Chinasoft International Beats the Market Trend in 2018 and Achieved Highest Revenue Since Listing

BEIJING andHONG KONG,March 21,2019 -- In 2018,the Group's businesses achieved steady growths. The revenue,service revenue,profit,profit attributable to the owners of the Company and basic EPS increased by 14.5%,17.4%,27.6%,26.6%,and 25.2% YoY respectively. The Board of Directors proposed to pay a dividend of HK$0.0215 per share for 2018.

RMB '000

2018

2017

Growth %

Revenue

10,585,013

9,243,684

14.5%

Service Revenue

10,339,012

8,807,512

17.4%

Profit

716,171

561,307

27.6%

Profit Attributable to the Owners of the Company

715,803

565,567

26.6%

Basic EPS (cents)

29.54

23.59

25.2%

In the extraordinary year of 2018,the Group's 60,000 employees united and worked cohesively together,despite the slowdown of economy in China and the trade war between China and the U.S,to realize sales of over RMB 10 billion and demonstrated what it means to be a leading IT service enterprise in China. The Group's traditional business continued to improve its service quality and the business grew steadily. The Group's emerging business focused on new technologies,ecosystems,and achieved rapid development. The revenue of the emerging businesses accounts for more than 15% of the Group's revenue,and the overall profitability of the Group has steadily increased.

1. Core Business Grew Steadily While Improving the Quality and Value of Its Services

During the reporting period,the Group continued to strengthen its cooperation with Huawei,HSBC,Tencent,Ping-An,and Alibaba. As a result,the TPG grew steadily. The Group followed Huawei's pace and used SD (Huawei Supplier Development Plan) to drive the Group's business development and improve its service quality and value. HSBC's business is progressing rapidly,while Hang Seng Bank's business achieved high growth. The Group's cooperation with Tencent made new breakthroughs and jointly established the Nearshore Delivery Center (NDC). The Group has become the one of the two largest IT service provider for Ping-An Group. For the first time,the Group became involved in the Ali Damo human-robot interaction business. Lastly,the Group strengthened its collaboration with Baidu to realize AI applications in the finance industry according to different scenarios.

2. Jointforce: Ecosystem Reaches Scale and The Cloud Integrative Service Entered into a Fast Promotional Phase

During the reporting period,the Jointforce platform continued to optimize its service content and capabilities as the business model evolved to create a cloud ecosystem for software development. There are currently more than 420,000 engineers,20,000 companies taking jobs,and 55,000 companies posting jobs on the platform. More than 1 billion lines of code were created and stored on the platform. Lastly,the Group finished digital due diligence for more than 13,000 software enterprises from GDP Top 50 cities,establishing the service provider's ability and credentials.

Furthermore,Jointforce realized its digital service capabilities and launched the "Cloud Integrative Service" to meet the government's software service demands. Currently the number of registered government units on "Cloud Integrative" platform has exceeded 3,000,and the total price of accumulated service projects have exceeded RMB 100 million yuan. This service has been deployed in Nanjing and Xi'An,with Baiyun District of Guangzhou,Yu Bei District of Chongqing,Zhenjiang City of Jiangsu soon to follow. The new model of "Cloud Integrative" is being quickly recognized,applied and promoted,which makes us more confident in the "absolute success of Jointforce".

3. Focused on Cloud Service and Accelerated Its Digitalization Services

During the reporting period,the Group's cloud business grew rapidly. The Group improved its cloud consultation,cloud migration,cloud operation and maintenance capabilities and accumulated DevOps and cloud native application service capabilities through real projects. Lastly,the Group made breakthroughs in new cloud services including as AI and IoT.

In the China,The Group achieved its target as Huawei's first "Sailing on the Same Boat" partner and was awarded as "Huawei Cloud's Best Partner" and recognized as a pioneer for "Huawei Cloud for All" as the two parties worked more closely. The Group has over 60 Huawei based cloud services in their catalog and successfully helped enterprises migrate over 3,300 servers,1,000 databases,with the volume of close to 3,500 TB. In the U.S.,Catapult announced "Azure Management Services (AMS),its subscription solution product. The subscription revenue more than doubled,and Catapult was awarded for 16 Microsoft certifications,and became a smart professional service provider for Azure,Microsoft 365,and Dynamic 365.

Currently the Company is in the process of building a Cloud and Intelligence Group known as the CIG. The purpose is to integrate the Company's cloud service capabilities,and through it,renew old customers and help them realize digitalization. The Company will leverage its ecosystem capability to build its cloud services (consultation and service platform) and grow along with customers.

4. Landing New Technology Application In Different Scenarios and Accelerate Strategic Cooperation and Business Layout

In the field of AI,the Company achieved strategic partnerships with Huawei and Baidu. The Company announced its industry-based AI solutions,leveraging the years of industry experiences,and implemented AI scenarios in banking,securities,insurance,retail,education,and other industries. The results of these scenarios were positive. During the reporting period,the Company reached a strategic partnership with the Nanjing Turing Artificial Intelligence Research Institute and Academician Yao Qizhi to establish the Jointforce Turing Research Institute. This institute is aimed to increase the speed of the evolution of artificial intelligence. Furthermore,the Company also participated in the investment of the Turing Technology Fund,incubating projects and enterprises in the field of artificial intelligence. Combining capital with actual implementation,the Group further deepens its layout in the field of artificial intelligence.

During the reporting period,the Company accelerated its strategic blueprint in the smart manufacturing industry. The Company's "Honeycomb" has reached strategic cooperation with famous enterprises,research institutes,and governments including Bosch,Forcam,ESI,Phoenix,Haier,Fast,and NARI in the field of industrial Internet platforms. The Company cooperated with Nanjing Turing Artificial Intelligence Research Institute to promote the application of digital city,new intelligent manufacturing technology,new business,and new model. The Group built intelligent manufacturing innovation centers and research institutes in Nanjing,Chongqing,Kunshan,etc.,provided diagnostic services and digital transformation services and integrated solutions for hundreds of companies. The Group will continue to push for practical smart manufacturing implementation aa it moves to become a core integrator in this field.

5. Bid Data: Chinasoft's Comprehensive Big Data Layout in Different Fields to Provide Competitive Advantages

During the reporting period,the Group's data business continued to break through around the strategy of "focusing on the industry" and "in-depth vertical driven solutions". The Group continued to consolidate its existing advantages in the financial industry,and maintained high growths in new fields including airports and one-card-system. Lastly,the Group will work to explore high potential clients in high tech,automobiles,and other industries..

The Group's forward-looking data architecture,data platform,and data service productization are particularly outstanding. The data asset management platform with independent intellectual property rights has become the first product in China to pass the big data product standard evaluation of the Ministry of Industry and Information Technology. The Group is also involved in the preparation of several national white papers in the field of big data and artificial intelligence.

In 2018,despite challenges brought by the complicated international environment to the capital market,ChinaSoft International has always maintained its strategic strength,firmly adhered to its blueprint,and maintained the stability of the capital market with practical actions. In April 2018,the Group launched an employee stock ownership plan,increasing the company's stock by 134.63 million shares,accounting for 5.54% of the total issued shares. Starting in December 2018,the Company's nine repurchased shares were used to motivate employees,totaling 38.172 million shares and accounts for 1.55% of the total number of issued shares. Through many initiatives,the Group has demonstrated the role of leading domestic IT companies,and has conveyed to the market a firm confidence in the future business development prospects and a high recognition of the value of the stock.

Looking forward to the future,the Group will cooperate with Huawei and other strategic customers through "Zero Distance Innovation" to continuously enhance the Group's digital engineering capabilities,transform the old business and develop new business with JointForce,utilize AI,big data,and industrial Internet platforms to build the new digital infrastructure in China,and create a new movement for transformation and upgrading. The Group will continue to demonstrate the value of a "fighter". It will continue its goal to become one of the top ten software service providers and a global leader in information technology services.