Chinese digital video surveillance specialist BlueStar, a domestic market leader, is growing fast in the banking sector and looking at other industries as well as international expansion for extra excitement.

Only 30% of the existing Chinese video surveillance market is digital at present, according to non-executive director Jeff Teo, which gives BlueStar a ‘significant replacement opportunity’ as companies upgrade systems. An additional driver for the banking sector is new legislation demanding that all ATMs and bank counters be monitored.

BlueStar doesn’t supply cameras (it will when a joint venture with JVC moves into production later this year) but the digital video recorders (DVRs) and software ensuring everything runs smoothly and securely. Presently, the top four domestic banks are all clients and BlueStar has signed new contracts with its largest customer, China Construction Bank, as well as a preferred-supplier deal with Bank of China covering nine provinces.

Among recent developments, Teo is particularly enthused by the clinching of a number of the increasingly prevalent networking contracts, making BlueStar likely to win repeat DVR business. Horizons were doubly expanded when the group stepped outside its banking stronghold by becoming a supplier to the Shanghai Stock Exchange and appointed 30-year industry veteran Romeo Kwok to steer an overseas assault.

As the year-end is moving to March, ‘second interim results’ have been published for the 12 months to December. These show revenues up 51% to RMB154m (�11m) and pre-tax profit ahead 18% to RMB53m (�3.8m). Strong cash flow kept cash balances stable at the �11m raised at IPO last June. Prospects look promising and, with a dividend planned for the full year, the shares have speculative appeal.

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