Hot Topics
Q.1. What was the latest operating performance of the Company?
In 2024, the global and domestic landscapes became increasingly complex and multifaceted, and the new wave of technological revolution and industrial transformation continued to deepen, with frontier technologies such as new-generation information technology and artificial intelligence constantly giving rise to new industries, new models and new momentum. Faced with operational challenges brought by the slowing revenue growth in the domestic telecommunications industry and increasingly fierce competition in the industrial digitalization market, the Group, positioning itself as a "New Generation Integrated Smart Service Provider" and fully leveraging its roles as the "Builder of Digital Infrastructure", "Provider of Smart Products and Platforms", "Provider of Industrial Digitalization Services", and "Guard of Smart Operation" (collectively referred to as the "Four Roles"), persisted in upholding technological innovation as its guiding principle, accelerated the expansion of strategic emerging businesses, developed new quality productive forces tailored to local conditions, thereby achieving "Effective Improvement in Quality" as well as "Reasonable Growth in Quantity", and firmly driving sustainable and high-quality development.
Adhering to its overall roadmap of "value-driven, seeking steady yet progressive growth and high-quality development" and practicing the principle of "revenue with reasonable profits and profits with matching cash flow", the Group achieved steady yet improving operating results, with efficiency indicators trending positively. During the year, the Group achieved total revenues of RMB150,000 million, representing a year-on-year increase of 0.9%. Among this, service revenue amounted to RMB146,212 million, representing a year-on-year increase of 1.9%. Gross profit reached RMB17,596 million, representing a year-on-year increase of 2.0%. The gross profit margin was 11.7%, up by 0.1 percentage point year-on-year, marking a steady improvement for three consecutive years. Net profit was RMB3,607 million, representing a year-on-year increase of 0.6%. The net profit margin remained largely stable at 2.4%. Free cash flow amounted to RMB5,214 million, showing favorable growth. Return on equity (ROE) was 8.2%. Basic earnings per share were RMB0.521, representing a year-on-year increase of 0.6%.
Q.2. Why has the Company's gross profit margin increased in the past three years? And what would be the trend going forward?
In 2024, the Group recorded gross profit of RMB17,596 million, representing an increase of 2.0% from RMB17,257 million in 2023. The Group's gross profit margin in 2024 was 11.7%, representing an increase of 0.1 percentage point from 11.6% in 2023, and the gross profit margin has continued to increase steadily. During the year, while catering for the scale of its development, the Group focused more on improving quality and efficiency, guided its subsidiaries through appraisal to strictly select and develop high-margin projects and increased the proportion of high-value businesses. At the same time, the Group continuously strengthened project management and cost control, and strove to enhance the value creation capability of its business. As a result of the above measures, gross profit margin continued to improve steadily. With the Group's deepening deployment in digital economy, new infrastructure construction and industrial digitalization areas, it is expected that the proportion of high-value businesses will gradually increase and thereby driving the trend of the Group's overall gross profit margin to improve.
Q.3. What were the major measures that the Company implemented to reduce the cost and improve the efficiency?
In 2024, the cost of revenues of the Group amounted to RMB132,404 million, representing a year-on-year increase of 0.8%, and the cost of revenues as a percentage of the total revenues decreased from 88.4% in 2023 to 88.3%. Among which, direct personnel costs amounted to RMB8,208 million, representing a decrease of 5.0% from RMB8,644 million in 2023. Direct personnel costs accounted for 5.5% of our total revenues, representing a decrease of 0.3 percentage point from 2023. The Group kept a reasonable control over its total headcount and continued to optimize the employee structure, which resulted in the continuous decrease of the proportion of direct personnel costs to total revenues. Subcontracting charges amounted to RMB80,406 million, representing an increase of 0.2% from RMB80,233 million in 2023. Subcontracting charges accounted for 53.6% of our total revenues, representing a decrease of 0.4 percentage point from 2023. By strengthening the full-process management of subcontracting continuously, enhancing the management and supervision through systems, technologies and personnel, as well as improving the self-sufficient delivery capability, the Group effectively controlled the subcontracting charges, with the proportion of subcontracting charges costs to total revenues declined and the growth rate of subcontracting charges being lower than the growth rate of total revenues by 0.7 percentage point. Materials costs amounted to RMB25,579 million, representing an increase of 3.7% from RMB24,671 million in 2023. Materials costs accounted for 17.0% of our total revenues, representing an increase of 0.4 percentage point from 2023. The increase was because the Group optimized its business model and undertook major projects in general contracting model proactively. In addition, the fast development of system integration business, which involved relatively more materials, also drove up materials costs. The Group will continue to strengthen the management of general contracting projects and enhance materials cost control by improving its internal procurement system and further implementing centralized procurement.
Q.4. The growth rate of the Company's new contracts in strategic emerging businesses, such as data centers, exceeded 30%, please provide details for the situation.
In 2024, the country vigorously developed new quality productive forces and promoted the deep integration of the real economy and the digital economy, with accelerated progress in digitalization, intelligentization, green development and security enhancement. The Group focused on key industry customers in government, emergency management, energy, transportation, education, and healthcare, and continued to deepen its development in strategic emerging businesses in digital infrastructure, green and low-carbon, smart city as well as emergency management and security. The total value of new contracts signed from strategic emerging businesses during the year increased by over 30% year-on-year, accounting for 37% of the total value of new contracts signed, representing an increase of approximately 7 percentage points from the previous year, creating a new growth engine for high-quality development.
In the field of digital infrastructure, The Group actively implemented the national strategies of building China into a cyberpower and Digital China. Keeping pace with the computing power demand driven by the iteration of artificial intelligence large models, the Group accelerated the intelligent and green upgrading of digital information infrastructure. Leveraging innovative AI energy efficiency optimization technologies and the leading capabilities in green and low-carbon, consultation and design as well as solution, the Group accumulated rich project experience in data centers, cloud services, and 5G+ businesses. It undertook intelligent computing and supercomputing center projects in industries such as telecommunications, finance, Internet and manufacturing, contributing to the construction of a national integrated computing power network and empowering the high-quality development of the digital economy, thereby solidifying the digital foundation for Chinese modernization. The Group undertook approximately 20 large-scale projects with contract values of more than RMB100 million each, and the value of new contracts signed in this field grew by over 30% during the year.
In the field of green and low-carbon, with the advancement of the national "Dual Carbon" goals, the Group engaged in the coordinated development of computing power and green energy, supporting the comprehensive green transformation of economic and social development. Focusing on energy and electricity, industrial manufacturing, transportation, real estate and construction, as well as information and communications, the Group provided customers with upgraded services such as electricity infrastructure and ancillary facilities, new energy construction, energy usage services and carbon management. The Group tracked and developed cutting-edge, energy-saving and carbon-reduction technologies, leveraging its integrated capabilities in "Consultation-Driven + Digital Empowerment + Product Innovation + Engineering Construction + Operation and Maintenance" to create comprehensive and customized green and low-carbon solutions. The Group secured several EPC general contracting projects with contract values exceeding RMB100 million each. The value of new contracts signed in this field grew by over 25% during the year.
In the field of smart city, the Group focused on urban renewal and the digital transformation needs of all industries and continuously deepened its efforts in developing key industries and regions. Leveraging its advantages in consultation and design as the lead, software development support, and general contracting delivery, the Group explored innovative applications of new technologies such as artificial intelligence, the Internet of Things, and big data in related industries. Relying on its professional local teams at the provincial, municipal, and county levels, the Group continuously strengthened its products and solutions capabilities, securing several projects with contract values exceeding RMB100 million each in areas such as social governance, digital government, smart transportation, smart education, smart healthcare, and enterprise digital transformation, comprehensively empowering the digital transformation of the economy and society. The value of new contracts signed in this field grew by over 40% during the year.
In the field of emergency management and security, the Group strictly adhered to the bottom line of safe development and continuously enhanced public safety governance and network information security capabilities. In emergency management, the Group used digital means to assist in disaster prevention, mitigation, and relief, as well as the handling of urgent, difficult, dangerous and major public emergencies. It promoted the implementation of proprietary products such as emergency command information systems, production safety risk monitoring and early warning systems, as well as natural disaster monitoring and early warning platforms, participating in the building of emergency management capabilities in multiple provinces and cities across the country. The Group participated in the national key research and development program "Prevention and Control of Major Natural Disasters and Public Safety" under the Ministry of Emergency Management, specifically the key project of "Key Technologies for Intelligent Generated Decision-Making Knowledge Base in Disaster and Accident Emergency Management Situations", achieving dynamic and efficient integration of spatiotemporal information at disaster sites, intelligent analysis, and emergency management and rescue decision-making support. In terms of network and information security, the Group actively responded to the cybersecurity operations and data security needs of customers in industries such as information and communications, finance, energy, and transportation, developing over 40 proprietary and controllable network and information security products and one-stop integrated solutions. The "Intelligent Video Surveillance Application System", which the Group participated in research and development, was successfully selected into the "2024 Cybersecurity Technology Application Exemplary Cases". The value of new contracts signed in the field of emergency management and security grew by over 30% during the year.
Q.5. Amid the drop in CAPEX of the domestic telecommunications operators, what strategies did the Company adopt to achieve revenue growth in the domestic telecommunications operator market?
Adhering to its "CAPEX + OPEX + Smart Applications" development strategy, the Group effectively addressed the challenges posed by the decline in CAPEX investment from domestic telecommunications operators. Guided by customers' needs, the Group improved the delivery quality of traditional businesses through digital means and closely followed operators' new transformation demands such as construction of computing power infrastructure and industrial digitalization. By fully leveraging its differentiated advantages in digital infrastructure, green and low-carbon, consultation and design, software applications, operation and maintenance, as well as deepening ecosystem cooperation, the Group achieved win-win collaboration. Despite the overall decline in CAPEX investment in this market, revenue from this market reached RMB83,603 million in 2024, representing a year-on-year increase of 2.3%. Among which, applications, content, and other ("ACO") business from such market increased 9.4% year-on-year, driving revenue growth.
The Group further integrated itself into the ecosystem of domestic telecommunications operators, leveraging its general contracting capabilities and integrated advantages to seize the opportunities from traditional businesses and transformation. It focused on opportunities in AI computing power construction, industrial digitalization, 5G+, and low-altitude economy to deepen its development in traditional CAPEX businesses. The Group expanded into the markets of network maintenance, property management, and supply chain services, and strived to increase its OPEX market share. It fully supported operators' demand for industrial digitalization during their transformation by actively engaging in the expansion of 5G industrial applications, industrial digitalization, network information security, and other markets. Additionally, the Group assisted operators in achieving green development by supporting "zero carbon" data center construction, green retrofitting of old machine rooms, and "Dual Carbon" energy-saving platform construction, which ultimately stabilized the fundamentals of its business with domestic telecommunications operators.
Q.6. How was the Company's development in the domestic non-telecom operator market with the rapid development of the digital economy in China? What services does the Company provide in this market?
In the domestic non-telecom operator ("domestic non-operator") market, the Group focused on high-value industries and businesses with significant strategic importance, high economic benefits, and close ties to people's livelihoods. It accelerated the development of industrial digitalization businesses and actively explored areas such as low-altitude economy, artificial intelligence, and intelligent computing and supercomputing. Leveraging its advantages of unique "Consultant + Staff + Housekeeper" service model and "Platform + Software + Service" capabilities, the Group provided customers with integrated, full-process services that incorporate cloud, artificial intelligence, security, and platform. The Group quickly responded to customer needs and provided a comprehensive smart product portfolio that could be disassembled or combined, along with full-process service capabilities from top-level design to product R&D and operation. In 2024, the Group signed over 1,400 new contracts value more than RMB10 million each, and the Group's annual contract value in several industries, including government, housing and construction, Internet and IT, energy, transportation, finance, and education, has exceeded RMB1 billion in each sector. Meanwhile, the Group strictly controlled project risks and expanded its business while ensuring project quality and mitigating operational risks, maintaining stable gross profit margin in this customer market. During the year, revenue from the domestic non-operator market amounted to RMB62,169 million, representing a year-on-year decrease of 2.0%. Among which, applications, content, and other ("ACO") businesses from such market increased 6.6% year-on-year, driving revenue growth.
Q.7. How was the Company's development in overseas market? And what is the Company's outlook in the development of the overseas market?
Centering on key regions along the "Belt and Road", the Group actively responded to the demand for digital infrastructure overseas by replicating its domestic capabilities in fundamental network and computing power infrastructure construction. Meanwhile, the Group steadily expanded into new businesses such as industrial digitalization and new energy, continuously optimized its overseas operating models, strengthened comprehensive risk management, and enhanced collaborative cooperation with "Go Abroad" Chinese enterprises. The Group successfully secured several high-quality and large-scale projects, achieving safe, compliant, and efficient development. In 2024, revenue from the overseas market grew rapidly, reaching RMB4,228 million, representing a year-on-year increase of 22.3%.
The Group will remain committed to overseas expansion, accelerating market penetration with a focus on four key regions, such as Asia Pacific, the Middle East, Africa, and Latin America; four key customer groups, such as telecom operators, energy and electricity customers, overseas governments and enterprises, and Chinese companies; and four key businesses, such as digital infrastructure construction, new energy, smart products and services, and industrial informatization services. By coordinating development and safety, the Group aims to achieve safe and effective development in overseas market.
Q.8. What were the Company's performance in businesses of TIS, BPO and ACO?
In 2024, revenue from the Group's telecommunications infrastructure ("TIS") services amounted to RMB75,172 million, representing a year-on-year decrease of 1.3% and accounting for 50.1% of total revenues. The decline was mainly due to certain customers' cautious investment and the Group's proactive control of low-value projects. While supporting domestic customers in the construction for computing power infrastructure, the Group leveraged its industry-leading TIS capabilities to actively expand into overseas market, achieving a year-on-year increase of 17.5% in relevant revenue from overseas customers. Revenue from business process outsourcing ("BPO") services amounted to RMB43,459 million, representing a year-on-year decrease of 0.2% and accounting for 29.0% of total revenues. Among this, revenue from low-margin products distribution business continued to be effectively controlled, decreasing by 18.9% year-on-year, further optimizing the revenue structure of this segment. Persisting in upholding technological innovation as its guiding principle, the Group continuously strengthened its software development capabilities and digital service standards. Revenue from applications, content, and other ("ACO") services maintained a favorable growth momentum, reaching RMB31,369 million, representing a year-on-year increase of 8.4%. Its proportion of total revenues exceeded 20%, reaching 20.9%, and revenue from ACO services remained as the primary driver of revenue growth for three consecutive years.
With the deepened implementation of the Digital China strategy and the accelerated pace of digital information infrastructure construction, competition in the digital construction sector has evolved towards a higher level and greater refinement. During the year, facing a complex external environment and intense market competition, the Group seized opportunities in the construction of domestic computing power networks, data centers, and intelligent computing centers, enhanced its comprehensive integrated smart service capabilities, and strived to overcome the impact of the decline in CAPEX from domestic telecommunications operators and the investment from domestic non-operator customers, thereby maintaining relatively stable revenue from TIS services. The Group further consolidated its resources and promoted specialized operations, ensuring stable revenue from BPO services, which possess attributes such as strong customer loyalty and short cash conversion cycles. At the same time, with technological innovation as the lead, the Group aggregated its capabilities in research and development as well as product development, and focused on the business opportunities in informatization construction such as smart city upgrades, enterprise digital transformation, and emergency management. As a result, the Group effectively met customer needs for digitalization, driving the development of its businesses such as system integration and software development, and sustaining robust growth in revenue from ACO services.
Q.9. Which areas did the Company invest research and development in? What were the results?
In 2024, the research and development expenses were RMB5,568 million, accounting for 3.7% of our total revenues. The Group continued to leverage technological innovation as a driving force, strengthening the deep integration of technological innovation and industrial innovation, building a key engine for developing new quality productive forces, and creating new momentum and advantages for high-quality development. Focusing on strategic emerging industries, the Group developed nearly 100 key industry products, such as smart photovoltaic, smart building, and smart sport, to meet customers' intelligent, secure, and scenario-based needs. It focused on key technologies in future industries, advancing in frontier areas such as 5G-A, blockchain, AI+, satellite communications, and low-altitude economy, and developed products such as the blockchain data service platform, the direct satellite connection product "Xingjitong", the network connected drone intelligent application platform, and AI product suites. The Group accelerated the commercialization and large-scale replication of technological innovation results, cultivating over 40 products with contract values exceeding RMB10 million each and implementing 12 comprehensive solutions, each deployed in more than 50% of the country's provinces, effectively enhancing enterprises' operational efficiency. The Group accumulated more than 3,900 authorized patents and 10,500 software copyrights. For the fourth consecutive year, the Group ranked fourth in the "100 Most Competitive Software & IT Service Enterprises", and several technological innovation projects received provincial and ministerial-level as well as national-level association science and technology awards. The Group was also included in the "China Cybersecurity Industry Panorama" by AQNIU and the "2023¡V2024 Recommended Directory of Outstanding Innovative Software Products", demonstrating its recognized innovation capabilities in the industry.
Q.10. Will the rapid development of artificial intelligence in China boost the Company's business development? What are the Company's plans of deployment in the field of artificial intelligence?
With the accelerated maturation of the domestic artificial intelligence ("AI") industrial chain, particularly the recent open-sourcing of industry-leading domestic AI large models, the commercial market of AI is poised for a new wave of rapid growth. As a leading digital infrastructure services provider in China, the Group will seize this opportunity to accelerate strategic deployment in the field of AI. Our Telecommunications Infrastructure Service ("TIS") subsidiaries are expected to benefit from a surge in demand for computing power center construction, our design institutes and Applications, Content and other Services ("ACO") subsidiaries will focus on customers' needs for private AI deployment, building a four-in-one data service system, covering data planning, governance, storage, and maintenance. Additionally, the Company will strengthen R&D innovation in AI large model applications to develop tailored AI solutions and delivery capabilities targeting strategic emerging industries.
Q.11. What management measures have been adopted to maintain the Company's free cash flow at a relatively healthy level? And what will be the future trend?
In 2024, the Group continued to strengthen working capital management and emphasized full-process business control. Free cash flow reached RMB5,214 million for the full year, with overall cash flow remaining healthy and sound. Adhering to the operating philosophy of "Revenue with Reasonable Profit, Profit with Matching Cash Flow", the Group emphasized the pre-bid project evaluation, customer credit rating, project delivery quality, accounts receivable collection, and budget management of projects, while placing greater emphasis on the collection of long-term accounts receivable, and enhancing collection through methods such as appraisal and guidance. At the same time, the Group effectively managed cash collection and payment, striving to maintain the cash flow at a reasonable and healthy level.
Q.12. What was the dividend paid by the Company? What's the dividend policy of the Company?
In light of the Group's stable operating performance and sound cash flow for the year, the Board has proposed a final dividend of RMB0.2187 per share for the financial year ended 31 December 2024, representing a dividend payout ratio of 42%. Please refer to "Dividend History" for the details.
The Company attaches great importance to the returns of shareholders. Taking into the consideration of the long-term interest and sustainable development of the Company, and with the support of the Group's profitability, the Company strives to maintain the continuity and stability of the dividend policy. The factors to be considered by the Company when formulating the dividend distribution plan are as follows:
1. Current and expected operating results and cash flow performance;
2. Future business development strategies and operating position, as well as future capital needs;
3. Daily working capital needs;
4. Expectations of shareholders and investors; and
5. Other factors that the Board deems appropriate.
Basic Information
Q.1. What kind of Company is China Comservice?
China Comservice ("China Communications Services Corporation Limited") is a leading service provider in the informatization sector in the PRC that positions itself as a "New Generation Integrated Smart Service Provider", leverages its strength as "Builder of Digital Infrastructure", "Provider of Smart Products and Platforms", "Provider of Industrial Digitalization Services", "Guard of Smart Operation" ("1 Positioning, 4 Roles"), the Group commits to "Building Smart Society, Boosting Digital Economy, Serving a Good Life". The Group provides integrated comprehensive smart solutions for the informatization and digitalization sectors. It is also the largest telecommunications infrastructure service provider in the PRC. Our services include telecommunications infrastructure services ("TIS") covering design, construction, and project supervision and management; business process outsourcing services ("BPO") covering network maintenance, property management, supply chain and products distribution; applications, content and other services ("ACO") covering system integration, software development and system support, value-added services and other services. (Please refer to "Corporate Profile" and "History" for more details)
Q.2. When was China Comservice listed?
The Company was listed on the Stock Exchange of Hong Kong on December 8, 2006. The offering price was HK$2.20 per share. (Please refer to "Share Information Overview" for more details)
Q.3. Who are the major shareholders of China Comservice?
China Telecommunications Corporation is our controlling shareholder which holds 3,393 million domestic shares, representing 48.99% of our total issued shares. In addition, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited, State Grid Information & Telecommunication Group Co., Ltd. and China National Postal and Telecommunications Appliances Co., Ltd. hold 608 million, 236 million, 166 million and 131 million domestic shares, representing 8.78%, 3.41%, 2.40% and 1.89% of total issued shares respectively. The public holding is 2,391 million H share, representing 34.53% of our total issued shares. (Please refer to "Shareholding Structure" for more details)
Q.4. Who are the major customers of China Comservice?
All major telecommunications operators in China, namely, China Telecommunications Corporation, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited, China Radio and Television Network Co., Ltd and China Tower Corporation Limited are our customers. We also provide services to domestic non-telecom operator (the "domestic non-operator") customers and overseas customers. In 2024, revenue from domestic telecommunications operator customers accounted for 55.7% of total revenues, revenue from domestic non-operator customers accounted for 41.5% of total revenues and revenue from overseas customers accounted for 2.8% of total revenues.
While further developing domestic telecommunications operator market, the Group has also endeavored to expand the domestic non-telecom operator market. The Group proactively provides services, such as smart city solutions, municipal infrastructure, intelligence building and data center construction, to key customers such as government agencies and customers in the industries of construction, Internet & IT, transportation, electricity, etc.
Other than China, the Group's business also covers dozens of countries and regions globally, and its overseas customers are mainly located in the emerging markets including Asia Pacific, the Middle East and Africa. (Please refer to "Our Business" for more details)
Q.5. What are the businesses under Telecommunications Infrastructure ("TIS") Services of the Company?
The Group is the largest telecommunications infrastructure service group in the PRC, providing a full range of telecommunications infrastructure services to telecommunications operators in China and overseas. These services include planning, design, construction and project supervision for fixed line, mobile, broadband networks and supporting systems. The Group also provides construction services of ancillary communications networks, integrated solutions for informatization and intelligentization solutions of industries to domestic non-operator customers such as government agencies, industrial customers and SMEs, as well as overseas customers. (Please refer to "Our Business" for more details)
Q.6. What are the businesses under Business Process Outsourcing ("BPO") Services of the Company?
The Group is the largest integrated provider of business process outsourcing services in the communications industry in China. The Company can provide customers with all-round quality outsourcing services including management of infrastructure for information technology ("network maintenance"), general facilities management ("property management"), supply chain and products distribution services. The target of our services includes domestic and overseas telecommunications operator customers, government agencies and enterprises customers. The Group focused on OPEX-driven business of domestic telecommunications operators, and strengthened the synergistic operation and brand building of OPEX-driven business. (Please refer to "Our Business" for more details)
Q.7. What are the businesses under Applications, Content and Other ("ACO") Services of the Company?
The Group provides information system integration and project implementation, industrial digitalization application and solutions, proprietary software and platform product development, digitalization business and IT system support as well as value-added services to customers including domestic and overseas telecommunications operators, government agencies and enterprise customers. (Please refer to "Our Business" for more details)
updated 23rd May, 2025
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