AsiaInfo Announces 2022 Interim Revenue up by 15% and New Orders up by Over 30%

Highlights

• Overall operation achieved a sound growth momentum with new orders growth of over 30% year-on-year;
• Revenue amounted to approximately RMB3,109 million, up by 14.5% year on year;
• Revenue from Three New Business surpassed RMB1 billion for the first time in a half-year, up by 81.4% year on year, and its proportion to the total revenue increased to 32.3%;
• COVID-19 caused the delay in delivery and inspection of projects, creating short-term pressure on profits. Net profit² (excluding share-based compensation expenses) amounted to approximately RMB262 million;
• The net profit margin (excluding share-based compensation expenses) was 8.4%; and
• With the ease of the epidemic, the positive momentum in revenue growth will be maintained and net profit will restore its growth momentum for the full year.

HONG KONG SAR – Media OutReach – 8 August 2022 – AsiaInfo Technologies Limited (�AsiaInfo Technologies” or “the Company” and its subsidiaries (collectively, “the Group”), stock code: 1675.HK) is pleased to announce the unaudited consolidated interim results of the Company for the six months ended 30 June 2022 (the “Reporting Period”).

Despite COVID-19, revenue growth sustained and increased by 14.5% year-on-year

With the official release of The Plan for Development of the Digital Economy in 14th Five-Year Plan Period, digital economy development plans have been issued and implemented rapidly in various regions, and digital technology is being fully integrated into the economy, people’s livelihood and other key areas. Facing the trend of digital transformation in the whole society, in the first half of 2022, guided by the business strategy of “One consolidation, Three developments”, the overall operating results of the Company maintained a sound growth momentum.

During the Reporting Period, new orders of the Company increased by over 30% year-on-year. The revenue of the Company amounted to approximately RMB3,109 million, up by 14.5% year on year. Among them, the revenue from the Three New Business amounted to approximately RMB1,004 million, up by 81.4% year-on-year, and its proportion to the total revenue increased to 32.3%.

In terms of profits, affected by COVID-19, the entry, delivery and acceptance of several projects of the Company were delayed, resulting in short-term pressure on profits. Gross profit reached approximately RMB1,054 million, up by 5.6% year-on-year. Excluding the share-based compensation expenses, the net profit amounted to approximately RMB262 million. With the ease of the pandemic in various regions after June, economic activities gradually resumed, driving the sustained and robust order bookings and the improvement of delivery efficiency, and the Company expected to maintain a sound momentum of revenue growth and the net profit is to restore its growth momentum for the full year.

The Board, after taking into full consideration of various factors including Shareholders’ returns, profitability, cash flow level and capital needs for future development of the Company, had decided not to distribute interim dividend for the Reporting Period and proposed to maintain the dividend payout ratio guidance of not less than 40% of the net profit for the year 2022.

Three New Business maintained fast growth with business structure optimized remarkably

In the first half of this year, the Company continued to implement the business strategy of “One consolidation, Three developments”. While continuing reinforcing its leading position in the Business Support Systems (“BSS”) market, Three New business showed solid growth momentum, and has become the main driving force for the rapid growth of the overall revenue.

For the DSaaS business, the Company completed the acquisition of iResearch Consulting at the beginning of the year, enhancing the DSaaS and intelligent decision-making capability and optimizing the revenue structure. During the first half of the year, the proportion of the revenue from industries outside the communications industry increased to nearly 40%. Moreover, the Company continued to innovate business models. Among them, the results-based and commission-based charging model helped improve customer trust, satisfaction and stickiness and was replicated at multiple customers in scale in the first half of 2022, and its proportion to the revenue of DSaaS (excluding iResearch Consulting revenue) increased to nearly 30%. During the first half of 2022, the Company’s DSaaS business achieved a revenue of approximately RMB484 million, up by 56.7% year-on-year, and its proportion to the total revenue reached 15.6%.

For vertical industries and enterprise cloudification, in the first half of 2022, the Company continued its focus on the five strategic industries, widened its footprint in the industries of government affairs, energy, transportation, finance and postal services, and achieved significant growth in business scale. Among them, energy and government affairs industries achieved significant growth in revenue, representing a year-on-year increase of 4.6 times and 1.7 times respectively. In energy industry, the Company promoted replications of core solutions such as energy middle office and 5G private network in nuclear power, wind power, thermal power and other markets, supporting customers to eliminate potential safety hazards, enhance synergy and operation efficiency. In the government affair industry, solutions such as government affairs big data and digital government have become important engines of revenue growth. In the first half of 2022, thanks to the continuous expansion of new and old customers in the vertical industries and the steady development of cloudification business, the Company’s revenue from vertical industries and enterprise cloudification business amounted to approximately RMB271 million, representing a year-on-year increase of 140.3%.

For the OSS business, the Company actively supported customers to establish an efficient, intelligent, neat and collaborative network operation management system. By improving its R&D and innovation, the Company’s 5G network intelligent products continued to drive the industry. During the first half of the year, with the acceleration of 5G construction in the country, the Company’s OSS business scale grew rapidly and achieved a revenue of approximately RMB248 million, representing a year-on-year increase of 88.7%.

For BSS traditional business, the Company actively answered customers’ new demand through technological innovation, deeply participated in the planning and construction projects of smart middle office and digital intelligence-related solutions for the three major telecommunications operators, helped customers achieve digital intelligence transformation, and continued to consolidate market leadership. In expanding new market, the Company successfully delivered 5G business support system project for China Broadcast Network (CBN), quickly supporting its nationwide launch of 5G service with high-quality customer service, five months after winning the bid. During the first half of 2022, COVID-19 led to the deferral in orders delivery and inspection, resulting BSS traditional business revenue amounted to approximately RMB2,065 million.

Driven by R&D, product capability continued to enhance

The Company always attached great importance to the R&D and continued to strengthen the product capabilities. In the first half of 2022, the Company increased investments in R&D with R&D expenses (excluding share-based compensation expenses) amounting to approximately RMB473 million, representing an increase of 8.7% year-on-year and accounting for 15.2% of revenue. In the first half of this year, the Company continued to intensively participate in 20 international/ national standards organisations, including 3GPP, ITU, ETSI, IEEE, TMF and O-RAN, etc. In terms of intellectual property rights, the Company added 44 new software copyrights certificates and 9 new patents, and made 50 new patent applications.

Through continuous refinement and enhancement of product capabilities, the Company has formed a structure based on “Middle Office” product system to empower three major product systems of “Digital Intelligence”, “Cloud Network” and “IT”, which has effectively contributed to the rapid growth of Three New Business. In digital intelligent product system and cloud network product system, the Company is at the forefront of the industry. In IT product system, the Company is among the tier-1 domestic vendors. As to middle office product system, the Company has built the foundation for the digital intelligence transformation of the industry.

Accelerate business development to achieve the goal of 2025

Looking forward, with the continuous strong demands for digital transformation of enterprises that brought by digital economy, the Company will always adhere to “One consolidation, Three developments” strategy, continue to strengthen the consulting & planning, product R&D, implementation and delivery, system integration, smart decision-making, data operation, customer service and other full-stack digital and intelligent capabilities, perfect the close-loop offerings for customers, and unswervingly strive to make solid progress towards the goal of “achieving a business scale of over RMB10 billion in 2025, half of which contributed by the new business”.

In terms of Three New Business, the Company will accelerate the business development, further promote Three New Business as the core driver for the rapid growth of the overall revenue. Meanwhile, the Company will deepen business collaboration, especially the intensive integration with iResearch Consulting, so as to create business synergy. For our traditional businesses, the Company will pay close attention to the digital and intelligent transformation needs of telecommunications operators and the development opportunities of new customers, empower customers with innovative and advanced products and solutions, expand the business landscape, and improve the efficiency, thus further solidifying the leading position in the telecommunications operators’ market.

The Company is fully confident about the long-term development and believes that with the ease of COVID-19 and the improvement of online operation, the delivery efficiency will be substantially improved and short-term pressure on profits during the first half of the year will be relieved. Further, the Company expects to maintain a sound momentum of revenue growth and the net profit will restore its growth momentum for the full year.

Note 1: Three New Business refers to Data-Driven Operation (DSaaS), vertical industries and enterprise cloudification, and Operations Support Systems (OSS) business.
Note 2: To facilitate comparisons of the overall operating performance of the Company in different periods, the net profit is adjusted to exclude the impact of recognition of share-based compensation expenses caused by the time difference of granting share-based compensation.
Hashtag: #AsiaInfo

About AsiaInfo Technologies Limited

AsiaInfo Technologies Limited was founded in 1993, and successfully listed on the Main Board of the Hong Kong Stock Exchange on 19 December 2018. Riding on consulting planning, product R&D, implementation and delivery, system integration, smart decision-making, data operation, customer service and other full-stack digital and intelligent capabilities, AsiaInfo Technologies provides software products and related services of business transformation and digitalisation for communication operators and corporate customers in industries such as finance, energy, transportation, government affairs, and postal services.