• Revenue from the Three New business[1] amounted to approximately RMB2,899 million, an increase of 12.7%, accounting for approximately 36.7% of total revenue.
• Adjusted net profit[2] for the Year was approximately RMB851 million and adjusted net profit margin was 10.8%.
• Operating cash flow was RMB582 million, an increase of 5.9%.
• Proposed a final dividend of HK$0.412 per Share, representing a dividend payout ratio equivalent to 40% of the adjusted net profit for the Year. Including the special dividend of HK$0.6 per Share declared in December 2023, the total dividend for the Year will be HK$1.012 per Share.

HONG KONG SAR - Media OutReach Newswire - 19 March 2024 - AsiaInfo Technologies Limited ("AsiaInfo Technologies" or the "Company", which together with its subsidiaries, is referred to as the "Group"; HKEX stock code: 1675), is pleased to announce its annual results for the year ended 31 December 2023 (the "Year").

Overall results

In 2023, AsiaInfo Technologies achieved a steady growth in revenue to RMB7,891 million, representing a year-on-year increase of 2.0%. Though the BSS and digital intelligence-driven operation businesses were under pressure, benefiting from the rapid growth of the OSS and vertical industry digitisation businesses, the overall revenue remained stable. The Three New business recorded a faster year-on-year growth of 12.7%, with its revenue amounting to RMB2,899 million, enlarging its proportion of the total revenue to 36.7%. Meanwhile, the Company stepped up its efforts in cost reduction and efficiency enhancement, maintaining a stable gross profit margin of 37.7%. Impacted by the non-operating items such as the impairment of goodwill and intangible assets, the net profit for the Year fell by 37.9% to RMB512 million. However, excluding the impact of the said non-operating items, the Company's adjusted net profit for the Year was RMB851 million, and the adjusted net profit margin sustained a double-digit figure of 10.8%, maintaining a sound profitability. Operating cash flow was RMB582 million, representing a year-on-year increase of 5.9%.

Commenting on the Group's results in 2023, Dr. TIAN Suning, Chairman and Executive Director of the Group, said, "In the past year, the external economic situation was severe and complex, with ongoing uncertainties during the economic recovery. Meanwhile, customers in the telecommunications industry continued to ramp up efforts to reduce costs, boost efficiency and enhance their proprietary research and development ("R&D") capabilities. Against this backdrop, the Company's traditional business faced a real challenge. Therefore, the Company kept on developing new businesses on the one hand, and innovatively upgraded its traditional business using new technologies such as AIGC/ GPT on the other hand, to offset the pressure brought by the traditional business and maintain a healthy and stable business development. In 2023, the Company attached a higher importance to cash flow health and strengthened its refined cost management to ensure the Company's long-term sustainable development. Excluding the non-operating items, the Company's profit for the Year continued to grow, and its operating cash flow also improved as compared to the previous year, continuously creating value for shareholders, customers and society."

The Board, after taking into consideration of various factors, particularly the cash returns of shareholders and the non-cash impact of the asset impairments, has decided to propose the distribution of a final dividend of HK$0.412 per Share for 2023 at the annual general meeting, representing a dividend payout ratio equivalent to 40.0% of the adjusted net profit for the Year. Including the special dividend of HK$0.6 per Share declared in December 2023, the total dividend for 2023 will be HK$1.012 per Share.

OSS business maintained a rapid growth, BSS business faced a real challenge

In the OSS business, the Company continued to seize market opportunities in areas such as computing power network, autonomous network, and ToB 5G networks with industry leading technology and products to promote rapid business growth. AsiaInfo's AN CoPilot efficiently supports telecommunication operators to advance to L4/ L5 high-level autonomous networks by building a model specific for autonomous network, network augmented cognition services and the toolkits. In 2023, the revenue from the OSS business reached RMB832 million, up by 24.9% year on year.

In the BSS business, facing challenges from its customers' intensifying efforts to reduce costs, enhance efficiency, and enhance proprietary R&D capabilities, the downward pressure on the traditional BSS business is increasing. The Company capitalised on the trend and actively deployed innovative technologies such as AIGC/ GPT, edge AI, metaverse, and digital twins to develop products that meet customers' demand on innovation, easing the downward pressure on the BSS business. The Company actively infused intelligence into its business, leveraging AIGC to develop products such as intelligent customer service multimodal interaction operations, intelligent marketing services, and ChatBI. In terms of market expansion, the Company continued to grow its customer portfolio and successfully replaced the business support systems of government and enterprise customers in several provinces and win projects such as the Billing System Reconstruction Project at China Telecom Shanghai Branch. In 2023, the revenue from the BSS business was down by 0.9% year on year, amounting to RMB4,881 million.

Deepened the high-quality development model of "Standardised Product + Solution" in the vertical industries

With the deep integration of digital technology and the real economy, various industries are striving to accelerate digital and intelligent transformation. Against this backdrop, the Company continued to focus on key industries such as energy, transportation, government affairs, etc., and further deepened the high-quality development model of "Standardised Product + Solution", at the same time appropriately controlled the pace of development. In 2023, the revenue from the vertical industry digitalisation business was RMB965 million, up by 27.5% year on year. In which, the revenue from the transportation industry amounted to RMB316 million, representing a year-on-year increase of 458.5%, while the revenue from the energy industry amounted to RMB269 million, representing a year-on-year increase of 136.5%.

In the transportation industry, the Company deepened its efforts in intelligent highways and promoted an innovative development in intelligent transportation hubs and digital intelligent logistics. In the area of intelligent highways, the Company developed digital intelligent products and solutions such as 5G+ Beidou inter-flow billing, traffic digital twin, and transportation big data governance and application. In the area of intelligent transportation hubs, the Company participated in the building of Chongqing East Railway Station smart hub project with the business model of "Standardised Product + Solution + System Integration". In the area of digital intelligent logistics, the Company integrated the data of railway, aviation, highway and sea transport, as well as customers' own data, to provide freight data, logistics visualisation, multimodal transport optimisation and other services, and achieved a rapid growth in orders during the Year with customers including Shougang, Baogang, Jiangsu Trans Union, Shandong Zhongze Energy and Environmental Protection and Qingdao SCO Demonstration Area.

In the energy industry, the Company strengthened its market leadership in nuclear power plant 5G private network while expanding into wind power, photovoltaic power and mining sites. The Company has signed a total of 23 nuclear power units for nuclear power plant 5G private network projects, covering nearly 30% of the nuclear power units under construction and in operation in mainland China. In the area of wind power, the Company's 5G private network projects have covered more than 100 wind farms and cooperated with China Broadcasting Network and CGN New Energy, successfully deploying 700MHz proprietary base stations in the construction of wind power 5G private network. In the area of photovoltaic power, the Company built a cloud-network integrated comprehensive energy management platform "Xihe Energy", and successfully completed benchmark projects such as CNH Energy Hainan distributed photovoltaic power project and Hainan Jiaotou zero-carbon service area. In the area of mining, the Company leveraged 5G private network, edge AI, big data and other products and solutions to break through the smart mining market. The Company sees huge market potential in the energy industry. In addition to the nuclear power units that had not yet been covered, there are still thousands of wind power farms, photovoltaic power sites and coal mines that have the demand for digital transformation.

Short-term pressure on digital intelligence-driven operation business with negative impacts diminishing

In 2023, iDigital experienced a short-term impact of its in-depth organisational reform and its industry research business was greatly affected by the sluggish capital markets and tight budget control of customers in Internet and consumption sectors, resulting a year-on-year decline in its revenue. However, the decline in revenue narrowed in the second half of the Year as compared with the first half of the Year. The Company believes that there is still enormous market demand for digital intelligence-driven operation business. Coupled with the easing of the above-mentioned negative impacts, it is expected that the digital intelligence-driven operation business will resume growth in 2024.

In DSaaS business, the Company continued to focus on industries such as telecommunications, government and enterprise, automotive and consumption. In the area of digital intelligence TMT, the Company continued to optimise its business model. In 2023, the Company added seven provincial customers in the models such as Internet "franchise zones" operations and results-based charging, reaching a total of 23 provinces. Meanwhile, the Group's client base of the DSaaS business expanded from provincial branches of within client groups to more specialised companies, such as China Moblie Financial Technology, China Mobile Internet, etc. In the area of digital intelligence internet of vehicles, the Company leveraged on telecommunications big data combined with AI, privacy computing, and other technologies to develop digital marketing solutions for the automotive industry, driving expansion of its client base, making breakthroughs in joint venture brands, commercial vehicles, and emerging brands and winning multiple projects from automotive companies such as Deepal, GAC Toyota and Dongfeng Motor. In the area of digital intelligence consumption, the Company focused on brand customers, providing services such as digital membership engagement and management and private domain marketing. It obtained Jingpai's membership digital marketing project and provided Nike with store insights and analytics, among others. In the area of intelligent decision-making, iDigital published couple of research papers on AIGC and digital transformation, etc., gradually becoming more influential in the digital consulting industry and winning multiple top-level digital consulting and planning projects from China Mobile Financial Technology, China Mobile's Migu and China Broadcasting Network, etc. In 2023, the digital intelligence-driven operation business recorded a revenue of RMB1,102 million, a year-on-year decrease of 4.2%, accounting for 14.0% of the Company's total revenue, with revenue from results-based and commission-based charging models accounting for 24.0% of the digital intelligence-driven operation business revenue.

Prospects

Talking about the future strategies, Dr. TIAN said, "Looking ahead to 2024, there are uncertainties in the external economic development. AsiaInfo Technologies will continue to navigate through the challenging environment, seeking opportunities and breakthroughs. Building upon the foundation of the strategy of 'One consolidation, Three Developments', the Company will further advance 'Four Shifts' strategy to drive development in non-telecommunication industries, standardised products, software and hardware integrated products and international markets."

"In terms of BSS business, the Company will proactively innovate its traditional business through technological and product innovations, mitigating downward pressure on the BSS business, while maintaining our leadership position in the BSS market. In addition, the Company will expand our OSS business boundary and put efforts into penetrating ToB 5G network equipment market. In the non-communications industry, we will continue to focus on key vertical industries such as energy, government affairs and transportation. We will seize favourable policy opportunities, strengthen our professional teams, and create benchmark cases with deepened adoption of the 'Standardised Product + Solution' model, to drive business growth with guaranteed quality."

"Integration has become the main theme of the ICT industry development, and the boundary between products and services is constantly being blurred. The Company will focus on five strategic products, namely 5G/6G networks, edge AI, database, xGPT, big data and trusted data circulation and intensify its efforts to promote the products in key vertical industries such as telecommunications, energy, government affairs, and transportation. As for international markets, with our capabilities in standardised products getting mature, the Company actively integrates into the global ecosystem and strive to expand into markets in the Middle East and Southeast Asia through overseas channels and partnerships, bringing the Company's software and hardware integrated standardised products such as 5G private networks, O-RAN, and edge AI to international markets."


Hashtag: #AsiaInfoTechnologies

The issuer is solely responsible for the content of this announcement.

AsiaInfo Technologies Limited

AsiaInfo Technologies Limited ("AsiaInfo" or "the Company"; Stock code: 01675. HK), founded in 1993, is a leading software product, solution and service provider, as well as a leading provider of full-stack digital and intelligent capabilities. Capitalising on consulting and planning, product R&D, implementation and delivery, system integration, decision intelligence, data operation, customer service and other digital and intelligent core capabilities, AsiaInfo provides enterprise customers in industries such as telecommunications, government affairs, energy, transportation, cable and postal services with end-to-end close loop digital and intelligent transformation service.

AsiaInfo adheres to the strategy of "One consolidation, Three development", maintains BSS market leadership with high quality and develops new businesses such as 5G OSS network intelligentisation, digital intelligence-driven operation, vertical industries and enterprise cloudification. The Company actively embraces advanced technologies such as 5G, cloud computing, big data, AI, and Internet of Things, forming three major product systems: cloud network, digital intelligence and IT.

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