- Boosts the Development of ITAI Business
- Cooperates with Government to Develop Intelligent Manufacturing Industrial Park Project
IBO Technology Company Limited (IBO Technology, or the Company, together with its subsidiaries, the Group; HKG: 2708) is pleased to announce its unaudited interim results for the six months ended 30 September 2022 (the Period). To promote the business development of Information Technology Application Innovation Information (ITAI) and seize the industry golden opportunities, the Group cooperated with the People’s Government of Fucheng District, Mianyang City, Sichuan Province (Fucheng District People’s Government) during the Period to develop an intelligent manufacturing industrial park project.
During the Period, the demand for ITAI IT (terminal products and industry solutions), 5G (communication equipment and private network solutions) and Internet of Things (“IoT”) (products and industry solutions), the Group’s three major business segments, increased steadily and showed a positive development trend. The Group’s revenue for the Period increased by approximately 37.5% to approximately RMB366.15 million (six months ended 30 September 2021: approximately RMB266.28 million), which was mainly benefited from the significant growth in the revenue of intelligent terminal products sales business of the Group for the Period as driven by the economic recovery, while the Group’s gross profit also increased by approximately 14.2% to approximately RMB76.33 million (six months ended 30 September 2021: approximately RMB66.85 million). Gross profit margin was 20.8% (six months ended 30 September 2021: 25.1%), mainly due to the increase in the revenue from the intelligent terminal products sales business, which has a relatively low gross profit margin, from 77.5% of the Group’s total revenue for the corresponding period of 2021 to 85.7% for the Period. The Group’s profit attributable to owners of the Company increased by approximately 69.1% to approximately RMB7.39 million for the Period (six months ended 30 September 2021: approximately RMB4.37 million), which was mainly due to the significant growth of revenue and gross profit during the Period as driven by the substantial increase in the revenue from the intelligent terminal products sales business during the Period, as compared with 2021, and also the decrease in the Group’s administrative expenses, finance costs, research and development expenses and income tax expenses during the Period as compared with the corresponding period of 2021.
Huge Room for Domestic Substitution and Strong Demand for ITAI Industry
The central government has incorporated the ITAI industry into the national development strategy, and has continuously introduced relevant policies to support the development of the industry, indicating that the PRC’s ITAI industry has entered into an accelerated stage of domestic substitution. At present, the ITAI industry presents a huge market space and unprecedented market opportunities. Benefiting from the central and local governments’ efforts to promote ITAI procurement, the scale of ITAI industry in the PRC has been growing rapidly, and the Group has penetrated into various key industries such as finance, telecommunications and energy. The market demand for purely domestically-produced software and hardware has accelerated, driving the development of the entire industry chain into a new “rillion-dollar industry”.
Actively Seizing the Opportunity of Domestic Substitution, the Demand for Major Business Segments Increased Steadily
During the Period, intelligent terminal products sales business remained as the main source of the Group’s income, accounting for approximately 85.7% of total revenue. During the Period, the Group focused on the development, production and sales of customised IoT smart terminals to customers. Benefiting from the recovery of economic activities, revenue from the intelligent terminal products sales business increased by approximately 52.2% to approximately RMB313.87 million (six months ended 30 September 2021: approximately RMB206.26 million).
With regards to software development, the Group plans and designs the software system frameworks and function lists for customers, and provides customised software application development services based on their business and management needs. Leveraging on its strong software development capabilities, the Group has been providing quality software application development services to serve customers in different industries for many years. Affected by the decrease in demand for seasonal services, the segment recorded a revenue of approximately RMB46.16 million for the Period (six months ended 30 September 2021: approximately RMB54.92 million), accounting for 12.6% of the Group’s total revenue.
With regards to system integration and system maintenance services, the Group’s segmental revenue were approximately RMB0.26 million (six months ended 30 September 2021: approximately RMB20,000) and approximately RMB5.86 million (six months ended 30 September 2021: approximately RMB5.08 million) respectively.
Boosted ITAI Business Development to Grasp the Market Gap of the ITAI Industry
In addition, the Group entered into a memorandum of understanding, an investment agreement and a supplemental agreement on the “IBO Technology Intelligent Manufacturing Industrial Park Project*”, and also formed a joint venture with Fucheng District People’s Government during the Period. The “IBO Technology Intelligent Manufacturing Industrial Park Project” is the first time that the Group has cooperated with the national government to launch an intelligent manufacturing industrial park project, proving that the Government is optimistic about the prospect of ITAI industry. It also marks a significant milestone for the Group since its entry into the ITAI industry in 2020, as a sign that the Group’s development in ITAI industry has been widely recognised by the government.
The “IBO Technology Intelligent Manufacturing Industrial Park Project” is to be invested in three phases. The investments in Phase I, Phase II and Phase III are projected to be RMB1.5 billion, RMB2 billion and RMB7 billion respectively. The project will accelerate the launch of domestically-produced products. For Phase I of the project, approximately 200,000 square-meter factories and ancillary facilities will be built. Approximately 2.5 million units of notebook computers, all-in-one computers, highly integrated desktop computers, cloud terminals and other ITAI terminal products can be produced annually when full production capacity of Phase I is reached. A high-end ITAI industrial park will be built in Phase II, and 5G equipment, energy storage equipment industrial park project, etc. will be built in Phase III. Moreover, Fucheng District People’s Government will invest RMB400 million through Sichuan Fuchuang Development Group Limited, a state-owned company, to form a joint venture with a subsidiary of IBO Technology to collobrate in the “IBO Technology Intelligent Manufacturing Industrial Park Project”.
The Board believes that the “IBO Technology Intelligent Manufacturing Industrial Park Project” will build a “closed-loop” ecosystem of the ITAI industry, so as to strengthen the supply chain synergy, production and manufacturing synergy and technology synergy of upstream and downstream enterprises. The base will be a key project to promote the Group’s future development. It is expected to improve the Group’s production capacity, build strong product delivery capabilities and optimise cost management, which will help the Group continue to boost the development of domestically-produced ITAI industry and product research and development, accelerate the launch of products, in order to meet the strong demand for ITAI products from the market and the government. Thus, it will help the Group actively grasp the market gap and unprecedented market opportunities.
Entered the Quantum Computing Industry, Expanding Revenue Stream
Furthermore, the Group announced that it will enter into a cooperation agreement with Shenzhen SpinQ Technology Co., Ltd. in respect of quantum computing cloud platform development project. Centering on practical applications of quantum computing products and technologies by enterprises engaged in such areas as e-government, scientific research institutes, education, finance, and biopharmaceuticals in cloud computing, big data, and other areas, the parties will pursue cooperation on the development of domestically-produced quantum computing cloud platform project.
Both parties have determined to form strategic partnership. They will both demonstrate complementary technological and marketing prowess, and will continue to integrate their respective advantageous resources, increase customer values, and achieve mutually beneficial cooperation. Leveraging on the technical advantages over quantum computing systems and application ecosystems of Shenzhen SpinQ Technology Co., Ltd., the Group is expected to enter the quantum computing industry through this cooperation, further expanding its revenue stream.
Synergistic Advantages of Three Major Businesses to Build a Moat
Looking ahead, leveraging on the close connection and synergy among the three major business segments, namely 5G, ITAI and IoT in the aspects of underlying technology, application technology, supply chain, project and business model, the Group will strive to seize the opportunities in the golden market, further strengthen and expand its own business, promote the healthy development of its business through multiple channels, actively identify suitable merger and acquisition targets that can create strong synergies with its existing principal business to support the Group’s operation and rapid development. IBO Technology will continue to pursue breakthroughs, research and develop and launch more new high-quality products and services, so as to deliver better results and make positive contribution to the development of ITAI and 5G industries in China.
* For identification purpose only
About IBO Technology Company Limited
IBO Technology Company Limited (Stock code: 2708.HK), a leading digital solutions provider, is principally engaged in providing 5G communication equipment and private network solutions, ITAI terminal products and industry solutions, IoT products and solutions, as well as industrial digital solutions in the PRC. The Group’s businesses mainly cover four areas, namely (i) intelligent terminal products sales; (ii) system integration; (iii) software development; and (iv) system maintenance services. With nearly 20 years penetration in the IoT industry, the Group serves customers from both the public and private sectors in the PRC, including government authorities, large-scale state-owned enterprises and private enterprises. In 2022, the Group cooperated with the People’s Government of Fucheng District, Mianyang City, Sichuan Province to develop an intelligent manufacturing industrial park project, striving to promote the development of ITAI products in future.
For more details, please visit: http://www.ibotech.hk/