CHINA SERVICE OUTSOURCING FIRMS PRESSED AHEAD LAST YEAR

AsiaInfo Services
05-06-2011
China Service Outsourcing Firms Pressed Ahead Last Year

BEIJING, May 06, 2011 (SinoCast Daily Business Beat via COMTEX) -- A group of publicly-traded service outsourcing firms in China gave a polished performance last year, with the speedy growth of the outsourcing market in the wake of the software boom.

Insigma Technology Co., Ltd. (SHSE: 600797), one of the service outsourcing firms in the country, completed a strategic role-shifting last year, casting its sight on offshore outsourcing and smart city projects.

The company, based in Hangzhou, Zhejiang province, lured a total of 10 new clients and big orders from the US last year, when outsourcing business in Japan expanded by 60%.

Insigma Technology generated operating profits of CNY 402.1231 million from software outsourcing and service business, a division that takes up 20.32% of the revenue from major operations.

Gross profit margin of the software outsourcing and service business amounted to 35.66%, in sharp contrast to a gross profit margin of 4.75% posted by the networking equipment and terminal operation.

The company sets an aim to rake in gross profit of CNY 680 million and revenue of CNY 5.6 billion from its major operations this year, said Insigma Technology, noting that revenue from information technology (IT) service at home and from offshore outsourcing are expected to stand at CNY 950 million and CNY 450 million, respectively.

Shanghai Hyron Software Co., Ltd. (SZSE: 002195), another software outsourcing service provider in the country, said in its financial report for the first quarter of this year that net profit and revenue leaped 125.2% and 55.95% from a year ago, respectively.

Hyron Software, which provides outsourcing service for companies in Japan, expects its net profit to surge 100%-130% in the first half of this year.

The company is primarily engaged in financial information service software business, embedded software business, mobile phone content and software related business, logistics and distribution software business, as well as computer-aided design (CAD) software package business.

Led by VanceInfo Technologies Inc. (NYSE: VIT)), several IT service outsourcing outrunners in the country like iSoftStone Holdings Ltd. (NYSE: ISS) and HiSoft Technology Internatnl Ltd. (NASDAQ: HSFT) are growing at 60% annually.

In April 2011, VanceInfo Technologies acquired operating subsidiaries of LW International Holdings Limited. The company offers its outsourcing services, through its network of onsite and offsite delivery locations, mainly in China.

iSoftStone Holdings completed the acquisition of Shanghai Kangshi Information Systems Company Limited (Shanghai Kangshi) in November 2010. The company offers an integrated suite of IT services and solutions, including consulting & solutions, IT services and business process outsourcing (BPO) services.

(USD 1 = CNY 6.49)

Source: www.yicai.com (May 06, 2011)

KEYWORD: BEIJING INDUSTRY KEYWORD: Computers & Electronics SUBJECT CODE: Computer
Software
SinoCast China Business Daily news
SinoCast China IT Watch
IT
outsourcing
growth
Internet
revenue

Copyright 2011 AsiaInfo Services (via Comtex). All rights reserved