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China Communications Services Corporation Limited Annual Report 2015
PRESIDENT’S STATEMENT
2
Revenue from supply chain service was included in the revenue from distribution business of the Group.
3
Six major group-level products include smart city, smart security, smart industrial park, intelligent building, cloud computing services and e-certification.
4
Key businesses under ACO services include system integration, software development and system support, and value added services.
control, the selling, general and administrative expenses for the year accounted for 11.5% of total revenues, representing a year-
on-year decrease of 0.5 percentage point. Profit attributable to equity shareholders of the Company amounted to RMB2,334
million, representing a year-on-year increase of 8.6%. Net profit margin was 2.9% which remained stable compared to the
corresponding period of last year. In 2015, the basic earnings per share of the Group was RMB0.337. We emphasized the
“value-driven” appraisal principle and continued to enhance our effective management of accounts receivable, and the accounts
receivable turnover days was 124 days, representing a year-on-year decrease of 8 days. Our free cash flow increased substantially
to RMB3,573 million, representing a year-on-year increase of 328.8% and reached a historical high.
BUSINESS DEVELOPMENT
In 2015, the overall business structure of the Group was further optimized. Telecommunications infrastructure (“TIS”) services,
our traditional service with sound competitive edge, achieved satisfactory development and recorded a year-on-year increase of
15.3%. The network maintenance business under the business process outsourcing (“BPO”) services achieved rapid development
and grew by 19.8%, which accounted for 20.7% of the Group’s incremental revenues and continued to be the second largest
contributor to the Group’s overall incremental revenues for two consecutive years. Revenue from applications, content and other
(“ACO”) services also maintained favourable growth with a year-on-year increase of 9.9%.
Revenue from TIS services amounted to RMB39,209 million, representing a year-on-year growth of 15.3% and accounted for
48.4% of the total revenues. Among that, the revenue of TIS services from China Telecom recorded a rapid year-on-year growth
of 33.7%. Besides, revenue of TIS services from domestic telecommunications operator customers other than China Telecom
remained relatively stable as the Group innovated its traditional sales and marketing model, fully captured the new business
opportunities from the Tower Company and the new cooperation relationship and tender model of domestic telecommunications
operator customers and increased its market share. The Group also continued to expand the domestic non-operator market, and
TIS revenue from such customers recorded a year-on-year increase of 12.9%.
Revenue from BPO services amounted to RMB33,014 million, representing a year-on-year growth of 5.8% and accounted for
40.8% of the total revenues. The Group continued to optimize business structure and identified new drivers for future
development while controlling the growth of businesses with low efficiency. The Group intensified its efforts in expanding
network maintenance business and the revenue of such business grew by over 18% for two consecutive years. We leveraged on
the opportunity of the establishment of China Comservice Supply Chain Management Ltd. to capitalize on the potential sub-
business within the distribution business, and revenue from supply chain services
2
recorded a year-on-year growth of 10.9%.
Revenue from ACO services amounted to RMB8,737 million, representing a year-on-year growth of 9.9% and accounted for
10.8% of the total revenues. The Group focused on customers’ demand in informatization services and dedicated in the
promotion of six major group-level products
3
, and revenue from the key businesses under ACO services
4
achieved a year-on-year
growth of 9.5%. We took initiatives for innovation in the ACO segment and achieved breakthroughs in projects such as
information security, e-commerce, big data and cloud computing, etc.
