A 2 billion yuan (HK$2.23 billion) project between Shougang Concord Technology Holdings, a unit of Beijing-based Shougang Group, and Southern Media Corp will help transfer more than three million cable television users in Guangdong province to a digital platform with a clearer signal by the end of next year.

We will sign up with about 20 cities in Guangdong by the end of next month so that we can secure one million potential customers, said Liang Yuejin, an executive director at Southern Media. That number will double to two million at the end of this year and to 3.56 million next year.

Hong Kong-listed Shougang Concord Technology, which makes set-top boxes in Dongguan, last month partnered with the Guangdong government-run Southern Media to speed up the province's upgrade to a digital cable television platform.

Our customers are mainly located in second and third-tier cities in the province such as Yangjiang, Shantou, Chaozhou and not in mature markets such as Guangzhou and Shenzhen, said Hu Guang, a vice-president of Shougang Concord Technology. We will supply Southern Media with 1.25 million set-top boxes this year and 2.4 million units next year for the project. About 10 per cent of them are equipped with interactive functions such as information search.

In Guangdong, the monthly fee for digital cable telelvision is fixed by the government at about 25 yuan per user, 6.60 yuan of which will be paid to content providers. Shougang Concord Technology can keep 80 per cent of the balance, according to its agreement with Southern Media.

The mainland's cable television digitisation kicked off in 2001, targeting 30 million users by 2005.

Last year, Shougang Concord Technology turned a profit of HK$87 million, compared with a loss of HK$74 million in 2006, because of a disposal gain of HK$126 million. But operating loss widened 14 per cent to HK$81 million.

We plan to sell our loss-making printed circuit boards business for HK$200 million and photomask business for HK$400 million this year, said Mr Hu. Then we will focus on the cable TV project, the revenue for which is expected to account for 80 per cent of total sales this year.

Photomask is one of the tools for the production of semiconductors.

Mr Hu said the company might consider proposing a special dividend for the one-off disposal gains.

Shougang Concord Technology also plans to spin off its intelligent information business and list it on the A-share market in two to three years. It owns 99.7 per cent of Sino Stride Technology, a provider of energy-saving and access control solutions for buildings.