Chinasoft International Ltd. · HKEX:354
Chinasoft International — H1 2011 Earnings Presentation
45 slides from Chinasoft International's earnings presentation, August 2011
Slide 1: ChinaSoft International 2011 Interim Investor Presentation
ChinaSoft International (0354.HK) 2011 Interim Investor Presentation August 2011
Slide 2: Disclaimer
Disclaimer These presentations and/or other documents have been written and presented by Chinasoft International Limited (“ChinaSoft International” or “the Company”). The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed.
Slide 3: Agenda
Agenda 1 Company Background 2 2011 Interim Financial Highlights 3 Business Review and Development 4 Future Outlook 5 Appendix 3
Slide 4: Snapshot of ChinaSoft International
Snapshot of ChinaSoft International Headcount 12476 Service IT Consulting and Solutions (40.8%) 10940 Offering 9467 IT Outsourcing (55.8%) 7759 (% of service revenue1) Others (3.4%) 4363 4816 2382 477 1055 238 2003 2004 2005 2006 2007 2008 2009 2010 2010 2011 June June Government & Manufactu
Slide 5: Business Development History
Business Development History Leading China based IT Services platform that serves the world with deep domain expertise and end-to-end service offerings 2010 Headcount: 10,940 2007 New Industries: Telecommunications 2005 Headcount: 4,363 2003 New Offering: Headcount: 1,055 New Industries:
Slide 6: Core Strength
Core Strength Putting equal emphasis on organic growth and ResourceOne® middleware platform M&A to be the Leading IT Services Company based on SOA, with independent IP rights, in fast-growing China market provides application software for industry Leading Innovative solutions for various verticals M
Slide 7: Completion of the initial overall business layout
Completion of the initial overall business layout Government & Manufacturing Telecommuni- Technology Services & After a decade of efforts, we have Financial Banking cations High- completed the initial overall layout in vertical industries, service offering and service areas. Consulting Services We c
Slide 8: Agenda
Agenda 1 Company Background 2 2011 Interim Financial Highlights 3 Business Review and Development 4 Future Outlook 5 Appendix 8
Slide 9: Key Financial and Operating Data
Key Financial and Operating Data RMB’000 2011 H1 2010 H1 Growth% Revenue 945,595 686,539 37.7% Service Revenue 852,382 594,739 43.3% Gross Profit 308,448 207,408 48.7% Segment Results 102,638 69,015 48.7% EBITDA 127,262 71,081 79.0% Non-GAAP Operating Profit* 138,740 82,314 68.5% Non-GAAP Net Profit
Slide 10: Key Financial and Operating Ratio
Key Financial and Operating Ratio Gross Margin Non-GAAP Operating Margin Service Gross Margin Total Gross Margin Service Operating Margin Total Operating Margin 17.0% 16.3% 36.9% 36.6% 37.3% 14.1% 14.6% 14.7% 34.9% 36.2% 13.8% 32.1% 32.6% 12.7% 12.0% 30.5% 30.2% 27.9% 10.6% 10.5% 2008 2009 2010 2010
Slide 11: Financial and Operating Ratio Analysis
Financial and Operating Ratio Analysis Per Per Per Per Per Service RMB’000 2011 H1 Service 2010 H1 Service Growth% Revenue% Revenue% Revenue revenue% revenue% G% Revenue 945,595 686,539 37.7% Service Revenue 852,382 594,739 43.3% Cost of sales 637,147 67.4% 479,131 69.8% 33.0% ——Salary Costs 406,222
Slide 12: Business Distribution
Business Distribution Service Revenue by Industry Verticals Service Revenue by Service Type Others Others 3.4% 9.7% G&M 21.7% IT Hi-Tech Consulting 20.9% & Solutions IT 40.8% Outsourcing Services 55.8% F&B 19.1% Charging mode: Charging mode: Telecom time and material fixed price 28.6% Total 2011H1 S
Slide 13: Segment Revenues and Results
Segment Revenues and Results Segment Revenue Segment Service Revenue Segment Results* RMB'000 2011 H1 2010 H1 Growth 2011 H1 2010 H1 Growth 2011 H1 2010 H1 Growth G&M 221,951 171,397 29.5% 184,610 134,058 37.7% 22,560 19,000 18.7% F&B 218,914 178,244 22.8% 163,042 123,783 31.7% 16,514 9,896 66.9% IT
Slide 14: Customers Analysis
Customers Analysis Top Customers Concentration Customer Analysis • For the 2011 H1, the service revenue from the Top 10 Clients % top 5 customers accounted for 38.3% of the Group‟s total service revenue. 77.0% • For the 2011 H1, the service revenue from the 65.0% top 10 customers accounted for 43.8%
Slide 15: Agenda
Agenda 1 Company Background 2 2011 Interim Financial Highlights 3 Business Review and Development 4 Future Outlook 5 Appendix 15
Slide 16: Deep Domain Expertise in China's Most Attractive Verticals
Deep Domain Expertise in China‟s Most Attractive Verticals Government & Manufacturing Financial Services & Banking • Audit: continues to be leading vendor. The Golden Auditing • Bank: The deficiency-free start-up of the new generation of Project has been reaching its peak, and our new businesses, Sh
Slide 17: Deep Domain Expertise in China's Most Attractive Verticals
Deep Domain Expertise in China‟s Most Attractive Verticals Telecommunications High Technology • With Telecom Operators: • Customer relationships remain stable, with sustained • Has signed the contract with China Mobile on the growth in business volume convenience card platform construction project i
Slide 18: Strong and differentiated human supply platform
Strong and differentiated human supply platform Nationwide Training Centers Superior Talent Management • The number of cooperated universities reached 382. The training business achieved profitability growth as well as ensuring talents supply to the company, training more than 35,000 students annual
Slide 19: Recent Strategic Cooperation with Hony Capital
Recent Strategic Cooperation with Hony Capital The Strategic Cooperation and Subscription demonstrates our strategic partner’s confidence in the prospects of the Group as well as its financial commitment for future acquisitions of the Group Highlights of the Strategic Cooperation Agreement Highlight
Slide 20: Changes in shareholding structure
Changes in shareholding structure 1 BEOFRE AFTER Number of shares Number of shares % of total shares % of total shares (000 shares) (000 shares) Hony - 0.00% 271,480 18.96% CNSS 165,320 13.02% 100,320 7.01% Far East 138,990 10.95% 113,990 7.96% GPC 119,270 9.39% 119,270 8.33% Others 846,100 66.64% 8
Slide 21: Agenda
Agenda 1 Company Background 2 2011 Interim Financial Highlights 3 Business Review and Development 4 Future Outlook 5 Appendix 21
Slide 22: Leading IT Services Company in the Fast-growing Chinese Market
Leading IT Services Company in the Fast-growing Chinese Market China Domestic IT Services Market Leadership in China IT Services Market size Ranked Top 3 by IDC in Consulting & Solutions for Government 51.6 industry vertical in 2007-09 (In USDbn) 43.0 Ranked Top 2 by IDC in IT Outsourcing for Am
Slide 23: Driving Revenue Growth
Driving Revenue Growth Government and Manufacturing: Fast growth driven by government‟s 5-year-plan (2011- 2015) which promotes IT Services in areas such as Social Security, Insurance, Agriculture, Power, High-speed Railway, Airport, Smart City, etc Telecom & High-Tech: Increasing IT Services ne
Slide 24: Driving Margin Expansion
Driving Margin Expansion Focus more on consulting and solution：Increasing of reusability of solutions for both Lines of Business, we can increase the Gross Margin of the whole Group around 1%. Focus on high margin customers：As to increase the weighting of Mobile Internet related business which e
Slide 25: Thank You
www.chinasofti.com THANK YOU
Slide 26: Agenda
Agenda 1 Company Background 2 2011 Interim Financial Highlights 3 Business Review and Development 4 Future Outlook 5 Appendix 26
Slide 27: Industry Solution
Deep Domain Expertise in China‟s Most Attractive Verticals Social Security Management Food and Drug Management Business Intelligence Government Auditing & Supervision Management Execution Permission Management Office Automation Agricultural Management Portal Website Sets Goods Digi
Slide 28: Case Study: Government – The Nationwide Auditing Program
Case Study: Government – The Nationwide Auditing Program Our Position The only Strategic Partner Total solution provider Core application developer 9 Years of relationship Achievements National Auditing Office Implementation of national audit office Central Government 18 Special Offices sy
Slide 29: Case Study: Manufacturing – Nationwide Tobacco Program
Case Study: Manufacturing – Nationwide Tobacco Program Our Position Only Strategic Partner 7 Years of relationship Achievements Business & Decision System, Management Execution System, Logistics Execution System, Warehouse Management System, ERP, RFID, etc Nationwide service network: 31 capi
Slide 30: Case Study: Financial & Banking – China UnionPay
Case Study: Financial & Banking – China UnionPay Our Position Only domestic provider for the switching system Total system integrator, and core application software developer 7 Years of relationship Achievements Top5 International Card Organizations 90 Nations and Areas Implementation of Chi
Slide 31: Case Study: Telecom – China Mobile
Case Study: Telecom – China Mobile Our Position Strategic partner at North Base for Mobile Payment and at South Base for Mobile Internet Strategic partner with Beijing Branch and Shanghai Branch Achievements Multiple cooperation areas with China Mobile Joint mobile IT Service with China Mobile
Slide 32: Case Study: Transportation & Logistics – Smart Card Solution
Case Study: Transportation & Logistics – Smart Card Solution Our Position Leading solution provider 7 Years of relationship No 1. Market share in one card pass solution nationwide, dominate in Beijing and Shanghai Achievements Solution for public transportation in subway, bus, rental, parkin
Slide 33: Case Study: Huawei
Case Study: Huawei – we are one of top three suppliers in ITO Our Position One of top three suppliers in IT outsourcing Comprehensive cooperation in consulting and solutions, as well as ITO Achievements Huawei manages its suppliers in outsourcing, solutions, and products. We are Huawei’s suppl
Slide 34: Serving Blue-chip Clients
Serving Blue-chip Clients Transportation & Government Manufacturing Financial & Banking Telecom & High-tech Logistics National Audit Office State Food and Drug Administration Ministry of HR and SS of PRC China Banking Regulatory Commission General Administration of CIQ Ministry of Agriculture of PRC
Slide 35: Serving Blue-chip Clients (cont'd)
Serving Blue-chip Clients (cont‟d) Key Customers and Years of Relationship 12 years 11 years 10 years 9 years 7 years 7 years 6 years 6 years 6 years 6 years National Audit Office Consulting Solutions ITO BPO 35
Slide 36: Global Delivery Capability
Global Delivery Capability Supporting global customers with China-based delivery centers (city and headcount) Beijing–3,596 London–10 Shanghai–2,117 Nanjing–1,478 Shenzhen–1,389 Dalian–941 Xi’an–614 Xiamen–442 Seattle–116 … Princeton–29 Tokyo–34 Sales & Delivery Center Offsho
Slide 37: Case Study: Microsoft
Case Study: Microsoft Our Position Top 10 global Microsoft strategic vendor among 3,500 vendors worldwide The only Microsoft Global Premier Vendor in China Achievements Multiple services including development, testing, localization, and daily operation. 360⁰ Relationship Global delivery capa
Slide 38: Case Study: Pfizer
Case Study: Pfizer Our Position Major supplier of Pfizer Close relation with U.S. Food and Drug Administration (FDA) Strategic partner of China’s State Food and Drug Administration (SFDA) Achievements Managing Pfizer’s enterprise R&D Electronic Document Management Systems and FDA application
Slide 39: Putting equal emphasis on organic growth and M&A (1)
Leading IT Services Company ： Putting equal emphasis on organic growth and M&A（1） Targets Upon Acquisition Year 2010 Vertical Verticals /Services Background and Contribution Acquisition Details Year Head Service Head Service CAGR% （24） count Revenue count Revenue Acquisition of Companies and Teams（2
Slide 40: Putting equal emphasis on organic growth and M&A (2)
Leading IT Services Company ： Putting equal emphasis on organic growth and M&A（2） Upon Targets Background and Acquisition Year 2010 Vertical Verticals /Services Acquisition Details Year CAGR% （24） Contribution Head Service Head Service count Revenue count Revenue Acquisition of Companies and Teams（2
Slide 41: Reconciliations of Non-GAAP Net Profit to Non-GAAP Operating Profit
Reconciliations of “Non-GAAP Net Profit” to “Non-GAAP Operating Profit” Per Per Per Per Per Service Service Service RMB’000 2011 H1 Revenue 2010 H1 Revenue Growth% revenue revenue Revenue % % % % G% Non-GAAP Net Profit* 60,589 6.4% 7.1% 36,557 5.3% 6.1% 1.0% 65.7% +Taxation 15,220 1.6% 1.8% 6,680 1.
Slide 42: Service Revenue by Contract Model
Service Revenue by Contract Model RMB'000 2011 H1 2010 H1 Growth Fixed Price 422,101 49.5% 293,366 49.3% 43.9% T&M 398,310 46.7% 270,902 45.6% 47.0% Volume Base 31,971 3.8% 30,471 5.1% 4.9% Total 852,382 100% 594,739 100% 43.3% 42
Slide 43: Operating Cash flow
Operating Cash flow Net Cash flow from Operating Activities (In RMBmm) 123 92 86 44 38 12 -55 -101 2005 2006 2007 2008 2009 2010 2010H1 2011H1 43
Slide 44: Days Receivable Comparison with Peers
Days Receivable Comparison with Peers Days Outstanding of AR Days of AR Comparison for 2010 185 85 154 151 142 134 135 118 126 145 193 126 2006 2007 2008 2009 2010 2010H1 2011H1 44
Slide 45: Aging Analysis of Accounts Receivables
Aging Analysis of Accounts Receivables (Unaudited) (Audited) RMB’000 % % 2011 Jun versus 2010 Dec 30 Jun,2011 31 Dec,2010 Within 90 days 417,148 66.70% 370,973 81.50% 46,175 12% Between 91-180 days 103,223 16.50% 40,565 8.90% 62,658 154% Between 181-365 days 71,466 11.40% 16,347 3.60% 55,119 337% Be
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