2023-03-31

(Hong Kong, 31 March 2023) Sinosoft Technology Group Limited (“Sinosoft Technology” or the “Group”, HKEx: 1297 ) announces the annual results of the Group for the year ended 31 December 2022.

 

2022 is a challenging year to the macro economy and the Group’s operations. With the recurrence of the COVID-19 pandemic, coupled with factors including intensified geopolitical conflicts and rising risks of global stagflation, economic growth of the PRC has fallen to its lowest level in many years. The difficult economic environment inevitably slowed down the market demand for informatization products and adversely affected the Group. The Group adjusted its business strategy in response to the market development, to focus on R&D in government big data products and services which have relatively stable demand, and exerted its advantages in relevant fields to sustain an overall stable income. For the year ended 31 December 2022, the Group’s revenue was approximately RMB 572.2 million, representing a decrease of approximately 2.4% year-on-year. Net loss was approximately RMB 153.7 million. Basic loss per share was RMB 12.50 cents.

 

Government Big Data Software and Related Services

For the government big data market, the downward pressure of the economy has caused government departments to reduce expenditures, budgets for informatization projects were cut, projects were postponed or even halted, and payment cycles were also affected. Meanwhile, rising labor costs added pressure on the Group. Despite the difficult operating environment, the Group is committed to leveraging its years of experience in R&D of government business and keep up with the pulse of market development, to provide customers with products that meet current needs and maintained stable income and market position in government products. For the year ended 31 December 2022, revenue generated from government big data software and related services amounted to approximately RMB 545.9 million, representing an increase of approximately 7.7% year-on-year.

 

Low Carbon & Ecology Software and Related Services

The current economic environment has brought a heavy blow to the low carbon and ecology market, and together with the decelerating pace of global carbon neutrality, budget of relevant products has declined. The Group will closely monitor the market development, to adjust strategies flexibly, and prepare for the future. For the year ended 31 December 2022, revenue generated from low carbon & ecology software and related services amounted to approximately RMB 26.3 million, representing a decrease of approximately 67.0% year-on-year.

 

Outlook

Looking forward, the Group will actively seek new growth points in response to market changes of the new stage, and at the same time intensify its intelligent R&D to increase the investment in R&D tools such as artificial intelligence and unified integration platforms, so as to improve R&D efficiency and reduce costs.

In the field of government big data, the “14th Five-Year Plan” Digital Economy Development Plan issued by the State Council clearly stated that by 2025, the added value of the core industries in the digital economy will account for 10% of the GDP, of which intelligent government service is one of the top ten digital application scenarios. The “Construction Guidelines for National Integrated Government Big Data System” issued by the General Office of the State Council also concluded the value and function of digital government capabilities during the pandemic, and emphasized the goal of establishing an integrated government big data system, which is to focus on the development of capabilities including government data governance, big data analysis, and security protection in the post-pandemic new stage. Therefore, the demand for government big data is expected to increase.

 

As government informatization applications are directly connected to government users, security and reliability are extremely emphasized in software design, which brings certain difficulties to the Group in undertaking business. Yet, along with extensively utilizing artificial intelligence and big data analytics technology, as well as the continuous evolution of policy concepts, the Group will focus on developing and upgrading solutions that have new technology integrated to application capabilities, as well as products with cross-system integration capabilities, to achieve greater market share and maintain stable revenue contribution.

 

Different levels of government service platforms in the PRC have consolidated numerous government systems and applications, and accumulated enormous valuable data resources. The Group will leverage its industry experience and advantageous position, to transform the accumulated knowledge in businesses including judicial, government services, and grid-based governance, and seize the opportunities of increasing demands, industry policy changes, and external technology upgrades targeting the national big data strategy and digital government construction. The Group will continuously upgrade its knowledge map, machine learning, and industry intelligent algorithm products to enhance product competitiveness, and increase investment in R&D of remote service integrated equipment to open up the new market of software and hardware integrated equipment at the same time.

 

In the field of low carbon ecology, the Group will continue to closely monitor market developments, adopt the most appropriate and beneficial strategy for the Group’s overall development, and strive for the best return in the difficult environment.

 

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