CHINASOFT INT'L 2024 Annual Performance Release: Continued Investment in Cloud-Edge-End Full-Stack AI Business Revenue Begins to Take Shape

According to Zhitong Finance APP, ChinaSoft International Limited (00354) announced its 2024 annual performance report on March 28. During the reporting period, the company achieved revenue of RMB 16.951 billion, with the full-stack AI products and services emerging strongly, contributing revenue of RMB 957 million, accounting for 5.65% of total revenue. The company reported an adjusted profit of RMB 650 million and an annual profit of RMB 511 million, proposing a dividend of HKD 0.0533 per share.

The company disclosed its full-stack AI products and services business for the first time, which includes a complete AI technology stack ranging from computing infrastructure operations, data governance, model training, inference deployment, edge intelligence, cloud intelligence to AI-native ERP and Agent industry applications. After years of continuous strategic layout and firm investment in the full-stack AI field, the company's full-stack AI business has begun to take shape, forming benchmark demonstration cases with leading clients in finance, energy and power, and manufacturing, showing a vigorous development trend of high growth and synergistic benefits. The company will firmly promote the transformation of full-stack AI at the cloud-edge-end and continuously disclose the latest progress.

Since launching the SP301 strategic plan in 2020, focusing on cutting-edge fields such as cloud intelligence, edge intelligence, and application intelligence, the company has intensively invested in building core capabilities and introducing high-quality external resources to seek a second growth curve and advance the company's medium- and long-term strategic layout. By 2024, it will iterate to SP304, with cumulative investments in full-stack AI products and services exceeding RMB 1.5 billion, achieving preset strategic goals in the cloud-edge-end full-stack AI layout and obtaining initial success.

The company is actively laying out a "1+3" strategy, which includes cloud intelligence + HarmonyOS intelligent IoT and digital twin/enterprise digital transformation and ERP consulting implementation/AIGC business, forming an organic business entity that promotes each other around the full-stack AI main line. Since 2017, the company has signed a "Together We Sail" strategic cooperation agreement with Huawei, becoming the first "Huawei Cloud Together We Sail Partner," establishing the CIG cloud intelligence business group, using the cloud as a foundation to solidify the full-stack AI base; in 2021-2022, the company signed a HarmonyOS ecological cooperation agreement with Huawei and established "ShenKaiHong" with Huawei and Shen Capital, successively setting up the AIG intelligent IoT legion and ABG intelligent IoT group, constructing a formation of product R&D "sharp knife" + industry solution "legion" + professional delivery "base camp"; in 2023-2024, the company established the AIGC Research Institute, Model Workshop Business Department, Industry Digital Intelligence Solution Legion, Digital Power Science and Technology Innovation Center, Financial AIGC Legion, Financial AI Laboratory, ChinaSoft International Consulting Company, and GBU International Business Department, accelerating the promotion of industry AI applications and internationalization with specialized teams, achieving success in the power industry and continuously expanding its achievements, further breaking into fields such as digital government and intelligent transportation. The company invested in Light Ship Intelligent Technology Co., Ltd. to strengthen its financial AI products and large model-driven Agent intelligent platform capabilities; it invested in Hangzhou ShuoPan Intelligent Technology Co., Ltd., relying on its leading 4A architecture and big data model-driven digital platform (EIMOS) to more efficiently carry out AI-assisted domestic ERP implementation development and intelligent software factory services. At the same time, it collaborates with Huawei and local governments to build a domestic computing power "new triangle" model The full-stack AI at the edge and cloud promotes and complements each other. The Digital Power Science and Technology Innovation Center and others have fully integrated with DeepSeek, promoting cloud business; the cloud business has long maintained the top position among Huawei Cloud ecosystem partners, providing DeepSeek and other AI-native applications with a highly advantageous potential customer space and access channels. The comprehensive CTSP cloud services, model factory, and new generation intelligent software factory services provide full support for customers to deploy AI in a full-stack manner. The market hotspot of the single-framework Harmony and the results of cloud collaboration, as well as the domestic ERP replacement in the key industry of Xinchuang, represent the culmination of cloud-edge AI and enterprise digital transformation, which is a key strategic layout for the high point of the industrial chain's value.

Continuously maintain the first share of Huawei Cloud business ecosystem, closely reach AI value customers with cloud intelligence business

The cloud is the key foundation for AI computing power and model access. The reporting period marks the seventh year of the company's strategic partnership with Huawei Cloud, "rowing in the same boat." The company has consistently adhered to the strategy of binding 10% with Huawei. During the reporting period, the company's public cloud performance reached 1.848 billion yuan, with a year-on-year growth of 25% in public cloud Core performance, among which the mid-tail Core performance grew by 31% year-on-year, maintaining the first position in the ecosystem for seven consecutive years. The cloud integration performance and the number of projects both ranked first in the ecosystem, leading the Huawei Cloud ecosystem market; the company was awarded the only heavyweight award "Huawei Cloud Ecosystem Rock Award" at the Huawei Cloud Ecosystem Conference.

The company uses Huawei Cloud business direct expansion, distribution, and continuous operation as a bridge to widely reach potential high-value customers in the broader DeepSeek ecosystem, fully linking AI-related products and services. As a core partner of Huawei Cloud CTSP, the company has achieved 10 first-level labels through CTSP professional services, launched 3 cloud baseline solutions, and jointly released solutions such as "Enterprise Cloud Migration Services" and "Data Governance Professional Services" with Huawei Cloud, providing services to over 300 customers and successfully landing more than 200 CTSP projects in various industries such as energy, steel, and pharmaceuticals, while co-creating large model scenario applications with leading customers.

Leverage the unique leading advantages of the open-source Harmony platform and integrated software-hardware products, mastering core root technologies at the edge

The company established the Harmony ecosystem team in 2019 and signed the Harmony ecosystem cooperation agreement with Huawei in 2021. In the same year, it invested in the establishment of Shenzhen Kaihong Digital Industry Development Co., Ltd., AIG Legion, and ABG Group, rapidly forming a "spearhead-legion-base" formation. The company is a platinum donor of the OpenAtom Open Source Foundation and a Class A donor of the OpenHarmony open-source project. The company, together with Shenzhen Kaihong, has 2 seats as community PMC members and 14 Committers, with a total of 404 intellectual property rights, contributing over 4.25 million lines of code to the open-source Harmony community, ranking first in code contribution to the open-source community outside of Huawei. A total of 80 chip adaptations have been completed in the south, serving over 500 categories, 400+ brand customers, with the number of connected devices reaching tens of millions; it is the largest investor, strongest in technology, and most contributive member unit in the open-source Harmony ecosystem outside of Huawei During the reporting period, the company, in collaboration with ShenKaiHong, continued to achieve breakthroughs in open-source HarmonyOS core technology, with KaihongOS becoming the first open-source Harmony security operating system distribution to pass the security testing certification by the Ministry of Public Security. The self-controlled enhanced LiteOS-M security kernel developed by the company has undergone formal verification and was the first to receive the EAL5+ security certification issued by the China Cybersecurity Review Technology and Certification Center (CCRC), becoming the first product in China's IoT operating system kernel field to obtain national-level authoritative certification; KaihongOS has made breakthrough progress in hard real-time capabilities, supporting hybrid deployment of single-core and multi-core, and has achieved an interrupt response + task switching delay of ≤3 microseconds, enabling KaihongOS to be applied in industrial scenarios with extremely low latency jitter; it has also launched camera, drone, robot, and AI PC products based on open-source HarmonyOS; achieved full ecological connectivity with HarmonyOS Next; and realized kernel-level support for Starlink connectivity, continuously demonstrating the leading position of the industry’s open-source Harmony operating system with multiple "firsts."

During the reporting period, the company, in collaboration with ShenKaiHong, created "national key equipment," deeply participating in the construction of Harmony standards and foundational platforms in key industries such as the military, military industry, electric power, and low-altitude economy. It has established a secure and trustworthy digital foundation in national key areas, becoming a nationally promoted autonomous and controllable distributed operating system in related fields. The company, in collaboration with ShenKaiHong, is shaping "urban innovation," actively promoting "Harmony + AI" scenario innovation and intelligent terminal ecological chain construction in urban renewal, smart transportation, smart emergency response, and environmental water services. The world's first open-source Harmony water conservancy terminal has achieved a full closed-loop for water and rain monitoring; "Fire Harmony, Construction Harmony, and Hope Harmony" have achieved key breakthroughs in industry scenarios; "Urban Harmony" has continuously created benchmark cases in Tianjin, Xi'an, Jinhua Pujiang, and Shenzhen Bao'an.

During the reporting period, the company deeply integrated into Huawei's pure-blood Harmony ecosystem in terms of native Harmony applications and meta-services, closely binding with Huawei's terminal and cloud teams to serve over 400 enterprises, providing Harmony migration for more than 500 applications, and cumulatively listing over 7,000 meta-services, maintaining the top position among Huawei service partners.

The company integrates HarmonyOS, Ascend computing power, and AI Agent to create a "device-edge-cloud" collaborative smart IoT foundation, promoting the transition of underlying data from "perception" to "generation," providing massive high-quality data for AI model training. It has formed a soft and hard integrated solution covering "device-edge-cloud-network-application." The company has launched more than 20 open-source Harmony-based intelligent terminal devices, achieving real-time data transmission at the billion-level, with the SuiMing Smart Link perception platform accumulating industry knowledge assets, becoming the "data fuel" for industry large model training. In over 30 scenarios such as highways and urban lifelines, the efficiency of device interconnection has improved by 40%, providing high-quality data sources for AI applications and closing the full-stack AI loop of "perception-decision-execution."

In the rich device field, the company has successively launched camera, drone, robot, and Harmony AI PC product solutions based on the open-source Harmony operating system. Among them, the new Harmony AI PC based on domestic chips has entered the market trial phase

Accelerating AIGC Innovation and Agent Factory Layout, Promoting the Unique Integration of Full-Stack AI Advantages in Computing Power/Models/Data/Applications

Since 2022, the company has established the AIGC Research Institute, built a Digital Power Science and Technology Innovation Center, an Intelligent Computing Center, and a Financial AI Laboratory, rapidly constructing core capabilities in basic computing power operations, data models, and industry Agent applications. During the reporting period, the company partnered with Huawei and Beijing Changping Future Science City to invest in the construction of the Digital Power Science and Technology Innovation Center, exploring a co-creation "new triangle" model where ChinaSoft International acts as the ecological organizer, Huawei provides advanced productivity, and the government offers policy support, establishing a new benchmark for domestic computing power. The Science and Technology Innovation Center deeply integrates the DeepSeek large model, relying on 50P Ascend computing power, to build core components for Huawei Cloud and enterprise IT applications, providing customers with three innovative experimental environments: AILab, Enterprise Core Economic Lab, and IDSLab, offering services for AI scenario innovation, localization innovation of enterprise core operating systems, and integration innovation of power applications, promoting the transformation and application of more cutting-edge technological achievements, helping the company gain a competitive position in the AI application field of electric power energy, and becoming a global model point for Huawei's digital power legion's Intelligent Computing Center and Huawei's computing product line's industry Intelligent Computing Center.

At the model level, the model factory has been upgraded to 2.0, based on the Ascend architecture, providing full lifecycle services from data governance, model training to deployment verification through the "model service + Agent product" business model, helping customers quickly build and continuously optimize AI models, and has deeply cooperated with leading customers in the energy power, government affairs, finance, auditing, and medical industries on AI lighthouse projects. The company has independently developed a large model operation management system, providing computing power operation and scheduling services, which have been implemented in Gui'an, Nanjing, and other places, successfully connecting to the smart city computing power platforms in Beijing and Shenzhen. At the product and application level, the JointPilot (Lingxi) artificial intelligence application platform continues to be upgraded, launching AI application construction tool products deeply integrated with DeepSeek, and collaborating with Light of the Boat to launch multiple Agent products in the financial sector. During the reporting period, several "Question" series products developed by the company successfully launched on the Huawei Cloud Store, entering the product catalog, and the "Public Sentiment Inquiry Assistant" entered the Huawei One Network Communication Corps solution catalog. The company successfully won the procurement project for Huawei Cloud's AI-native application engine, landing over 90 industry large model application projects, covering more than 200 enterprises in finance, energy, steel, and other fields. Leveraging the advantages of close binding with Huawei Computing, Huawei Cloud, and long-term capability accumulation, the company achieved a comprehensive breakthrough with Ascend + large models, completing adaptation for over 50 customers and practical verification of over 40 large model projects.

During the reporting period, the company created over 30 benchmark cases in industries such as finance, energy power, government affairs, manufacturing, auditing, and healthcare, deploying over 80 intelligent agent products, covering more than 50 cities nationwide, as well as overseas markets such as Hong Kong and South Africa. In the financial sector, it serves state-owned banks and leading city commercial banks on AIGC projects; in the government sector, it collaborates with Huawei's One Network Communication Corps to achieve breakthroughs in scenarios such as hotline public sentiment analysis and smart medical insurance inquiries in Shenzhen, Yancheng, and other places; in intelligent manufacturing, it launched solutions for comprehensive management of mines and anti-theft mining; in the auditing field, it won projects from China National Offshore Oil Corporation and Huaxia Bank, and received the highest rating from the China Academy of Information and Communications Technology The medical field has implemented a medical research assistant in Chengdu's top-tier hospitals. The company, in collaboration with Huawei, launched joint solutions for urban governance and smart power distribution, winning the second prize in the Ministry of Industry and Information Technology's Innovation and Entrepreneurship Competition and other honors such as the "Dingxin Cup" from the China Academy of Information and Communications Technology.

Building AI-native ERP consulting implementation and self-developed service capabilities, achieving a breakthrough in high-value areas of digital transformation

The company continues to build a talent pool for high-end consulting implementation and project management in enterprise digital transformation, ERP development and delivery, and domestic self-research/migration. It is continuously developing AI-native ERP consulting implementation and self-developed service capabilities. During the reporting period, the company increased investment in the research and development of industry-specific editions of core business systems, combining high-value application scenarios in the industry. Based on standardized product functional modules, it developed industry solution plugins, tools, and prefabricated resource libraries, template libraries, and configuration lists to shorten implementation cycles. For industries such as power and energy, it provides exclusive functional modules and business processes, incorporating industry best practices to ensure consistency between business and finance. By integrating cutting-edge technologies such as AI and big data, it offers intelligent analysis, forecasting, and decision support functions, supporting business process automation and intelligent operations. It fully adapts to domestic basic software and hardware environments. Through modular design, open architecture, and microservices, it supports functional expansion and system integration to meet the future business expansion and technology upgrade needs of enterprises. The company collaborates with outstanding clients for joint innovation, not only helping enterprises solve the technical challenges of domestic ERP system replacement but also providing strong support for their digital transformation, becoming an important partner for enterprises to achieve digital transformation in the era of AI large models.

During the reporting period, the company successfully delivered a self-developed ERP prototype system project for a central state-owned enterprise in the power sector, becoming the first service provider to offer consulting implementation of core business systems from partners to clients. The company participated in the core module of an ERP implementation project for a central state-owned energy enterprise, supporting the client in strengthening strategic control based on unified data standards, process specifications, and technical architecture, promoting the optimization of enterprise resource planning systems, integration of business and finance, collaboration between operations and production, and upstream and downstream collaboration, achieving overall optimization of the value chain. It provided supply chain data governance services for a central state-owned oil and gas enterprise, establishing a management data warehouse for overseas investment enterprises and offering planning, design, and implementation services for the management reporting system. The company continues to deepen its engagement with leading central state-owned enterprises in the energy and power industry, such as China National Petroleum Corporation, State Grid Corporation of China, China Energy Group, and China Southern Power Grid, while also expanding projects like the integrated planning and scheduling of China National Petroleum Corporation's Planning and Design Institute and the ERP management platform of China Coal Technology & Engineering Group. It is continuously implementing benchmark projects in the fields of energy, power, logistics, and manufacturing.

The company is also increasing investment in the construction of a delivery methodology system for large and complex engineering projects based on generative AI technology. Through Agentic Software Engineering (ASE), it has established an organization, methodology, and system that supports the business of core enterprise operating systems, completing knowledge generalization to ensure efficient implementation and high-quality delivery, improving ROI through collaboration between humans and intelligent agents. Agentic CDM (Agentic Chinasoft International Delivery Methods) is an intelligent delivery methodology covering the entire project lifecycle, focusing on pain points such as data governance, requirement communication and training, document management/knowledge management/template generation, through AI technology and automation tools Achieve end-to-end efficient delivery from demand analysis to system launch. This methodology combines three models: package-driven, platform custom development-driven, and platform integration. Through practical feedback and continuous iteration, a standardized and reusable delivery framework has been formed, covering the entire cycle of value links including current situation sorting, deconstruction analysis, high-level design, low-level design, system implementation, testing and verification, deployment switching, and batch implementation. Through the Agentic CDM delivery methodology, ChinaSoft International has not only improved the efficiency and quality of project delivery but also provided enterprises with a standardized and intelligent delivery framework, becoming an important support for its digital transformation in the era of AI large models.

Deepening Overseas Layout, Business Expansion and Delivery Capability Steadily Improved

During the reporting period, the company, as a strategic partner of Huawei Cloud overseas, used Hong Kong as a bridgehead to deepen market expansion in the Middle East and Southeast Asia, building a systematic business expansion and delivery service capability in key regions such as Asia-Pacific. Successfully completed the Kai Tak Sports Park project in Hong Kong, achieving full scene visibility, controllability, and management of the sports park, enhancing the smart operation and safety assurance capabilities of the venue; won the HKD 410 million Hong Kong Police CDIP project, establishing a benchmark for government autonomous and controllable IT. The company established a joint venture, Joint Advanced Technologies (JAT), with Saudi 3F Technology, and the joint venture JAT successfully signed a contract with Huawei Cloud, officially setting sail for business in the Middle East.

Future Outlook: Foundation Business Rebounds, Full-Stack AI Business Drives Company Transformation and Development with High Growth

Looking ahead, the company will further solidify its foundation business, deeply apply AI tools to improve quality and efficiency. The AI recruitment Agent and AI operation Agent have been launched internally, significantly enhancing operational efficiency in related fields and ensuring the steady development of the foundation business.

The company has achieved preliminary results in the full-stack AI product and service market, technically rooting down to form a technological leading advantage; focusing on industries such as electric power, finance, government, manufacturing, and healthcare, leveraging the company's long-term accumulated industry advantages, combined with comprehensive capabilities in cloud, AI, HarmonyOS, and ERP, to achieve breakthroughs and comprehensive layouts. The regional market focuses on key areas such as Beijing, Shenzhen, Chengdu-Chongqing, Hangzhou, and Xi'an, forming a three-dimensional service capability from basic perception networks, resilient city construction, government management services, local industry services to low-altitude economic construction. The company will further consolidate its advantages established in the full-stack AI field at the cloud-edge-end, continue to increase investment in cloud, AI-native, HarmonyOS smart IoT, and domestic ERP fields, ensure high-speed growth in revenue from full-stack AI products and services, further support the foundation business, and assist the company in transforming into a full-stack AI enterprise.

The company has been selected as one of the top 15 of the Top 100 Information Service Enterprises in China for 11 consecutive years and has consistently ranked in the top 100 of Gartner's global IT service list. In the future, the company will adhere to technological innovation and ecological collaboration, continuously enhance global competitiveness, and strive to become a leading global provider of full-stack AI products and services, creating long-term value for shareholders