- Operating revenue was approximately RMB7,891 million, an increase of 2.0% year-over-year.
- Revenue from the “Three New” businesses amounted to approximately RMB2,899 million, representing a year-on-year increase of 12.7% and accounting for approximately 36.7% of total revenue.
- Adjusted net profit for the year amounted to RMB851 million, with an adjusted net profit margin of 10.8%.
- Operating cash flow reached RMB582 million, indicating a positive year-on-year increase of 5.9%.
- Proposed final dividend of HK$0.412 per share for 2023, representing a payout ratio equivalent to 40% of adjusted net profit for the year, and after taking into account the special dividend of HK$0.6 per share declared in December 2023, the total dividend for the year 2023 will amount to HK$1.012 per share.
On March 18, 2024, AsiaInfo Holdings Co., Ltd. (“AsiaInfo” or the “Company”; stock code: 01675.HK) released its comprehensive annual results for the fiscal year closing on December 31, 2023.
AsiaInfo Achieves Steady Growth Momentum in 2023
In 2023, AsiaInfo achieved steady growth in operating revenue to RMB7,891 million, up 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. Notably, the “Three New” business, as a whole, achieved a growth rate of 12.7% year-on-year, generating revenue of RMB2,899 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% year-on-year. Excluding non-operating items such as impairment of goodwill and intangible assets, the Company’s adjusted net profit for the year amounted to RMB851 million, with a double-digit net profit margin of 10.8%, which still maintains a good profitability. Lastly, the Company’s operating cash flow amounted to RMB582 million, representing a year-on-year increase of 5.9%.
Upon reviewing 2023 results, Dr. 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 enhancement, 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: Enhancing High-Quality Development Model of “Standard Products + Solutions”
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, the Company 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 RMB965 million, representing a year-on-year growth of 27.5% and accounting for 12.2% of total revenue. Among them, the transportation industry contributed RMB316 million, surging by 458.5% year-on-year, while the energy industry raked in RMB269 million, achieving a growth of 136.5%.
In the transportation industry, the Company 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, Qingdao SCODA, and so on.
In the energy industry, the Company 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 in-operation 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 project 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, as well as its solutions to break into the smart mining market. Given the vast potential in the energy market, there are still thousands of wind power, photovoltaic stations, and coal mines awaiting digital transformation, in addition to the nuclear power units not yet covered.
Digital Intelligence Operations: Business under Short-term Pressure, Negative Effects Gradually Mitigating
In 2023, iDigital experienced the pain of deep organizational change and the significant impact of the weak capital market and strict budget control by customers in the Internet and consumption sectors on its industry research business, leading to a revenue decline compared to the previous year. However, the decline narrowed in the second half of the year. The Company believed that the market demand for the digital intelligence operation business remains huge, and with the negative factors gradually subsiding, it expected the digital intelligence operation business to return to growth in 2024.
In terms of DSaaS, the Company continued to focus on communication, government and enterprise, automobile, consumer and other industries. In the field of digital intelligence communications, the Company continued to optimize its business model, in which the provincial customers of Internet zone operation and share by equity, etc., added seven new provinces in 2023, with a cumulative total of 23 provinces. At the same time, the DSaaS market has been further expanded from provincial customers within the customer group to more professional companies, such as CM Financial Technology and China Mobile Internet. In terms of digital intelligence government and enterprise, the Company won projects such as the Digital Chongqing Credit Infrastructure Database, laying a solid foundation for the future of continuous government affairs data circulation and realization. In terms of digital intelligence Internet of vehicles, the Company created an automotive digital marketing solution based on communication big data and combined with AI, privacy computing and other technologies, continuing to expand the customer map in the automotive industry, and to tap the market in terms of joint venture brands, commercial vehicles, and emerging brands, winning the contracts with Deepal, Gac-Toyota, and Dongfeng Motor. In terms of digital intelligence consumption, the Company has deeply cultivated brand customers. Focusing on the scenarios of membership operation and private domain operation, it has won the digital marketing project of Jingpai membership, and continued to provide Nike with store insights and other services. In the field of decision intelligence (DI), iDigital has published several research reports related to AIGC, digital transformation, and other fields, and gradually formed a greater influence in the digital consulting industry, winning several digital top-level consulting plans from clients such as CM Financial Technology, Migu Company, China Broadcast Network, etc.
In 2023, the digital intelligence operation business realized revenue of RMB1,102 million, a decrease of 4.2% year-on-year, accounted for 14.0% of the total revenue, and the revenue from the pay-for-results and revenue-sharing model accounted for 24.0% of the revenue from the digital intelligence operation business.
Communication Industry: OSS Business Maintains Rapid Growth
In terms of OSS business, the Company grasped market opportunities in the areas of computing power network, autonomous network and ToB 5G network, and continued to drive rapid business growth with industry-leading technologies and products. AsiaInfo’s autonomous network co-pilot product system (AN CoPilot) can effectively support communication operators to carry out the evolution to L4/L5 high-level autonomous networks by creating proprietary AN CoPilot model, cognitive enhancement services and autonomous network co-pilot toolkit. In 2023, the revenue from the OSS business amounted to RMB832 million, representing a year-on-year growth of 24.9% and accounting for 10.5% of the total revenue.
In terms of BSS, the Company is now facing the challenges brought by customers’ increased efforts in cost reduction and efficiency and independent research and development. The Company has followed the trend and actively utilized innovative technologies such as AIGC/GPT, edge AI, metaverse, and digital twins to build products and meet customers’ innovative needs. The Company has actively injected intelligence into its businesses, utilizing AIGC to form products such as intelligent customer service multimodal interactive operation, marketing service intelligence, and ChatBI. In addition, in terms of new customer expansion, the Company has continued to develop its customer map. It helped to replace business support systems for government departments and enterprises in multiple provinces and won projects such as the reconstruction of Shanghai Telecom’s billing system. In 2023, the BSS business realized revenue of RMB4,881 million, a slight decrease of 0.9% year-on-year.
Forward Outlook: Expanding International Market Based on “Four Transformations” and Delivering Continuous Innovation in New Productivity
When discussing the Company’s future strategy, Dr. Tian 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 implementation of the business strategy of ‘One Consolidation with Three Developments,’ the Company will further implement the ‘Four Transformations’ development strategy targeting non-communication industries, standard products, integrated software and hardware products, and the international market, aiming to provide ‘new productivity’ for customers, the industry, and society at large.”
“In terms of 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.”
“Integration is currently a key focus of the ICT industry’s development, with the boundaries between product and service companies becoming increasingly indistinct. Our Company will continue to focus on five strategic products: 5G/6G networks, edge intelligence, databases, xGPT, big data, and trusted data circulation and make a greater effort to promote these products to key vertical industries, including communications, energy sources, government affairs, and transportation. In terms of the international market, as our capabilities in standardized products gradually become mature, we will actively integrate into the international ecosystem and strive to expand into the Middle East and Southeast Asia markets through overseas channels and leveraging partnerships. Then, we can promote our hardware and software integrated standard products, such as 5G private networks, O-RAN, and edge AI, to the international market.”