FAQs

Hot Topics

What was the impact of novel coronavirus (the "COVID-19") pandemic on the results of the Company in the first half of 2020?
In the first half of 2020, the novel coronavirus (the "COVID-19") pandemic made a huge impact on the overall social economic development, in which the Group also faced unprecedented pressure and challenges on its operation. Due to the pandemic, we faced difficulties including deferred tendering from our major customers, delay in the commencement of work and project delivery as well as the constraints on cross-regional works. In particular for the first quarter, it was a critical period in China for fighting against the pandemic and most of the Group's businesses could not be carried out normally. Meanwhile, rigid costs were incurred while anti-pandemic expenses increased, and there was an overall dislocation of our operation, leading to immense pressure on its revenue and profit.

The Group seized the accelerating informatization construction such as "Emergency Management", "5G construction", "Digital Society", and also the demand on "New Infrastructure" prompted by the pandemic. The Group sought to overcome challenges by broadening the sources of revenue while cutting costs and adopting various measures to proactively promote resumption of work and production. With the pandemic situation in China turned relatively stable in the second quarter, the Group's overall operating performance was marked with a recovering year-on-year growth. In the second quarter, the revenue of the Group showed a noticeable rebound compared to the first quarter, and revenue for the second quarter was up by 7.4% as compared to the same period last year, and the growth was higher than China's GDP growth in the same period. Though the quick recovery in the second quarter could not fully mitigate for the decline in the first quarter, we still managed to achieve commendable operating results in the first half despite a difficult external environment.

In the first half of 2020, the Group's total revenues recorded RMB53,834 million, representing a year-on-year decrease of 4.0%. Revenue from Core Businesses accounted for 96.6% of the total revenues, representing a year-on-year increase of 0.7 percentage point. Cost of revenues recorded RMB47,931 million, representing a year-on-year decrease of 3.7%. Gross profit recorded RMB5,903 million, representing a year-on-year decrease of 6.3%. Gross profit margin was 11.0%, representing a year-on-year decrease of 0.2 percentage point. With the benefits from developing high-margin businesses, optimizing business structure, controlling costs and enhancing efficiency, the Group effectively mitigated the impact of the pandemic on its gross profit margin, thus the decline of the gross profit margin slowed down noticeably. Having considered both the pandemic situation and the needs for its own development, the Group sped up the pace of its digital transformation and leveraged various supplemental measures such as "online" and "remote" to promote sales and marketing and strengthen communications, thereby enhancing operating and management efficiency. As a result, selling, general and administrative expenses amounted to RMB4,785 million, representing a year-on-year decrease of 4.0% and accounting for 8.9% of total revenues, which remained at the same level as compared with the same period of last year. Profit attributable to equity shareholders of the Company was RMB1,588 million, representing a year-on-year decrease of 7.2%; net profit margin was 2.9%, representing a year-on-year decrease of 0.2 percentage point. Basic earnings per share amounted to RMB0.229, representing a year-on-year decrease of 7.2%. Free cash flow was RMB–1,596 million.
Under the impact of the pandemic in the first half of 2020, what's the difference of the development of the Company as compared to the past?
The pandemic had a relatively noticeable impact on the construction business and domestic telecommunications operator market of the Group. Meanwhile, new traits and changes in our operation emerged. Thanks to the Group's increased investment in R&D, continuous investment and experience accumulation in the informatization for serving the society in recent years, domestic non-telecom operator ("domestic non-operator") market was the first that resumed positive growth and contributed over 40% of total revenues; ACO business became the main growth driver in the first half of 2020, with its revenue realized double-digit robust growth and contributed about 15% of total revenues. The deployment of the Group in recent years enabled us to better cope with the decline in domestic telecommunications operator market as well as TIS and BPO businesses, safeguarding the stable fundamentals for its development.
In the first half of 2020, what measures did the Company take to maintain growth in the domestic non-telecom operator ("domestic non-operator") market during the pandemic? And what services does the Company provide in this market?
Domestic non-operator customers, as the Group's largest customer group, maintained the growth momentum and played a decisive role in stabilizing the overall operating performance in the first half of 2020. Revenue generated from such market recorded RMB21,851 million, representing a year-on-year increase of 3.7%. The contribution to the total revenues from the domestic non-operator market exceeded 40% for the first time and reached 40.6%. Among which, the Core Businesses revenue recorded a year-on-year increase of 5.9% and accounted for 93.4% of the overall revenue from such market, representing a year-on-year increase of 1.9 percentage points. The Group took up the mission of "Building Smart Society, Boosting Digital Economy, Serving a Good Life", strived to look into the needs of customers in the vertical industries and leveraged its unique "Consultant + Staff + Housekeeper" service model and "Platform + Software + Service" competitive capabilities to provide its customers with vast variety of smart products and solutions. The Group achieved major breakthroughs in the fields of Emergency Management, Data Center, Digital Government, Smart Game and Smart Airport. The proportion of new contracts in the domestic non-operator market with a size of over RMB100 million (per contract) increased from 8% in 2019 to 14%. The new contract value in the first half of 2020 for the Core Businesses in the domestic non-operator market increased by 6.7% year-on-year.

The further advancement of New Infrastructure, as well as the deep integration of emerging technologies such as 5G, IoT, Artificial Intelligence, Blockchain with the real economy, will create booming demand for digitalization from society and industries. The Group has been paying close attention to the development trend of industrial digitalization. Through innovation and transformation (including the construction of foundation platforms such as CCSYUN Platform and CCS IoT Platform, enhancement of research and development capabilities and optimization of ecosystem), the Group achieved rapid business growth in domestic non-operator market and sustained optimization of its revenue structure. We proactively provide the series of smart-typed comprehensive solutions to our key customers such as government agencies and customers in the industries of transportation, electricity, Internet & IT and construction, etc., and we have already developed more than 30 different types of smart products, such as Smart City, Cloud, Smart Emergency Management, IoT Platform, CCS Network Information Security Solution, Smart Transportation, etc., which allows us to provide smart products portfolio that could be disassembled or combined as per customers' needs, as well as integrated comprehensive smart service covering top-level design to product R&D and operation.
What business opportunities does the Company expect the development of New Infrastructure including 5G can bring to the Company? What competitive advantages does the Company possess and what measures have you implemented to capture the related opportunities?
Chinese government vigorously promotes New Infrastructure including 5G, leading to the need for general contractor of New Digital Infrastructure to fulfill new market demand, which brings us ample development opportunities mainly on: firstly, digitalization of traditional infrastructure and integration of new and traditional infrastructure; secondly, New Infrastructure enables digital transformation of society and industries to accelerate, facilitates new technologies such as AI to deeply integrate with real economy, thus bringing new market on intelligentization of social governance and applications of people's livelihood; and thirdly, domestic telecommunications operators accelerate their transformation, general contracting service model in 5G and data centers, new operations and new business in cloud-network integration bring new opportunities in digital services.

Under the aforementioned background, the Group believes it is hardly possible that "a single product, a single ability or a single service" could meet the needs of the society and industry in the future. In view of the new era of the Digital Economy, the Group positions itself as "New Generation Integrated Smart Service Provider". Focusing on the demand of customers from the business sector, the Group accelerates innovation and transformation, keeps improving capabilities and strengthening growth momentum. The Group will take advantage as a listed SOE with hundred-billion revenue scale, unique 4T capabilities including Communications Technology, Information Technology, Data Technology and Operational Technology, decades of experience and technologies in telecom and informatization industries, as well as technology capabilities, platform capabilities, service and product capabilities. Meanwhile, we will take advantage on our neutral market position to construct symbiotic ecosystem in order to provide "cross-platform, cross-connection, cross-application, cross-region and cross-supplier" integrated smart services to our customers and create greater value.

Meanwhile, the new market environment has exposed the Group to new demand, with the 5G era calling for integrated service providers of digital infrastructure. Acting as a "Builder of Digital Infrastructure", the Group has been devoted to seizing the opportunities arising from 5G investment and co-build and co-share by domestic telecommunications operators. The Group has set up dedicated project management teams, strengthened its capabilities, and expanded the 5G construction business by adopting a new general contracting model. Given the arrival of 5G and the accelerated digitalization of society, this will lead to new demand for Internet of Everything, the Group's maintenance business will be seeing an explosive growth opportunity. Acting as the "Guard of Smart Operation", the Group adapts to the changes in market trends by building up China Comservice Maintenance Cloud Platform, and expediting the enhancement of our digital maintenance capabilities. The Group will utilize Cloud Computing and IoT technologies to provide customers with multi-dimensional, integrated, efficient and predictive smart maintenance service. On the other hand, the pandemic has accelerated the pace of digitalization, cyberization, and intelligentization of society, and brought defining changes to both social governance models and people's way of living. The popularization of the new generation information technology promotes the deep integration of digital economy and real economy. Acting as the "Service Provider of Data Production" and "Provider of Smart Products and Platforms", the Group has focused on the changes in industries and customers' demand, and achieved major breakthroughs and was rewarded with achievements in the fields of Emergency Management, Data Center, Digital Government, Smart Game and Smart Airport, with our brand awareness and reputation further elevated. Currently, in the seven key areas of New Infrastructure, the Group has been deeply involved in the construction of 5G and data centers and vigorously explore opportunities in IoT and AI. We will explore the integration demand and potential in digitalization of traditional infrastructure such as Extra-high Voltage Supply Systems and Urban Rail Systems.
What's the Company's participation in New Infrastructure related businesses such as 5G?
The "New Infrastructure" led by 5G is making an impressive debut. 5G is not only the key task of the "New Infrastructure", but also serves as a growth driver to support the elevated development on digitalization, cyberization, and intelligentization of industries and society. As 5G integrates with various industries' development, 5G relevant investment from domestic telecommunications operators and various industries will increase gradually. Of which, 5G construction investment in short-term will be mainly from domestic telecommunications operators, which will induce domestic telecommunications operators' CAPEX to resume growth. On the other hand, 5G network construction has a very strong spillover effect, which will drive investment of domestic non-operator market, boost information consumption and further penetrate into various industries and sectors. Also, the society's attention on digitalization was aroused by the pandemic, which will expedite digital transformation of society and industries. The Group believes that 5G and New Infrastructure will bring more opportunities to us in the domestic non-operator market.

To prepare for the new changes and trend brought by 5G, the Group has cultivated a broad spectrum of smart products and solutions and accumulated a wealth of experience from providing a number of smart service and operation and maintenance support services. The Group possesses rich experience in serving business-end market, and accumulated much know-how in smart products and industry services. Currently the Group has already had over 30 industrial solutions targeting different sectors and industries, and provided customers with standardized and customized comprehensive smart solutions, with a focus on key sectors such as government, transportation, electricity, games and emergency management. The Group has been keeping a robust growth momentum in domestic non-operator market in recent years.

Meanwhile, the Group has been fully dedicated to supporting the 5G network construction of operators, and we have also made use of the EPC general contracting service model to support our customers' constructions such as 5G. Through general contracting, we can expand market share to consolidate our leading market position, and the relevant business volume is increasing steadily. Besides, the development of 5G and New Infrastructure have great demand for data centers. As a major constructor of data centers in the PRC, the Group has been maintaining our leading market position. We provide data center construction and professional integrated services for domestic telecommunications operators and Internet companies. With years of experience in data center construction, the Group signed many sizeable data center projects with size over RMB100 million in the first half of 2020. New contract amount grew strongly and doubled to over RMB4 billion. Leveraging the opportunities provided by general contracting for 5G from domestic telecommunications operators, the Group will strengthen its EPC general contracting capabilities for the digital infrastructure and expand construction opportunities, including enterprise dedicated networks, data centers, and industrial ICT.
In the first half of 2020, the Company's revenue from the domestic telecommunications operator market experienced a temporary decline as affected by the pandemic. With operators increasing 5G construction, will the Company see better future growth opportunities in the domestic telecommunications operator market?
Owing to the pandemic, the bidding and tendering process and project commencement of the domestic telecommunications operators were behind schedule early in the year, and the Group's performance in the domestic telecommunications operator market experienced some fluctuation. Revenue from such market recorded RMB30,546 million, representing a year-on-year decrease of 9.2% and accounting for 56.7% of total revenues; among which, revenue from China Telecom amounted to RMB17,162 million, representing a year-on-year decrease of 6.5% while accounting for 31.9% of the total revenues. Revenue from domestic telecommunications operators other than China Telecom recorded RMB13,384 million, representing a year-on-year decrease of 12.5% while accounting for 24.8% of the total revenues. Although the development in the first half was affected by the pandemic, the Group continued to persist in its "Dual Growth Drivers+" development strategy, and supported its customers' 5G development and cloud-network integration construction. In addition, pursuant to the change in our customers' needs, the Group made use of the EPC general contracting service model to support our customers' constructions such as 5G, and the relevant business volume increased steadily.

In the domestic telecommunications operator market, the Group will continue the "Dual Growth Drivers+" development strategy. By focusing on the CAPEX investment planning of the domestic telecommunications operators and adapting to the demand of the acceleration in 5G construction and the change in construction model, the Group will undertake projects using the general contracting model and take full advantage of the CAPEX opportunities. Meanwhile, the Group will focus on OPEX business opportunities and help customers to build competitive edges by consolidating and improving their network operation and service capabilities. The Group will seize the window of opportunity regarding our customers' transformation, leveraging its unique position in terms of smart applications, industry solutions, network information security and project implementation to fully support the cloud-network integration of our customers, proactively integrating into the customers' value chain and symbiotic ecosystem. We will jointly expand the new ICT market with customers while expanding our own value to ensure the sustainable and stable development of the domestic telecommunications operator market.
How was the development of overseas market in the first half of 2020? What's the Company future outlook in the development of this market?
The Group's revenue from the overseas market recorded RMB1,437 million in the first half of 2020, representing a year-on-year increase of 7.3% and accounting for 2.7% of the total revenues. Benefiting from the smooth execution of projects in Nepal, Saudi Arabia, etc., and revenue from the respective projects being recognized in phases, overseas business achieved growth amid the headwind in the first half of 2020. The Group strictly implemented the scientific prevention and control measures for the pandemic, and its staff stationed in overseas business regions recorded zero infection in the first half of 2020.

In the overseas market, the Group will seize opportunities from the continuous opening-up of China and in-depth promotion of the "Belt and Road" to accelerate the transformation and upgrade of its "EPC+F+I+O+S" model ("EPC (Engineering, Procurement, Construction) + Finance + Investment + Operation + Solution"). The Group will accelerate its business expansion by focusing on key regions including Southeast Asia, the Middle East and Africa and developing key businesses including "New Infrastructure" overseas represented by 5G, maintenance, data center and electricity. At the same time, by integrating digitalization demand from overseas customers, the Group will promote the launch of smart products and services in overseas market. Meanwhile, the Group will enhance its collaboration with domestic telecommunications operators and "Go Abroad" Chinese enterprises to explore new room for development in overseas business.
What were the Company's performance in businesses of TIS, BPO and ACO in the first half of 2020?
In the first half of 2020, the impact brought by the pandemic on domestic construction projects was particularly evident. The Group's revenue from TIS services recorded RMB29,037 million, representing a year-on-year decrease of 5.7% and accounting for 53.9% of the total revenues. Among which, TIS revenue from domestic non-operator customers amounted to RMB11,185 million, representing a year-on-year increase of 4.9%. TIS revenue from overseas customers amounted to RMB1,108 million, recording a robust year-on-year growth of 18.3%. TIS revenue from domestic telecommunications operators amounted to RMB16,744 million, representing a year-on-year decrease of 12.8%.

Revenue from BPO services recorded RMB16,959 million, representing a year-on-year decrease of 6.4% and accounting for 31.5% of the total revenues. Among which, revenue from network maintenance business decreased by 0.4% year-on-year, and revenue from general facilities management (property management) business increased by 4.7% year-on-year. The impact inflicted by the pandemic on the supply chain business was relatively more apparent and revenue from such business recorded a decrease of 13.9% year-on-year. The Group continued to exercise proactive control over its products distribution business, with the revenue from such business recording a decrease of 20.3% year-on-year, and accounting for 3.4% of the total revenues, which represented a decrease of 0.7 percentage point year-on-year.

Revenue ACO services amounted to RMB7,838 million, representing a year-on-year increase of 10.1% and accounting for 14.6% of the total revenues, up by 1.9 percentage points. Among which, revenue from system integration business recorded a year-on-year increase of 15.6%, whereas revenue from software development and system support business recorded a year-on-year increase of 21.1%. The rapid growth of ACO services and its positive contribution to the overall operating performance reflected the favorable results of the early deployment of the Group's software and digital service capabilities in recent years, which also facilitated the development of its traditional TIS business.
The Company's decline of gross profit margin continued to moderate in the first half of 2020, in which aspects did it benefit from?
Gross profit margin of the Group in the first half of 2020 was 11.0%, representing a year-on-year decrease of 0.2 percentage point. Amid the impact from the negative revenue growth caused by the pandemic, there was additional pressure on gross profit due to the rigid costs and the additional anti-pandemic costs. However, benefiting from the Group's efforts to expand high-margin business, optimize business structure and control costs strictly, it effectively alleviated the impact of the pandemic on the gross profit margin, which showed a noticeably moderating decline (In the first half of 2019, the gross profit margin of the Group was 11.2% and recorded a year-on-year decrease of 1.0 percentage point).

At the same time, having considered both the pandemic situation and the needs for its own development, the Group sped up the pace of its digital transformation and leveraged various supplemental measures such as "online" and "remote" to promote sales and marketing and strengthen communications, thereby enhancing operating and management efficiency. As a result, selling, general and administrative expenses amounted to RMB4,785 million, representing a year-on-year decrease of 4.0% and accounting for 8.9% of total revenues, which remained at the same level as compared with the same period of last year. Profit attributable to equity shareholders of the Company was RMB1,588 million, representing a year-on-year decrease of 7.2%; net profit margin was 2.9%, representing a year-on-year decrease of 0.2 percentage point.
What was the free cash flow in the first half of 2020? And what would be the trend going forward?
In the first half of 2020, the pandemic posed significant impact on the domestic macro economy and the company encountered more pressure in cash collection and payment as well as cash flows, which widened the gap between the Group's receivables and payables during the reporting period and affected the advance payment from and prepayment to construction projects. On the other hand, the Group purchased anti-pandemic supplies to secure the employees' health and safe production in fighting against the pandemic. These expenses led to further increase in cash outflow. Free cash flow in the first half of 2020 was RMB–1,596 million.

With the impact of the pandemic wearing off and taking into account of our cash flow pattern in first half and second half of the year in general, cash flow will see a good recovery in the second half of the year. But given the relatively high uncertainty in the macro-environment in 2020 and a larger need for working capital for the expansion of general contracting projects such as 5G, we expect free cash flow for the year would face more pressure than the past. The Group will continuously adhere to the effective value-driven principle and carry out working capital management initiative to strengthen management of accounts receivable, accounts payable, prepayment and project delivery, and endeavor to maintain healthy financial position.
What are the Company's future strategies?
The Group fully understands that, although the COVID-19 has had a relatively large impact on both society and the economy, there is no change in the fundamental development trends for China's macro-economy, which is still heading for long-term prosperity, steady improvement and high-quality development. China is continuing its determination to provide policy support in promoting synergistic development among industries and facilitating innovation and transformation of enterprises. There is no change on the penetrative and extensive implementation of the "Belt and Road". The advent of the pandemic brings both crises and opportunities, including the acceleration in the progress of digitalization, cyberization and intelligentization of society, the acceleration in the development of New Infrastructure as represented by 5G, and the acceleration in the process of upgrading social governance as represented by Emergency Management. All of the above opportunities will expedite the process of deep integration of digital economy and real economy. As a "New Generation Integrated Smart Service Provider", the Group will implement the government's requirement for "stability on the six fronts" and "security in the six areas" and focus on its "three main tracks of development" to seize opportunities brought by the government's new growth momentum as leveraged and cultivated by informatization and intelligentization. Meanwhile, we will proactively explore the vast development potential brought by the deep integration of the digital and real economies, whilst accelerating our transformation and upgrade, and facilitating integration into the digital society ecosystem, with a view to achieving high-quality development of the Group.

In the domestic non-operator market, the Group will grasp the window of opportunity in the post-pandemic era and focus on new market potential, including the "New Infrastructure" represented by 5G, modern Smart City upgrade, Digital Governance and the digitalization of industries. Besides, we will be focusing on the massive potential for incremental business volume brought by the integration and upgrade of traditional infrastructure with the digital technologies and accelerating our deployment in this area. Meanwhile, the Group will focus on the key sectors such as government, transportation, electricity and games, and provide our customers with a rich portfolio of products and services such as smart solutions, emergency management and security. As such, we would be able to realize the in-depth promotion of our smart business and market share expansion leading to another breakthrough in the domestic non-operator market.

In the domestic telecommunications operator market, the Group will continue the "Dual Growth Drivers+" development strategy. By focusing on the CAPEX investment planning of the domestic telecommunications operators and adapting to the demand of the acceleration in 5G construction and the change in construction model, the Group will undertake projects using the general contracting model and take full advantage of the CAPEX opportunities. Meanwhile, the Group will focus on OPEX business opportunities and help customers to build competitive edges by consolidating and improving their network operation and service capabilities. The Group will seize the window of opportunity regarding our customers' transformation, leveraging its unique position in terms of smart applications, industry solutions, network information security and project implementation to fully support the cloud-network integration of our customers, proactively integrating into the customers' value chain and symbiotic ecosystem. We will jointly expand the new ICT market with customers while expanding our own value to ensure the sustainable and stable development of the domestic telecommunications operator market.

In the overseas market, the Group will seize opportunities from the continuous opening-up of China and in-depth promotion of the "Belt and Road" to accelerate the transformation and upgrade of its "EPC+F+I+O+S" model ("EPC (Engineering, Procurement, Construction) + Finance + Investment + Operation + Solution"). The Group will accelerate its business expansion by focusing on key regions including Southeast Asia, the Middle East and Africa and developing key businesses including "New Infrastructure" overseas represented by 5G, maintenance, data center and electricity. At the same time, by integrating digitalization demand from overseas customers, the Group will promote the launch of smart products and services in overseas market. Meanwhile, the Group will enhance its collaboration with domestic telecommunications operators and "Go Abroad" Chinese enterprises to explore new room for development in overseas business.

Meanwhile, pursuant to the needs of its market and customers, the Group will continue to enhance its core capabilities and build a business system that could better fulfill its customers' demand and value, conform with its internal development needs and the capital market's requirements. Leveraging the opportunities provided by general contracting for 5G from domestic telecommunications operators, the Group will strengthen its EPC general contracting capabilities for the digital infrastructure and expand construction opportunities, including enterprise dedicated networks, data centers, and industrial ICT. The Group will continue to increase its R&D investment. Capitalizing on the establishment of the China Comservice General Research Institute, the Group will enhance its dispersed R&D system, expedite the R&D and construction of the CCSYUN (our cloud service) Platform, CCS IoT Platform, and Network Security Service Platform to accelerate its digital transformation, and build smart products based on cloud-native ecosystem, thus improving service capabilities and standards for different customers under various business scenarios. The Group will strive to enhance the construction of ecosystem and optimize its internal ecosystem whilst building a symbiotic ecosystem with our business partners to facilitate capabilities accumulation and capabilities enabling to realize the rapid iteration and upgrade of technology and R&D, as well as the rapid penetration into local markets. The Group will make the best use of capital resources and promote the integration of finance with industrial development through capital investment and innovative models for external co-operation to create value for corporate development. We will continue to strengthen the training and recruitment of high-technology talents, and nurture core experts and talent teams in design and consultation, product R&D, project management, sales and marketing, delivery and implementation, with a view to enhancing the core competitiveness of our technologies and talents.
What was the latest dividend paid by the Company? What's the dividend policy of the Company?
The Board paid a final dividend of RMB0.1321 per share for the financial year ended 31 December 2019, representing a dividend payout ratio of 30%. Moreover, in view of the Group's outstanding operating results and free cash flow level for the year, the Board also paid a special dividend of RMB0.0264 per share for 2019. Taking into consideration of the above factors, the Company's total dividend for 2019 was RMB0.1585 per share, representing a total dividend payout ratio of 36%. (Please refer to "Dividend History" for more details)

The Company has been devoted to maintaining a relatively stable and sustainable dividend, and increase return to our shareholders in consideration of various factors including the results performance and the business development needs.

 

Basic Information

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" and commits to "making our society smarter, making our life better, and making our employees happier". 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 management of infrastructure for information technology, general facilities 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)
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)
Who are the major shareholders of China Comservice?
China Telecommunications Corporation is our controlling shareholder which holds 3,559 million domestic shares, representing 51.4% of our total issued shares. In addition, China Mobile Communications Group Co., Ltd., China United Network Communications Group Company Limited and China National Postal and Telecommunications Appliances Co., Ltd. hold 608 million, 236 million and 131 million domestic shares, representing 8.8%, 3.4% and 1.9% of total issued shares respectively. The public holding is 2,391 million H share, representing 34.5% of our total issued shares. (Please refer to "Shareholding Structure" for more details)
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, 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 the first half of 2020, revenue from domestic telecommunications operator customers accounted for 56.7% of total revenues, revenue from domestic non-operator customers accounted for 40.6% of total revenues and revenue from overseas customers accounted for 2.7% 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 cities solutions, municipal infrastructure, intelligence building and cloud computing data center construction, to key customers such as government agencies and customers in the industries of transportation, electricity, internet & IT and construction, 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 Africa, the Middle East and Southeast Asia. (Please refer to "Our Business" for more details)
What services does the Company provide in domestic non-telecom operator (the "domestic non-operator") market specifically?
The Group has been paying close attention to the development trend of industrial digitalization. Through innovation and transformation, the Company achieved rapid business growth in domestic non-operator market and sustained optimization of its revenue structure. Through replicating its experiences and technologies in serving domestic telecommunications operators, enhancing research and development of projects and products, as well as strengthening the building of our marketing team, we proactively provide the series of smart-typed comprehensive solutions to our key customers such as government agencies and customers in the industries of transportation, electricity, Internet & IT and construction, etc. Also, we provide our customers with cloud computing data center construction, information security and city pipelines engineering services, etc. Our all-round services include smart-typed comprehensive solutions, communications network planning and design, construction, maintenance outsourcing, system integration, communications network support and development of software and hardware, application software development, voice value-added service and e-Commerce certification, as well as e-Commerce information platform service for SMEs.
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 and support systems. The Group also provides integrated solutions for ancillary communications networks and integrated informatization solutions for domestic non-telecom operator customers such as government agencies, industrial customers and SME's, as well as overseas customers. (Please refer to "Our Business" for more details)
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)
What are the businesses under Core Business Process Outsourcing (Core BPO) Services of the Company?
Core BPO services of the Group are BPO services excluding products distribution service, i.e. management of infrastructure for information technology ("network maintenance"), general facilities management ("property management") and supply chain services. In recent years, the Group has focused on "optimizing structure, sustaining growth, strengthening capabilities and enhancing efficiency" along the way of its business development, and further optimized the business structure by continuing to proactively control products distribution business with low efficiency.
What are the businesses under Applications, Content and Other (ACO) Services of the Company?
ACO means Applications, Content and Other services. The Group provides system integration, software development and system support, value-added services to the domestic telecommunications operators and domestic non-telecom operator customers, including government agencies, industrial customers and small and medium enterprises. (Please refer to "Our Business" for more details)

 

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Last Updated: 29 Septmeber 2020