Data-transfer device seen to triple sales as China goes 3G Sunlink International Holdings, whose shares have surged more than 400 per cent this year, plans to more than triple sales of gadgets that transfer data from vehicles to telephone networks, as the opening of the mainland's third-generation mobile-telephone market releases bandwidth from older networks. Sunlink's data-transfer machine, or 'black box', can collect data such as the driving speed, position and even weight of a vehicle and transfer it to a data centre through the general-packet-radio-service (GPRS) network for use by logistics or bus companies, or for storage and further analysis. The mainland is expected to issue 3G licences later this year, which means telecommunications operators will have GPRS bandwidth - at present devoted to 2.5G communications - available for vehicle use. 'After China opens its 3G mobile market, telecommunications operators have no need to shut down their 2.5G networks immediately but can target the data transfer market for transportation,' Sunlink chairman Andy Wong Shu-wing said. Sunlink also plans to boost sales by expanding in the United States, where it can take advantage of a sales network run by its second-largest shareholder, Fu Guang. 'We can use Fu Guang's 60,000 selling points in the United States to boost our overseas sales,' Mr Wong said. Fu Guang bought a 16.9 per cent stake in Sunlink for HK$40 million, or 12.8 HK cents per share, according to an announcement in February. Shares of Sunlink rose 67.76 per cent to close at 25.5 HK cents on February 23, its first trading day after the announcement. Fu Guang, which sells car parts in the mainland and the US, previously held 6.5 per cent of Sunlink and is now the second-largest shareholder with a 21.9 per cent stake. Sunlink launched its black box in 2005 and started to sell it under the Kenji brand last year. A unit with software for basic positioning functions may be priced at about HK$1,000, while one with value-added services such as a car alarm and remote-control by a handset may cost from HK$7,000 to HK$8,000. Mr Wong, who declined to disclose how many black boxes Sunlink sold in the mainland last year, said market growth would be very strong in the next two years. 'Mainland drivers are willing to pay more than 100 yuan a month to subscribe to data-centre services, especially if they work for the logistics or transport industries,' Mr Wong said. 'A bus company can cut costs if its control centre can easily relocate the buses by knowing their exact positions.' Profit from the company's electronic turnkey device solutions, including sales of black boxes and power meter modules, jumped 550 per cent to HK$23.5 million last year from HK$3.6 million in 2005. Sales grew 149 per cent to HK$284 million to account for 35 per cent of total sales, from 17 per cent in 2005. Sunlink's net profit surged 163 per cent last year to HK$25.3 million on a 20 per cent jump in sales to HK$808 million. Sunlink also plans to sell another product to the US market - a rear-view mirror with a video camera that lets the driver monitor the rear of the car when reversing. The company's increased profit from turnkey devices is helping to offset declining income from its semiconductor distribution business, where profit fell 7 per cent to HK$10.2 million last year amid fierce market competition. Sales also fell 7 per cent to HK$524 million. 'Although the semiconductor distribution market is quite competitive, we will continue to run this business in coming years,' Mr Wong said. 'We also want to sell more power meters to Chinese electricity providers, so they can automatically collect meter data through the wireless network.' The company, which outsources manufacture of its black boxes to a mainland partner in Dongguan, includes among its suppliers Wavecom, a French-based provider of wireless communication solutions for automotive, industrial and mobile professional applications.
