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ZSTN gains market share in "Lucrative GPS business"

|Includes: ZST Digital Networks, Inc. (ZSTN)

ZSTN makes headwinds in the GPS vehicle tracking system which are ordered by big corporate fleets (delivery companies) or government agencies looking to track their employees locations. The GPS business is more lucrative and should increase profit margins as well as cash flows.

Aug 10 (Reuters) - China's ZST Digital Networks (ZSTN.O) posted a better-than-expected quarterly profit, helped by higher demand for its vehicle tracking and fleet management systems, and raised its 2010 outlook, sending its shares up 30 percent.

For the full year, the company expects net income of $17-$19 million, on sales of $125-$130 million, from its previous forecast of net income of $13-$15 million on revenue of $115-$125 million .

Analysts on average were expecting net income of $19.21 million, on revenue of $123.35 million, according to Thomson Reuters I/B/E/S.

For the second quarter, ZST Digital posted a net income of $5.2 million, or 45 cents per share, compared with $2.6 million, or 30 cents per share, a year ago.

Analysts on average were expecting net income of 34 cents per share, on revenue of $30.6 million.

Revenue rose 40 percent to $33.0 million.

Revenue from vehicle tracking GPS products and related services was $6 million for the quarter, representing 18 percent of total revenue, the company said.

Shares of the company were trading up 21 percent at $6.44 Tuesday morning on Nasdaq. They touched a high of $6.90 earlier in the session. (Reporting by Vaishnavi Bala in Bangalore; Editing by Unnikrishnan Nair)