Eastkit Electronic Technology (Shanghai) Co. Ltd, located in Xinzhuang Industrial Zone of Shanghai, is subsidiary of Mitsumaru East Kit (Holdings) Limited which is listed in Hong Kong Stock Market (stock code 2358).  Relying on its unique “Eastkit model”, this company has been keeping its business performance healthy and continuously upward for many years.

Ever since it was founded in 1999, the company mainly focuses on providing Single-Stop-Shop solution on manufacturing of TV and other AV equipment, including such services as design, development and sales of TV circuitry board, procurement, quality inspection and logistics.

As is known to all, color TV industry is intensively competitive. The fast changing technology has sped up the updating and upgrading of products, while price competition between major TV manufacturers has never witnessed a pause. After many years of market shuffling and combining, those enterprises that are still able to survive in this industry need not only maintain their current scale and power, but also consider remodeling business, concentrating resources distribution on high value-added area. To this aim, quite a few enterprises have begun outsourcing part of their business to achieve an optimum equilibrium point between cost and profit. This has provided tremendous market and opportunities for solution providers with research and development capability. Hence, EastKit Model, the fruit of Eastkit’s business wisdom, emerged to meet this demand.

EastKit Model employs an asset-light strategy, mainly specializing in second development, IPO, global sales, etc. EastKit’s strategy is to channel its advantageous resources primarily into R&D and industrialization of R&D achievements, which is a value chain creating high added value. The production value chain with low added value is outsourced to other factories with comparative advantage, but still subject to strict requirement and technical specification. The final finished products will be inspected, packed and delivered to locations designated by customers, in kits in CKD Completely Knocked Down format. The feature of this model is that only limited fixed asset and human resources are needed with a focus on control system design, component purchasing. In this way, the company functions as a bridge between components manufacturers (semiconductor companies, for instance) and color TV manufacturers. Benefiting from this successful positioning of asset-light model, eastKit Shanghai has been ranked among the top 500 enterprises with highest ndustrial sales revenues in Shanghai. In the year of 2002, EastKit Shanghai ranked 12 in Shanghai’s enterprises with high profit per capita.

The key to EastKit Model’s flourishing business is its leading technology. IC as the key component of TV circuitry board has a direct impact on TV core research and development speed. During the past ten years, EastKit has steadily sped up its R& D from the initial state with its own IC for TV core to the age of joint development with IC provider. Cooperation between EastKit and Philips is a typical example. Philips does not allow users access to the source code of UOC software, unless customers buy GTV development software from Philips. For this reason, big TV manufacturers in China, such as Changhong, TCL and Konka, employs Philips to design software. The only work they do is to specify the requirements and inspecting the final product. In order to master the key technology of UOC software development, EastKit spent huge amount purchasing GTV development software from Philips and dispatched two software engineers to Philips UK for technical training. Up till now, only two domestic companies have bought this software and EastKit is the first. The result is, from MOC-A , the first UOC project, all UOC software of EastKit is programmed entirely by EastKit’s own engineers. The harmonious cooperation between EastKit and IC providers has not only accelerated IC new products testing, but also ensured that EastKit could release the most up-to-date IC together with its new circuit board, thus consolidating its position as market leader.

EastKit boasts of a very strong R&D team. Talents are treasures of EastKit. In China, training a software engineer with independent development capability is time-consuming. Besides, the dull and tedious design process and special requirements for programs simplification to save IC space have made excellent software engineers the rarity of rarities. Each year, EastKit would recruit excellent graduates from key colleges and universities to join the company and provide a series of learning-in-practice training. Bold innovation on development and research is also encouraged. In addition to its emphasis on engineers training, EastKit has also continuously created opportunities to facilitate mutual help, mutual learning, experience sharing and pass-on between engineers. It is the most precious that many engineers of EastKit come from large color TV manufacturers with experience for mass production. Thus, the circuitry board designed by them are not only leading in technology, but also applicable to mass production. Thus not only the testing and modifying cycle of the products is shortened, but also the research cycle. Savings made in detailed process, in cost or time consumed, are accumulating precious wealth for EastKit.

Meanwhile, to provide most up-to-date and cost-efficient products with cost advantages to customers, functional divisions of Eastkit are linked to each other closely. Engineering department often consult purchasing and sales department for the latest market information about components and parts, and about development stage of semiconductor, striving to get customer orders for Eastkit circuitry board with lower cost, better enhanced and optimized functions by decreasing the number of components and parts needed, and improving their performance.

Apart from these, the Eastkit emphasizes Custom-tailored design, taking into account the real situation of different areas and countries. For example, Cuba is a country with energy shortage, so the color TV set designed for Cuba should be power-saving — total power consumption shall be reduced to less than 80W and standby power consumption less than 3W. Since power supply in Cuba is unstable, the TV should be enabled to keep working on AC70V power supply. Since equipment in Cuban TV station is out-dated, with low signal receiving ability and without CATV, what is more, it is easily susceptible to interference from both inside and outside the TV set, TV sets used in Cuba require higher image-receiving sensitivity and strong anti-interference ability. Another example, Indians area accustomed to gathering together to watch TV with TV set placed in open air. TV sets designed for them need to have high-volume. To facilitate communications, the company has established various cross-country joint labs for overseas customers, where engineers from Eastkit co-work with engineers from overseas customers and jointly develop products which can be used in various countries and regions.

If we say the Eastkit Model has successfully set up a comprehensive business platform, by sticking to “No Brand” strategy, it also makes its business model more adjustable, which can be operated with skill and ease. The company does not have its own private brand but positions itself as a neutral service provider, thus avoiding competition with customers. Compared with pure components and parts providers, Eastkit offers more service to customer, ie. custom-designed advanced circuitry board according to particular requirements. Besides, it also functions as a RESERVIOR by coordinating and balancing customers’ different demands in peak season and off-peak season.

The company’s products are not only sold to China market at its base, but also to overseas. Widespread sales network has been set up worldwide, including Asia, Europe, North America, and Australia, with a very good reputation. Lots of name brand home appliance and consumer electronics products providers such as Konka, Panda, Hisense, NEC, Videocon, Grundig, JSA (Videofon) are all long-term and stable customers of the company.

Eastkit has the honor to make contribution to foreign affairs of our country, to the pride of the whole company. the core TV technology developed by EastKit Company is utilized in a project of China donating 1 million TV sets to Cuba, under the care from both comrade Jiang Zemin and Castro, Cuba President. The auxiliary components and parts are also provided by Eastkit. As a national project, Cubans sets high standard for image and audio quality. They took one LG sample TV from Cuba, regarded by them as the best TV in Cuba’s market, demanding that the TV developed in Eastkit must reach or surpass this sample TV set both in performance and functions. After more than one year’s hard efforts since 2000 with numerous repetitive experiments (such as reliability experiment, environment experiment, electricity/light/audio/color experiment, mechanical experiment) carried out by Panda, even some field experiment on receiving Interference conducted in Cuba, the design was finally accomplished. The TV sets were manufactured by Panda Group. The AQL (Acceptable Quality Level) rate is the highest in record. The EFR (Early Failure Rate) and replacement and repair rate of the TV set used in Cuba are also very low, even lower than the color TV sets manufactured by Japan and South Korea. For this reason, this TV model was highly acclaimed by Cuban people. Early 2003, when Castro visited China, he paid a special visit to Panda Company and expressed the appreciation from Cuban government, “one million thanks to China, one thank for each color TV set.”

By May of 2003, all 1 million TV sets for Cuba have been shipped out. Due to its reliable quality 1.3 million more TV sets are exported to Cuba upon request from Cuba government.

Since Eastkit Electronic Technology (Shanghai) Co. Ltd was founded five years ago, nearly all profits have been re-invested. The registered capital has increased from the original 1 million US dollars to the current 5.48 million dollars. Sales revenue in 2003 exceeds 300 million, the net profit being 37 million. With gradual increase of business, at the end of 2003, the Group employed foreigners with management expertise in international enterprises as company leaders for reform. The company has absorbed advice of various professionals and restructured its organization, in order to gradually internationalize and normalize its operation, making it more transparent and market-oriented.

With the quickening of development pace after its mother company’s IPO in overseas stock market, the platform created after EastKit Model will mature and optimize itself gradually, which not only works well for providing color TV solution, but also for providing other similar Audio-Video products solutions.

It is commonly agreed that there is no sunrise industry but sunrise enterprise. Eastkit Electronic Technology (Shanghai) Co. Ltd strives to develop new technology and optimize its operation model with a spirit of continuous innovation so that the company can continue maintaining a healthy growing momentum.