DMX Technologies (DMXT.SI) is riding high on its expansion in China’s digital media market, benefiting from the Chinese government’s move to force cable operators to switch from analogue to digital content by 2015.

The technology firm that offers software solutions to cable TV providers and telecommunications firms, is confident that its revenue will rise by 20% this year, up from US$190.4 million ($251.8 million) last year, said CEO Jismyl Teo in an interview. 

 

DMX is offering cable operators the software needed to migrate from analogue to digital. The firm aims to gain 18% of the estimated US$2.5 billion software and hardware slice of the digital media TV cable market by 2015.

 

Being an early market entry player, the firm has high hopes for its digital media business in China and expects revenue from this sector to increase up to 30% this year. 

 

She expects the number of subscribers signing up with cable TV operators, who do business with DMX, increasing 7 fold from 4 million to 30 million within the next 5 years.

 

"It will be the fastest growing segment for us due to the take up rate in China. Our objective will be looking at the digital media business contributing more than 50% of our total revenue," Teo told Reuters.

 

"I am quite sure we can achieve that because we were in the market early and we have build a strong base with cable operators in 10 over consolidated provinces ranging from Shanghai, Nanjing, Beijing and Qingdao." Teo said. 

 

The firm, which has a market cap of about US$441 million, reported earnings of US$58.6 million in the second quarter, a rise of 20.1% from a year earlier, with China accounting for over 70% of sales.

 

DMX also entered into a joint venture last December with Japan’s second largest telco, KDDI (9433.T) to develop a one stop solution service that converges all three networks, broadband, mobile and internet. 

 

DMX also expects revenue from its infrastructure segment to grow 10 to 15% due to increased sales from its managed services business that mainly provides security solutions to clients. Demand is strong from South Korea and Indonesia.

 

DMX share price was down 3.2% in afternoon trade, but rose 26% last week following news that its  American Depository Receipts will begin trading on Sept 23.