Yusys Technologies Co., Ltd. (300674) published its 2020 financial report on March 31, 2021, delivering remarkable growth statistics achieved through a combination of technological innovation and sophisticated operations.

Revenue for Yusys Technologies in 2020 was 2.982 billion yuan, of which revenue attributable to the parent company was 453 million yuan, representing a year-on-year increase of 65.18%. The net profit attributable to the parent company, excluding share incentive expenses and extraordinary item, was 385 million yuan for an increase of 45.88% relative to the previous year.

Yusys Technologies improved management and operational efficiency during the period of the report, doing so through the use of IT systems and big data analytics. This resulted in significant improvements in key operational indicators. Statistically, Yusys Technologies’ net operating cash flow was 363 million yuan, thereby achieving a year-on-year increase of 101.15%. The profit margin on net assets was 21.90%, a year-on-year increase of 6%. The gross profit margin also increased from the previous year.

Yusys Tech's main business enjoys record growth, and the three major product lines advance

The COVID-19 pandemic served to hasten the digitalization process in several industries. Consequently, the digital transformation of the banking industry was accelerated as part of China's strategy for the use of information technology as the means to innovate throughout the major sectors, and there was increased demand for financial technology.

Given the critical environment of pandemic prevention and cure, Yusys Technologies has overcome difficulties and demonstrated remarkable resilience. Once the domestic COVID-19 situation began to ease in late March--thank to the public's willingness to implement prevention measures--the company resumed a full production schedule. Software development and services--a strong business unit within Yusys Technologies--recovered rapidly. As a result, there was year-on-year growth in three consecutive quarters and consistent growth from the month-on-month perspective. For the second quarter, the year-on-year growth rate increased by 15.06%. Results were also strong in the fourth quarter, registering year-on-year growth of 27.18%.

Yusys Technologies has formed the first echelon, having credit, data and supervision as the three lead product categories. According to the latest report from the research firm IDC, Yusys Technologies ranks among the top three in the market for nearly half of the IT solutions that target the banking industry. In fact, Yusys Technologies ranks first for credit management and regulatory reporting, and ranks second in the data field.

The company boosted research, development and market expansion, enhanced competitiveness and consolidated its position as the frontrunner in 2020. The three major product lines advanced hand in hand with strong momentum and completed the strategic introduction of innovative solutions. Thus, a solid foundation for business development in the following years was created.

Additionally, Yusys Technologies completed the research and development phase for a series of data middle platform products based on its own distribution and microservices technology architecture. Moreover, it certified product compatibility with important domestic providers of basic software and hardware. In the process, the company initiated the company's strategic development in the field of financial credit innovation. In 2020, Yusys Technologies provided data middle platform solutions and services to more than 20 customers, including various financial institutions such as state-owned banks, joint-stock banks, city commercial banks, rural commercial banks and trust companies.

Yusys Technologies' credit products from credit management to post-loan asset management, thus ensuring a keen competitive edge. Moreover, given the deepening partnership with strategic shareholder Baidu, Yusys Technologies has integrated that company's AI technologies--including intelligent speech, image recognition and intelligent text segmentation--to create an array of credit products. This forms the seven core capabilities in intelligent credit, which collectively implement the intelligent re-engineering of credit business processing for customers through the advanced use of digital credit systems. The company has also established a team of professional credit consultants. The team will create an integrated business model consisting of "Consultation + Product + Implementation" so as to empower small and medium banks.

Yusys Technologies’ regulatory product line is growing and maturing. It can meet full reporting requirements by the China Banking and Insurance Regulatory Commission, the People’s Bank of China and the State Administration of Foreign Exchange. Products and solutions have been implemented in banks such as two state-owned commercial banks, six joint-stock banks, a number of city commercial banks, rural commercial banks and rural credit banks as well as other financial institutions such as trust, finance, leasing and consumer gold.

Significantly, although the expansion of overseas business has been affected to some extent due to the COVID-19 pandemic, it continues to advance. In the Singapore market, Yusys Technologies provides a regulatory report submission platform system for a Chinese state-owned bank, which is in the trial phase. Through remote delivery, the company has also completed the POC of transformation of a Singapore bank branch, thus encouraging follow-up partnership. In the Indonesian market, Yusys Technologies also attained breakthroughs in 2020, with related projects officially launched and operating stably.

Additionally, Yusys Technologies is integrating resources with partners such as Huawei, NTT DATA and Singapore's OCBC Bank to jointly develop the Southeast Asian market. It is anticipated that the expansion of overseas markets will be an important part of Yusys Technologies’ new five-year development strategy.

Innovative operations business maintains high growth, and new momentum drives multipolar growth

The company's innovative operations business was relatively less affected by the pandemic, and consequently that segment enjoyed better profitability and a larger margin, thereby ensuring deeper revenue sources and facilitating multipolar growth for Yusys Technologies. When 2020 is taken as a whole, the company's revenue from innovative operations grew 47.53% in relation to the previous year.

The financial ecological platform jointly operated by Yusys Technologies and its clients continued to perform strongly during the period of this report, with two new clients launching and trial operations getting underway. During the fourth quarter the company also signed its first major state-owned bank, an achievement made possible by innovation. Concurrently, amid the process of implementing retail transformation strategy for existing customers, Yusys Technologies used innovative operation business to expand business opportunities horizontally and promote the development of software development business.

Yusys Technologies will continue to promote deeper integration with Baidu, to jointly create an intelligent financial cloud. The cooperative operation model, with financial cloud services as the carrier, will play an important part in the evolution of Yusys Technologies. According to IDC's latest report, "Tracking China's Financial Cloud Market (Jan. - June 2020),” Yusys Financial Cloud ranks at the top in the cloud-application solution market of China's banking industry.

Increase investment in technology research and development

Technology is fundamental to innovation. Research, development and technological innovation has been an important aspect of Yusys Technologies since its establishment. In 2020, the company's R&D investment increased by 14.20% relative to the previous year.

Yusys Technologies, as a leading domestic financial IT solution provider, innovates constantly. It captures industry dividends and leads the industry in the pursuit of business development. Thus Yusys Technologies, in 2021 and beyond, will continue the effort to innovate in financial operational business, non-bank financial markets and overseas markets. High-quality growth is more than simply a mission. It's the expectation.