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Want to know how to profit off an industry set to grow fivefold in the next three years?

According to yesterday's South China Morning Post [SCMP], in China there are 9,000 companies that supply security and monitoring hardware, software and services. This market was worth USD 7bn last year - and should bulge to $33 bn by 2009, because:

* An ever-developing economy requires more surveillance;
* The 2008 Olympics will require surveillance spending of $6-12 billion, as may the 2010 World's Fair in Shanghai, and
* The Government has changed various laws, meaning that more surveillance equipment and services are mandatory kit:

- On 18th January, Ordinance 458 decreed that all entertainment halls must have video monitoring equipment by 1st March;
- Other ordinances require that the following groups get surveillance equipment:

+ 28,000 coal mines;
+ all justice departments and courts;
+ street surveillance for 660 cities, and
+ retail stores in Xian, where surveillance gear has to be installed before licenses can be granted.

Money-making implications: Buy US-listed China Security & Surveillance Technology (CSSTF), GE (GE) and Honeywell (HON). China Security is obviously much tinier, and seeks to become a dominant player in this niche. This means that its profits will be affected most by the developments in this particular industry.

CSSTF 1-yr chart:

CSSTF 1-yr chart

Source: Chinese Surveillance Industry Set to Expand Five-fold: How to Profit