base. So from that angle, we are not just simply adding the Keen Awards say all the revenue, plus total organic growth. So after we [completing] the acquisition, so we will spend a lot of efforts bringing in the new solution and new products in front of all our existing customer base, which is usually who are starting to generate a decent incremental revenue, the two quarters after our completing a deal. So that’s why from our perspective, so in the first two quarter of closing a deal, so the impact is a little bit, is just kind of neutral or slightly accretive. But it’s usually after two quarters, so we’re going to see explosive growth from that business.

So that’s why from the 2008, in terms of our guidance, I believe most of the business coming from our organic business, we believe, you know, the impact to our overall business, our overall revenue guidance, or EPS guidance, is coming from, coming to Q3 or Q4, mostly in Q4. So from that angle, so we don’t think we have too much impact to our, you know, the guidance number this year. It’s certainly a plus, but you know, we cannot quantify, you know, how much penny is coming from the acquisition at this moment.

James Faucepte: Great, thank you very much.

Operator: Thank you. Our next question is from the line of Ramesh Misra from Collins Stewart. Please go ahead.

Ramesh Misra: Hi, good morning Jeffrey and Frank. My first question is in regards to Q1. Obviously SG&A was pretty high in Q4. Should we be looking at a similar rate in Q1, or does that comes down sharply in Q1?

Jeffrey Kang: You know, one of the reason in the fourth quarter, because we usually have a lot of expenses going to be booked in the fourth quarter because it’s year end, so we are not going to say in general, in general our operating expenses will kind of, will be gross lower than the revenue growth. That’s how and where our operating leverage coming from. So we encourage investors to use the annual basis to measure the business, rather than quarter-by-quarter. So this is especially in the fourth quarter is the year end, we usually kind of taking more reserves out of the fourth quarter to be conservative accounting. So that’s why we don’t expect the SG&A to continue to jump that much in the quarter-over-quarter.

Ramesh Misra: Okay. In terms of overall revenues and business trends in Q1, you know the Street have you down about 15% or so in Q1. Is that something that you’re comfortable with, I mean, do you anticipate a fairly sharp decline in the handset business and more modest declines in the other segments? Can you give us a sense of the different drivers in Q1?

Jeffrey Kang: First of all, first of all we didn’t see the sharp decline in terms of the mobile business. As I just explained we think the mobile business is normal, is generally better than how people anticipated. So the same thing in other segments, telecom infrastructure as well as the digital media business. So that’s why we are not going to see any significant or sharp decline for any of our business. So that’s why I think you know, even though for the company, we don’t give this quarterly guidance, we only give annual guidance, but I think the currently we are, I think there’s overall at the current state, the street consensus is the right indication for the business breakdown by quarter this year.

Ramesh Misra: Okay. In regards to your clean tech effort, can you help us understand what exactly is it? Are you going to focus on LED lighting, or are you going to well, are you going to make solar cells, what exactly is the plan here?

Jeffrey Kang: You mean in the KA Deal?

Ramesh Misra: No, in the clean tech and the green energy focus that you have.

Jeffrey Kang: We are, we, as we explained in the last call, we are focusing on the energy saving. So more like the electricity you know, how, with designer module, and module solution to target in the power, you know, power supply industry, to supply the industrial application, to help the customer to save their electricity or other energy consumption. So in terms of the business model, it’s more similar to what we are doing now. So we’re going to partner with the leading chip set or a power chip set venders to design modules to serve the equipment and the system of OEM customer base in China.

Ramesh Misra: Got it. And then my final question, on the 3G side Jeffrey, is it, I think you mentioned this before, but most of your revenues that you anticipate in 3G will be coming from the handset side, not from the telecom infrastructure, is that still true, or is there a change over there?

Jeffrey Kang: I think both of the revenue; I think you know, we’re going to see the capital expenditure from both sides; from both infrastructures side as well as the mobile handset side. So we believe, you know, this year the capital expenditure is not just for the mobile handset. You know, for in the 10 cities this deal needed to be deeper infrastructure investment to have the better coverage. And on the same time, so we are going to see the 3G is going to roll out to more cities in China this year.

Ramesh Misra: Okay. Now of course you have no inclusion of this in your overall ’08 guidance, but if there is an up side from 3G, what should we be taking off? Is it 10 million, is it 20 million, is it 50 million?

Jeffrey Kang: I think you know, at this moment I don’t want to give any, too much kind of high expectation at this moment. So we just think about if we, if the capital expenditure and 3G license coming, you know, according to inline with our, if it’s in line with [what] people anticipated, so it’s probably going to be adding like another you know, 5% growth to us this year.

Ramesh Misra: Okay. All right, thanks very much guys.

Jeffrey Kang: Thanks.

Operator: Thank you. Our next question is from the line of Amir Rozwadowski from Lehman Brothers. Please go ahead.

Amir Rozwadowski: Good afternoon Jeffrey, Frank and Wanyee. From my side, I know that you’re not giving sort of quarterly guidance Jeffrey, but given the upcoming Olympics, is there any shift in seasonality in your revenue expectations, or should we look at it as similar to seasonal patterns from previous years?

Jeffrey Kang: I think in general you know, we didn’t see too much of the seasonality shifting in this year. We think about at this moment, that Q1 for the COGO specific, we think the Q1 is a little bit stronger than normal seasonality.

Amir Rozwadowski: Okay. Great, and then in terms of your guidance for 2008, I know we’ve seen significant appreciation of the Chinese Yuan, are you including any additional appreciation in your guidance?

Jeffrey Kang: I don’t think so.

Amir Rozwadowski: Okay.

Jeffrey Kang: Specifically even many people anticipate the Chinese currency will have another 7 to 10% appreciation in this year but it’s very hard for us to predict that type of kind of trend. So that’s why, if you look at our ’07 number and our audited number is like revenue is 6, 7 million dollar higher than our reported revenue or guidance number, and EPS number also higher, so that’s why we encourage investors to using the normalized you know, number to measure our business rather than use the GAAP number, purely year-end GAAP number, because that already included those currency appreciation. But so our current guidance is based on the, you know, exchange rate at this moment. So that’s why in the end of the year we’re probably going to face another happy problem like this, in the end of 2008.

Amir Rozwadowski: Okay great. Thank you very much for taking my questions.

Operator: Thank you. Our next question is from the line of Adele Mao from Susquehanna International Group. Please go ahead.

Adele Mao: Hi, I have two questions. First of all, Jeffrey, given that you know the synergy from there should be acquired company for not taken (inaudible) for another quarter. Could you just give us an idea in terms of what their existing revenue is, like you know, just in terms of size and how big they are?

Jeffrey Kang: You know, we are for our acquisition target, as I just said, we are not purely saying how much existing revenue they are generating, but our, you know, we are more focusing on doing our own calculations. So after this company acquired by COGO and they have existing products, technology and solutions, and then we are able to put that solution in front of our broad customer base there, so that’s what, then we are able to easily calculate how much incremental revenue we can generate in the next 12 months after we [complete this acquisitoin. So based on this calculation, this projection and we decided on how and when to do the closing a deal. So that’s why it’s too early to tell the investor community what’s exactly revenue, revenue level looks like for the company we will acquire. But certainly, every deal we have done will be accretive deal to us and do well and have a very strong foundation for us to drive our long term growth.

Adele Mao: Are they currently generating meaningful revenue, like, you know, are you buying their potential customer relationships or existing contracts?

Jeffrey Kang: We actually, we pretty much focusing on existing technology and products rather than their revenue and existing customer relationships.

Adele Mao: Okay. In terms of KA, it looks like it’s going to be 10% of good total revenue, so it’s going to be 20, $30 million revenue type of business. Could you just discuss KA’s customer base a little bit, on who were their original customers and who are the customers COGO actually brought in, because of the synergy you can generate from the deal?

Jeffrey Kang: For example, before COGO acquired them, so they have some a few, two or three, customers in the cell phone sector, mostly are those second tier or third tier of OEM guys, in which mostly US investor are not familiar with like, most of them are basically in Shenzhen you know, to produce the cell phone maker, one million or two million units per year. But after COGO … acquired by COGO, we put them in front of many of our tier one customers like ZTE, Huawei, like Tianyu or Changhong…. We are also in addition to media segment, you know, put them in front of many GPS vendors and customers, so that’s why after a couple of months, the design in’s time, so we won a few major design win from our customers, such as Changhong and TCL and they are investing a very strong revenue ramp-ups since they know this quarter. That’s why, you know, that show the investor how, what’s the quality of the deal for us and what, how we’re going to generate incremental revenue by each acquisition we have done.

Adele Mao: Okay, that’s very helpful, thank you.

Operator: Thank you. And again if there are any additional questions please press star, one, at this time. And it looks like we have no further questions. Please continue.

Jeffrey Kang: So…go ahead.

Operator: Sorry, we do have a question from the line of Jack Harris with JSH Partners. Please go ahead.

Jack Harris: Jeffrey, good quarter, what I’d like to know is, when you use $0.90 this year, I want to be perfectly clear about that does not include the Yuan, is that correct? I mean the warrant, appreciation, is that correct?

Jeffrey Kang: Yes, correct.

Jack Harris: Okay. So therefore in order to find out what the growth rate is ex the acquisitions that you say are small in the numbers, what would the $0.73 have been if the Yuan appreciation was taken out?

Jeffrey Kang: That’s $0.71, $0.71 yeah.

Jack Harris: $0.71. So then you’re consistent with your 25 to 35% growth rate with your organic growth, is that correct?

Jeffrey Kang: Yeah, correct.

Jack Harris: Thank you very much.

Operator: Thank you. And at this time there are no further questions.

Jeffrey Kang: So thanks very much for coming for this call. Our focus over the past five years has been on creating a pattern of sustainable and solid growth for the company. We believe providing long term, robust growth has been much more valuable than having one or two high performance years, and we are optimistic about maintaining our consistent growth pattern.

I would like to take this opportunity to thank all COGO’s believers, employees, customers, partners and long term shareholders. We have provided COGO with the opportunity to deliver robust and sustainable growth in the past and going forward as we enter 2008. We believe we are in the right industries and the right markets to be able to capture and capitalize the tremendous opportunities in China. Management is committed to drive sustainable high growth in the next five years and providing significant returns to our shareholders.

Thank you again for joining this call. I look forward to talking with you soon. Thank you.

Operator: Ladies and gentlemen, this concludes today’s Comtech Group Incorporated annual audited results and 2008 guidance conference call. Thank you for your participation and you may now disconnect.

About Comtech Group, Inc.:
Comtech Group, Inc. (NASDAQ:COGO) is a leading provider of customized module and subsystem design solutions in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Comtech leverages these relationships and combines their IP to create designs that Comtech then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Comtech Group focuses on the digital media, mobile handset and telecommunications equipment end- markets for its customized design modules while also offering business and engineering services to its large telecom equipment vendor customers. Over the last eleven years, Comtech has grown its customer list to include more than 200 of the largest and most well known manufacturers across the mobile handset, telecom equipment and consumer markets in China, covering both multinational Chinese subsidiaries and Chinese domestic companies.