Question-and-Answer Session
Operator
Thank you, sir. We will now be conducing the question-and-answer session. (Operator Instructions) Our first question comes from Jeff Kessler with Imperial Capital. Please take your question.
Jeffrey Kessler – Imperial Capital
Good morning, Terence.
Terence Yap
Good morning, Jeff.
Jeffrey Kessler – Imperial Capital
A couple of questions, first, with new wins like Nanjing and Haimen City, how long does it take and what is the process for you to go from installation to servicing these projects and what types of services are you going to able to provide though these projects as they build up?
Terence Yap
As part of our overflow strategy most of these projects are really still one installation differences. But as we indicated in the call, when we complete the installation project we actually have a our full drop of future recurring revenue businesses such as maintenance of equipment and even providing upgrading of software and equipment as the City expects. In terms of the timeline itself, the project will actually lasts about two years, but right now at this point in time, we are splitting into different phases but as we complete Phase 1 we can recognize revenue from Phase 1 and financing with the local bank. So we anticipate that the revenues will start coming in 2010, especially for the Nanjing and also the Haimen City.
Jeffrey Kessler – Imperial Capital
Okay. Second question is, can you get a little bit more specific on your programs to rebound or reinvigorate several of the gross margins in the couple of your sectors that have slowed down a little bit?
Terence Yap
Well we are continuing to monitor the overall situation, as I mentioned the biggest challenge have taken by our team so far it’s related to corporate side, of going product or selling systems relations to the corporate sector. We have seen that the margins as still being impressed in the corporate sector, but we are somewhat happy and somewhat unsatisfied that the margins on a overall basis had stabilized, and they are going through increased little bit, going forward we will continue to focus more on larger government contracts, which the margins are much more further even the less competitive debt, and also given that a government is also paying a lot more pension, and ensuring the safety of the whole cities, but it does not mean that we will for go the corporate sector, because for every single corporate client that we get it tilt the customer base or else for future recurring revenue on the services business cycle. So hopefully, we see the beginning of the recovery in the gross margin, this quarter what kind of a probably in terms of a good results that end the margin stabilizing. We will continue to work on this, and we will continue to focus on largest government contract that at same time building the customer base for the future recurring service business.
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