BlueStart SecuTech, a provider of digital video surveillance solutions in China, lost a third of its share price after pre-tax profits plunged 87 per cent in the year to the end of March.
Profits declined from RMB 37m to RMB 5m after revenues fell 17% to RMB 176m (March 31: RMB 213m). The gross margin dropped from 53% to 51%, while the gross profit dropped 20% from RMB 113m to RMB 90m.
The company said the results reflect its customers' general delay with their projects, which resulted in a decrease in orders of DVR and surveillance solutions.
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Investment in research and development went ahead as planned, totalling RMB 19m (2011: RMB 20m).
In a statement the firm said: "The general recent financial downturn that affected business confidence has had a negative effect on the surveillance industry and we have suffered a disappointing year.
"Our revenue and profits were less than the previous year. We continue to focus our business in the banking, police, and government security agency sector and continue to provide high quality software, products and services to our quality customers.
"Despite the general downturn we have been able to win some major contracts throughout China and achieve new orders.
"The company believes the financial year 2013 will still be another challenging year for its business, although we continue to win new contracts and new clients. The company intends to increase its revenue in two ways: one is to develop the sales channel by expanding the sales team; the other is to continue to win more banking clients. We hope to createa firm foundation for the year through with this hard work."
The share price fell 33.33% to 6.50p by mid afternoon.
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