Huaxing Venture: Capture 3G Technology Service market

As a professional company in the field of communication technology services, Huaxing Entrepreneurship (300025) mainly provides mobile communication technology services and research and development, Sales test optimization system. After years of development, the company provides services and products have covered 29 provinces and autonomous regions nationwide, is the industry's most extensive service area of the enterprise, including Third-party mobile network evaluation and optimization services in the field of domestic top three.

Huaxing Venture Chairman Cheng said that through three years of efforts, and strive to make the company's communications technology services comprehensive ability to a step, while expanding the proportion of high-end services, to seize the 3G market share of technical services. And this listing fund-raising investment projects, will enable the company's next generation of test optimization system products in the domestic promotion.

Strengthen core strengths

Huaxing Entrepreneurship provides services mainly include the mobile Communication Network survey, evaluation, optimization, and so on, the products mainly include huaxing flywireless test optimization system, huaxing fly spire/guide Test optimization system. Company Development has formed three core competitive advantages, respectively, for the service technology advantages, "services + products" portfolio advantages and customer channel advantages.

The prospectus shows that China Star's fund-raising fund is to invest in "mobile communication technology Service base and service network construction project" and "New generation of mobile communication Network test optimization system development and production project" Two major projects, the investment is 7,115.240,000 Yuan and 4,710 910,000 yuan, the total investment of the project is 11, 8.2615 million Yuan.

Cheng analysis, the completion of the fund-raising project will enable the company to adapt to the future market demand, maintain technology leadership, so that the company's service scale expansion, quality of service and response speed greatly improved, product structure more optimization, product value-added and technical content higher.

The implementation of the mobile communication Technology Service base will enable the company to expand the supply of 2G and 3G Technical services and market share, provide human resource protection for the long-term development of the company's technical services, and the implementation of the new generation of mobile communication Network Test optimization system will expand the company 3G domain products, enhance the company's competitive strength

Earnings show, Huaxing 2007 years, 2008, 2009, respectively, the first half of the net profit of 13.8292 million yuan, 17.4393 million yuan and 8.8394 million yuan. GF Securities estimated that, 2009-2011, the net profit of Huaxing is 23.13 million yuan, 30.03 million yuan, 37.33 million yuan, the growth rate is 33%, 30%, 24% respectively.

Increase market share

Cheng that the current communication evaluation and optimization industry market concentration is low, but by the standardization of the industry, management model centralization, and telecommunications operators and the corresponding service providers to stabilize the relationship between the stability and other factors, market share will inevitably continue to focus on the dominant enterprises.

The Guangdong Securities Research newspaper pointed out that huaxing in the evaluation of optimization services and test optimization system in the market in the forefront of the industry. The future company will maintain a good cooperative relationship with China Mobile, will benefit from the growth of the industry and the company's market development. In addition, the company's business scope from the smooth expansion of operators to Huawei, ZTE and other major equipment providers, related income has a certain growth in space.

Guotai report also pointed out that the third party mobile communication Network evaluation and optimization service industry concentration is low, with the help of the capital market, Huaxing's share is on the rise. At present, there are about 400 domestic enterprises, of which less than 50 national enterprises. 2008, huaxing in the evaluation of optimization services and test optimization system market share in the forefront of the industry. Although facing Motorola, Beijing News, Zhuhai Ding Li competition, but the company has been involved in the 3G Network test optimization (3G services accounted for 20% in the first half of 2009), which for the follow-up 3G Network test optimization to provide technical reserves and experience, the launch of investment projects will be conducive to the company further expand market share.

At present, China is in the initial stage of commercial application of 3G technology, the huge investment of 3G network and the formation of the outsourcing trend of network operation and maintenance bring broad market space for the third party mobile network evaluation and optimization service industry. According to estimates, 2008, the domestic third-party mobile network evaluation and optimization service industry market capacity of 3.15 billion yuan, in the next few years, the market capacity of the industry will continue to grow to 2012 will increase by 57.78% to 4.97 billion yuan.

However, Huaxing also has a small size, high customer concentration and the risk of reliance on major customers. Combined calculation, 2009 1-June, 2008 and 2007, the company's sales revenue for China Mobile and its subordinate and subsidiaries accounted for 74.77%, 93.85% and 95.59% of the current operating income respectively.

(This source: China Securities newspaper author: Lin Yu)