ECSI scores China contract

ECSI scores China contract


China is proving a lucrative market for electronic security company ECSI, which has just received a $5.152 million order to provide software and hardware for China's National Alarm Response (NAR) system.

Earlier this month, ECSI completed a backdoor listing on the Australian Stock Exchange, after raising more than $13 million from a share issue and convertible note to help speed the progress of the Chinese contract. The deal is part of a 10-year exclusive contract to upgrade security for the NAR system, which is similar to Australia's 000 network, according to the company.

ECSI secured the deal through its wholly owned Chinese subsidiary, Electronics and Computing 21, which has an exclusive renewable contract with Beijing Jeton Yangtze Technology Company (Jeton) to supply and monitor the NAR system.

Originally owned by the state, Jeton was privatised by the former Director of the Ministry of Public Security, Lu Xiao Bing, who is now its majority owner and CEO. Lu Xiao Bing also has an 8 per cent stake in ECSI.

The $5 million order is the first in the contract, and represents around 5 per cent of the hardware and software needed in the cities of Beijing, Dalian and Chengdu, said Graeme Green, ECSI's CEO.

"This is the first of what will be a production line of regular hardware and software orders to get the system up and running across China," he said.

"We're pleased things are moving so quickly as there are healthy profit margins from the large volumes of hardware and software sales to set up the national security system, and then from ongoing fees from nationwide security monitoring."

Once the hardware and software is in place, ongoing security monitoring fees will account for most of the contract revenue, Green said.

The initial system target is around 10,000 NAR clients for each of 200 cities in China, according to Green. It will provide access control systems and streaming video and audio information directly to the Chinese Police Force centres, linking them to organisations such as banks, airports, government buildings and even military bases.

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