Chinasoft's Result Achieved High Growth -- Jointforce to Contribute to Internet+ Era

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Mar 31, 2015, 11:59 ET

BEIJING and HONG KONG, March 31, 2015 /PRNewswire/ -- Chinasoft International (hereinafter referred to as "Chinasoft" or "the Group") announced its financial results for fiscal year 2014. In 2014, the Group's service revenue, operating profit, and net profit attributable to equity shareholders was RMB 4.15 billion, 380 million, and 200 million respectively, realizing a YoY growth of 35%, 51%, and 35%. During the reporting period, the Group's net operating cash flow improved significantly, from a deficit of RMB 61.04 million to positive cash flow of RMB 74.80 million.

In 2014, individual lines of businesses have achieved favorable growths, noticeably in the research and development and promotion of Jointforce, Huawei, mobile, and cloud services.

I. Create an Internet based Crowd-Sourcing Cloud Ecosystem

During the reporting period, Jointforce, a crowd-sourcing platform based on cloud, continued to be perfected. Jointforce entered its beta testing in early May of 2014, and publicly debuted at the annual Ali-Cloud conference, creating a buzz across the industry. On December 12 and 16, 2014, the Group officially launched the Jointforce platform in Beijing and Hong Kong respectively, signifying Chinasoft's resolve to transform into a platform enterprise. At the end of 2014, Jointforce had over 8,100 registered developers, with nearly 700 live projects. The effects of micromanagement which increased management efficiency and lowered costs became apparent. As more of the Group's business lines migrate to Jointforce, the Group is seeing its internal resource management becoming more dynamic, and its incentive programs more appropriate. Both management and employees now have more reason to be confident for a better working environment while increasing productivity.

As of 31 March 2015, Jointforce platform is expanding rapidly with more than 27,000 registered developers, of which more than 10,000 developers are external users. The Group believes that the supply and demand of IT services is closely related and will help each other grow. The platform will fulfill the service promise of "fast completion" of projects, starting with creating a community of developers. Then, the Group will invite 100 recognized enterprises to sign up and post jobs onto Jointforce (goal during beta launch). Now, there are over 200 registered enterprises on Jointforce, of which 40 of them have posted jobs onto the platform, showing the market demand for "fast, trustworthy, and affordable" IT services.

II. Strategic Cooperation with Huawei Enterprise Business Line to Drive Innovation

During the reporting period, the Group continued to improve overall operation of Huawei related business, registering a growth of more than 88%, with steadily improving margins. The Group and Huawei signed a strategic cooperation agreement for Chinasoft to become a Gold Agent for Huawei's enterprise business line, and joining Huawei on its new goal to penetrate into ICT services industry. In the current phase, the Group is focused on having joint innovation in cloud infrastructure solutions on the enterprise level. In 2014, Huawei and Chinasoft jointly developed a new generation of tobacco manufacturing execution systems. These projects were also related to Ministry of Industry and the Internet Innovation Alliance on the front of Industrialization 4.0. For this, Chinasoft received Huawei's "Innovative Solutions Award." In the new environment of building a "secure, reliable, and self-controlled national information" strategy, the Group sees a tremendous potential through the full-on cooperation with Huawei, combined with the Group's own market insights.

III. Continue to Improve Cloud Presences in Different Industry and Contribute to Internet+

As the first Ali-Cloud Ecosystem commercial partner, Chinasoft currently has a full range of Ali-Cloud Ecosystem technical capabilities. The Group provides cloud consulting, design, solutions, planning, integration, application delivery, migration and other cloud services. During the reporting period, the Group worked closely with Ali-Cloud and completed the very first of Ali-Cloud's "Digital China" project by signing the "Cloud Above Guizhou" project (which came after the Lishui project). Furthermore, the Group signed a strategic cooperation agreement to develop e-government operation and big data platform (for public services) in Guizhou province on the Ali-Cloud.

In terms of expanding the Group's oversea cloud business, Catapult's "Solutions as a Service" has gone through a number of break-throughs and now has FUSE, an Intranet as a Service product. "Solution as a Service" received praises across the industry and earned high recognition from Microsoft. In 2015, Microsoft cloud services will push heavily in the enterprise-class projects, and on this front, Catapult's Solution as a Service is very much in line with Microsoft's objectives. In the most recent period, the sales for Microsoft Azure have surpassed the sales of Amazon cloud, giving bright outlook for the Group. Furthermore, the Group is actively putting together an elite level team to understand and learn from the American enterprise cloud market to transfer that knowledge back to the Chinese market and expand its cloud markets.

In 2014, the Group continued to work closely with China Mobile. Chinasoft successfully won the renewal of the China Mobile Fetion wireless project, the China Mobile unified communications project, the China Mobile 139 mailbox project, and the China Mobile unified payment platform. The company actively cooperated with China Mobile's three new ("New Voice", "New Info", "New Connection"). The Group is working with China Mobile on its proposed unified communications strategy on multiple fronts: the planning, drafting of specifications, designing and developing the software. Chinasoft has become the core service provider due to its leading mobile R&D in instant messaging capabilities and the scale required for large projects, marking its position in a mobile era.

In 2014, the Group signed a strategic cooperation with the Ministry of Public Transportation Management Research Institute to collect traffic big data and use scientific methods and new technology to manage, harvest, and analyze the big data. This is the true definition of the future of public transportation big data application.

The Group also signed with WeBank to build a system to access product card organizations and data preparation system. The successful signing with WeBank (considered as the representative of Internet Banks) set a good precedent and helped lay a solid foundation for the Group to enter into the Internet finance business.

Looking into the future, the concept of Internet+ has been elevated to a national policy, and the Group will take full advantage of this opportunity to transform its businesses through its cloud computing, mobile, and big data capabilities, industry giant partners, and broad vertical customer base. The Group has already made progress in the Internet+ era on the fronts of government administrative cloud, pharmaceutical cloud, mobile Internet, industrial Internet, transportation management big data, and mobile, and will continue to take advantage of the new markets opportunities sprung from the Internet+ policy. At the same time, the Group will build sub ecosystems on Jointforce, starting with the long tail markets of e-government and industrial Internet market. Software will redefine the world, and become the backbone to other industries. Chinasoft, through Jointforce, will be able to offer "fast, affordable, and efficient" services to help that. Chinasoft will be the "water provider" to all the diggers during the Internet+ gold rush, and successfully transform from the traditional IT services to an Internet based company.

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SOURCE ChinaSoft International Ltd.