2017 Annual Results
☆Digital China achieved an operating income of RMB 62,216 million in 2017, with an increase of 54% over the same period of last year and an increase of 21% in the same scope of statistics;
☆The net profit attributable to the shareholders of the Listed Company was RMB 723 million, with an increase of 79% over the same period of last year and an increase of 185% in the same scope of statistics;
☆ The net profit after deduction of non-recurring profits and losses attributable to the shareholders of the Listed Company was RMB 337 million, with an increase of 78% over the same period of last year and an increase of 57% in the same scope of statistics;
☆ Basic earnings per share was RMB 1.1.
In the evening of March 29, 2018, Digital China Group Co., Ltd. (000034.SZ) released its annual results for 2017, achieving an operating income of RMB 62,216 million, with an increase of 54% over the same period of last year and an increase of 21% in the same scope of statistics, and the net profit attributable to the shareholders of the Listed Company of RMB 723 million, with an increase of 79% over the same period of last year and an increase of 185% in the same scope of statistics. For the above comparison in the same scope of statistics, the impact of earnings from asset disposal of Shenxin Taifeng in 2016 was excluded, and the operating data of Digital China after releasing the financial results for the 1st quarter of 2016 was restored.
Year 2017 is a crucial year for the full implementation of the “13th 5-Year Plan”. The structural adjustment on the supply side has achieved its results to some extent. Moreover, 2017 is also the first year for development of (MSP) cloud service providers. Taking the gradual uploading of enterprises’ core systems to the cloud as the opportunity, the entire industry is experiencing a transition from information technology to data technology and from the era of information to the era of Big Data. As a representative of the advanced productivity in the era of network interconnection, the information technology industry has become an important engine driving the high-quality development of economy and the digital transformation of the entire industry.
In 2017, Digital China (000034.SZ) adapted itself to the situation and seized the opportunities. While consolidating its leading position of main business share and revenue in domestic market, it also resolutely promoted a strategic transformation with cloud computing as the core, resulting in a significant improvement in performance structure, a significant improvement in performance quality, and a breakthrough in strategic transformation.
The value of cloud computing business is highlighted, making contribution to shaping a complete value chain of cloud services.
For the whole year of 2017, the income of Digital China from cloud computing business grew from zero, recording an operating income of RMB 202 million with a gross profit rate of 33.3%, which was significantly higher than that of the traditional business.
In the same year, Digital China decided its development direction of promoting cloud-based strategic transformation with MSP as the core, and set the goal of becoming a leading cloud management service provider in Chinese market. It provided enterprises with cloud computing resources, cloud management services and scenario-based solutions by centering on the hybrid cloud architecture. Besides, it also deployed integrated cloud services, realizing provision of comprehensive cloud resources covering public cloud, private cloud and hybrid cloud, as well as cloud-based specialized services including consulting, implementation, migration, operation and maintenance, training, and customer success services, so as to help enterprises achieve continuous optimization of their cloud uploading and on-cloud architecture and ensure the security and high availability of enterprises’ cloud systems.
In October 2017, Digital China completed the acquisition of Shanghai Yungoal Information Technology Co., Ltd. (hereinafter referred to as “Yungoal Information Technology”), a domestic leading provider of cloud computing value-added services, realizing an effective supplement to Digital China’s business layout in cloud resource aggregation and cloud value-added services, thus rapidly improving Digital China’s technology and service capability in the field of cloud computing. At present, Digital China has integrated the advantages of the “Yunboard” (a cross-cloud management platform) and the ServiceQ (a cloud operation and maintenance management and enterprise IT service platform) independently developed by Digital China and Yungoal Information Technology, so as to quickly establish mature technology delivery capability and project management system, initially forming complete and unique cloud management service platform products to provide enterprise customers with professional lifecycle cloud services. Relevant solutions regarding Big Data, AI, and IoT have been applied in various industries such as automotive, retail, and media assets. Furthermore, with the establishment of Digital Cloud’s Yungoal Lab, Digital China is accelerating the cloud resource aggregation and cloud service collaboration and integration between Digital China and Yungoal Information Technology, aiming to establish a complete value chain of cloud services from the aggregation of upstream massive cloud resources to the cloud value-added services.
In addition, on the aspect of cloud resource aggregation, China Digital first became the only company in China establishing a highest-level partnership with AWS, Azure and Aliyun, then was listed as one of the first batch of Greater China partners certified by Oracle Cloud MSP, and passed a couple of Huawei CSSP certifications and carried out in-depth strategic cooperation with Oracle and Huawei Cloud. Digital China’s cloud management platform products have been fully interfaced with the top five public clouds, i.e., AWS, Azure, Aliyun, Oracle, and Huawei Cloud. On the aspect of cloud licenses and qualifications, following the IDC, ISP, ICP and multi-point communication certification, Digital China has obtained the Internet Resource Collaboration Service Operation License issued by the Ministry of Industry and Information Technology (also called the MIIT Cloud Service License), and recently passed the Credible Cloud Certification by the Ministry of Industry and Information Technology (for cloud host and block storage). Its cloud service has gained a number of authoritative recognitions, laying a sound and solid foundation for development of the public cloud customizing services.
Creating a new starting point for Digital China’s vision of internationalization
In November 2017, the construction of the Digital China International Innovation Center (IIC) at the Shenzhen Bay Super Headquarters Base was officially commenced. With IIC as a carrier, Digital China will attract leading sci-tech companies from all over the world, providing innovative companies with a platform for cooperating with global sci-tech giants. Innovative talents, technologies and resources at home and abroad will be deeply integrated and the innovation drive in high-tech fields such as cloud computing, Big Data, AI, and cyber security will be fully activated, to develop IIC into a window of innovation of Guangdong-Hong Kong-Macau Greater Bay Area city cluster toward the international world as well as a place of gathering high-end international innovation elements.
The “13th 5-Year Plan for National Information Technology Planning” issued by the State Council clearly states that, by 2020, a digital education resource public service system will be basically established, forming a digital education resource cloud service system covering the whole country, with multi-level distribution and interconnection achieved. With the continuous optimization of the “Internet + Education” practice, the education cloud market sees a huge opportunity for development. Complying with the trend of education towards quality education and intelligent education, Digital China regards education as the next breakthrough and proposes to energize education with high-techs such as Internet, cloud computing, Big Data and AI, so as to push the deep integration of information technology and education industry, promote wider application and innovative development of educational technology, and advance the strategic layout of educational technology in a comprehensive manner.
In November 2017, Digital China held a partner forum in Wuhan towards the education industry and established the “Digital China Smart Education Alliance”. It will, work hand in hand with more than 3,000 channel partners in education all over the country, energize the education industry with technology, and comprehensively push the layout of educational technology. In December 2017, Digital China released an announcement saying that it would, at a proposed price of RMB 4.65 billion, acquire 100% equity of Guangdong Qixing Educational Technology Co., Ltd. (hereinafter referred to as “Qixing Educational”). At present, this major asset restructuring project has been approved by the Anti-Monopoly Bureau of the Ministry of Commerce, and no further audit against the acquisition of equity of Guangdong Qixing Educational by Digital China will be arranged. This project as a whole is under smooth progress.
According to the management of Digital China, Digital China will actively grasp the historic opportunities offered by the industrial Internet policies, namely, million-level companies in China are uploading their systems to clouds. Meanwhile, it will vigorously promote the enterprise cloud service strategy with MSP as the core. Moreover, Digital China will also energize the education industry with high-techs such as cloud computing, Big Data, AI, etc., fully promote the in-depth integration of information technology and education industry, advance the layout of educational technology, finally realizing its leap-forward development.