Since the beginning of this year, as the economy and society have fully resumed "normal" operation, China's economic operation has gradually stabilized and improved, and the quality of development has steadily improved. However, due to the more complex and severe external environment, the domestic economic recovery situation is also facing some risks and challenges. .
Despite this, AsiaInfo Technology Holdings Co., Ltd. (01675.HK) still delivered a good report card-in the first half of 2023, AsiaInfo Technology's overall operations showed a steady growth trend. Among them, newly signed business orders increased by more than 20% year-on-year, of which new orders for "three new" businesses increased by more than 70% year-on-year; overall operating income reached RMB 3.282 billion, a year-on-year increase of 5.6%, of which "three new" business income reached RMB 1.091 billion yuan, a year-on-year increase of 8.7%, accounting for 33.3% of operating income.
Objectively speaking, this is a hard-won report card, and the most critical reason for AsiaInfo’s steady growth is: on the one hand, AsiaInfo continues to grasp the good growth momentum of the communication industry, further consolidating the company’s market share in the communication industry. On the other hand, while firmly developing new businesses, AsiaInfo has also paid more attention to the development quality and expansion model. With the "standard product + solution" business innovation model, it has driven the high-quality large-scale replication and development of new businesses. landing.
In this regard, Gao Nianshu, executive director and CEO of AsiaInfo, emphasized: "It is expected that AsiaInfo's revenue growth rate will continue to increase in the second half of the year, and the profit growth trend will continue. Looking into the future, the company will also adhere to the 'one consolidation, three development' The strategy and the direction of 'leading both in product and service' will unswervingly push forward to the new goal."
Steady growth in overall performance
Looking at AsiaInfo's 2023 mid-term performance financial report, the rapid growth of OSS business and vertical industries among the "three new" businesses has become the "bright spot" in this financial report, while the digital intelligence operation business is affected by the external environment and internal organizational changes. "Under pressure", specifically:
Gao Nianshu, Executive Director and CEO of AsiaInfo
First, in terms of OSS business, AsiaInfo has continued to invest in research and development by focusing on areas such as computing power network, self-intelligent network, network digital twin, cloud network digital intelligence, and network management upgrades, empowering the digital intelligence transformation of communication networks, and realizing network intelligence. chemical products to maintain industry leadership. Among them, orders for standard products such as 5G network fault management systems, network cloud management platforms, network resource management systems, and network function virtualization suites have grown rapidly, and the OSS business scale and market share have continued to expand. The data also shows that in the first half of 2023, AsiaInfo's OSS revenue has achieved rapid growth, reaching RMB 285 million, a year-on-year increase of 14.9%.
In addition, in terms of BSS business, Yaxin Technology actively promotes steady business growth through innovative technology and responding to new needs of customers, and also maintains its leading position in the BSS market. In the first half of 2023, AsiaInfo's BSS traditional business revenue was 2.105 billion yuan, a year-on-year increase of 1.9%, which can be said to have played the role of "ballast stone" for performance.
Second, in terms of vertical industries, AsiaInfo focuses on five strategic industries, continues to expand energy, government affairs, transportation and other industries, and has formed an innovative development model of "standard products + solutions". According to the data, the revenue of AsiaInfo's vertical industry and enterprise cloud business in the first half of the year was RMB 351 million, a year-on-year increase of 29.4%. Among them, the energy industry achieved a revenue of over 100 million yuan, and the business scale nearly tripled that of the same period last year; the revenue of the transportation and government affairs industries increased by 71% and 40% respectively.
In Gao Nianshu's view, in the future, the development model of "standard products + solutions" and strong system integration capabilities will be the root of the need to "root" in vertical industries in the future. Currently, AsiaInfo is increasing its investment in standard products . In the future, as more and more standardized products are sold, the company will also achieve further improvement in the vertical industry.
Third, in terms of digital intelligence operation business, in the first half of 2023, AsiaInfo's digital intelligence operation business achieved revenue of 455 million yuan, and digital intelligence operation business accounted for 13.9% of the total revenue. Although it decreased by 6.0% year-on-year, it still continued to promote the optimization of the business model. Revenue from the pay-by-result and share-sharing model accounted for 23% of the operating revenue of Data Intelligence, an increase of 3.0 percentage points year-on-year. In addition, in terms of smart operation business (DSaaS), AsiaInfo's digital intelligence TMT revenue also maintained "double-digit" growth.
Gao Nianshu explained that the reason for the slight decline in the revenue of the digital intelligence operation business in the first half of the year is that: from the perspective of the external environment, the intelligent decision-making business is greatly affected by the weak capital market and the shrinking demand for research reports in the Internet, consumer and other industries; and From the perspective of internal factors, in the first half of 2023, based on the initial reorganization completed last year, iResearch will further promote the in-depth reform of business and organization, from the original industry-based operation model to the matrix marketing of regions and industries organization, strengthen the coverage of the regional market, and enable the company to respond and meet the digital intelligence operation needs of government and enterprise customers more efficiently.
"Although the organizational change has brought short-term pain to the digital intelligence operation business, AsiaInfo still believes that the market demand for the digital intelligence operation business is still huge, especially with the implementation of the new organizational structure and the gradual recovery of the market, it is expected that the digital intelligence operation The business will also gradually improve in the second half of the year." Gao Nianshu said.
In fact, in the past few years, AsiaInfo's layout around the "three new" businesses in terms of technological innovation, business model, customer success, and ecological construction has made the "three new" businesses truly form a "positive cycle" and a "flywheel effect". ". Because of this, although the performance of AsiaInfo's digital intelligence operation business has declined slightly in the first half of this year, its overall "three new" business income still reached RMB 1.091 billion, a year-on-year increase of 8.7%, accounting for an increase in the proportion of operating income to 33.3%. From this perspective, the steady growth of the "three new" businesses still has immeasurable new value for the future development of AsiaInfo.
Behind the accumulation of vertical industries
There is no doubt that the official release of the "Overall Layout Plan for the Construction of Digital China" at the beginning of this year means that the construction of "Digital China" has entered a substantial stage of implementation, and the driving force behind it is the digital transformation of all industries.
In this process, various, complex and diverse application scenarios can be regarded as "points" all over Digital China; thousands of industries and various types of industry needs constitute the "line" of Digital China's development. From point to line, from line to plane, constitutes the future pattern of coordinated development of "Digital China". It is precisely based on these changes in market demand that AsiaInfo’s business model innovation formed through “standard products + solutions” and strong system integration capabilities not only drives AsiaInfo to go deeper into vertical industries, but also creates AsiaInfo in vertical industry markets. A whole new level of competitiveness.
Among them, in the transportation industry, AsiaInfo teamed up with the project investment and construction consortium to win the largest high-speed rail smart hub project in Southwest China - Chongqing East Railway Station Smart Hub Project, with a project value of more than 600 million yuan. The largest benchmark project. This is not only a manifestation of the achievements of AsiaInfo's continuous promotion of "digital intelligence" in recent years, but also a benchmark for further market expansion in the future.
At the same time, AsiaInfo has also continued to deeply participate in the construction of expressway digital systems in Yunnan, Hunan, Guangdong and other provinces, and its digital expansion in the expressway field has also been further expanded.
In addition, in the energy industry, AsiaInfo continued to deepen the nuclear power market in the first half of this year. Among them, the order of Jiangsu Nuclear Power was implemented, realizing a contract value of RMB 140 million in revenue. At present, there are a total of 78 nuclear power units in operation and under construction in China, and AsiaInfo's 5G private network products and services have covered 23 of them. In addition to the nuclear power market, there are still more than 2,000 thermal power units and thousands of new energy stations in China that have 5G private network-related needs, which also brings broad market promotion and replication space for AsiaInfo’s technology business.
In the government industry, AsiaInfo has deepened its government big data business capabilities and built its operational capabilities, promoted the Tianjin Binhai New Area big emergency fusion platform project with "products + services", and provided big data related products and solutions for Shanghai Big Data Center and other departments plan.
Looking back, the reason why AsiaInfo was able to achieve rapid development in vertical industries was not achieved overnight, but the result of AsiaInfo’s deep cultivation of vertical industries over the past few years.
As Gao Nianshu said: "The most fundamental reason why AsiaInfo can maintain its leading position in the communications industry is that the company has been deeply involved in this field for 30 years. From one system to multiple systems, from a simple platform to a more complex platform, there is intensive cultivation behind it, and it does not happen overnight.”
Similarly, the reason why AsiaInfo is able to "blossom and bear fruit" in vertical industries today is also inseparable from AsiaInfo's continuous construction of industry competitiveness in three areas, which can be observed from three dimensions:
First of all, from the perspective of service genes, AsiaInfo "started" in the communication industry, and has accumulated a large amount of experience and service capabilities in serving large and medium-sized enterprises over the years. "In vertical industries, we must truly contribute to the long-term development of industry customers, not just pursue short-term benefits. Therefore, when AsiaInfo decided to enter vertical industries, it was determined to thoroughly understand these industries through decades, and It is necessary to continuously build the company's service capabilities." Gao Nianshu said.
Secondly, from the perspective of business model, in the past few years, AsiaInfo has gradually explored and innovated the business development model of "standard products + solutions" around the needs of vertical industries in the past few years, and combined with the company's strong system integration management capabilities, it has further promoted AsiaInfo has gone deeper into the process of digital and intelligent transformation of vertical industries.
Gao Nianshu said that AsiaInfo Technology has integrated new technologies such as cloud computing, artificial intelligence, big data, and 5G communications, and has built a solid product "base" capability in standard products. At the same time, AsiaInfo Technology has always focused on transportation, energy, finance, government affairs , Postal and other vertical industries, and develop related solutions for these industries "adapted to local conditions", which also forms a "winning secret" for us to enter vertical industries.
"Solutions for vertical industries must have industry characteristics, and the development of solutions must propose specific solutions based on these industry characteristics. Taking the energy industry as an example, AsiaInfo has spent a lot of time doing research on the needs of the industry. A lot of in-depth understanding, including business characteristics, business processes, and architecture and systems, etc., so as to create a solution suitable for the energy industry. In the future, AsiaInfo will still focus on its own advantageous industry fields and will not do All industries will not be greedy for big advances." Gao Nianshu said.
Finally, from the perspective of the professional team, the capabilities of the professional team established by AsiaInfo also played a vital role in its development of vertical industries. Also taking energy as an example, AsiaInfo's energy team has accumulated more than 15 years in this industry, so it has a very deep understanding of the digital and intelligent transformation needs of the energy industry. Not only that, in the current vertical industries where AsiaInfo has advantages, AsiaInfo has also established a standard business team and provided platforms, products and project management capabilities, which is also the key to AsiaInfo's ability to win the recognition and trust of customers in vertical industries reason.
Gao Nianshu believes that vertical industries must spend time "intensive cultivation". For service providers, serving these large and medium-sized enterprise customers requires not only product capabilities, but also a sense of service, as well as professional talents and professional teams. Firmly "rooted" in the vertical industry. More importantly, outside the communications industry, more and more industry customers have entered a new stage of digital and intelligent transformation, and AsiaInfo's reserves in the past few years have given AsiaInfo the ability and confidence to seize These new opportunities in the industry are believed to be able to lay a solid foundation for AsiaInfo's orders and revenue growth in the next few years.
It can be seen that the key to AsiaInfo's ability to achieve "profound accumulation" in vertical industries is that AsiaInfo can focus on the long-term layout and not be blinded by the hustle and bustle of short-term interests; Innovation has really allowed AsiaInfo to build its own unique market competitiveness in vertical industries, and this is also the secret and confidence for it to achieve rapid growth in vertical industries.
Winning trend and rising trend of AsiaInfo
It is worth mentioning that in the first half of 2023, AsiaInfo will also continue to invest heavily in research and development, of which the research and development expenses will be about 505 million yuan, a year-on-year increase of 3.7%, accounting for 15.4% of revenue, and vigorous investment Behind the research and development resources, AsiaInfo has also achieved many achievements in the field of technological innovation.
It is understood that AsiaInfo has continued to invest in research and development by focusing on the three major product systems of "cloud network", "digital intelligence" and "IT", and is currently moving towards the goal of "leading both in products and services". Among them, the "cloud network" field has achieved international leadership, innovatively released the industry's first computing power endogenous network product, and based on technologies such as cloudification 5G and AI to achieve "integration of general and computing", helping communication operators' network construction "investment subtraction" Multiplication of resources and addition of capabilities".
At the same time, the field of "digital intelligence" has achieved domestic leadership and some international advanced. At present, AsiaInfo's new products in this field continue to introduce new products, including edge AI, edge AIoT data collection/computing/intelligent computing gateway, and privacy computing all-in-one machine. In the field of "IT", AsiaInfo continues to consolidate its position as the first camp in China, and realizes the comprehensive evolution of PaaS platform products to cloud native, continuously improving flexibility, scalability and security To build a cloud-native technology foundation for technologies such as AI and big data. AsiaInfo is also facing the metaverse, and continues to evolve digital twins, 3D/XR and other technologies and products to promote the multi-ecology construction of the metaverse.
In addition, AsiaInfo continues to deeply participate in the work of 20 international/national technical standards organizations such as 3GPP, ITU, ETSI, IEEE, TMF, and O-RAN, and has formed more than 240 international/domestic standards. Related products and technologies have accumulated more than 90 international/domestic patents and more than 1,300 software copyrights.
Of course, since the beginning of this year, the explosion of large models represented by ChatGPT has also formed a "tsunami effect" in China. Almost all technology companies are trying to find ways to enter the track of large models. In this regard, AsiaInfo has also deployed ahead of schedule and "bowed into the market". Not only is the company actively using large-scale model technology, but it also combines large-scale model technology with the needs of vertical industries to empower customers to better capture large-scale The value produced by the model.
Gao Nianshu said that large-scale models have a great impact on companies like AsiaInfo, because AsiaInfo is a company with a high concentration of engineers, so the company also hopes that engineers will actively learn large-scale models and master large-scale model technology. At present, AsiaInfo Technology has started to use large-scale model technology to automatically generate codes and test cases in its internal R&D process. The core purpose is to improve the internal work efficiency of AsiaInfo Technology through large-scale model technology.
On this basis, AsiaInfo empowers customers in vertical industries through large-scale model technology, but the main strategy is "do something and not do something". What is certain is that AsiaInfo will not be a general-purpose large-scale model platform, but will focus on large-scale models in vertical industry fields; on this basis, AsiaInfo will take the lead in starting in its own familiar and advantageous fields, such as For the communication industry, large models or enhanced models for the field of communication cognition will be built on the basis of large communication models. At present, AsiaInfo has more than 40 projects for large model technologies for specific fields, which are not only being applied in the company's Business processes and "production lines", and it is expected that some of them will also be converted into external technologies and projects for industry "empowerment".
It can be seen that in the field of BSS business, AsiaInfo has jointly created innovative applications with industry customers, and its AIGC technology has been applied in multiple CRM platform seats and metaverse operation and maintenance projects; It will also make better use of technologies such as AIGC and AI large models to empower the development of business such as industry research and consulting.
Gao Nianshu believes that large-scale model technology may play the role of "copilot" in enterprise applications in the future. The so-called "co-pilot" means that large-scale model technology will be superimposed on enterprise applications or systems, helping enterprises to achieve the effect of "reducing costs and increasing efficiency". For example, AsiaInfo now uses large-scale model technology in precision marketing, which is to superimpose the communication enhancement model into the traditional marketing system, then superimpose the large-scale communication model into the customer service application, and finally superimpose it into the analysis report field. Superimposed to the field of network optimization, etc., so under this application scenario, the large model technology is similar to the concept or role of 'co-pilot'. Facing the future, AsiaInfo will also fully integrate with more vertical industries to promote the application of large-scale model technology in more industries.
The full text summarizes that behind the steady growth of AsiaInfo's overall performance in the first half of 2023 is the confirmation of AsiaInfo's continuous investment in "three new" businesses and the realization of the "flywheel effect", especially in vertical industries. To meet the needs of specific application scenarios, a business development innovation model driven by the troika of "standard products + solutions + integration capabilities" has been created, which not only realizes the "profound accumulation" in vertical industries, but also forms AsiaInfo's digital intelligence in enterprises The most core value in the transformation process.
On this basis, AsiaInfo adheres to "intensive" R&D investment, continuously provides industry-leading products and solutions, and builds its own unique service capabilities. It is believed that the victory and rising trend of the goal of "half the business" will also provide new momentum for the digital transformation and upgrading of more Chinese enterprises, and it will also drive and lead China's digital economy to a broader new future.
Shenyao's Science and Technology Observation was founded by a senior technology media person, Shenski, who has 20 years of experience in dissemination of enterprise-level technology content. He has long focused on the observation and thinking of industrial Internet, enterprise digitalization, ICT infrastructure, and automotive technology.
