(Report Producer/Author: Debang Securities, Qian Jinyu)
1. A leading manufacturer of core banking systems that has been focusing on financial technology business for more than 20 years
1.1. Established for more than 20 years, it has significant advantages in the core business areas of the bank
1.1.1. 20 years of focus on fintech business, software development accounts for more than 90% of revenue
Sunline Technology was founded in Shenzhen in 2002 and successfully listed on the Growth Enterprise Market of the Shenzhen Stock Exchange in 2012. Focusing on the field of financial technology for 20 years, it is the world's leading financial digital consulting and solution service provider. Sunline serves customers in the financial industry, mainly banks, and provides customers with IT solutions and services related to the construction of key business systems related to the whole life cycle by virtue of its self-developed core technologies and products, focusing on key business systems such as customers' core business systems, credit business systems, credit card business systems, and business middle platform systems, so as to fully meet the goals of digital transformation of different types of financial institutions.
In 2003, Sunline Technology independently developed SunLtts, an integrated banking business system, and launched the core system project of Bank of Zhengzhou, starting the journey of financial technology. In 2006, it cooperated with Chong Hing Bank of Hong Kong to officially enter the foreign banking market. SINCE THEN, IT HAS CONTINUED TO DEVELOP ITS OWN TECHNOLOGY, LAUNCHING THE FIRST JAVA VERSION CORE SYSTEM IN 2013 AND THE FIRST DISTRIBUTED CORE SYSTEM IN 2014. In 2015, the company launched the first distributed architecture banking core business system in China, which was successfully put into operation in WeBank. In 2016, Ping An Bank's new-generation core business system was successfully put into operation, replacing foreign core systems for the first time, marking its entry into joint-stock banks. In 2020, SunLtts V8, the country's first "microservice + unitized" architecture of a new generation of distributed banking core business system, was launched, ushering in a historic breakthrough and successfully opening up a new territory of large state-owned banks, and successively winning bids for major bank projects such as Postal Savings Bank, Bank of Communications, Bank of China, and Industrial and Commercial Bank of China. In 2021, the industry's first new core system using the architecture of "microservice application + domestic distributed database" was successfully put into operation in Kunshan Rural Commercial Bank, won the bid for the credit card consulting project of Minsheng Bank, and opened up full-stack services from consulting to design, demand, development, testing, launch, acceptance and other stages, and a number of major projects of large state-owned banks and joint-stock banks were successfully put into operation.
The company's main source of revenue is software development business, accounting for more than 90%, and system integration business, maintenance service business and other businesses together account for less than 10%. By product, the company's revenue is dominated by digital financial business solutions, accounting for more than 50%. In H1 2023, a variety of project types such as the core business of banking, credit management, and core business of financial companies in the company's digital finance business have won bids, covering joint-stock banks, leading city commercial banks, provincial financial companies, etc.
1.1.2. The three solutions are competitive and in a leading position in the core banking system
The solution services provided by the company mainly include three categories: digital financial business solutions, big data application system solutions and comprehensive value management solutions. At present, the company's products have been widely used in banking, Internet finance, consumer finance, asset management, securities, funds, financial companies, financial holding platforms and many other financial industries. Since its establishment 20 years ago, the company's related products have formed a good reputation and competitive advantage in the market, and steadily marched towards the goal of industry leader, among which, the bank's digital financial business solutions have been in the leading position in the industry in recent years, the big data application system solutions have gradually occupied the leading position in the industry, and the comprehensive value management solutions have gradually entered the state-owned banks, joint-stock banks, small and medium-sized banks and non-bank markets, and have made key breakthroughs in key areas. The company's three major solutions usually use the "product + service" payment method, according to the different needs of customers will be combined with the company's products to meet the customer's customized needs in terms of technology, at the same time, according to many years of service experience, for customers to establish a full set of management system, including standardized business processes, standardized management system, etc.
According to the "China Banking IT Solution Market Forecast, 2021-2025" issued by IDC, China's banking IT solutions are mainly divided into more than 20 subdivided solution application scenarios, such as basic business solutions, digital business solutions, channel and customer experience solutions, management, risk control and compliance and other solutions. Basic business solutions include core business systems, credit operating systems, payment and clearing systems, intermediate business systems, financial market business systems and other solutions, which are the core of bank IT solutions. According to IDC's 2021 China Banking IT Solutions Market Share Report released in August 2022, the company ranks third in the market share of the basic business solution segment.
According to the "China Banking Industry IT Solution Market Forecast (2021-2025)" released by IDC, the largest market size in the IT solution segment of the banking industry in mainland China in 2021 is the bank core business system solution market, which is 11.59 billion yuan, followed by data intelligence solutions.
In terms of market share, the company is in a leading position in the field of core banking business systems. The core system of a bank mainly includes deposit and loan business, capital business, payment and settlement business, and accounting and other accounting processing business, which is the heart of the entire banking information system and the foundation of other business systems, and determines the overall competitiveness of the bank. According to IDC's 2022 China Banking IT Solutions Market Share Report, 2021, the company ranked second in the core business system solutions market.
The core system independently developed by the company has been continuously promoted and applied in the market for many years and is the company's main product. The company's core system products have an iteration cycle of two to three years, and the current products rely on the distributed scheme of autonomous, safe and reliable unitized distributed architecture and microservice architecture, which can carry agile and changeable business scenarios and business fluctuations at the same time, and carry out horizontal expansion to meet the high concurrency and high experience of the Internet era; Loose coupling of basic microservices such as public operations and business microservices such as customers, deposits, and loans. In addition, the product supports flexible deployment and remote multi-active deployment, supports online and offline integration, has good compatibility and platform agnostic, and can meet the rapid iteration of products and the information technology innovation needs of customers in the financial industry. At present, the company's distributed core system business architecture has been applied in many banks and has been recognized by many large state-owned banks.
1.2. Entering the big banks to create a benchmark case, profitability is fluctuating but is expected to stabilize and recover in the long run
Since 2021, the company has gradually implemented strategic transformation, starting to expand from focusing on small and medium-sized banks to large bank customers, and winning bids for the digital business of leading banks such as Postal Savings Bank and Bank of China. As of the end of June 2023, the company has cooperated with all policy banks, large state-owned commercial banks, and national joint-stock banks, and has cooperated with 46 of the 48 urban commercial banks and rural commercial banks with assets of more than 500 billion yuan, with a coverage rate of more than 96%. Deeply participated in the construction of the new core of the Postal Savings Bank, and created a benchmark case of the new core system of the bank. In 2020, in order to meet the technological development needs of the digital transformation of leading banks, the digital financial business solution integrated the original company's technology platform, core business system, Internet finance, credit card business, credit business system, channel business and other product lines to create an overall banking business system solution based on a unified enterprise-level technical architecture. In 2020, the company won the bid for the new core enterprise-level distributed framework EDF and bank remittance component projects of the Postal Savings Bank, helping the Postal Savings Bank to build the first core modernization benchmark project of independent innovation of a large state-owned bank, empowering the business transformation of the Postal Savings Bank with science and technology, marking the beginning of a new journey for the company to become a major state-owned bank. In 2021, the company cooperated with the Postal Savings Bank of China to implement a new generation of distributed core system technology platform and successfully put into operation, injecting new momentum into the digital transformation and development of the Postal Savings Bank and creating a new engine for the Postal Savings Bank to build a first-class large-scale retail bank. In 2022, the company cooperated with the Postal Savings Bank of China to implement a new generation of personal business distributed core system for more than three years, which was successfully put into full production, which is a major practice of independent and controllable key technologies of financial technology in China's banking industry. Relying on years of innovation and practice in the field of core systems, the company has deeply participated in the construction of the new core distributed technology platform and related business components of the Postal Savings Bank, injecting new momentum into the digital transformation and development of the Postal Savings Bank and building a new engine for the Postal Savings Bank to build a first-class large-scale retail bank.
Judging from the revenue and profitability in the past three years, the company's operating income has grown steadily, and the profitability has declined significantly. From 2020 to 2022, the company's operating income increased from 1550.8398 million yuan to 1887.2187 million yuan, with an average annual compound growth rate of 10.31%.
From the perspective of revenue, the company's operating income in 2021 grew relatively flat compared with 2020, mainly due to the company's acceleration of strategic transformation in the current period, and the sale of its subsidiary Changliang Baotai with insurance as its target customer at the beginning of the year, and the business income of Sunline Baotai was excluded from the company's consolidated statements; The large growth in 2021 was mainly due to the acceptance of major bank projects in the early part of the year and the recognition of revenue, and in the first half of 2023, the company's operating income increased year-on-year compared with the previous period, mainly due to the growth of the company's business scale. From 2021 to January to June 2023, the company's net profit declined significantly, mainly due to the following reasons: Financial institutions represented by banks continue to promote digital transformation, which has brought about extremely fierce competition for fintech talents, which has generally increased the labor cost of the industry, which in turn has led to a large decline in the company's gross profit margin. The company accelerated its strategic transformation and gradually expanded from focusing on small and medium-sized banks to large bank customers, which led to a large increase in operating costs due to the complexity of large bank projects, high requirements for personnel quality, and long project implementation cycles. The earnings of some subsidiaries did not meet expectations, resulting in a large amount of goodwill impairment, which in turn led to a large decline in the company's net profit. In order to stimulate the enthusiasm of employees, the company implemented equity incentives and provided for share-based payment expenses, which led to a large decline in the company's net profit.
After the previous few years of running-in with Daxing in all aspects, the relevant problems in the Daxing project have been effectively controlled. The company improves the company's human efficiency ratio by increasing the number of orders, increasing business growth and refined management, so as to further improve the level of gross profit margin and net profit. In the long run, the company's gross profit margin is expected to stabilize and rebound.
1.3. Continuous equity incentives to enhance the stability of the company's team
Mr. Wang Changchun, Chairman of the Board of Directors of the Company, is the controlling shareholder and actual controller of the Company, accounting for 14.08% of the total share capital as of September 30, 2023. In 2018, the company introduced a strategic partner, Tencent.
The company carries out equity incentive plans for technical backbone employees from time to time, improves the employee remuneration system, and adheres to the employee stock ownership policy for a long time to achieve win-win sharing among employees. Since its listing in 2012, the company has implemented four equity incentive plans, granted restricted shares to a large number of core employees, and created a long-term and sustainable comprehensive employee incentive system.
2. Information innovation and digital transformation drive demand, and the company is expected to fully seize business opportunities
2.1. Financial information innovation is accelerating, and the company's core business system orders are strong
Since 2020, the implementation of information innovation in the financial industry has accelerated, and at present, financial information innovation is being further promoted in an all-round way, gradually penetrating into the core business system. According to the Securities Times, in August 2020, the first phase of the financial industry's information innovation pilot was launched, with 47 pilot institutions, including banks, insurance, and securities firms, requiring the purchase of basic software and hardware in the financial industry to account for 5 to 8% of its IT outsourcing;In May 2021, the second phase of the pilot project of information innovation in the financial industry was launched, and the pilot institutions were expanded to 198, and the pilot institutions required the OA mail system to be replaced with full-stack information innovation products, and the general business system began to carry out some information innovation applications, and the information innovation investment of the pilot institutions was not less than 15% of IT expenditure. In 2022, in accordance with the technology promotion route of "pilot first, then comprehensive", after the completion of the two phases of the pilot, it is expected to expand to more than 5,000 in the whole industry, and the pilot scope will penetrate from large banks, securities, insurance and other institutions to small and medium-sized financial institutions. In 2023, under the guidance of policies, regulators, industry associations and other parties, representative offices of various financial sub-sectors will first complete some of the three batches of pilot work, and the replacement path will gradually deepen from the peripheral edge system to the internal core system, and will accelerate into the stage of comprehensive construction.
The distributed architecture in the information innovation environment has brought about an increase in the demand for system reconstruction, and the company's three major solutions represented by the digital financial business are expected to fully seize the business opportunities and achieve rapid growth in signed orders. Historically, the banking IT system architecture has typically consisted of computing equipment, database technology, and storage devices provided by IOE (IBM, Oracle, EMC), which is a centralized architecture. With the deepening of digital transformation, the original architecture is no longer suitable for processing massive user data, and cannot cope with high-concurrency and diversified business scenarios. The distributed architecture is composed of X86 servers, distributed databases and distributed storage technologies, which not only has strong data processing capabilities, but also has low cost and a high degree of domestic substitution of hardware, which is in line with the goal of independent and controllable information innovation. As the earliest informatization among financial institutions and the banking industry with the highest participation in information innovation, the upper-level business system has a great need for adaptation and upgrading, and has a large number of system reconfiguration needs.
With the increasing complexity of system adaptation in the information innovation environment, and the increasing opportunities for upgrading the core and overall architecture of banks, the company is expected to rapidly expand the scale of advantageous solutions such as core business systems. In the context of the information innovation policy, financial institutions need to have a clear timetable for domestic substitution, and customers have a rigid demand for domestic substitution. At present, some financial institutions have replaced marginal products such as OA to the replacement stage of core trading systems, so the demand for core systems is relatively strong. In the first three quarters of this year, the company has identified more than a dozen orders related to core system refactoring, compared with an average of 5-6 per year in the past and only two last year, according to the company's investor communication minutes. Therefore, from the order side, the market demand for core business systems is strong this year. In the coming years, order growth in the core business systems of banks is expected to be expected. Sunline Technology has full-stack financial service capabilities from financial infrastructure adaptation to financial industry applications, providing one-stop financial information innovation solutions for financial institutions of different sizes and different stages of transformation to meet the diversified needs of financial information innovation development. The company serves the digital transformation of financial institutions and the implementation of information innovation practices with the integrated service capability of "consulting + solution + implementation + project PMO management". At present, the company has successfully provided scientific and technological support for the implementation of information innovation projects of nearly 100 banks, such as Postal Savings Bank, Ping An Bank, China CITIC Bank, Bank of Nanjing, WeBank, and Zhangjiagang Rural Commercial Bank.
2.2. The digital transformation of the banking industry continues to advance, and IT investment continues to increase
In recent years, as the technical direction of the new cycle of financial technology, distributed and the national strategic guidance of the information and innovation industry have jointly driven the digital transformation and upgrading of banks and other financial institutions, and promoted the release of a new round of financial technology market space. At the technical level, cutting-edge technologies such as big data, AI, and cloud computing continue to develop and are implemented in various fields and industries. In the financial field, the important position of financial technology has become very prominent, and financial institutions have also taken action, putting forward higher requirements for technology upgrading and product architecture. Digital transformation is the strategic direction of banks, and fintech has the momentum to continue to invest. In 2022, the People's Bank of China issued the Fintech Development Plan (2022-2025), which clearly stated that "fintech helps the digital transformation of the financial industry, releases the potential of data elements, and improves the quality and efficiency of financial services" as the main goals of fintech innovation. In the context of the construction of "Digital China", banks have made it clear that digital transformation has become the key to differentiation. The six major state-owned banks have all incorporated digital construction into their strategic layout and are in an important position.
Compared with foreign banks, domestic banks have room for continuous improvement in technology investment. According to the 2022 annual reports of the six major state-owned commercial banks, the total investment in science and technology of the six major banks in 2022 reached 116.549 billion yuan, a year-on-year increase of 8.42%. However, compared with the four major banks in the United States, the ratio of IT investment to revenue of the six major banks in mainland China is generally low. In order to continue to deepen digital transformation and implement the requirements of information innovation, domestic banks are expected to accelerate IT investment and construction pace.
The market size of IT solutions for the banking industry in mainland China is expected to maintain steady growth. According to the IDC report, in 2017, the market size of IT solutions in the banking industry in mainland China was 27.81 billion yuan, of which the market size of information technology services was 23.30 billion yuan, accounting for 83.78% of the total industry market size, and in 2021, the market size of IT solutions in the banking industry in mainland China reached 59.89 billion yuan, of which the market size of information technology services was 50.74 billion yuan, accounting for 84.72% of the total industry market size. It is estimated that by 2025, the market size of IT solutions for banking in mainland China will grow to 118.56 billion yuan, of which the market size of information technology services will reach 98.8 billion yuan.
In H1 2023, the company's sales contract value increased by nearly 27% compared with the same period in 2022, of which the sales contract value of digital financial business solutions increased by more than 40% year-on-year, and the sales contract value of big data application system solutions increased by about 15% compared with the same period in 2022. In the future, with the gradual improvement of the external economic environment and the continuous improvement of industry demand, the results of market development are expected to gradually appear.
2.3. After years of work, we have launched the core overall solution of digital intelligence, and the competitiveness of our products has been rising
Focusing on the new generation of information technologies such as big data, artificial intelligence, and cloud computing, the company carries out innovative exploration of the integration of technology and business, and continuously improves the company's technology application capabilities. Since its establishment, the company has adhered to independent research and development, and has a number of pioneering achievements. In terms of bank core systems, Sunline Technology launched the first JAVA version of the banking core system in China in 2013 and the first distributed core system in China in 2015. Since then, in the field of core systems, Sunline Technology has brought a number of products or cases such as "first" and "first" to the market.
It has taken a long time for banks to embrace the transformation of distributed architecture, but the core system area is considered to be "the most important and the most difficult to localize", which is a key indicator to measure the success of banks' fintech transformation. At present, the "new core" of banks still faces multiple challenges in moving from "digitalization" to "digital intelligence", including the slow speed of product iteration and innovation, the lack of self-mastery capabilities, the lack of ability to cope with massive high concurrency, and the slow speed of iterative innovation. Based on the bank's practical pain points and needs for the construction of the new core system, Sunline Technology established the "Taishan" R&D project internally at the end of 2021. In December 2023, Sunline Technology launched the Digital Intelligence Core Solution, an innovative banking core system product. The core overall solution of Sunline Digital Intelligence, which has been launched for many years, is the beginning of the "Taishan" project. In two years, hundreds of people have invested in the cooperation of more than 100 different types of financial institutions in the core construction practice, forming a new set of methodology, tool platform system and process, and forming a complete set of solutions for this set of methodology and implementation of new processes. Sunline's core overall solution is built in response to the general trend of artificial intelligence, and consists of a set of implementation processes, a set of cloud-native digital productivity technology bases, and application design assets and codes based on implementation process guidance and development. On top of the digital base, the process is standardized through innovative processes to form asset precipitation. Compared with the previous version, the company's digital intelligence core overall solution has two major highlights and differences in the implementation process and enterprise-level asset construction. The innovation of the implementation process stems from Sunline's milestone project implementation experience in large state-owned banks, and has been polished and optimized to open up the entire link from project requirements to delivery to asset iteration. Because this innovative implementation process is implemented from an enterprise-level architectural perspective, it can reduce the deviation of the bank's strategic objectives and ensure that the IT system is complete and correct to undertake the business modeling results. The construction of enterprise-level assets is mainly based on Sunline's years of experience and knowledge in serving the core system of banks, which can save banks from building enterprise-level assets from scratch, which requires a lot of manpower and material resources.
At present, Sunline's digital intelligence core overall solution has been gradually implemented in leading joint-stock banks and city commercial banks, and its effect has gradually become prominent. According to the company's official website, the company helped a city commercial bank build a new generation of core system, which will completely replace the existing foreign core system, including deposit and loan business and full-function core business of corporate and retail, which can meet the bank's diversified business needs. At present, the bank's new-generation core system can support high-concurrency big data processing and stably handle the business of 100 million-level accounts.
3. Develop overseas markets and create a second growth curve
3.1. Fintech brands are pioneers in going overseas, cutting into overseas with products, and have accumulated stable customer resources
The company is the first national financial technology brand to go overseas, and the first Chinese enterprise to successfully implement the core system in a large bank in Southeast Asia, with rich experience in going overseas. In 2016, the company started the process of internationalization along the "One Belt, One Road", took the lead in promoting the concept of digital banking overseas, and has opened up the banking informatization market in Southeast Asia. As the first Chinese enterprise to successfully implement the core banking system in a large bank in Southeast Asia, the company has 60+ customers in Southeast Asian countries such as Malaysia, Thailand, and Indonesia as of June 30, 2023, focusing on core banking, digital banking, foreign exchange, big data and financial solutions, and has formed a number of successful cases.
The company is one of the few domestic IT companies that really cuts into overseas with products, and it is scarce. The company focuses on key markets in Southeast Asia such as Malaysia, Thailand and Indonesia, seizes opportunities in opportunistic markets and key projects such as Vietnam, the Philippines and Africa, focuses on Icore products, and at the same time looks for market opportunities and seed customers for modern core replacement; The R&D progress of the product will quickly transfer the product capabilities and project experience to overseas banks to achieve rapid occupancy, and it is planned to take the promotion of Mcore products as a new growth point for overseas business in the next two to three years. In 2023, the company's overseas business continued to deepen the company's footprint in the global financial markets, further consolidating its market competitiveness in Thailand, Malaysia, Indonesia and other countries in the Southeast Asia region, and winning projects from top banks in the region. After years of layout and deep cultivation in the Southeast Asian banking IT solution market, the company's overseas operating income has continued to grow steadily in recent years. In the process of business development, the company has established stable business cooperation with many financial institutions such as CIMB Bank in the Philippines, SCB Bank in Thailand, SCC Bank in Malaysia and China CITIC Bank (Hong Kong) in Hong Kong, China. With the deepening of the bank's informatization and the increase of business scale, the bank's IT system needs to be continuously upgraded, iterative and even redeveloped, and the customer's needs are continuous and sticky, and the extensive enterprise-level customer resources provide an important guarantee for the company's subsequent business development.
3.2. It is planned to raise funds to build a modern core system overseas, improve competitiveness, and create new profit growth points
Driven by the wave of digital economy, the construction of new IT core business systems of overseas banks is becoming more and more demanding. According to the Southeast Asia Digital Economy Report 2022 jointly released by Google, Temasek and Bain, the total transaction value of Southeast Asia's digital economy is expected to reach US$200 billion in 2022 and US$330 billion in 2025. In the ASEAN Digital Master Plan 2025, released in 2021, it is stated that the mainland will guide ASEAN's digital cooperation from 2021 to 2025 to build ASEAN into a leading digital community and economy driven by secure and transformative digital services, technologies and ecosystems. The state encourages mainland financial digital service enterprises to "go global" and accelerate the pace of building a digital society in ASEAN countries. With the continuous increase of policy support and the continuous deepening of the company's business overseas, overseas business is expected to become a huge growth point for the company's business. Southeast Asian banks need to make rapid adjustments to their core systems, which brings huge opportunities for companies to go global. In recent years, the rapid development of information technology has accelerated the pace of construction of the digital economy, and the demand for online and Internet-based financial services of Southeast Asian financial institutions has increased. In order to reduce O&M costs and adapt to the development of the digital economy, Southeast Asian banks need to quickly adjust their core banking systems, which brings huge market opportunities to the company's Southeast Asian business.
However, the construction of bank IT systems in Southeast Asia is influenced by European and American manufacturers and differences in local financial regulatory rules and regulations, resulting in different requirements for bank core system service providers. Therefore, in view of the differentiated demand for IT solutions in overseas markets represented by Southeast Asia, the company needs to upgrade the sub-sectors of overseas modern core systems, and newly develop sub-functional modules such as correspondent banking, cloud native, partner center, national capabilities and Islamic culture, so as to make full use of the company's existing technology platform resources to create products that meet the needs of customers and regulatory needs in target countries, and increase the market share in Southeast Asia. In October 2023, the company received the "Reply on Agreeing to the Registration of Shenzhen Sunline Technology Co., Ltd. to Issue Shares to Specific Objects" issued by the China Securities Regulatory Commission, according to the company's "2023 Prospectus for Issuing A Shares to Specific Targets (Registration Draft)", the total amount of funds raised in this issuance (including issuance costs) will not exceed 572.5863 million yuan, and the net funds raised after deducting the issuance expenses will be used for the project.
The largest total investment in the fundraising project is the "Financial Business System Construction Project Based on Enterprise-level Modeling and Implementation Process", which is to upgrade and improve the company's existing digital financial solutions, and will build an overseas modern core system according to the characteristics of overseas business to enhance the competitiveness of overseas products. The financial business system construction project based on enterprise-level modeling and implementation technology is intended to be based on the enterprise-level implementation process method, sort out the panorama of the financial business system business field, and model the business field to form enterprise-level modeling assets, develop on the basis of a unified technology platform, realize various competence centers in the business middle platform, and combine the characteristics of overseas business to build an overseas modern core system, and the whole system can be assembled through the standardized business process of "decoupling-reconstruction-reuse". service architecture to achieve the purpose of business agile innovation.
According to Zhitong Finance and Economics, from the perspective of market competition, the main participants in the Southeast Asian banking IT market are local old and European and American manufacturers, and the competition pattern is relatively scattered, and there is no absolute monopoly manufacturer. The main players in banking IT in Southeast Asia are: Silverlake, TaTa, Infosys, Temenos, Oracle, FISV, etc. Among them, Silverlake, TATA, and Infosys are Asian companies, and the rest of the manufacturers are from Europe and the United States, and each provider has its own strengths in their respective fields. According to the company's investment records, in the process of overseas delivery, the proportion of standardized products is higher than that in China, which is conducive to the improvement of gross profit margin. In 2022, the gross profit margin of some Southeast Asian bank IT service providers is significantly higher than that of domestic bank IT vendors such as Sunline, Yusys Technology, and Gao Weida.
With the development of the company's overseas business, it is expected to open up new profit margins. According to the company's investment records, as overseas products become more and more perfect and stable, and the customized part is getting smaller and smaller, the gross profit margin is expected to rise. In addition, overseas software licensing is a relatively stable income, which can contribute to the overseas business with greater profits. The company hopes that in the next three years, the profit of overseas business will be the same as that of domestic business, that is, the profit of overseas business accounts for half of the company's total profit.
(This article is for informational purposes only and does not represent any investment advice from us.) To use the information, please refer to the original report. ）
Selected report source: [Future Think Tank]. Future Think Tank - Official Website