Chinasoft International (354) H2 2024 earnings summary

Executive summary

• Revenue for 2024 was RMB 16,950.7 million, down 1.0% year-over-year, with service revenue declining 1.9% to RMB 16,314.2 million.

• Profit for the year dropped 28.3% to RMB 511.1 million, mainly due to increased bad debt provisions and reduced government subsidies.

• Adjusted profit rose 3.8% to RMB 650.2 million, reflecting operational efficiency improvements.

• Gross profit margin decreased to 22.1% from 23.4% due to pricing pressure from major clients.

• Final dividend of HK$0.0533 per share proposed, subject to shareholder approval.

Financial highlights

• Gross profit was RMB 3,741.5 million, down 6.5% year-over-year.

• Other income fell 43.6% to RMB 241.9 million, mainly from lower government subsidies and interest income.

• Other gains increased 161.7% to RMB 219.6 million, driven by investment income and fair value gains.

• Finance costs decreased 13.3% to RMB 175.9 million due to refinancing of high-cost loans.

• Income tax expense rose 167.6% to RMB 57.0 million, mainly from higher investment-related income and tax settlements.

• Basic EPS was RMB 20.01 cents, down 22.7% year-over-year.

Outlook and guidance

• Focus on expanding high-margin AI services and accelerating full-stack AI product deployment.

• Plans to enhance delivery efficiency with AI tools and further reduce administrative expenses.

• Continued investment in AI, ERP, and HarmonyOS ecosystem to drive digital transformation and new growth.

• Aims to maintain strong solvency and deliver stable long-term value to shareholders.