2018-03-26

Revenue reached RMB 601.0 million, representing an increase of 15.8% year-on-year

Net profit was RMB 229.7 million, representing an increase of 20.0% year-on-year

Net profit margin was 38.2%

Basic earnings per share was RMB 18.54 cents (2016: RMB 15.45 cents)

The Board has recommended the payment of a final dividend of RMB 2.78 cents per share (2016: RMB 2.33 cents) 

(Hong Kong, 26 March 2018) 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 2017.

With the continuous development of China’s informatization market, the focus of software products and solutions has gradually shifted to the use of data analysis and services. The Group, who is a leader in the application for data analysis in its main business areas, has provided innovative industry application software and data value-added services for government departments and enterprises. For the year ended 31 December 2017, the Group’s revenue reached RMB 601.0 million, representing an increase of 15.8% when compared to the same period in 2016, with all core business segments of the Group achieved continuous revenue growth. Net profit increased by 20.0% year-on-year to RMB 229.7 million, with net profit margin recorded 38.2%. Basic earnings per share was RMB 18.54 cents. The Board has recommended the payment of a final dividend of RMB 2.78 cents per share for the year ended 31 December 2017.

Tax Software and Related Services

For the year ended 31 December 2017, revenue generated from tax software and related services recorded RMB 153.4 million, representing a 13.9% year-on-year growth. During the year under review, despite the challenges brought about by the continuous economic and export slowdown, the Group flexibly adjusted its strategies to cooperate with large foreign trade integrated service providers, to offer comprehensive export tax rebate risks control solutions that cover their full business process, which achieved satisfactory results. Together with the new products launched in the second half of the year that were favored by the market, contributed to the growth for relevant revenue.

Low Carbon & Ecology Software and Related Services

As the Group’s low carbon related products and business has reached the area of ecological civilization, the name of this segment has been changed from carbon management solutions to low carbon & ecology software and related services, in order to better describe the nature of its current business. For the year ended 31 December 2017, revenue from low carbon & ecology software and related services amounted to approximately RMB 113.5 million, representing a 14.1% year-on-year growth. The Group launched products such as provincial low carbon cloud, ecology cloud, environmental rights trading platform, and low carbon transportation software. The Group also implemented low carbon & ecology management solutions in low carbon pilot cities and ecological civilization demonstration areas. Together with the upgrading demand for relevant cloud platforms and sales of carbon asset management systems to large corporations, contributed to the relevant revenue growth. During the year under review, the Group’s products for low carbon & ecology software and related services were sold to different markets beyond Jiangsu Province, including Inner Mongolia Autonomous Region, Jilin Province and Heilongjiang Province.

Government Big Data Software and Related Services
As the Group applies big data technology in its government related products and provides different services based on big data analytics, the name of this segment has been changed from e-Government solutions to government big data software and related services, in order to precisely describe its business focus. Benefited from profound business experience in the field of government services, as well as the ability to integrate business with big data and artificial intelligence technologies, revenue generated from government big data software and related services for the year ended 31 December 2017 amounted to approximately RMB 290.7 million, representing an increase of approximately 23.2% when compared to the same period in 2016. The scale of government projects obtained by the Group has greatly increased during the year under review. Revenue from government data analysis services and public service related products have also increased significantly. Under this trend, judicial and public security related products were sold to more than ten provinces and cities including Hebei, Tianjin, Gansu, Inner Mongolia, Hubei, Fujian, and Qinghai. Integrated solutions and products with cloud platform structure also received increased demand for upgrades.

Outlook

Looking ahead, along with rapid development of information technology in the entire society, nearly all activities in people’s daily life are generating data. Digging massive data for analysis and learning is currently a major development in the information technology area. The Group utilized advanced technologies such as big data analytics and artificial intelligence to develop application software products. These products are able to help customers to greatly enhance working efficiency, forecasting and alerting of potential problems, etc. In addition, innovative data applications can create new business ecosystems and open up more possibilities for the Group to generate revenue through its data value-added services.

For tax software and related services, in addition to solidifying existing foundation in export tax rebate related product, service and training markets, the Group will propel its tax business along with the trend of internet application, and extend its services from tax rebate to integrated services covering sourcing, trading, purchasing, customs clearance, and inspection, etc. On the other hand, leveraging on the advantages of in-depth understanding in business and capability in big data analytics, the Group plans to promote various trend analyzing services for export-related enterprises and financial institutions.

For low carbon & ecology software and related services, the central government’s emphasis on ecological civilization has reached an unprecedented height and targets for green, low carbon, cyclic development of different levels of governments will therefore become clearer. The Group will continue to target departments from different levels of governments to promote its products for carbon emission, ecological civilization monitoring and management, and environmental rights trading. In addition, with the support by relevant policies, industrial enterprises have a deeper understanding and higher demand for green transformations and upgrades. The Group will leverage on massive data accumulated from tens of thousands enterprises across the country to take the lead to develop industrial internet cloud platform with the theme of “green low carbon”, and connect with relevant financial, consultation, technology, product and equipment companies from upstream and downstream, to empower industrial enterprises by online and offline  services, so as to establish an internet platform economy, and to generate revenue from cloud-based application software rental and value-added services.

For government big data software and related services, gradual implementation of the national big data strategy has led to a new stage of informatization market with data value-added as the core. The Group, which has conducted in-depth research on the combination of big data applications and government business, has developed data sharing and business integration products and services that are highly synchronized with government informatization market development. The Group’s reputation and product influence in the government service industry are increasing. The Group will continue to leverage on its leading position in judicial and public security industry, to rapidly promote relevant products in different provinces and cities. For markets which have implemented relevant platforms, the Group will launch upgraded platform with more powerful analyzing ability and higher degree of automation through the use of technologies such as big data analytics and artificial intelligence, and strive to provide different data value-added services, so as to increase the proportion of recurring revenue. In addition, the Group will continue to replicate the model of “Yun Shang Jian Ye”, which is jointly developed with Alibaba Cloud, to promote one-stop “smart government” which integrates the Group’s products in various fields to different regions.

Leveraging on years of experience and in-depth understanding in the Group’s major business areas, combining the ability in integrating data analysis to applications, the Group will intensify its development in data value-added services on the foundation of continuous sales in application software products, to prepare for greater market and more rapid growth in the future.