Gist:
Financial Summary (Audited)
HONG KONG, March 27, 2024 /PRNewswire/ -- China Communications Services Corporation Limited ("China Comservice" or the "Company", together with its subsidiaries, the "Group") (HKSE: 552), today announced its audited annual results for the year ended December 31, 2023.
Operational performance
In 2023, the country will accelerate the construction of digital China and new industrialization, a new round of scientific and technological revolution and industrial revolution will develop in depth, and the process of digitalization and intelligence will continue to accelerate. Based on the positioning of "a new generation of integrated intelligent service providers", the Group is guided by technological innovation, deeply cultivates strategic emerging industries, builds core capabilities, improves the quality of enterprise development, and achieves good business performance and development benefits.
First, the business performance is stable and improving
Adhering to the general route of "value-led, steady progress and high-quality development", the Group gave full play to its advantages as "digital infrastructure builder", "smart product and platform provider", "industrial digital service provider" and "smart operation guarantor" (hereinafter referred to as the "four"), accelerated the expansion of strategic emerging industries, continued to improve its operating performance, and achieved steady growth in operating revenue and net profit[1]. For the full year, the Group achieved operating revenue of RMB148,615 million, representing a year-on-year increase of 5.6%. Among them, service revenue[2] was RMB143,437 million, representing a year-on-year increase of 6.1%. Operating gross profit was RMB17,257 million, representing a year-on-year increase of 8.0%. The gross profit margin was 11.6%, an increase of 0.2 percentage points year-on-year, and increased for two consecutive years. Net profit was RMB3,584 million, representing a year-on-year increase of 6.7%, and the growth rate continued to outpace the revenue growth rate. The net profit margin was 2.4%, stable and rising. Free cash flow remained solid at RMB4,333 million. Return on equity (ROE) was 8.6%, up 0.1 percentage points year-on-year. Basic earnings per share was RMB0.518, representing a year-on-year increase of 6.7%. In view of the Group's good operating performance and cash flow level for the whole year, and in order to further enhance shareholder returns, the Board of Directors recommended that the dividend ratio for the financial year ended 31 December 2023 be increased from 40% in 2022 to 42%, and a final dividend of RMB0.2174 per share, representing a year-on-year increase of 12.1%.
(1) Driven by advantageous businesses, the three major business segments maintained a good growth trend
For the full year, the Group's revenue from telecommunications infrastructure services reached RMB76,137 million, representing a year-on-year increase of 4.4%, accounting for 51.2% of operating revenue. Among them, the high-value consulting and design business developed well, which led to the effective improvement of the profitability of this sector. Business process outsourcing service revenue reached RMB43,551 million, representing a year-on-year increase of 1.1%, accounting for 29.3% of operating revenue. Benefiting from the Group's software and digital service capabilities, application, content and other service revenue maintained a rapid growth rate, reaching RMB28,927 million, representing a year-on-year increase of 16.8%, accounting for 19.5% of operating revenue, contributing primarily to the increase in revenue. Among them, the software development and system support business maintained rapid growth, with a year-on-year increase of 25.1%.
(2) Keeping up with the upgrading of digital demand, the three major customer markets have risen steadily
Second, the strategic emerging business has become stronger and better, and new results have been achieved in transformation and upgrading
In 2023, the construction of Digital China entered a new stage of overall layout and comprehensive promotion, and the Group continued to deepen its efforts in strategic emerging industries such as digital infrastructure, smart city, green and low-carbon, and emergency safety, and strengthened new momentum and new advantages, with the total new contract value increased by more than 30% year-on-year, accounting for nearly 30% of the total new contract value, an increase of approximately 5 percentage points over the previous year, effectively driving the overall business transformation and upgrading, and boosting the high-quality development of the enterprise.
In the field of digital infrastructure, the Group actively participates in the construction of intelligent computing centers and supercomputing centers, as well as the transformation and upgrading of data centers, strengthens a series of cloud businesses such as cloud consulting, cloud migration, cloud integration, cloud operation and maintenance, and integrates a new generation of digital intelligence and green technologies with profound industry experience accumulation to form a unique "1+2" new digital infrastructure construction solution (i.e., providing whole-process and full-professional integrated services, and providing green, low-carbon, Digital intelligence), data center energy-saving technology and full-process digital delivery capabilities are leading the industry. Successfully undertook eight major hub nodes of "Eastern Data and Western Computing" in China and a number of overseas data center projects, and the annual growth rate of new contracts signed in this field was about 30%. Released the White Paper on the Development of China's Data Center Industry (2023) to contribute wisdom and strength to build a solid foundation for digital infrastructure.
In the field of smart cities, with the development of social governance segments and the acceleration of digital transformation of the whole industry, the Group continued to focus on digital government, smart parks, smart transportation, smart education, smart medical care, enterprise digital transformation and other tracks, continuously built a strong marketing team, improved service quality, gave full play to the integrated advantages of consulting and design leadership, software development support and general contract delivery, and relied on the service capabilities covering the three levels of provinces, cities and counties across the country to achieve key industries, The key areas have developed through penetration, and a number of EPC general contracting projects of 100 million yuan have been obtained, and the new contract value from this field has increased by more than 20% throughout the year.
In the field of green and low-carbon, the Group contributed to the comprehensive green transformation of economic and social development, grasped the investment needs of new digital power systems, explored new tracks for the layout of carbon assets, focused on key businesses such as power infrastructure and supporting facilities, photovoltaic construction, energy consumption services, and carbon management, promoted the R&D and promotion of low-carbon, zero-carbon, and carbon-negative key technologies, and created "consulting leadership + digital empowerment + product innovation + engineering construction + operation and maintenance" The whole process of green and low-carbon solutions has strengthened the core competitiveness and differentiated advantages in this field, and the growth rate of new contracts signed from this field has reached more than 50% throughout the year.
In the field of emergency security, the Group is committed to promoting the construction of a social public security system, keeping up with the needs of customers for safe operation and data security, and using artificial intelligence, big data, 5G, Internet of Things and other technologies to create a comprehensive application platform for emergency management, a safety production risk monitoring and early warning system, an emergency command information system, a cyberspace surveying and mapping, data security monitoring and other products, so as to achieve sensitive awareness, accurate prediction, timely response and scientific decision-making of major risks, provide high-quality industrial planning and top-level design services, and provide high-quality industrial planning and top-level design services for urban public safety. The safety of industrial production and natural ecology were guaranteed, and the amount of new contracts signed in this field achieved steady growth throughout the year. The Group has the leading capabilities in smart application services and platform construction in this field, and has been successfully selected into the "Smart Security Emergency Industry Atlas" [6].
3. Enhance the core advantages of enterprises and comprehensively promote high-quality development
(1) Strengthen innovation capabilities and build strategic core products
The Group adheres to the principle of driving "connotative" growth with technological innovation, increasing R&D investment around strategic emerging businesses, carrying out applied technology innovation in line with customer needs, and accelerating the R&D and implementation of core products. The Group strengthened the overall planning of scientific and technological innovation, laid out cutting-edge technology fields such as 6G, data center, computing power, blockchain and artificial intelligence in advance, compiled a total of 16 national standards throughout the year, and authorized more than 3,000 patents in total. The Group has ranked fourth in the "Top 100 Competitive Software and Information Technology Service Enterprises" for three consecutive years, and has won a total of 49 important awards in various science and technology awards throughout the year, and its innovation ability and technological strength have been widely recognized by the society.
(2) Adhere to the guidance of consultation and enhance the value of smart services
The Group has always been customer-centric, constantly building a strong team of industry experts and scientific and technological talents, giving full play to the leading effect of "consulting + technology", and relying on the multi-professional and full-process comprehensive service advantages of "consulting and design + general contracting + integration + operation and maintenance" to meet the new needs of customers for scenario-based, intelligent, safe and sustainable digital services. The Group has established a number of industry research institutes to create an "industry center + regional platform" matrix, continuously enhance the systematic capabilities of "industry insight, marketing delivery, solution creation, product research and development, and ecological aggregation", and provide customers in various fields and industries with first-class intelligent services of higher value.
(3) Relying on the deep cultivation of the industry, strengthen the brand power of the enterprise
The Group serves the overall planning of the national digital China, continuously deepens the connotation of the "four", and is committed to building a differentiated and high-quality brand advantage. Through the layout of forward-looking strategic emerging industries, with value creation as the main line, we will build strong core products and key capabilities, and improve the leading power and influence of corporate brands in the industry and society. The "China Telecom & China Unicom 5G Co-construction and Sharing SA Construction Project" undertaken by the Group won the Gold Award of National Quality Project. Relying on its rich industry experience and digital technology advantages, the Group has built benchmark projects such as digital twins and industrial Internet, which have been reported by mainstream media such as CCTV for many times.
(4) Promote reform and digital transformation to fully unleash the vitality of development
The Group relies on deepening reform to enhance the endogenous driving force for development, and continuously promotes the modernization of corporate governance system and governance capabilities. We will continue to improve the supply chain, property business integration and value enhancement, and become stronger and better through professional operations. Formulate overall plans and implementation plans for digital transformation, and improve the level of digital management in key areas. Implement the strategy of strengthening the enterprise with talents, optimize the selection and employment of personnel and incentive mechanisms, cultivate and expand high-tech leading talents, scientific and technological talents, delivery marketing talents and craftsman talents, and provide strong support for the stable and healthy development of enterprises.
Looking to the future
Mr. Luan Xiaowei, Chairman of China Communications Services, said: "At present, the formation of new quality productivity integrating digital technologies such as cloud computing, big data and artificial intelligence is accelerating, and the digital economy has become an important support for building a new development pattern, and the digital transformation of the whole society has brought a broad market space. In the face of the new situation and new opportunities, the Group is committed to building "the main force in digital infrastructure construction, the vanguard of smart city services, the leading enterprise in production and digital services, and the credible expert in smart operation", adheres to the value leadership and innovation transformation drive, strengthens the quality and efficiency of traditional businesses, deeply cultivates new subdivision scenarios, service forms and trend hotspots of strategic emerging businesses, strengthens scientific and technological innovation capabilities, market expansion capabilities, general contracting delivery capabilities, risk control capabilities and capital operation capabilities, continuously improves the core competitiveness of the enterprise, and builds " First-class intelligent service innovative enterprise", work hand in hand with shareholders, customers and society to write a new chapter of high-quality development. 」
About China Comservice
As a new generation of integrated smart service providers, China Comservice provides integrated smart solutions for the field of informatization and digitalization, providing telecommunications infrastructure services including design, construction and project supervision, business process outsourcing services including information technology infrastructure management (network maintenance), general facility management (property management), supply chain and commodity distribution, as well as applications, content and other services including system integration, software development and system support, and value-added services. The company's main customers include domestic telecom operators and domestic telecom operator customers including China Tower Co., Ltd., domestic non-telecom operator group customers including domestic government agencies, industry customers and small and medium-sized enterprises, as well as overseas customers. The controlling shareholder of the Company is China Telecom Group Co., Ltd., and the shareholders of the Company also include China Mobile Communications Group Co., Ltd., China United Network Communications Group Co., Ltd., State Grid Information and Communication Industry Group Co., Ltd. and China Post and Telecommunications Equipment Group Co., Ltd.
In 2023, the Group ranked 98th in the "2023 Fortune China 500 Listed Companies". Ranked 1,499th in the "2023 Forbes Global 2000" and was selected as the "2023 Forbes China ESG Innovator". Won the "Most Admired Company", "Best CEO", "Best CFO" and "Best Environmental, Social and Governance" awards in the "2023 Asia's Best Management Team" poll organized by Institutional Investor. Won "Asia's Best CEO", "Asia's Best CFO", "Best Investor Relations Company" and "Best Environmental Responsibility" in the "13th Asian Excellence Awards" organized by Corporate Governance Asia. Won the "Gold Award" in the "The Asset ESG Corporate Awards 2023" organised by The Asset, a financial magazine.
For further information, please visit the website of China Comservice at www.chinaccs.com.hk
Forward-Looking Statements:
The press release contains forward-looking statements containing forward-looking statements and information about the Company, its business and prospects that are based on the Company's beliefs and assumptions and current information. In press releases, the use of words such as "expects," "believes," "estimates," "anticipates," "plans," "prospects," "future" and other similar words that relate to the company or its business are forward-looking statements. These statements reflect the Company's current views on future events and are subject to risks, uncertainties and assumptions. Should one or more of these risk factors become true, or if any relevant assumptions are subsequently found to be incorrect, actual results may differ from the forward-looking statements in this press release. The Company does not intend to update these forward-looking statements, other than under its ongoing disclosure obligations under the Listing Rules or as otherwise required by the Exchange.