2017-03-30

(Hong Kong, 30 March 2017) Sinosoft Technology Group Limited (“Sinosoft Technology” or the “Group”, HKEx: 1297 ) is pleased to announce the annual results of the Group for the year ended 31 December 2016.

 

Benefited from the continuous development in informatization and ecological civilization, together with the increasing spending on information technology of the whole society, more market opportunities were brought to the Group. Under the favourable business environment, the Group proactively launched new products and intensified promotion in different provinces and cities that helped contributed to the solid financial performance. During the year ended 31 December 2016, the Group’s revenue reached RMB 518.9 million, representing an increase of 18.9% when compared to the same period in 2015, with all core business segments of the Group achieved continuous revenue growth. Net profit increased by 20.0% year-on-year to RMB 191.4 million, with net profit margin recorded 36.9%. Basic earnings per share was RMB 15.45 cents. The Board has recommended the payment of a final dividend of RMB 2.33 cents per share for the year ended 31 December 2016.

 

Tax Software and Related Services

For the year ended 31 December 2016, revenue generated from tax software and related services recorded RMB 134.7 million, representing a 10.9% year-on-year growth. In the first half of 2016, the Group experienced a trough in this segment of the business as a result of a series of reasons including the country’s replacement of business tax with value-added tax. The Group then proactively adjusted its strategy in the second half of 2016 and launched high-end customised services that was met with big demand by the market. At the same time, the Group also obtained tax related projects from regions outside of Jiangsu Province, including Qingdao, Shenzhen and Guizhou Province during the period under review. This not only marked an important step for expanding tax related business into other geographical markets, but at the same time, helped to contribute to the increase in revenue. With the completion of the change in tax regime, enterprises’ demand in tax software products resumed to a normal growth in the second half of the year, which helped to significantly improve the Group’s revenue generated from tax software and related services.

 

Carbon Management Solutions

During the year under review, the Group continued to promote its carbon management solutions to different geographical markets and enterprises, and launched various new products. This helped to drive up the Group’s revenue for this segment by approximately 14.8% year-on-year to approximately RMB 99.5 million for the year ended 31 December 2016, as compared to the same period in 2015. The Group’s carbon management solutions products have been sold to markets including Fujian Province, Inner Mongolia Autonomous Region, Chongqing and Lanzhou. Apart from low carbon related products, the Group also developed an environmental protection related business. During the year under review, the Group launched a pollution rights trading system, in response to the country’s development in the direction of payment and trading in exchange for pollution rights. The Group also launched building energy consumption monitoring system based on the policy of Internet + Building Energy Management. Both products successfully broadened the Group’s product lines and helped contributed to the revenue.

 

e-Government Solutions

The Group’s effort in developing and enhancing e-Government solutions in recent years has gradually bear fruit. For the year ended 31 December 2016, revenue generated from e-Government solutions recorded approximately RMB 236.0 million, representing an increase of approximately 28.8% when compared with the same period in 2015. During the year under review, different e-Government solutions continued to be sold to various regions outside Jiangsu Province, such as Beijing, Shanghai, Tianjin, Hebei Province, Gansu Province and Inner Mongolia Autonomous Region. Along with the continuous development in e-Government, the increased in such related spending helped brought about demand in upgrading existing products, which in turn contributed to the increase in revenue.

 

Outlook

Looking ahead, information technology penetrating to different parts of the society and personal life is already a megatrend. The Group has been focused in tax, low carbon and e-Government areas. With years of experience accumulated and possessing an in-depth understanding of these industries, the Group will continue to seek out opportunities for offering efficient and innovative solutions so as to bring about sustainable growth.

 

For tax software and related services, the Group will continue to leverage on its experience in export industry, understanding in customers’ demand as well as professional knowledge, to provide products and services in a deeper and wider manner. The Group is developing various software products related to invoice verification, customs clearance query etc., and planned to intensify the promotion of online training program. These coming products and services will no longer be restricted to specific region, which can help promote tax software and related services to markets outside of Jiangsu Province. For carbon management solutions, the Group will continue to promote low carbon products to different geographical markets. The newly launched pollution rights trading system which is related to environmental protection, matches the trend of national environmental protection policies and is welcomed by the market. As such, the product is expected to be replicated into more provinces and cities. For e-Government solutions, existing products will be promoted to markets outside Jiangsu Province continuously, with deepening applications to create demand for upgrade. Meanwhile, the cooperation with Alibaba Cloud and Ant Financial Services Group not only provides stronger platform resources and technologies, but also allows all parties to integrate their marketing resources and promotions more efficiently. In the long term, the cooperation represents a meaningful step for the Group’s products and businesses migrating to internet-based and seizing greater opportunities in the market. Riding on the development trend of new economy, together with the competitive edges and prospects in different core business segments, the Group will continue to strengthen its R&D and enhance its competitiveness, to prepare for greater growth in the future.