亚信科技

On August 14, 2024, AsiaInfo Holdings Co., Ltd. (“AsiaInfo” or the “Company”, stock code: 01675.HK) announced its interim results for the period ended June 30, 2024. 

During the reporting period, amid the persistent complexity and uncertainty in the external business environment, AsiaInfo adhered to its “Four Transformations” development strategy, with its “Three New” businesses continuing to keep a double-digit growth, achieving revenue of RMB 1.20 billion, a year-on-year increase of 10.0%. Notably, revenue from vertical-industry digitization surged 34.6% year-on-year to RMB 473 million. Furthermore, iDigital completed its organizational restructuring, leading to an improved revenue trend in digital-intelligence operations. Revenue generated from results- and revenue-sharing models accounted for 26.7% of digital-intelligence operations revenue, marking a 3.7-percentage-point increase compared to the previous year.

During the reporting period, the telecommunications industry has experienced slower growth, with the investment cycle at a trough, and the cost reduction of service providers significantly increased. Consequently, the Company's order prices were significantly under pressure, negotiation difficulties intensified, order progress was significantly delayed, and revenues from businesses such as BSS were significantly impacted, leading to notable pressure on the interim results. As a result, the Company's operating revenue decreased by 8.8% year-on-year to RMB 2.994 billion, with a net loss of RMB 70 million for the period. However, the Company anticipates a rebound in performance in the second half of the year, striving to achieve an annual profit superior to the previous year.

The Board of Directors attaches great importance to shareholder interests and returns and has guided that the final dividend for the year 2024 will be 40% of the annual net profit attributable to equity holders of the Company, with active consideration given to keeping the amount of the final dividend per share relatively stable as compared to the previous year.

Continued Momentum in Vertical-Industry Digitization Drives Over 30% Revenue Growth

In the first half of 2024, the Company sustained its push into the vertical-industry digitization market, continuously optimizing its “standard products + solutions” development model and intensifying expansion efforts in key sectors such as energy sources, transportation, and government affairs. Simultaneously, the Company maintained a moderate level of risk control and development pace to achieve high-quality growth. As a result, revenue from vertical-industry digitization reached RMB 473 million, marking a year-on-year increase of 34.6%, sustaining a rapid growth.

In the energy industry, the Company's 5G private network products and solutions continued to expand market coverage, with over 30 new projects signed in the first half. Its 5G private network has accumulated coverage of 23 units across five major nuclear power bases, representing nearly 30% coverage, while closely focusing on 5G construction opportunities for CNNC (China National Nuclear Corporation)'s operating and under-construction units. In the photovoltaic sector, the Company led the market with its innovative models, having currently integrated data from over 600 stations and successfully won key projects such as CHN ENERGY New Energy's 5G wireless private network and Hunan Datang's photovoltaic 5G network coverage. In the wind power sector, the Company further solidified its leading position in smart wind power farm construction, with 5G private network projects covering nearly 200 wind power farms. During the first half, it successfully bid for projects such as CGN NE's new energy wind power wireless network. In the mining sector, leveraging its standard products and solutions in 5G private networks, edge intelligence, and big data, the Company continuously won projects such as intelligent construction and upgrading of an open-pit coal mine for China Coal Technology & Engineering Group and intelligent construction planning and design for a coking company.

In the transportation industry, the Company's multi-scenario layout delivered significant results, with revenue increasing 2.9 times year-on-year. In smart highways, the Company successfully integrated big model technology into the network charging system of a provincial highway customer, establishing a benchmark application for “big model + intelligent customer service.” In smart hubs, the Chongqingdong Railway Station project has been progressed smoothly, and the Company renewed its contract for the Shanghai Metro Phase III project, providing robust support for the intelligent transformation of transportation hubs. In digital intelligence logistics, the Company further improved its logistics data sources, completing the integration of four major data sources from railways, waterways, highways, and shipping, striving to create showcases and benchmark projects across multiple sectors such as steel, coal mines, ports, and aviation.

Digital-Intelligence Operation Business: Organizational Restructuring Completed with Revenue Trends Improved

In the first half of 2024, IDigital completed its organizational restructuring, resulting in a new structure that better enhances regional market coverage and enables the Company to respond efficiently to customer needs. As a result, business gradually recovered, and revenue trends showed improvement. During this period, the digital-intelligence operation business generated revenue of RMB 447 million, a slight decrease of 1.9% year-on-year. Among which, revenue from the results- and revenue-sharing payment model accounted for 26.7% of the digital-intelligence operation business income, up 3.7 percentage points from the previous year.

In the telecommunications industry, the Company deepened its cooperation with service providers in the CHBN (Consumer, Home, Business, and New Verticals) business areas, continuously innovating its business models and introducing a series of efficient digital intelligence products and operational services to support customers in maintaining and expanding their customer base while enhancing related values. Regarding equity and investment flow businesses, the Company achieved large-scale replication across communication operators in 16 provinces, such as Yunnan, Tibet, and Fujian.

Leveraging its strengths in data elements and data operations, the Company ventured into new growth avenues in non-telecommunications industries such as consumer goods, finance, and automotive, driving positive changes in revenue trends for its digital-intelligence operations. In the consumer goods sector, the Company has integrated telecommunications big data resources to provide precise insights for fast-moving consumer goods, tobacco, and pan-culture-tourism industries. In addition, focusing on core scenarios like member marketing, private domain operations, and customer flow insights, the Company has developed efficient data insight and digital marketing solutions. In the first half of 2024, it successfully helped a leading FMCG brand expand its member base to over 30 million users. In the finance sector, the Company zeroed in on precision marketing and risk control rating, offering financial clients advanced tools like marketing scores, customer data platforms, and SCRM based on multi-source data, facilitating them in precise decision-making. In the automotive industry, with media, live streaming, and leads as its three pillars, the Company leveraged telecommunications big data to create innovative data services for automotive customers, such as value-added replacement and purchases, and precise lead delivery. During the first half, the Company successfully collaborated with ecosystem partners like Ali and Volcano Engine, broadening its data sources and providing comprehensive support including user insights and marketing digitization middle-office to multiple new energy vehicle, independent, and joint venture automotive brands.

Telecommunications Industry: BSS Business Was Under Pressure, with OSS Business Being Slightly Down

Due to the slowdown in the growth of the telecommunications industry, the investment cycle being at a trough, and the sharp increase in cost reduction efforts by service providers, the Company's OSS business revenue marginally declined by 1.6% year-on-year to RMB 280 million in the first half of the year.

The external environmental factors and significant cost reduction measures by operator customers led to notable pressure on order prices, making commercial negotiations more challenging and significantly delaying order progress. Consequently, the Company's traditional BSS and other businesses faced immense pressure in the first half of 2024. BSS business revenue was RMB 1.747 billion, a year-on-year decrease of 17.0%.

A some service providers transform themselves into technology-driven enterprises and strive to enhance operational efficiency and customer satisfaction, there has been a notable increase in demand for projects driven by innovative technologies such as “AI+” and “Big Model+”. In the first half of the year, the order value of “AI+” projects surged by over 55%, with 56 “AI Big Model + BSS” innovative application projects inside. Leveraging its self-developed “Yuansi” industry foundation model product system, the Company actively utilized tools such as ChatCRM and ChatBI to promote the intelligent upgrade of CRM operations, enhance business analysis capabilities, build big model infrastructures, and significantly improve code development efficiency for operators across multiple provinces.

What's more, the telecommunications industry remains a high-quality sector, and the Company will continue to consolidate its technological leadership, seize opportunities in the upgrading of new technologies such as “AI+” and “Big Model+”, actively participate in joint research and development with service providers, and maintain its leading position in traditional businesses. We believe that despite short-term impacts on performance, the fundamentals for the Company's long-term development remain solid, with revenue and profits maintaining a stable trend.

Focusing on Three Product Systems to Strengthen R&D Innovation and Technology Leadership

The Company has always attached great importance to its core R&D capabilities, continuously focusing on the three product systems of “Cloud Network,” “Digital Intelligence,” and “IT,” and continuously strengthening its R&D innovation and technology leadership. With its product systems evolving towards full integration with AI Native, the Company is actively promoting the implementation of the strategic goal of “Four Transformations.” In the first half of the year, R&D investment amounted to RMB 436 million, accounting for 14.6% of revenue.

In the “Cloud & Network” domain, the Company continues to hold its international leading position; in the “Digital Intelligence” domain, it is ranking higher domestically, with some products being internationally advanced; and in the “IT” domain, it has consolidated its position in the first tier around China.

In the first half of the year, AsiaInfo released the “Yuansi” industry foundation model product series, officially launching one general AI and cognitive enhancement platform TAC MaaS, three industry foundation models, and eight cognitive enhancement tools. It has generated nearly 80 business opportunities. Also, the Company was recognized as a “Leader” in Gartner's inaugural Magic Quadrant for Communication AI globally, ranking first in all three sub-scenarios. In addition, it has actively expanded into international markets in edge intelligence, privacy computing, and other integrated software-hardware products, with targeted R&D for specific overseas demands. Multiple customer proofs of concept (POCs) have been successfully completed in the Middle East, Southeast Asia, and other regions, accelerating the internationalization of its products.

AsiaInfo has continued to deeply participate in 20 international/national technical standards organizations such as 3GPP, ITU, ETSI, IEEE, TMF, and O-RAN. Its position in such international standards has significantly shifted from following to leading, with 30 new international/domestic standards formulated in the first half of the year. During this period, the Company's related products and technologies received 44 international/domestic patents and 58 software copyrights.

Looking Ahead: A Rebound in Performance Anticipated for the Second Half of the Year

In the second half of the year, AsiaInfo is projected to experience a rebound in performance, striving to achieve full-year profits superior to those of the previous year.

The Company will accelerate the progress of commercial negotiations for BSS orders, mitigating the impact of declining order prices and signing delays. Meanwhile, it will seize opportunities for technological upgrades, such as those driven by “AI+” and “Big Model+”, and actively participate in joint R&D activities to secure its leadership position in the BSS business. Consequently, it is expected that the rate of revenue decline of BSS business will be significantly narrowed for the whole year.

In terms of the “Three New” business, the Company forecasts robust growth in revenue throughout the year. It will expedite the promotion and replication of digital-intelligence operation business, expanding the scale of revenue based on and results and shared earnings. Meanwhile, AsiaInfo will strengthen collaboration with telecom service providers in government-enterprise and international joint development businesses, aiming to secure larger shares of cooperation thus broaden its revenue base. Furthermore, the Company will continue to deepen its roots in key industries such as energy sources, transportation, and government affairs, driving sustained and high-quality growth in non-telecommunication market business.