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Beidou System brings new Opportunitise to GPS Industry

2010-09

Satellite navigation is included in the new industry of the "second Five-Year" plan, the draft has been prepared currently. Future research and development of satellite navigation technology application will be placed in an important position,and independent technology development will become a priority. Special management of China's satellite navigation system, the Director of the Office Ran Cheng said that once the application of relevant technology is mature, the Chinese satellite navigation industry will enter a blowout period, annual growth will be far higher than the current 50%, in 2020 the output value of China's navigation market will be far more than 400 billion.

Industry analysts believe that in the early industry growth period, chip and terminal equipment providers in the upstream industry chain will have the right to speak the industry, the enterprise whose main business is chip and navigation terminal are expected to benefit most.

Fully supported by Policy and Funding
National Development and Reform Commission Industry Secretary,Chen Bin said, on September 2, " Industrial Structure Adjustment and the Guiding Catalogue(2010 version)" (draft) has been completed and will be strategic in cultivating new industries and will make significant progress. Under the current policy, encouraging investment projects in "Catalogue" will be in accordance with relevant state regulations for approval, approval or filing; all financial institutions should provide credit support in accordance with the principles of credit; some of the equipment will be exempted from customs duty and import VAT. Industry sources, this means that in the framework of the industrial restructuring directory, strategic and emerging industry in the future will be in financing, taxes, etc. fully supported.

Not long ago, vice president of the NDRC Macroeconomic Research Institute Wang Yiming has revealed that, now seven aspects of the emerging industry more agreeable by the parties are, namely, energy saving, new energy, new generation of information technology, bio-industry, high-end equipment manufacturing, new materials, new energy vehicles.

Satellite navigation industry is undoubtedly an important new industry members.At the "Shanghai International Intelligent Transportation and Industrial Technology Development Forum Navigation" on 1 to 2 September, Qiang Xiaozhe, the Director of the High Technology Development & Industrialization Information and Space in the Ministry of Science said, satellite navigation is a new industry included in the space of marine development, "second Five-Year" plan,and the current draft has been prepared, the state will vigorously support the development of independent technology to support interoperability compatibility among multiple satellites, support and encourage the development of a number of satellite navigation products.

It is understood that the Ministry of Industry, Science and Technology, Ministry of Finance and other departments are involved in the formulation of the plan. To encourage the development of China's satellite navigation industry, the competent authority has planned to increase support. Finance, for example, on the one hand to expand direct financing, guidance and support eligible companies listed overseas; on the other hand, Science and Technology, Ministry of Finance will provide the major special funds to support the financial support of the relevant companies.

Rapid growth of industry development
China Global Positioning System Technical Application Association Centre Cao Chong pointed out that "China's Beidou navigation system has been into the GNSS, to become one of the four systems, and industry has entered a new stage of development. Satellite navigation is both a sunrise industry, at least the next life cycle of fifty years; and high efficiency with high growth characteristics, is a small investment, big output typical. "
The Director of the Special management of China's satellite navigation system Office,Ran Chengqi said, the Chinese satellite navigation and development into high-growth period of the future can be expected blowout.
Shanghai Gaode Software Company CEO Cheng Congwu said, China's Beidou navigation system to further promote the rapid growth of the country industrial scale which in 2012 is expected to reach 1,000 billion yuan, will reach 4,000 billion yuan by 2020.
In this regard, Ran Chengqi thinks, "This is a conservative forecast according to compound annual growth rate of 20%. In fact, the satellite navigation industry maintains 50% annual growth, from 4.0 billion in 2003 up to present more than 500 million, 2009 annual growth rate even more than 80%. "

A number of listed companies benefit from
Affected by this news,on Sept. 3, the satellite navigation industry stocks such as the united Si Zhuang, BDStar, Guoteng electronics and China satellites all have good performances.
Brokerage analysts believe that even though the performance of related stocks have been good, but the short-term opportunities for such shares may still exist, first,the satellite navigation is a sunrise industry, whose future life cycle is long and development space of the industry is huge; the second is the satellite navigation feature of high efficiency and high growth ,small input, large output; the third is the recent market speculation in the small cap stocks extremely strong, continuous pulled up the main features.Investors are advised to take an active interest.

The industry believes that the four market segments of satellite navigation industry will enter a high growth. The one first is high-end manufacturing, including navigation chips and modules, a wide range of communications chips and modules, receiver components, display devices and machine integration; the second for the software industry, including system software category, navigation and positioning software timing , map engine with a variety of embedded application software, etc.; the third is related to the modern service industry and navigation; the fourth for the integrated data industry.

Analysis of CSC's report believes that in the early growth period of Beidou industry, chip and terminal equipment providers in the upstream industry chain will have the right to speak, the company ,including the Guoteng electronics, BDStar, united Sizhuang, whose main business is chip and navigation terminal are expected to benefit max. With the promotion of downstream applications, substantial growth in the number of users and scale to enhance the industry will gradually transfer the right to speak to the downstream service provider.
CITI analysts believe that the from the the Ministry of Science officials' statement before and the definition Premier Wen made early on the strategic new industries, the state's determination to support the navigation system is very clear that there is a case more firmly optimistic about our long-term satellite navigation Theme investment; from the view point of the market attention, the recent share price are being sought related to listed companies, so we can see that the market for satellite navigation and future.