2017-08-22

Sinosoft Technology Announces Interim Results 2017

Revenue increased by 16.9% to RMB 239.2 million

Net profit climbed 12.6% to RMB 75.2 million

Revenue reached RMB 239.2 million, representing an increase of 16.9% year-on-year

Net profit reached RMB 75.2 million, representing an increase of 12.6% year-on-year

Net profit margin recorded 31.4%

Basic earnings per share for the six months ended 30 June 2017 was RMB 6.07 cents, as compared with RMB 5.39 cents* (restated) for the six months ended 30 June 2016

*The Group distributed 1 bonus share for every 5 existing shares based on the 1,032,258,000 ordinary shares in issue as at 19 September 2016. For the purpose of comparison, the 206,451,600 newly issued shares have been regarded as if those shares were in issue since 1 January 2016. Earnings per share for the six months ended 30 June 2016 was restated accordingly.

(Hong Kong, 22 August 2017) Sinosoft Technology Group Limited (“Sinosoft Technology” or the “Group”, HKEx: 1297 ) is pleased to announce the interim results of the Group for the six months ended 30 June 2017.

During the first half of 2017, informatization continued to develop. Under the backdrop of increasing labour costs, enterprises were keen to enhance efficiency through information technology. Customers’ demand for the Group’s products increased accordingly. For the six months ended 30 June 2017, the Group’s revenue recorded a year-on-year growth of 16.9% to RMB 239.2 million. Net profit reached RMB 75.2 million, representing an increase of 12.6% year-on-year. Net profit margin recorded 31.4%. Basic earnings per share was RMB 6.07 cents.

Tax Software and Related Services

During the period under review, the Group adjusted its strategies in order to combat the challenges brought about by the continuous economic and export slowdown. Apart from providing tax software and related services to enterprises, the Group also cooperated with a large foreign trade integrated service provider, to offer comprehensive export tax rebate risks control solutions. Revenue from tax software and related services recorded approximately RMB 54.6 million, representing an increase of approximately 3.8% when compared with approximately RMB 52.6 million for the same period in 2016.

Carbon Management Solutions

Under the backdrop of continuous propelling energy saving, environmental protection and ecological civilization policies, together with the soon to be launched national carbon trading market, demand for carbon management solutions from different administrative levels and enterprises is strong. During the six months ended 30 June 2017, the Group has implemented carbon management solutions in 4 low carbon pilot cities, driving the revenue in this segment to surge by approximately 70.7% to approximately RMB 38.2 million, as compared to approximately RMB 22.4 million for the same period in 2016.

e-Government Solutions

For the six months ended 30 June 2017, revenue generated from e-Government solutions achieved approximately RMB 123.6 million, representing an increase of approximately 19.4% when compared with approximately RMB 103.5 million for the same period in 2016. During the period under review, the Group’s signature products of judicial and security related platforms continued to record strong sales. Clients for judicial products covered all administrative levels from the Central Government to provincial and municipal governments, as such, national layout for judicial products expansion was achieved. Along with the Central Government’s intensifying demand in informatization management capabilities, e-Government solutions is entering into a prosperous period. The increased in such related spending helped bring about government agencies’ demand for new products as well as upgrading of existing products, which in turn contributed to the increase in revenue.

Outlook

Looking ahead, since informatization has been taken as a strategic measure for China’s reformation in governance, the growing demand for information technology from government agencies, enterprises and citizens which leads to an increase in market demand for application software will bring many business opportunities to the Group. For tax software and related services, the Group will continue to leverage on its competitive edges, and break the boundary of software products by implementing internet capabilities and cloud computing technology into new products, to provide all-time accessibility and wide coverage internet-based products and cloud-based services.  For carbon management solutions, the Group will seize the opportunities from the national carbon trading market which is expected to be launched soon and promote its abundant carbon management product lines to different geographical markets. Apart from the carbon management related platforms, the Group’s pollution rights trading system series has set the benchmark for the industry and is being pursued by many provinces and municipals and is expected to obtain a huge market. For e-Government solutions, the Group will continue to enhance features in judicial and security related platforms. With the intelligent judicial products, which have spread out its national expansion layout in the first half of 2017, the Group will further apply its capability in big data analysis, to plan a series of extended innovative products to promote in different provinces across the county. Riding on the trend of informatization, 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.