Automated Systems Holdings Ltd, the Hong Kong-listed arm of Singapore information technology (IT) firm CSA, plans to set up its first office on the Chinese mainland.

 

"Going to the mainland has become a trend," said the company's Managing Director Lai Yan-ting. "Many of our Hong Kong-based clients have relocated their productions to the mainland, South China in particular."

 

The firm is the latest in a line of smaller-sized Hong Kong players attempting to avoid a decline of the home market by taking advantage of the mainland's IT spending boom, analysts said.

 

Lai hoped the mainland business could contribute 20 percent to Automated Systems' turnover in two years, although it was still "in its infancy." The company this month posted a HK$757 million turnover from April to December in 2005, up 10 percent on a yearly basis.

 

Automated Systems, which offers IT-related services such as applications and software development, systems integration and maintenance support, is playing catch up with the "go-mainland" trend, Lai said. The 33-year-old company has offices in Macao, Thailand and Taiwan.

 

Though aiming high on the mainland, Lai said the company would expand its business gradually. It will start by receiving orders from existing clients and its parent.

 

"We should first get familiar with the marketplace," he said.

 

After that, the company will adopt diverse approaches to make it big.

 

"We may get assets injection from our parent CSA," Lai said. "Or, we may acquire rivals to grow bigger."

 

The company is in talks with several targets on a takeover, he said, although no deal has been finalized yet.

 

Automated Systems' move caters to the economic trend, said Andes Cheng, an analyst with South China Research Ltd.

 

"Rising numbers of mainland enterprises are now willing to spend more on information and technologies," he said. "That trend will only get more pronounced in the coming years, considering the mainland's economic growth rate and its efforts to climb up the added-value chain."

 

(China Daily February 15, 2006)