亚信科技

Abstract

1. The net profit reached approximately RMB 516 million, with a better performance than that of the previous year.  The net profit margin increased to 7.8% (by 1.3%), maintaining a robust and healthy profitability.

2.  Cost reduction and efficiency improvement measures, as well as cost control initiatives, yielded significant results, with a gross margin of 37.4%, maintaining a stable level.

3. The total operating income was approximately RMB 6.646 billion. Revenues from "Three New Businesses" amounted to RMB 2.599 billion, accounting for approximately 39.1% of total revenue, with an increase of 2.4% compared to the previous year.

4. High importance was attached to shareholder interests and returns. It was proposed to distribute an final dividend of HKD 0.252 per share, with a payout ratio of 40% of the net profit, and declare a special dividend of HKD 0.16 per share. The total dividend for 2024 amounted to HKD 0.412 per share.

Future Outlook

1. In 2025, the Company will adhere to a strategy on steady and progressive development, and consolidate the foundation of its communication business to ensure stability in its core operations.

2. While steadfastly advancing the development of "Three New Businesses", the Company will focus on three major growth areas: AI large language model (LLM) delivery business, private 5G networks and applications, as well as digital intelligence operations, to promote higher-quality development of the Company.  

On March 10, 2025, AsiaInfo Technologies Limited (hereinafter referred to as "AsiaInfo Technologies" or the "Company", Stock Code: 01675.HK) announced the full-year results for the year ended December 31, 2024.

In 2024, the Company continued to deepen its strategic transformation, leverage technological innovations such as artificial intelligence and big data to empower vertical industries and digital transformation, and continuously advanced its business layout across various application fields.  However, due to significant cost reduction measures implemented by enterprise clients, particularly operator clients for their growth pressure, the operating income was RMB 6.646 billion, with a year-on-year decrease of 15.8%.  Among this, the revenue from "Three New Businesses" was about RMB 2.599 billion, with a year-on-year decrease of 10.3%, but their ratio to the total  revenue increased to 39.1%, with an increase of 2.4% compared with the previous year.

In response to the transformation of traditional businesses, the Company adopted various cost reduction and efficiency improvement initiatives, such as leveraging AI tools to improve delivery efficiency, strengthening centralized procurement, and achieving full coverage of a one-stop business expense platform. These efforts resulted in significant cost control achievements, with a stable gross margin of 37.4%.  The net profit reached approximately RMB 516 million, and the net profit margin increased to 7.8%, with an increase of 1.3% compared with the previous year, maintaining a high profitability.

The Board of Directors placed high importance on shareholder interests and returns. After full consideration of the Company's business development, profitability status, and cash flow level, it was proposed to distribute a final dividend of HKD 0.252 per share for 2024, with a payout ratio of 40% of the net profit, and declare a special dividend of HKD 0.16 per share. The total dividend for 2024 amounted to HKD 0.412 per share.

Stabilization and Recovery of Digital Intelligence Operations

In 2024, the Company continued to deepen its presence in industries such as telecommunications, automotive, consumer goods, and finance. As a core Independent Software Vendor (ISV), the Company forged a deep collaboration with Volcano Engine and built a full-lifecycle private domain operation platform based on WeCom, creating an integrated online-to-offline operation system. Additionally, through model innovation and its "AI + Big Data" advantages, the Company achieved significant growth in the industries such as automotive, consumer goods, and finance.

 In 2024, revenues from digital intelligence operations got stabilized and recovered, reaching approximately RMB 1.106 billion, with a year-on-year increase of 0.4%, accounting for 16.6% of total revenues. Revenues from the pay-for-results and revenue-sharing model comprised 25.4% of digital intelligence operation revenues.  The Company will accelerate the scale development of the pay-for-results model, striving to become an industry leader in this payment approach.

Focus on Quality of Digital Business and Reoriented Development Directions in Vertical Industries

In 2024, the Company continued to empower key industries such as energy, transportation, and government services with innovative technologies like 5G, big data, and AI, to develop industry-specific products and solutions and seize opportunities in the digital and intelligent transformation and upgrading of vertical industries.  The Company prioritized the development of two key areas in the market of vertical industries: private 5G networks and applications, and LLM applications and deliveries.  By the end of 2024, the Company had delivered 50 core networks and over 21,000 base stations for private 5G networks.  By providing customized private 5G network products and industry solutions, the Company aims to create differentiated competitive advantages and strives to become a leading player in the field of private 5G networks.

Large orders from key vertical industry clients resulted in significant revenue fluctuations due to the impact of individual orders.  The Company placed greater emphasis on balancing development pace and quality, accurately identified and proactively forwent high-risk, large-value government and enterprise orders for exceeding RMB 1 billion through its mature order quality admission process.  Meanwhile, due to adjustments in the construction cycle of nuclear power private 5G networks in 2024, revenues in this sector declined from RMB 965 million to RMB 676 million, accounting for 10.2% of the Company's overall revenues. 

Momentum in LLM Delivery Business

AsiaInfo Technologies gained an early start and rapid implementation in the LLM delivery business, and established long-term partnerships with leading domestic cloud computing and LLM vendors. From more than 200 projects, it has summed up and developed a set of delivery tools with core competitiveness, and has formed mature teams and management experience in various LLM delivery projects annually. This has resulted in AsiaInfo Technologies' unique LLM delivery system characterized by "a methodology + a toolset + a professional team". The Company addresses the complex application scenario implementation needs for industry's top-level customers through highly customized large model solutions, defining the service implementation logic and standards, and establishing industry and technological moats. In terms of long-tail customers, standardized product sales are leveraged to ensure a steady stream of project revenue and profit.

Through strategic partnerships with leading cloud service providers and large model developers such as Alibaba Cloud, Volcano Engine, Baidu AI Cloud and DeepSeek, the Company has established an end-to-end industry-specific large model solution system spanning verticals including government & enterprise, energy, finance, transportation, etc. The Company will steadfastly implement its development strategy to establish itself as a top-level enterprise in large model delivery. By leveraging its accumulated technical expertise and close collaborative partnerships with main large model developers, it will drive proactive contributions to the advancement of large model applications.

Revenue declining in traditional service, and slight revenue declining in OSS service

The communications industry remains in a cyclical trough of overall investment prior to the advent of 6G. Confronted with transformation and upgrading in traditional BSS service, the Company will implement cost reduction and efficiency enhancement measures to address the revenue declining in traditional service, while cultivating new revenue sources through technological innovation and customer development. In 2024, the revenue in BSS service reached approximately RMB 3.948 billion, with a year-on-year decline of 19.1%; while the revenue in OSS service reached approximately RMB 818 million, with a slight year-on-year decline of 1.8%.

In terms of business development, the Company has integrated innovative technologies such as "AI+" and "large model+" into traditional service to address challenges, achieving significant breakthroughs in AI empowerment. The total number of AI large model-related projects has exceeded 100, with continuously expanding service coverage. Meanwhile, the Company has introduced DeepSeek V3 and R1 foundational models to deeply empower its Business Support System (BSS). In addition, the Company's AISWare Insights · LLMs for Verticals product system has been full-stack adapted to DeepSeek and put into operation, achieving the closed loop of "domestic LLM+computing power+LLM service+vertical scenario".

In terms of customer development, the Company has successfully secured a key project from HKT (Hong Kong Telecommunications) and undertaken a project from one operator in Southeast Asia, further expanding its overseas market. Simultaneously, the Company has successfully stepped into China Unicom's OSS market with breakthroughs in multiple provinces and achieved zero breakthrough in several provinces within China Mobile's OSS market, fully demonstrating its competitive edge and business expansion capabilities in the OSS domain.

Future Outlook

Dr. Tian Suning, Chairman and Executive Director of AsiaInfo Technologies, stated: "Looking ahead to 2025, the Company will adhere to a development strategy of seeking progress while maintaining stability. On one hand, we will consolidate the foundation of our core telecommunications service to ensure the stability of our bedrock; on the other hand, while continuing to advance the development of the "Three New Services", we will focus on cultivating three key growth points as AI large model delivery service, private 5G network and application, and digital intelligent operation, thereby driving the Company towards higher-quality development."

In terms of traditional service sector, the Company will achieve refined operation through optimized operating mode, innovative management approach and workforce streamlining for efficiency gains, thereby significantly enhancing cost efficiency and ensuring sustained profitability of traditional service. The Company will deeply integrate AI and large model technologies, comprehensively enhance the intelligence level of business support system, and mainly promote co-innovation and R&D cooperation with customers, centralized and intensified support system construction, domestic substitution in the M domain, and new customer market expansion, effectively mitigating the downward pressure in BSS service; in terms of OSS service, the Company will focus on centralized and intensified network operation, apply "AI/large model/agent+" technologies, consolidate resources in OSS segment market, and expand network equipment service. By continuously improving technical capabilities and market penetration rate, the Company will further increase its market share.

In terms of AI large model delivery, the Company will deepen strategic collaboration with leading large model developers such as Alibaba Cloud, Baidu AI Cloud, and Volcano Engine. Through resource integration and complementary strengths, we will synergistically explore the large model application market, and strive to become a top-level enterprise in the industry. The Company will focus on improving the development of large model delivery platform, optimizing delivery tool chain, innovating delivery methodologies, and continuously consolidating core competitive advantages in delivery scale, quality control and cost optimization, thereby building differentiated competitiveness with high technological barriers.

In terms of private 5G network and application sector, the Company will deepen "5G+AI" technological integration, consolidate market leadership in dominant industries such as nuclear power, new energy and mining, and continuously expand the market share in private 5G network solutions. Meanwhile, the Company will actively expand the emerging application scenarios such as power grid, petroleum and petrochemical, airport and port. By providing customized private 5G network products and industry-specific solutions, the Company aims to build a differentiated competitive edge and strives to become a top-level enterprise in the private 5G network sector. The Company will build a comprehensive private 5G network industrial ecosystem and achieve sustained expansion in market coverage through technological innovation and deep cultivation in scenarios.

In terms of digital intelligent operation service, the Company will concentrate on key industries such as communications, automotive, consumer goods and finance, continuously enhance capabilities in data governance, model algorithm and scenario application, and deepen collaborative innovation with strategic partners such as Volcano Engine, Lingyang and Tencent in AI and big data. By fully leveraging the technological advantage of "AI + Big Data", the Company aims to accelerate the scale development of outcome-based payment mode and strives to become the industry leader in outcome-based payment solutions.