亚信科技

On March 18, 2024, AsiaInfo Holdings Co., Ltd. (“AsiaInfo” or the “Company”) released its comprehensive annual results for the fiscal year closing on December 31, 2023.

Three New Business Continue to Maintain Double-Digit Growth

In 2023, AsiaInfo achieved steady growth in operating revenue, reaching RMB 7.891 billion, an increase of 2.0% year-on-year. Despite facing pressure in its traditional BSS business and digital intelligence operation business, the Company maintained a stable revenue scale, thanks to the rapid growth of its OSS and vertical industry digitalization business. The Three New Business, as a whole, achieved a growth rate of 12.7% year-on-year, generating revenue of RMB 2,899 million, accounting for 36.7% of the Company's total revenue. Meanwhile, the Company stepped up its efforts in cost reduction and efficiency enhancement initiatives, resulting in a gross profit margin that remained stable at 37.7%. Excluding non-operating items such as impairment of goodwill and intangible assets, the Company's adjusted net profit for the year amounted to RMB 851 million, with a double-digit net profit margin of 10.8%, which still maintains a good profitability. Operating cash flow reached RMB 582 million, indicating a positive year-on-year increase of 5.9%.

Upon reviewing 2023 results, Tian Suning, Chairman of AsiaInfo, commented, “Over the past year, the external economic situation has remained severe and complex, with ongoing uncertainties in the process of economic recovery. Meanwhile, customers in the communication industry have been focusing on cost reduction, efficiency improvement, and independent research and development. Against this backdrop, the Company's traditional business has faced considerable challenges. In response, the Company has focused on developing new business while leveraging technologies such as AIGC/GPT for innovative upgrades to offset the pressure from traditional business and maintain healthy and stable development of overall business. In 2023, the Company has placed greater emphasis on maintaining cash flow health and strengthening cost management to ensure its long-term sustainable development. After excluding non-operating items, the Company has continued to achieve growth in annual profits, and its operating cash flow situation has also improved compared to the previous year, continuously creating value for shareholders, customers, and society.”

After careful consideration of various factors, including the cash return to shareholders and the non-cash-based impact of asset impairment, the Board of Directors has recommended the payment of a final dividend of HK$0.412 per share for the year 2023 at the Annual General Meeting, which is equivalent to a payout ratio of 40% of the adjusted net profit. Considering the special dividend of HK$0.6 per share declared in December 2023, the Company's total dividend for 2023 is HK$1.012 per share.

Vertical Industries Continue to Gain Momentum, with Energy Sector Expanding into Fields such as Wind Power and Photovoltaics

With the in-depth integration of digital technology and the real economy, various industries were striving to accelerate the digital intelligence transformation. Against this backdrop, AsiaInfo continued to focus on key industries such as energy sources, transportation and government affairs, and further deepened the high-quality development model of “standard products + solutions”, while moderately controlling the pace of development. In 2023, the revenue of digitalization expertise in vertical industries generated revenues of RMB 965 million, an increase of 27.5% year-on-year, accounting for 12.2% of total revenue. Among them, the transportation industry contributed RMB 316 million, surging by 458.5% year-on-year, while the energy industry raked in RMB 269 million, achieving a growth of 136.5%.

In the transportation industry, AsiaInfo continued to plough into intelligent high-speed business, and remained committed to driving innovation in the fields of intelligent hubs and digital intelligence logistics. For intelligent high-speed business, it has developed a range of digital intelligence products and solutions, including 5G+Beidou free-flow billing, traffic digital twins, and traffic big-data-based governance and application. For intelligent hubs, the Company has successfully implemented the Chongqingdong Railway Station project with the business model of “standardized products + solutions + system integration”. For digital intelligence logistics, by integrating data from railroads, aviation, highways, and waterways with customer-owned data, the Company has provided freight data, logistics visualization, multimodal transport optimization and other services, leading to a surge in orders this year from customers such as Shougang Group, Baogang Group, Trans Union, Shandong Zhongze Energy (Shandong), Qingdao SCODA, and so on.

In the energy industry, AsiaInfo has broadened its horizons in wind power, photovoltaics, mining, etc., while maintaining its leadership in the market of nuclear power 5G private networks. the Company's nuclear power plant 5G private network project has signed agreements with 23 nuclear power units, encompassing nearly 30% of China's operational and under-construction nuclear power units. In the field of wind power, the Company's 5G private network project covered over 100 wind power farm and has partnered with China Broadcast Network and CGN NE, successfully applying its self-developed 700MHz base stations in the construction of 5G private network for wind power. In the field of photovoltaics, the Company has developed a cloud-network integrated comprehensive energy platform “Xihe Xingyuan”, and successfully completed benchmark projects such as distributed photovoltaic project of CHN ENERGY HAINAN and zero-carbon service areas of Hainan Province Communications Investment Holding Co., Ltd. In the field of mining, the Company leveraged its products such as 5G private networks, edge intelligence, and big data, and its solutions to break into the smart mining market.

In an interview with Huanqiu, Gao Nianshu, CEO and Executive Director of AsiaInfo, emphasized that “while nuclear power units are yet to be covered, there are thousands of wind power plants, photovoltaic stations, and coal mines that require digital transformation. This suggests a significant market potential for digitalization in the energy industry, and we anticipate that relevant businesses in the industry will continue to thrive and expand rapidly.”

In the pursuit of ESG, energy conservation and carbon emission reduction, Gao Nianshu cited AsiaInfo's office building as an exemplary case of leveraging digital technologies to save energy and reduce carbon emissions. The building's rooftop has photovoltaic panels, and a low-carbon energy management platform has been deployed inside the building to monitor and optimize power, water, gas, lighting, air conditioning, and other systems. In 2023, AsiaInfo significantly reduced water, electricity, and gas consumption, enhancing energy efficiency and cutting operational costs.

Looking Forward: Continuing to Deliver New Productivity

When discussing the Company's future strategy, Tian Suning stated, “in 2024, there may be some uncertainty in external economic development. However, AsiaInfo will continue to explore opportunities and make breakthroughs in this challenging environment. Based on the promotion of the business strategy of 'One Consolidation with Three Developments,' the Company will further implement the 'Four Transformations' development strategy towards non-communication industries, standard products, integrated software and hardware products, and the international market, providing 'new productivity' for customers, the industry, and society at large.”

“With regards to BSS business, the Company will continue to inject intelligence into traditional businesses through technological and product innovations, maintaining its leading position in the BSS market. At the same time, the Company will expand the boundaries of OSS business and intensify efforts in expanding the ToB 5G network device sector. In non-communication industries, we will maintain our focus on key vertical industries such as energy, government affairs, and transportation, leverage policy advantages, expand our professional teams, carry out comprehensive operation with the 'standard products + solutions' model, and achieve scale expansion while creating benchmarks and ensuring quality.”

Tian Suning stated that convergence is the dominant trend in the current development of the ICT industry, as boundaries between product and service companies are becoming increasingly blurred. AsiaInfo is committed to focusing on five strategic-level products: 5G/6G networks, edge intelligence, database, xGPT, big data, and trusted data circulation. the Company is increasing its efforts to promote its offerings in key vertical industries, such as communications, energy sources, government affairs, and transportation. Internationally, AsiaInfo is integrating into the global ecosystem as its standardized product capabilities mature. the Company aims to increase its presence in the Middle East and Southeast Asia markets by leveraging overseas channels and the 'borrowing ships to go out to sea' strategy, introducing its hardware and software integrated standard products, such as 5G private networks, O-RAN, and edge AI, to the global market.