HIGHLIGHTS:
- Driven by the businesses related to digital services in the domestic non-telecom operator market, the OPEX business and the industry-oriented smart application businesses in the domestic telecommunications operator market, the Group's overall results maintained steady growth, with business value further manifested
- Domestic non-operator market became the largest customer group for the first time, the development quality of such market was enhanced and became increasingly significant to the profit growth of the Group
- The Group built up its strength in 5G technologies and capabilities while proactively satisfying 5G network construction demand of the domestic telecommunications operators. New Infrastructure led by 5G infrastructure will also bring the Group with great potential for growth
OPERATING PERFORMANCE
In 2019, businesses related to digital services in domestic non-telecom operator (the "domestic non-operator") market served as the main growth driver of the Company. Meanwhile, OPEX and intelligentization businesses in the domestic telecommunications operator market also provided sound support for the growth of the Group. Total revenues for the year amounted to
Dividend
The Board has proposed to distribute a final dividend of
Mr.
MARKET DEVELOPMENT
In 2019, the Group adhered to the three main development tracks of the domestic non-operator market, the domestic telecommunications operator market and the overseas market, focused on the digitalization and intelligentization demands in society and industries, forged its integrated smart service capabilities and accelerated market development and deployment. As a result, the Group achieved satisfactory results with business and revenue structures continuously optimized and development quality noticeably enhanced.
Domestic Non-Operator Market
In 2019, with the Group's long-term investment and devotion to the field of smart service, the domestic non-operator market sustained a rapid and healthy development trend in recent years, and customers in the market became the largest customer group for the first time. The development quality of the domestic non-operator market was enhanced, which became increasingly significant to the profit growth of the Group. In 2019, the Group recorded a revenue of
Domestic Telecommunications Operator Market
Upon the issuance of 5G licenses by
Overseas Market
In 2019, revenue from the Group's overseas market was
BUSINESS DEVELOPMENT
In 2019, by focusing on digitalization and intelligentization businesses, the Group increased resources input to extend its integrated smart service capabilities centered on integrated solutions. New development features of the Group emerged with its consultation and planning businesses led the way and drove the development of software services and smart products, as well as the robust growth of digital infrastructure construction business. Meanwhile, the Group vigorously expanded the OPEX business of domestic telecommunications operators and paid close attention to the new business demand arising from the transformation of such customers, thus strengthening its customers' loyalty continuously to ensure the Group's stable fundamentals. Following the business transformation and upgrade of the Group in recent years, its revenue sources became more diversified and its business structure became healthier.
Telecommunications Infrastructure ("TIS") Services
In 2019, the Group's TIS services recorded a revenue of
Business Process Outsourcing ("BPO") Services
Revenue from the BPO services amounted to
Applications, Content and Other ("ACO") Services
Revenue from the ACO services amounted to
increase of 17.3%, making it the fastest growing segment among the three major businesses. It accounted for 13.7% of the total revenues, which was 0.8 percentage point higher year-on-year. Through capturing the domestic opportunities arising from the digitalization construction by the government and industries, as well as the intelligent transformation of the domestic telecommunications operators, the Group provided smart products, smart services and industrial integrated solutions to customers. Currently, the Group have accelerated the promotion of over 30 smart applications among vertical industrial customers. In 2019, revenue from the Group's system integration, software development and system support businesses reported a year-on-year increase of 23.5% and 14.2% respectively. Revenue from the ACO Major businesses reported a year-on-year increase of 18.6%, surpassing the growth rate of the national software business revenue and demonstrating a sound development result of such businesses.
INNOVATION AND TRANSFORMATION
In 2019, the Group deepened innovation and transformation continuously to ride on the new trend in Digital Economy era.
Construction of foundation platforms. The Group continued to promote the construction of "CCSYUN" (our cloud service) and "CCS Open IoT Platform" to drive transformation. Besides, the Group improved network and information security capabilities by the establishment of platforms including cloud security, cloud-based monitoring and content automated testing to satisfy market demand. Furthermore, the Group launched pilot maintenance platform to plan ahead for the new maintenance areas of the 5G and IoT era.
Enhancement of research and development capabilities. By focusing on social and industrial intelligentization demands, the Group increased investment in research and development by way of setting up a dispersed research and development system as well as capitalizing on its ecosystem alliances and research institutions. The Group converged capabilities based on its foundation platforms to accelerate the research and development and the iteration of its products, so as to respond to market demand in a rapid manner and support development through capabilities enabling.
Optimization of ecosystem. On one hand, the Group continuously established the middle platforms for capabilities accumulation and capabilities enabling to optimize internal ecosystem and enrich industrial ecosystem, thus bringing in new partners from government, industries and research and development institutions. On the other hand, the Group emphasized the construction of talent ecosystem by ceaselessly enhancing various expert teams and Comservice Craftsmanship systems, with the view to accumulating adequate reserves of diverse talents.
PROSPECTS
Mr.
Currently, the domestic and global economic environments are experiencing profound adjustment, and the COVID-19 epidemic has increased the downward pressure on the domestic and international economies, and put considerable pressure to the Group's operation and development during such period. At the same time, the COVID-19 epidemic has brought changes to the pattern of production, daily life and demand in the society, accelerating the digitalization progress of the society and industries, which has also brought the Group with rare opportunities. From the macro perspective, there is no change to the basic trend that the economy of China is still heading for long-term prosperity; there is no change to the development advantages accumulated since reform and opening up, including the technological base, the size of the market, and the domestic demand potential; there is no change to the regional economic development strategy and the trend of advancement of the 'Belt and Road'. From the perspective of industrial development and technological progress, the further advancement of 'Cyberpower', 'Network Information Security' and commercial use of 5G, as well as the deep integration of emerging technologies such as 5G, IoT, Artificial Intelligence, Blockchain with the real economy, will create booming demand for digitalization from society and industries. During the epidemic, cutting-edge technologies such as 5G have played an important role and fostered great market demand. 'New Infrastructure' including data center and Industrial Internet, which is led by 5G infrastructure, will also be the critical foundation for digital transformation of the society and the construction of modern smart city. It will not only generate important driving force for future economic development, but also bring the Group with great potential for growth. In particular, the 5G infrastructure will give rise to application investment in the upstream and downstream of the industry value chain and various industries, which would facilitate the continuous emergence of new demand, new business forms and new applications, creating further growth potential in the domestic telecommunications operator market and the domestic non-operator market.
In the future, the Group will adhere to the overall roadmap and focus on the main development tracks based on its positioning of 'New Generation Integrated Smart Service Provider' to fit into the overall development of China, the society and industries, with a view to further promoting value transformation and forming new development advantages.
In the domestic non-operator market, by focusing on opportunities arising from New Infrastructure such as 5G and riding on the accelerating trends of modern smart city upgrade, digital governance and industrial digitalization as the epidemic broke out, the Group will take various measures to continuously expand its business scale in such market and optimize its integrated smart service capabilities, including: speeding up its deployment in key regions such as
In the domestic telecommunications operator market, the Group will uphold the 'Dual Growth Drivers+' development strategy and take advantage of its advanced deployment in aspects including the 5G construction as well as the research and development for applications. The Group will also integrate into customers' ecosystem in light of the changing industrial development. Furthermore, the Group will further develop the 5G network construction and the OPEX business, while capturing the demand for smart applications and assisting customers in transformation. By taking all these efforts, the Group will secure the fundamentals of our operation while making new breakthroughs in development.
In overseas market, by grasping the opportunities arising from the advancement of 'Belt and Road' and leveraging on its 'EPC+F+I+O+S' model, the Group will focus on the overseas demand for network infrastructure and digital services with the promotion of its smart products and services, thus realizing steady growth of overseas revenue. Meanwhile, the Group will strengthen collaboration with domestic telecommunications operators, 'Go Abroad' Chinese enterprises, and local partners to expand overseas market and explore new development potential.
At the same time, the Group will allocate more resources to research and development in respect of 5G, Big Data and IoT, as well as improving our dispersed research and development based on our foundation platforms, with a view to enhancing the quality and quantity of smart products and facilitating capabilities enabling for social and industrial development. The Group will enhance its corporate governance by pushing forward the State-owned Enterprise Reform 'Double-hundred Action', develop flexible mechanism that is adaptive to the changing market, talent team, innovative mechanism and symbiotic ecosystem, with a view to promoting value transformation and becoming an integrated smart service provider with cutting-edge technologies and supreme intelligence."
About China Comservice
China Comservice is a New Generation Integrated Smart Service Provider that provides integrated comprehensive solutions in the informatization and digitalization sector including telecommunications infrastructure services spanning from design, construction to project supervision and management; business process outsourcing services spanning from management of infrastructure for information technologies (network management), general facilities management(property management), supply chain and products distribution; applications, content and other services spanning from system integration, software development and system support to value-added service, etc. The Company's major customers include domestic telecommunications operators (including the three domestic telecommunications operators and China Tower Corporation Limited), domestic non-telecom operator customers including government agencies, industrial customers and small and medium-sized enterprises, as well as overseas customers. Its controlling shareholder is China Telecommunications Corporation, and besides,
The Group ranked 86th in the "2019 FORTUNE China 500" published by FORTUNE China, and was listed among the "2019 Forbes Global 2000 - World's Largest Public Companies" by Forbes. In the voting for "The Asset ESG Corporate Awards 2019" held by the magazine The Asset, the Group was awarded "Gold Award - Corporate Governance, Social Responsibility and Investor Relations". The Group was also granted "The Best of
Forward-looking statements
This press release contains forward-looking statements and information relating to us and our operations and prospects that are based on current beliefs and assumptions as well as information currently available to us. The words "anticipate", "believe", "estimate", "expect", "plans", "prospects", "going forward" and similar expressions, as they relate to us or our business, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks, uncertainties and various assumptions. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may diverge significantly from the forward-looking statement. We do not intend to update these forward-looking statements other than our on-going disclosure obligations pursuant to the Hong Kong Listing Rules or other requirements of the
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