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UPDATE 1-TechFaith gets phone contract from Chinese govt |
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Mobile phone software developer China TechFaith Wireless Communication Technology Ltd (CNTF.O: Quote, Profile, Research) said it received a contract from the Chinese government to develop phones for police forces in two provinces, triggering a 25 percent rise in its shares.
The contract opens up new opportunities for the company to diversify its revenue sources in the booming Chinese security industry.
"This is their first government contract and I think investors see it as a new market opportunity for the company," Jefferies & Co analyst Brian White said by phone.
Susquehanna International Group analyst Adele Mao said she felt encouraged that the company had made progress in diversifying its revenue sources, especially in high-growth areas such as public security.
The pocket PC cellphone's features will include global positioning system, ID scanner and other features, the company said.
Such contracts are controversial in the United States, as congressional critics have accused American companies of providing technology to help the Chinese government keep close tabs on dissidents.
The company did not provide any financial terms of the contract, but said the initial shipment was expected in December 2007.
White expects the revenue from the contract could reach $2.5 million in the current year with the potential for sales of at least $10 million in 2008.
Shares of the Beijing-based company were trading up $1.69 at $8.00 in morning trade, making them the third biggest percentage gainers on the Nasdaq.
Submitted Date: Oct 18, 2007
Source: Reuters
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