Chinasoft International (0354.HK) Investor Presentation Interim Results 2015

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1 Chinasoft International (0354.HK) Investor Presentation Interim Results 2015

2 Disclaimer These presentations and/or other documents have been written and presented by Chinasoft International Limited ( ChinaSoft or the Company ). The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. Neither the presentation nor any of the information contained therein constitutes an offer to sell or issue or the solicitation of an offer to buy or acquire or invitation to purchases or subscribe for any securities of the Company in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied upon in connection with any contract, commitment or investment decision whatsoever. 2

Agenda 1 Company Overview 2 20151H Financial Results

3 Agenda 1 Company Overview H Financial Results Business Developments and Strategic Outlook 3

Outsourcing IT Infrastructure Services Emerging Cloud Application Mobile Consulting Custom Software Development Solutions System Integration Professional Training

4 Company Overview Company Transformation: From comprehensive IT services provider to an Platform based Internet company. Established 2000 Different Businesses Out- Sourcing Application Development and Management Product Engineering Enterprise Application Services Business Process Outsourcing IT Infrastructure Services Emerging Cloud Application Mobile Consulting Custom Software Development Solutions System Integration Professional Training Employment Training Students Training HK GEM Listing 2003 HK Main Board Listing Code Market Cap. Shares Outstanding Traded Volume (30-Day Avg) HK HKD 6.07 billion 2.04 billion 30.0 million As of 2015/08/17 4

5 Business Development History Years Internet Electricity Electricity Electricity Verticals Covered Service Capabilities Regions Covered Government, Manufacturing Insurance, Securities Insurance, Securities Insurance, Securities Insurance, Securities Telecom Telecom Telecom Telecom Telecom Finance, Bank Finance, Bank Finance, Bank Finance, Bank Finance, Bank Finance, Bank Hi-Tech Hi-Tech Hi-Tech Hi-Tech Hi-Tech Hi-Tech Hi-Tech Government, Manufacturing Government, Manufacturing Government, Manufacturing Government, Manufacturing Government, Manufacturing Government, Manufacturing SMAC Government, Manufacturing SMAC IT Consulting IT Consulting IT Consulting IT Consulting IT Consulting BPO BPO BPO BPO BPO BPO IT Training IT Training IT Training IT Training IT Training IT Training IT Training ITO ITO ITO ITO ITO ITO ITO IT Solution IT Solution IT Solution IT Solution IT Solution IT Solution IT Solution IT Solution Central, South America Central, South America Central, South America Central, South America Central, South America Japan Japan Japan Japan Japan Japan USA USA USA USA USA USA USA China China China China China China China China 5

Snapshot of Chinasoft Total Revenue RMB 000 Services Coverage Hardware Revenue Service Revenue 282 10.

6 Snapshot of Chinasoft Total Revenue RMB 000 Services Coverage Hardware Revenue Service Revenue % 2% ESG ETC % 35% PSG OSG , ,068 2, , ,960 1, , H1 2015H1 Hardware Revenue to Total Revenue 38.6% 12.7% 31.2% 24.5% 16.7% 14.2% 12.7% 7.8% 4.3% 6.4% 1.4% 7.7% Industry Coverage 2% 15% 38% 20% 21% 4% Gov. and Manufacturing BFSI Public Services High-Tech Telecom Others 6

Broad Blue Chip Customer Base 金审金质金保金农金宏金卡 - 20 Chinese government ministries level institutions - 6 "Twelve Gold Project - 100% coverage of the top 100 Chinese cigarette

----- - Over 30 cities - Issued over 100 million system cards Government Public Services Telecom Manufacturing Finance, Bank Hi-Tech, Internet - 100% Chinese banks - 26 foreign

7 Broad Blue Chip Customer Base 金审金质金保金农金宏金卡 - 20 Chinese government ministries level institutions - 6 "Twelve Gold Project - 100% coverage of the top 100 Chinese cigarette brands - 2 top 3 Chinese car brands - 4 top 5 strong Chinese machinery manufacturers - 5 top 10 Chinese steel companies Shanghai Beijing Shenzhen Tianjin Chongqing Hanzhou Qingdao Over 30 cities - Issued over 100 million system cards Government Public Services Telecom Manufacturing Finance, Bank Hi-Tech, Internet - 100% Chinese banks - 26 foreign banks - 13 finance institutes - 100% coverage of the top 3 Chinese telecom operators - 2 top three global telecommunications equipment supplier - Nearly 100 hi-tech and Internet companies 7

8 Industry Dynamics Unlocking the Potential The Chinese IT Services Market Size of Market Top Players: Characterization Roughly RMB 1 trillion ($150 bln) and growing Neusoft, ChinaSoft, Digital China, HP/IBM Very fragmented top 5 players representing less than 10% of total Market Outlook: Favorable with China moving rapidly into digitalization & industrial 4.0 and Internet+/Software+ Internet/Cloud: China is leap-frogging into next gen computing Cloud: Ali-Yun, Huawei s Fusion Sphere, Qing-yun; Docker Labor Force: Approximately 10 mln in number with annual increases of about 150k; Young, ambitious and very hungry.

Market Positions (Overall Top 3) Government and Manufacturing Telecom Government IT solutions E-government Social security Financial market NO.3 NO.1 NO.

1 Quality inspection Audit Manufacturing: MES Finance and Banking Banking IT solutions NO.1 NO.1 NO.2 NO.6 Public Services One-card solutions NO.

settlement NO.1 NO.3 Hi-Tech Credit NO.4 Outsourcing orders from other countries NO.3 Counter trading NO.2 Outsourcing orders from Europe and America NO.

9 Market Positions (Overall Top 3) Government and Manufacturing Telecom Government IT solutions E-government Social security Financial market NO.3 NO.1 NO.3 NO.5 Mobile client application development and adaptation services China Mobile s Internet base core suppliers Huawei's largest IT services provider No.1 Quality inspection Audit Manufacturing: MES Finance and Banking Banking IT solutions NO.1 NO.1 NO.2 NO.6 Public Services One-card solutions NO.1 Nations first payment and settlement, Urban rail transit ticket transfer payment system Automatic fare collection system Credit cards Payment and settlement NO.1 NO.3 Hi-Tech Credit NO.4 Outsourcing orders from other countries NO.3 Counter trading NO.2 Outsourcing orders from Europe and America NO.2 Risk management NO.6 Microsoft's global chief supplier and the world's most valuable supplier Smart business and support NO.5 Tencent s gaming s biggest service provider 9

10 Professional Services Business (PSG) General Solutions PSG Solution Capabilities Audit Management Food and Drug Management Online Audit Application Government Social Insurance and Benefits State Owned Asset Mgmt Administrative Management Policy Planning System Public Portal CRM OA Manufacturing, Distribution ERP MES LES Safety Production Management WMS EAI Product Code Tracking BI Portal Group RFID BFSI (Banking, Financial Services & Insurance) Payment System Receivable System Credit System Bank Card System Credit Card System Risk Management System Digital Marketing Supply Chain Leverage Insurance System Digital Insurance System Insurance Dev. Support Reimbursement System GIS Electronic Ticketing System Public Services One Card Access AFC ACC Smart Transportation Airport Operating System Telecom Mobile Payment Mobile Instant Communication Corporate Weibo Mobile Application Store Embedded Browser Mobile Advertisement Mobile Community One-Click Dial Platform Electricity Material Management Solution Marketing Management Solutions Core Products Middleware Platform ResourceOne is Based on SOA and Cloud Popular in Government and Manufacturing Verticals trusted cloud Named the Best Government Platform by CCID 5 Years In a Row TopLink/TSA+ Platform Used in Union Pay, Government, and Provinces Centers Support Cross Regional Bank Card Online Transaction 10

Global Delivery Capabilities Leveraging the developing Chinese Market and human

multinational companies Use different languages in different regions Services rev.

Xi an 2,800 Guangzhou 1,100 Dalian 800 Changsh-650 Xiamen-700 Tokyo 54 Seattle 200

11 Global Delivery Capabilities Leveraging the developing Chinese Market and human resources to reach the world 39 Sales and Delivery Centers Worldwide Service over 100 multinational companies Use different languages in different regions Services rev. base London-10 Beijing 4,600 Shenzhen 4,800 Nanjing 3,000 Chengdu-1,100 Shanghai 2,600 Xi an 2,800 Guangzhou 1,100 Dalian 800 Changsh-650 Xiamen-700 Tokyo 54 Seattle 200 Princeton 26 Austin-400 on region China: 74.8% International: 25.2% Sales and Delivery Center Service Coverage 11

12 Shareholder Structure 2015/08/17 Dr. Chen As of 2015/06/05 # of Shares % of Shares Microsoft BOCOM International Dr. Chen Yu Hong 264,392, % Microsoft 97,250, % Others BOCOM International 50,000, % Others 1,618,411, % BOCOM International (Bank of Communications) becomes a long term shareholder and strategic partner of Chinasoft. Total 2,037,837, % 12

13 Agenda 1 Company Overview H Financial Results Business Developments and Strategic Outlook 13

14 Financial Highlights RMB H1 2014H1 Growth Revenue 2,388,751 1,937, % Service Revenue 2,204,689 1,909, % Net Profit Attributable to Shareholders 139, , % EPS (Cents) % Total Asset 5,946,378 5,344, % Total Liabilities (2,701,801) (2,643,435) 2.2% Total Equity 3,244,577 2,701, % 14

15 Segment Results RMB 000 Revenue Service Revenue Results 20151H 20141H Growth 20151H 20141H Growth 20151H 20141H Growth PSG 961, ,705 23% 777, ,291 4% 86,879 83,778 4% OSG 1,160, ,495 21% 1,160, ,495 21% 88,637 71,574 24% ESG 220, ,991 47% 220, ,991 47% 25,206 16,891 49% ETC 45,729 47,448-4% 45,729 47,448-4% 847 1,706-50% Total 2,388,751 1,937,639 23% 2,204,689 1,909,225 15% 201, ,949 16% 15

16 Income Statement RMB H1 Per Revenue % Per Service revenue% 2014H1 Per Revenue % Per Service revenue% Growth% Revenue 2,388,751 1,937, % Service Revenue 2,204,689 1,909, % Cost of Sales (1,711,509) (71.6%) (1,356,441) (70.0%) 26.2% Gross Profit 677, % 30.7% 581, % 30.4% 16.5% Other Income 12, % 0.6% 20, % 1.1% (38.3%) Selling Expenses (110,631) (4.6%) (5.0%) (102,160) (5.3%) (5.4%) 8.3% Administrative Expenses (339,572) (14.2%) (15.4%) (299,977) (15.5%) (15.7%) 13.2% Allowance for Doubtful Debt (309) (0.01%) (0.01%) (298) (0.02%) (0.02%) 3.7% Amortization (46,326) (1.9%) (2.1%) (40,350) (2.1%) (2.1%) 14.8% Finance Cost (39,565) (1.7%) (1.8%) (35,528) (1.8%) (1.9%) 11.4% Share of Results of Associates % 0.03% % 0.02% 60.6% Profit Before Taxation 154, % 7.0% 124, % 6.5% 24.3% Taxation (11,261) (0.5%) (0.5%) (9,080) (0.5%) (0.5%) 24.0% Profit for the Period 143, % 6.5% 115, % 6.0% 24.3% 16

Customer Analysis Top 10 Customer Proportions Customer Analysis 65.0% 57.0% 43.7% 43.6% 46.3% 52.0% 49.3% 55.2% For 20151H, the service revenue from the top 5 customers accounted for 49.

17 Customer Analysis Top 10 Customer Proportions Customer Analysis 65.0% 57.0% 43.7% 43.6% 46.3% 52.0% 49.3% 55.2% For 20151H, the service revenue from the top 5 customers accounted for 49.4% of the Group s total service revenue (20141H: 44.2%). For 20151H, the service revenue from the top 10 customers accounted for 55.2% of the Group s total service revenue (20141H: 49.3%) H1 2015H1 In 20151H, the Group had 83 customers with service revenue of RMB 6 million or more. 17

18 Agenda 1 Company Overview H Financial Results Business Developments and Strategic Outlook 18

The Future O&O Large Customers and Industry Long-Tail Market Large customers (Huawei) and industry (finance) customers have strong economic background, actual demand, and sufficient funding.

19 The Future O&O Large Customers and Industry Long-Tail Market Large customers (Huawei) and industry (finance) customers have strong economic background, actual demand, and sufficient funding. They have strong technology and management capabilities, and they are sensitive to quality and processes, driving up the standards of their suppliers. The group will build core Offline TPG Online IIG Clients in the long-tail clients typically have less dependcy with IT services and are very price sensitive. Through the Internet based Jointforce, the Group will consolidate the IT resources and provide cheap delivery as its core competitiveness competitiveness with technology and professional capabilities. Vision: Become the foothold global industry leading ITS company in China. To Become the Huawei of the ITS world! Mission Continue to be customer-centric and cooperate with value customers. Take advantage of the technology change, especially in "cloud" to develop a full chain of high quality and efficiency services. Continue to expand globally and become a long-term, stable and reliable partner. 19

$ $ IT Companies ChinaSoft Code Code ChinaSoft is

20 Jointforce Enterprises Programmers Other Businesses (SMEs) $ Code Code $ Personal Developers JointForce $ $ IT Companies ChinaSoft Code Code ChinaSoft is Jointforce s operator and manager Technical Team 20

21 Jointforce Process Contract Pre-Dev Development Test/Integrate Op./Maintenance Sales Market research System design Software development Testing Integration Op and maintenance Basic JF Services Reservation/ Contract Mgmt. Contract management, process and project tasks management, cloud code management, communication traces services Resource characterization and supply, process service orders, warning services throughout the project execution, code optimization service PTS Services Subdivide tasks Design review Quality control Security audit Localization of cloud Tuning services Functional testing, mobile App Performance testing, security testing Other Services Supervision Consulting System Design Training Security 21

Jointforce Development 2014/05 2014/10 2014/12 2015/06 Jointforce internal testing Jointforce debuted at the Ali Conference, creating a buzz in the industry Jointforce beta launch in Hong Kong and

Jointforce Today: - 41,000 Engineers - 300+ Teams - 1,600 IT Companies 2015 Jointforce Development Direction: Obtain a non-linear growth based on Jointforce platform.

22 Jointforce Development 2014/ / / /06 Jointforce internal testing Jointforce debuted at the Ali Conference, creating a buzz in the industry Jointforce beta launch in Hong Kong and Beijing 7,000 users during beta launch 8,000 users by end of ,000 users, of which 17,000 users are external engineers Over 800 companies online, of which 80 have posted jobs Commercialized Jointforce Today: - 41,000 Engineers Teams - 1,600 IT Companies 2015 Jointforce Development Direction: Obtain a non-linear growth based on Jointforce platform. To do so, we will focus on long tail markets, administrative government and industrial Internet at first, while creating an ecosystem centered around Jointforce. Next, we will integrate Zhai Ke Xue Yuan with Jointforce. Lastly, we will create a supply chain finance. 22

Strong Growth in Huawei Business Enters Phase II of Partnership Outsourcing Phase I: Win the

Sales Leverage Huawei to grow, expand into verticals and globally Huawei Business Revenue 1337

End Terminal FY14 2.5 bln market FY17 10.

Africa, Europe 2009 2010 2011 2012 2013 2014 2014H1 2015H1 On April 2012, the JV with Huawei

On August 2014, Chinasoft signed a strategic cooperation with Huawei to become its Enterprise

23 Strong Growth in Huawei Business Enters Phase II of Partnership Outsourcing Phase I: Win the trust of Huawei, expand outsourcing business steadily Enterprise Business: Local and Global Sales Leverage Huawei to grow, expand into verticals and globally Huawei Business Revenue 1337 (RMB millions) FY14 3 bln market IT Basic network Data Comm. End Terminal FY bln market FY bln market ASP CSP Asia Pacific, Latin America, North America, Middle Easter, North/South Africa, Europe H1 2015H1 On April 2012, the JV with Huawei became operational. On August 2014, Chinasoft signed a strategic cooperation with Huawei to become its Enterprise Business Gold Label Agent, and will work with Huawei in cloud computing, network security, industry 4.0 to increase businesses. Software Process IT New services, verticals New Regions The first half of 2015, Huawei maintained its advantage in the network services, consumer business scale doubled YoY. In the software service business, became the mobile payment technology leader. In business enterprises, cooperate fully with Huawei s cloud. 23

24 Huawei s Prospect in Enterprise Solutions (China) Huawei Revenue Huawei Revenue:1.5 bln;cagr: 67.4% Partner Revenue:2.5 bln;cagr:79.8% Partner Revenue At this stage, the customer is not only focused on the product, but also with its business applications and services. According to the trend, in 2019 China ICT market forecast overall investment 680 billion, 220 billion of investment services, Huawei and partners can participate in the service space for 71 billion. 24

25 Integrate Catapult: Learn from Microsoft and Expand Globally Catapult s own Solutions as a Service achieved breakthrough, and launched the first Intranet as a Service, FUSE, signing clients lie SATO within with one week of launch. Catapult s solutions and transformation ideology are recognized by the client, and will continue to work closely with Microsoft as a part of the 2015 company goal. Public and private cloud Terminal: Sharepoint, Win8, WP8, XBox Cloud products:iaas, PaaS and SaaS Microsoft s first Global Premier Vender in China Microsoft s most valuable providers China Microsoft s MCS priority supplier COPC(Customer Operations Performance Center) certified 25

26 Your interests! 奋斗的青春绽放的精彩

27 Exhibits Partner Profiles 27

Breakthrough in Mobile Businesses and Strengthened Relationship with China Mobile Chinasoft s Role and Position Core mobile Internet base supplier Core provider of unified communication Strategic

Fetion: Won bid again for 2014-2015 Fetion Wireless System Product project at RMB 104 billion, showing the Group s strong development capabilities and experiences in mobile market.

28 Breakthrough in Mobile Businesses and Strengthened Relationship with China Mobile Chinasoft s Role and Position Core mobile Internet base supplier Core provider of unified communication Strategic partners with China Mobile Northern (including mobile payment) and Southern Region Comprehensive strategic partner of China Mobile Beijing and Shanghai Branch 2014 Progress Areas of Partnership Fetion: Won bid again for Fetion Wireless System Product project at RMB 104 billion, showing the Group s strong development capabilities and experiences in mobile market. Unified Communication: Won the bid for unified communication, symbolizing the Group s business has penetrated to the core of China Mobile Technology. 139 Mailbox: Won bid for 139 mailbox mobile terminal. The Group will improve its service, expand customer base, and increase customer loyalty. Unified Payment: Launched the payment platform and completed phase two of design and development. Distribution channels include Tmall, mobile market place, and other banks. Linked with Alipay, Tenpay, and Union pay. 飞信融合通信移动电视移动音乐 Fetion Mobile TV 统一支付 Mobile Music Mobile Wallet 移动商城 Mobile Market 无线城市和生活移动阅读 Mobile Read Cooperated with Xinhua News Agency Moternet Mobile Video 139 mail 移动邮箱移动搜索移动门户移动影音 28

Expand Administrative Cloud Business with Ali

Security Financial Market Quality Inspection

1 NO.1 > 15 years experience > 1,000 team

and implementation capabilities that's in line

welfare State-owned assets Food and drug

Support System Online filing and approval

integration Internet+ Government Through its

Chinasoft was able to complete the Li Shui

Build Cloud Above Guizhou platform led by the

This platform is the nation s first cloud

29 Expand Administrative Cloud Business with Ali Government Solutions E-Government Social Security Financial Market Quality Inspection Audit Market Market Position NO.3 NO.1 NO.3 NO.5 NO.1 NO.1 > 15 years experience > 1,000 team members Have solutions, large-scale management and implementation capabilities that's in line with the vertical management style needs of China s central and local government. Core Solutions Audit Social insurance and welfare State-owned assets Food and drug Administrative license Government Decision Support System Online filing and approval Public Portal Cloud migration and cloud integration Internet+ Government Through its proprietary product ResourceOne Cloud, Chinasoft was able to complete the Li Shui smart government administrative cloud project. Build Cloud Above Guizhou platform led by the Guizhou provincial government. This platform is the nation s first cloud service platform with data that is manage and shared by the provincial government. 农业部财政部国家地震局人社部国务院国资委环保部中国气象局中纪委证监会新华社国家药监局 Main Customers 政务云平台国家审计署国家海洋局质量监督检疫总局公安边防部队国家外汇管理局中国民用航空局 29

ChinaSoft International

ChinaSoft International (0354.HK) 2013 Interim Results Investor Presentation August 2013 Disclaimer These presentations and/or other documents have been written and presented by Chinasoft International