SD77 and BSST holders11 Jan 2010 14:03
got a bit of news for you from today hot off the press. this will surge
Interview: BlueStar has banks covered
By John Harrington
Date: Monday 11 Jan 2010
When a chief financial officer tells you his company is looking to expand in ‘second tier’ cities and defines those cities as ones that ‘only’ have a population of ten million or so, it is a startling statement to the average westerner.
The chief financial officer in question is Romeo Kwok, and the company is BlueStar SecuTech, one of China’s leading video network surveillance solution providers.
It numbers among its customers the big names of the Chinese banking world, including the Bank of China, China Construction Bank, the People’s Bank of China, Bank of Communications, Agricultural Bank of China, plus HSBC, and most, if not all, of the smaller names you will not have heard of, thanks to government regulations that make police surveillance of banks mandatory.
BlueStar provides both network solutions – digital video recorders, cameras – and also surveillance command centres.
‘The network solution side is growing in tier one cities,’ Kwok said, explaining that tier one cities include the likes of Shanghai, with a population of around thirty million. ‘We share the revenue with the police commercial department. We never have any problem getting paid,’ Kwok joked, adding that the split is usually 66/34 in the police’s favour.
The banks are notoriously slow payers, however. At the interim stage, covering the six months to 30 September 2009, debtor days had increased to 405 days from 276 days a year earlier, due to an increase in the number of longer duration networking projects the group undertook. The full year results are likely to show a truer reflection of the company’s debtor position, as customers traditionally stump up in the final quarter of the calendar year.
‘Around three quarters of our revenue is generated from tier one cities. The civilian network platforms provide a large measure of recurring income that is very important for us,’ Kwok said.
On the subject of barriers to entry by competitors, Kwok cited the copyright it holds on the surveillance technology, which it is now leveraging in partnership with Samsung by selling BlueStar-branded surveillance equipment.
‘The margins will be lower in the retail channel but we are prepared to accept this to boost volumes. The real barriers to entry, though, are the political relationships we have developed more than the technology,’ Kwok said.
Nevertheless, the technology sounds impressive. The company has high hopes for its perimeter protection solution that could enable it to expand into the defence sector. ‘The technology can not only sense things that are there that should not be, it can also sense things that aren’t there that should be,’ Kwok enthused. ‘We can provide t
Sign In
Follow the stocks
