On the evening of March 26, 2019, Digital China Group Co., Ltd. (“Digital China” for short; stock code: 000034.SZ) released its 2018 Annual Performance Report. During the reporting period, Digital China’s annual revenue in 2018 reached CNY 81.858 billion, achieving a year-on-year increase of 31.57%; and the net profit after deduction of non-recurring gains and losses was CNY 472 million, achieving a year-on-year increase of 39.97%. It is particularly noteworthy that Digital China’s cloud computing revenue in 2018 represented a year-on-year increase of 187.41%. In general, during the past year, Digital China has obtained strong growth in revenue, steady enhancement in performance and significant improvement in structure.
Improving capacity and rapidly accumulating core value of cloud business
In the turbulent domestic cloud service market, people always keep a close eye on Digital China. According to the 2018 Annual Performance Report, Digital China was rapidly developing its cloud business and rapidly accumulating the core value of such business, which can be demonstrated by the year-on-year growth rate, gross profit margin and regular customers. The future development deserves greater expectations from the capital market.
In terms of cloud managed service (MSP), Digital China has become a cloud-based operation and maintenance service provider for several outstanding enterprises in the automotive and retail industries, and provides its clients with services and solutions such as MSP, Internet of Vehicles, Big Data Platform, digital marketing, and intelligent robot training. It is the general agent of Azure Stack in the Beijing and Shanghai markets and one of the first partners of Microsoft China and is comprehensively strengthening its cooperation with Alibaba Cloud, AWS and Huawei Cloud in the hybrid cloud field. Digital China has cooperated with IBM to establish cloud computing customer experience centers in Beijing and Guangzhou, where IBM Cloud Private has been introduced to provide a full range of services for partners and customers. In addition, Digital China has signed proprietary cloud project contracts with Guodu Securities Co., Ltd. with a total price of CNY 100 million, to provide 10-year dedicated cloud-based customized operation of the customer’s core system following the high standard of the financial securities industry.
In terms of digital solutions (ISV), Digital China has provided highly reproducible digital solutions based on technologies such as Internet of Things, big data and artificial intelligence for the majority of its customers including the world’s top 500 enterprises in the retail, fast-moving, automotive industries, etc. For example, the Intelligent Management Cloud Platform of Digital China “Imcloud” has provided public cloud and private cloud services for more than 1,000 schools and hotels and nearly 10,000 SMEs in China. provides the “Cloud – Pipeline – Terminal”, a complete enterprise-level video communication service, which can help enterprises in improving their communication efficiency and making quick decisions. The SaaS product Clouds Service Management (CSM) independently developed by Digital China is an OOTB product that realizes agile deployment of public and private clouds. For the purpose of supporting the CSM product, Digital China has also launched a virtual service robot Luma, a robot specially designed for service management with natural language processing and machine learning abilities, and provides professional services to various clients such as OnStar.
In terms of cloud resale service (AGG), Digital China can cooperate, as a senior partner, with the main cloud services, AI/IoT and big data providers both at home and abroad, to provide the most abundant cloud computing and digital related resources and products on the market, including public cloud resources, private cloud/hybrid cloud platforms, SaaS, AI and Big Data as well as other emerging technologies and applications, so as to provide customers with one-stop, diverse information exchange and resale services. In the past year, another 300 channel partners cooperated with Digital China in AGG and value-added services.
Empowering partners and establishing new cloud ecosystem
In the DT era, the ability to build a cloud ecosystem has become an important benchmark for measuring industry leaders and has received great attention from the capital market. Based on the analysis of the Annual Report, the “To B” Channel Network of Digital China has the widest domestic coverage (covering more than 1,000 cities in China), the largest ecological scale (covering more than 30,000 channel partners), and the highest operational efficiency (inventory turnover rate and capital cost as well as other operational efficiency index considerably higher than average standard of the industry ), providing strong support for the rapid expansion of its cloud computing business and laying a solid foundation for the construction of Digital China cloud ecosystem.
Recently, Digital China has entered into strategic cooperation with MBCloud and BAIC BluePark Information Technology Co., Ltd., and has begun to offer professional cloud services for the financial and automotive industries. At the Huawei China Eco-Partner Conference 2019, Digital China signed a strategic cooperation agreement with the Bank of Beijing, whereby Digital China will acquire the first batch of 3 billion + 3 billion comprehensive credit line and special credit, effectively enhancing its ability to empower the ecological partners in the field of capital and financial services. With the continuous deepening and upgrading of the Huawei Strategy, the cooperation between Digital China and Huawei has moved to various areas such as consumption, finance, smart cities, and cloud computing. At the same time, Digital China has also become the general distributor of Alibaba Cloud, and has begun to explore the new generation model of cloud resources resale. In the future, Digital China will fully empower its partners through products, technologies, solutions, value-added services, funds and other dimensions to truly achieve synergy, mutual benefit and win-win results, and will open a new era of cloud ecological cooperation.
Digital economy approaching critical point of booming, bright future for Digital China
According to the IDC report, by 2021, more than 50% of the world’s economy will be digital economy, and for China, this figure will be 55% (currently only 32%), showing that the digital economy is approaching the critical point of booming. Remembering the mission of creating “Digitalized China”, Digital China has been strengthening its technical service capabilities and resource aggregation capabilities in the fields of cloud computing and big data since it announced its decision to comprehensively turn to the cloud field in 2017. In 2018, Digital China presented brilliant performance to the capital market.
In 2019, Digital China will actively grasp the opportunities brought by the development of the digital economy, and will comprehensively mobilize its superior resources of technology, customers and channels. While maintaining stable and healthy growth of the overall operation, it will actively expand its business areas, strengthen technical capacity construction, expand the technical team, and further strengthen the industry-and-customer-oriented marketing system, so as to build a new cloud ecosystem and achieve rapid growth of cloud services and digitalized business.