chinasoft international limited 中軟國際有限公司 report... · chinasoft international...

* for identi�cation purpose only

Incorporated in the Cayman Islands with Limited LiabilityStock Code: 0354

中軟國際有限公司Chinasoft International Limited

*

Chinaso

ft International Lim

ited 中軟國際有限公司

Interim R

epo

rt 2017 二零一七年中期業績報告

Chinasoft International LimitedInterim Report 2017

1CONTENTS

PAGE

Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Chairman’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Recent Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Management Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Interim Results – Consolidated Statement of Comprehensive Income (Unaudited) . . . . . . . . . . . . . . 22 – Consolidated Statement of Financial Position (Unaudited) . . . . . . . . . . . . . . . . . . . 23 – Consolidated Statement of Changes in Equity (Unaudited) . . . . . . . . . . . . . . . . . . . 25 – Consolidated Statement of Cash Flow (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 26 – Notes to the Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . . . 27

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Chinasoft International Limited Chinasoft International Limited

2

Interim Report 2017 Interim Report 2017

PBHIGHLIGHTS

Results for the first half of 2017For the six months

ended 30 June(unaudited) (unaudited)

Income statement highlights 2017 2016 % ChangeRMB’000 RMB’000

Revenue 4,145,060 2,884,951 43.7%

Revenue from service 4,047,248 2,832,120 42.9%

Profit for the period 240,445 218,619 10.0%

Profit attributable to Owners of the Group 245,470 236,237 3.9%

Basic EPS (RMB cents) 10.26 11.04 (7.0%)

Profit for the period after excluding share option expense 311,982 226,292 37.9%

Profit attributable to Owners of the Group after excluding share option expense 317,007 243,910 30.0%

Basic EPS after excluding share option expense (RMB cents) 13.25 11.40 16.2%

(unaudited) (audited)Statement of financial 30 June 31 December position highlights 2017 2016 % Change

RMB’000 RMB’000

Total assets 7,759,527 7,229,303 7.3%Total liabilities (2,985,259) (2,896,664) 3.1%

Total equity 4,774,268 4,332,639 10.2%

• TheDirectorsdonotrecommendthepaymentofaninterimdividendforthesixmonthsended30June2017.

• NoclosurefortheRegisterofMembersoftheCompany.


PB


3CHAIRMAN’S REPORT

DearInvestors:

In the first half of the year, theGroup’sbusiness underwent some salesdriven structuraltransformation under the new premises of “Leveraging the Global Market, Leading the Technological Revolution, Establishing the Industry Ecosystem, and Becoming a Global ITS Enterprise”andaccelerated theservicingblueprint for itsclouddrivendigital transformation.Asaresult,theGroupmaintaineditshighbusinessgrowth.Furthermore,theGroupbecamethefirstcooperativepartnerwithHuaweithat“sailsthesameboat”fortheHuaweiPublicCloud.

I. Establish Nationwide Online and Offline Jointforce Operation System

During the reportingperiod, Jointforcechanged itsdomain from “ jointforce.com” to “jfh.com”andfullyenteredintoJointforce2.0.Withit,thecoreandthebusinessmodelofJointforcereceivedacomprehensiveupgrade,expansion,andenhancement.Furthermore,JointforceandHuaweidevelopmentcloudlaunchedamission-levelstrategiccooperation,furtherbundling the functionsandservicesofbothparties tocreateaone-stopsoftwaredevelopmentcloudsolutionservice fordevelopersandsoftwarecompanies. Itaims toshatter the timeandgeographical restrictionsof the traditionalmodel,and focusesonthemultidimensional, customized,and fragmenteddemandof softwaredevelopment.Jointforcewill allowparticipating ITcompanies toachievenew levels through its “fullprojectlifespan”toolsupportandtheguaranteedqualityofcrowdsourcingdevelopment.

In termsofoperation, Jointforcewill leverage theGroup’snationwideadvantages inhuman resourcesandservicecapabilities toestablishofflineoperationcenters in18cities includingNanjing,Qingdao,Beijing,Shanghai,Xi’an,Dalian,Chengdu,Wuhan,Guangzhou,Shenzhen,Hangzhou,Jinan,Xiamen,Changsha,Suzhou,Tianjin,Chongqing,andHefei.ThecenterswillallowJointforcetoscaleitsmembershipservices,contractors,ecosystempartnerships,deliverymanagement,andother localpromotingandservicingteamstofullycoverallofthekeysoftwarecitiesandsurroundingcitieswithfoundationsoftheITindustry.Throughastrengthenedcooperationwithlocalgovernments,Jointforcewillcombine regional industrycharacteristicsanduse thesoftwareparksasbasis to interactcloselywithsoftwaredevelopersanddifferent levelsofcontractors toprovidedifferentservices.Inthethirdquarter,Jointforcewillhavefinishedtheinitial layoutof itsonlineandofflineoperationsystemandcreateanewsoftwaredevelopmentcloudecosystem.

II. Outsourcing Business Receives an Upgrade and Its Long-Term Accumulation of Excellent Software Engineering Capabilities Will Become Cloud Services

Over theyears, theGrouphasprovidedHuawei,Baidu,Ali,Tencent,andotherglobalenterpriseswithoutsourcingservices,and through this,slowlyaccumulateda full suiteofsoftwareengineeringcapabilities includingsoftwaredevelopmentprocesses,softwaredevelopmentmodels, softwareR&Dqualitymanagement, softwareR&Defficiency,softwareoutsourcingsuppliermanagement,softwareR&Dprojectmanagement,etc.WiththenewcooperationbetweentheGroupandHuawei,theGroupwill,throughpubliccloud,transform itsexcellentsoftwareengineeringcapabilities todifferent industries tocloudservicesandrealizeanupgradeoftheoutsourcingbusiness.


4



“CloudSoftwarePark”,acloudsolutionforsoftwareengineeringservices,isacustomizedsolutiondedicatedtosoftwarecompaniesinsoftwareparks.TheCloudSoftwareParkwillcombineJointforceandHuaweiDev.Cloudasits“carrier”,softwareengineeringcapabilitiesas its“content”,andhelptheparkstocreate innovativeservicemodels.Thissolutionwillprovide the ITcompanies in theparkswithsoftwareservices,clouddevelopment tools,softwareengineeringcapabilitiesservices,encouragementtomovetheenterpriseontothecloud,andhelpthecompaniesscaleusingcloudtoimprovequalityandincreaseefficiency.

Duringthereportingperiod,theCloudSoftwareParkwasimplementedinQingdao,Xi’an,Nanjing,andXuzhou.Inthefuture,theGroupwill linkup300keysoftwareparksinChinaand the30,000 ITcompanies residing in them to trulybuildasoftwareecosystemandrealizeanindustrycapabilityupgrade.

III. Traditional Core Solutions Will Become Cloud Solution Services

WewillfullyexecuteandactonthestrategiccooperativeagreementwehavewithHuawei.Forcloudservices,cloudsolutions,andsoftwaredevelopmentcloud,wewill createacomprehensivecollaboration in areas includingproduct creation,market expansion,operationpromotion,andecosystemconstruction,andcreate long term“1 (Huawei)+1(Chinasoft)+N(partnersintheecosystem)”partnerships.

TheGroupwill fully takeadvantageof thishistoricalopportunity to fullyupgradeandmigrate its traditionalsolutions tocloud-basedsolutions inmanufacturing,government,f inance, transportation, electricity, education, e-commerce, etc. Through industrybenchmarkclients,wewill establish thestatusquo forpubliccloudservices in thoseindustriesandfullypromotetheindustrycloud-basedsolutionsthroughHuawei’schannels.

TheGroupandHuawei jointly announced the “smartmanufacturing” solutionas thefirstbatchofcloudmigratedcloud-basedsolution.Thissolutionhasbeen implementedin Jiangsu,Guangdong, andothermanufacturingcentricprovinces for industrial bigdatacollection,analysis,andapplication.Through theestablishmentof regionalsmartmanufacturingcenters, theGroup launchedananalysisplatformasaservicealongwithitssmartmanufacturingsolution tocreatea true“3 in1”smartmanufacturing lifecycleofintroducing,implementing,resultingandpromoting.Duringthereportingperiod,theGroupsuccessfullysignedwitha“NationalEquipmentManufacturingIndustryDemonstrationCity,”and in the futurewillestablishasmartmanufacturingmodel inJiangsuandGuangdongprovinceasitcontinuestoplanitslayoutofcitypromotionsforthe“NationalManufacturing2025” .


4



Dear investors,wewill stay trueand faithful toouroriginalmissionandcontinue totrek forward.At theendof the firstquarter, theGrouphadanexecutivemeeting forallofourcoreemployeesatYan’an.Wehavedecided tohaveanewstart (Chinasoft’stransformation)atYan’an,andaredeterminedto:

Takethe initiativetomakethemanagementteamyoungerbytenyearsatdifferent levels,fromthetopbusinessdecisionmakers,headofthedifferentbusinesslines(Huawei,HSBC,etc.),tothemanagersofdifferentbusinessunits.ThisistoprovideinsuranceforthecoretalentsastheGrouptriestorealizeitsgoalofRMB30billionofsalesinthenextfiveyears.

Nomatterwhat,wewill adhere toour threekeyprinciples:1)adhere toour ideologyandcontinue tomove towards the rightstrategicdirection,2)adhere toourselvesandcapabilitiesandhaveapractical implementationthoughtpractice,and3)adheretobeinganhonestenterpriseandserviceourclientswith100%ofourcapability.

TheGroup’ssalesorganizationtransformationfurtherperpetuateourstartupspiritof“workhard,persevere,and relyononeself!” In fiveyears,ourprofessional technologyservices,cloudsolutions,andJointforcewilleachreachRMB10billionofsales,helpingusreachoursalesgoalofRMB30billion!

Dearinvestors,wetrulythankyouandarehonoredtohaveyoualongsideournewjourney.Wewillremaincommittedtoourmission,andbelievethatwewillmoveswiftlyyetsteadily,furtheraccumulatemoreknowhowsyetactconcisely.Wemust reachourgoals,andwewillreachourgoals!


6


7RECENT BUSINESS DEVELOPMENT

• JointForce (JF) – Development of Internet Crowdsourcing Platform:Duringthereportingperiod,Jointforcegrewrapidlyandcontinued togather IT resources indifferent industries,technical areas and regions.Currently, there aremore than180,000engineers, 3,000companies,and20,000contractors,withthecontractamountexceedingRMB800million.

Duringthereportingperiod,Jointforce’scoreproductcapabilitieshavebeenfullyupgraded,expandedandenhancedonthebasisof theoriginaloperationmodel. Itsdomainnamehasbeenshiftedfromjointforce.comto jfh.com,andthewholeproducthasbeenupgradedinto2.0 from1.0. InApril, Jointforce releasedmembershipandstoreservice features,whichgrasped thedifferentiationneeds in softwaredevelopmentand ITservice,andprovidedserviceproviderswithprofessional, fastandeasyshopcustomizationpresentation,shopoperationmanagement, industryexperienceprefabrication,serviceordering function,andabundantprivilegedservicesand tools. Italsoprovided fasterdemandpublicityandquickpurchase functions for thebuyerside.Duringthereportingperiod,JointforcehaspromotedaWeChatminiApp,WeChat serviceaccount,Appandnewofficialwebsite toprovideuserswithcomprehensiveconnectionandaccessservices.TobettersupportJointforce’scommission-freeandmembershipmodels,italsolaunchedasmartrecommendationsystem2.0basedonAI+bigdata,whichgreatlyenhanced theaccuracyandefficiencyoforderdistributionandmatching recommendationwith theaccuracyof80%,20%higher thanbefore,andtheaveragetransactiontimedecreasedby30%.

During the reportingperiod,JointforceandHuaweiDevCloudhaveconductedmission-levelstrategiccooperation.Theybinded their functionsandservicesclosely togetherand jointlybuildabrandnewsoftwarecustomizationanddevelopmentecosystem, toopenaneweraof smart softwaredevelopment.BycooperatingwithHuaweiDevCloud, Jointforcehassubstantiallyupgraded itsoriginaldevelopmentandcooperationcloud,establishedafull-life-circleclouddevelopmentanddeliveryplatform,andprovided transactionversionandcommunityversion,so thatprojectsonJointforcecanbedelivered throughsoftwaredevelopmentcloudinaone-stopmethod,andthemassdevelopersandteamscanalsojointhecommunityforfastexperience,practiceandcapabilityupgrade.

During thereportingperiod,Jointforcehasdevelopedacloudsoftwareparkservicesystemplatformtoprovidecloud-service-basedcharacteristicservicesforsoftwareparksindifferentplaceson thebasisofcloudcomputingmodel. It launchedonlinesuccessfully inQingdaowithcontractsignedwithXi’an,Nanjing,andXuzhou.


6



• Huawei:During the reportingperiod, theGroupsigned the firstcloudmutualcooperationagreementwithHuawei that“sharesthesameboat” todevelopcomprehensivecooperationinsoftwaredevelopmentcloud,cloudsolutionandcloudservice.Duringthereportingperiod,theGroup’scooperationwithHuaweibecamecloserandmore in-depth,and ithasbecomemoreactive instrategic layoutandclearer inbusinessdirection.Softwareservicehasbeensuccessfullydeveloped fromtraditionalADM (applicationdevelopmentandmaintenance) toglobalcooperationwithmajorbreakthroughs inAO, IO,andADM.With theaccumulationofyearsofservices forHuawei, theGrouphassuccessfullybuilt themodelofGTS (GlobalTechnologyService)globalizationsolutioncompetency,andkept improvingandverifying itsfeasibility inpractice.Softwareglobalization layouthasgradually formed inChina,havinganabsoluteadvantage inmarketshareandservicecapabilities.Centers in IndiaandRomaniahavebeenbuiltwithimplementationofprojects,andinfuturetherewillbegreatprospectsinserviceproductsthroughcontinuouslyenhancingthecompetitivenessandbuildingthebrandwithprofessionalservices.

• HSBC: During the report ing period, the businesswithHSBC has been steadywithbreakthrough,havingwiderbusinessrangeandstrongerbusinesscapability.

During the reportingperiod,HSBCChina launchedanewgenerationofmobilebankingsystem,MobileZ,which integrates face recognition,artificial intelligence,React,andcloudtechnologyandother latest technologies.MobileZ is the firstproductentirelydevelopedbytheGroup’steam,andthefavorablereceptionfromcustomersandusersthereafterhasfullyprovedtheGroup’sstrengthinHSBCbusiness.

Dur ing the report ing per iod, CMB (Commercia l Banking) project achieved amajorbreakthrough.The teamhasexpandedgreatlyandbecomethebiggestoutsourcingserviceprovider forCMB.ThroughcooperationwithCMB,wehavesuccessfully explorednewbusinessinHSBCbusinessbesidesretailbanking.

Duringthereportingperiod,theGrouphasbuiltanewgenerationofATMsolution–mVTM,attractingwideattention in thebanking industry.mVTMhasachievedmobilityofATM,andsupports face recognitionandothernew features.TheGroupsignedacooperationagreementwithHangSengBank,andhasbeennegotiatingwithoverseasbankcustomers.Thiswill be thebridgehead for future solutionexport,which laysa solid foundation foroverseasexpansionoftheGroup.

• China Mobile & China Telecom:During the reportingperiod, theGroupsuccessfullywonthebiddingofChinaMobile’sMiguCultureOperation&MaintenanceSupportandSoftwareDevelopmentSupportProject, andbecameamains supplier forMiguCultureGroup.Duringthereportingperiod,theGrouphasbeenservingChinaMobileInternetfor itsunifiedcommunicationclient,technicalresourcepool,FetionOTTandotherprojects.TheGrouphasalsobeencooperatingwithHuawei toactivelyexpandbigdata,mobilepayment,electronicchannels,onlinecustomerservice,videoandother fields toassist thedigital transformationofChinaMobile.

During the reportingperiod, theGroup’sbusiness inChinaTelecomhasbeenstable,andtheGroupkeptprovidingserviceinBestpayandhavewonthebiddingofShaanxiTelecom’sElectronicFinancialManagementPlatform.TheGroupkeptcooperatingwithHuaweitoserveChinaTelecominreal-timebilling,governmentcloudandotherfields.


8



• Cloud Services:

C loud Manager : The Group has ove r 100 se rv ice ce r t i f i ca t ion eng ineers whocomprehensivelysupportclients’cloudstrategywithcloudprojectexperienceandcaseaccumulation,providingclientswithcloudconsulting,migration,managementservicesandotherprofessionalcloudservices.Cloudmigrationservicehelpsclientswithorderly,secure,andquickbusinessmigrationandensures thebusiness’continuity,availability,andsecurityofbusinesson thecloud.TheGroup’scloudmigrationservicehassuccessfullyprovidedone-stopand terminal-to-terminal cloudmigrationservice tocustomers in the Internet,medicaltreatment,government,enterprises,gameandotherindustries.Duringthereportingperiod, theGrouphastakenthe initiativetoobtainHuaweiCSSP(CertifiedServiceSolutionPartner)clouddirectioncertificationqualification tobecomeastrategicpartnerofHuaweicloudplatform.Ithasachievedmigrationofnearly3,000cloudhost/physicalhost,nearly1,000projects,andabout2,000setsofapplicationsystems. Ithasexclusivelywon thebiddingofaprovince’scloudmigrationandcloudoperationandmaintenanceserviceproject ledbyDevelopmentandReformCommission,andplans tocompleteadministrationcloud inover300operationsystemsprovidedby42departmentsandbureaus in theprovince.Over12departmentandbureau’soperationsystemshavebeenputoncloud.

Cloud Storage:Duringthereportingperiod,thecoreproductofcloudstorage,theGroup’sclouddisk,gradually increasedcompetitivenesswithexperiences in the industryandfurtherimprovementinsaleschannels.Duringthereportingperiod,theGrouphasformedsolutionsfor finance,education,medicalandother industriesandcomprehensivelysold themtohelpclouddisksalesachieveabreakthrough.Under theguidanceof themutualcooperationagreement theGroupwill cooperatewithmany representativesofHuawei,which hasimpressiveprospects.Cloudstorageopenplatform(PaaSlayer)isnowintheOBPstagewithcloseconnectionwitheducationcloud,medical treatmentcloud,andcallcenter;and it isexpectedtobeavailableinthemarketbytheyearend.

Duringthereportingperiod,theGrouphasconductedthoroughcooperationwiththeworld’sleadingcloudapplication integrationserviceproviderMuleSof.Through thecooperation,theGroupwill helpenterpriseswith fasterupgradeand transformation, taking the initialopportunityintheprocessoftheentireITindustry’sdigitaltransformation.

• Catapult:Duringthereportingperiod,Catapulthasmadesignificantprogressinexpandingitscloudbusiness,becomingaleadingenterpriseincloudapplicationsanddatamodernizationaswellascloudmigration.Catapult is thebestpartnerofMicrosoft,winning16MicrosoftGoldCertifiedcapabilitiesand2SilverCertifiedcapabilities.Catapult,asanomineeof theannualglobalcloudproductivitypartnerand(USA)NationalAnnualSolutionPartner,receivedrecognitionfromMicrosoftglobalpartneralliance.

During the reportingperiod,Fuse,Catapult’sSaaSproduct,hascontinued itssuccesswith100%customerrenewalrateandrapidsubscribergrowth.Catapult’sIToptimizationservicesolution,Launch,saved itsclientsoverUSD1.8millionand improved theirservicequalitiesover73%.Catapult’sdevelopmentofITsecuritycomplianceasservicesolution,Spyglass,iscomingtoanendandwillbeannouncedsoon.


8



• Big Data:Duringthereportingperiod,theGroup’sbigdatabrandhasbeenfullyrecognizedby the industry;and the team’sconsulting,development,and implementationcapabilitieshavebeenverifiedandcontinuetoaccumulateinmanyprojects,achievingkeybreakthroughsinmedia,energy,transitandotherindustries.

During the reporting period, theGroup has been providing data assetmanagementconsultingservices forXinhuaNewsAgencyChinaEconomic InformationService,assistingthecustomer tobuild theeconomicdatastandardsystem,exploringacomprehensivedataassetmanagementmechanismandrealizingmethodsoffinancialdata,andachievingdigitaltransformation.

Duringthereportingperiod,theGrouphassuccessfullywonthebidofPetroChinaSalesBigDataPlatformProject toestablishabigdataplatform for thecustomer toachievehistoricaland real-timedata storageandprocessing, effectivemanagementof large-scaledata,providedatasharingserviceforregionalcompanies,andhelpthecustomertosolvebusinessproblems.PetroChinasalesbigdataplatformprojectisabenchmarkprojectintheindustry,andtheGrouphasmarked itsadvantageousposition inenergy industry,havinghuge futurepotentialopportunitiesinthisindustry.

During the reportingperiod, theGroupprovidedplanningand implementationservices fortheconstructionprojectof the firstphaseof thedatacenterofChinaWestAirportGroup.TheGroupwillbuilda “smartairport”, strengthendatamanagement,andpromotesmartmanagementoperationandservices.Through this firstdatacenterproject in theairportindustry, theGroupexploredandsummarized thebestways forbigdatabuilding in thisindustry.ThisprovidesabrightfuturefortheGroupinthisindustry.

• Government and Enterprise Business:During the reportingperiod, thedomestic regionallayoutof government andenterprisebusinesshasbeencompletedwithestablishmentof close relationswithgovernments andparks.During the reportingperiod, thenewlyestablishedsalesteams,newregionalteamsformedspecificallybytheGroupforgovernmentandenterprises,madeevidentprogress inpushing theGroup’scloud,bigdata,andnewbusinesses.TheGroupalsoexpandedcooperationwithHuaweiinmanyindustriesandfields.Formanufacturecloudbusiness, theGrouphas joinedhandswithHuawei toannouncedthe“smartmanufacturingcloud”solution,andsigneda“nationalequipmentmanufacturingdemonstrationbase city” for cloud softwarepark business. The softwareparks havebeen implemented inQingdao,Xi’an,Nanjing,andXuzhou,andwillhavecomprehensivecooperation in industrycultivation, talent training,smartparkandotheraspects.Forsmartcitybusiness, theGrouphas thoroughlyparticipated ina first-tiercity’ssmartcityoverallplanningand implementedcomprehensivecooperation.Forbigdatabusiness, theGroupbuiltgovernmentaffairsbigdata,policeaffairsbigdata,urbanbigdataandetc.Thebusinessinpublicsecurity,governmentaffairs,educationandotherfieldshasachievedagoodstart.


10



• Manufacture/Tobacco:Duringthereportingperiod, logistics(tobacco)businessmaintainedthe leadingposition in the industrywithkeybreakthroughs indigital transformation.TheGroup’sSMES (IntelligentManufacturingExecutionSystem)haswon thebiddingofHongtaGroup’sMESproject,settingabenchmarkofsmart factory in the industry.TheGroup tooksmartmanufacturingsolutionsandproductsrepresentedbySMESasthefoundation, joinedHuawei topromoteHoneyCombfor theentiremanufacturing industry,andsigned intelligentmanufacturingcooperationagreementswithJiangsuEconomicand InformationTechnologyCommissionandmultiplemunicipal units in Jiangsu.TheGroupwill actively followupcooperationwithGuangdong,Henan,Shandongandothermajormanufacturingprovincestopromoteupgradeandtransformationofregionalmanufacturingindustry.

• Audit:During the reportingperiod, the thirdphaseofGoldenAuditingProjectwasabouttobegin.TheGroupmaintainedcooperationwith the forefrontcustomerofaudit ITandthemaintained its leadingposition inaudit IT.With theunstructuredauditdataextractiontoolandbigdatamanagementplatformofShandongProvincialAuditOfficesuccessfullygoingonline,Shandong’sbigdataaudithasbeenrecognizedbytheAuditCommissionandbecomeatypicalapplicationcaseintheindustry.TheGrouphaswonthebiddingofJiangxiauditsupervisionplatformprojecttobuildanewversionofauditsupervisionsystem.Lastly,theonlineauditsystemhasbeensuccessfullyacceptedandpromoted inJiangsuProvince,helpingJiangsutocarryouttrainingtodobigdataauditandanalysis.

• Finance and Banking Industry:During the reportingperiod,bankingbusinesshashadsteadyperformancewithcontinuouscustomergrowthandkeybreakthroughinnewbusinessdirection.TheGrouphasbeensteadilydevelopingbigcustomerbusiness,andexploringbusiness innovation,new technologypromotionandapplicationandotherdirectionswithcustomerstogetherbasedonyearsofcooperationandfullunderstandingofthebusiness.

Breakthroughinthenewdirectionisreflectedinthepromotionandapplicationofnotesandriskcontrolandothernewproducts,confirmationoftheapplicationinbigdatadirection,andthe implementationoftheInternetpaymentandunifiedpaymentplatform.Newproductsfornoteshavewonthebiddingsofmanybanks,establishingthemarket-leadingpositioninthisroundofnoteupgrade.Riskcontrolproductshavebeen implemented inmanycustomerswithcontinuousoptimizationandupgrade.Creditextensionand financingproductshavebeen implemented inmanycustomers,meetingvarious typesofcustomers’creditservicedemand.

Forbigdata, theGroupwon thebid fora largestate-ownedbank’sbigdata rickcontrolandbid fordatamarketingproject,whichwillbeabeaconcaseofbiddataapplication inthe industry. Ithassuccessfully implementedanational joint-stockbank’sbiddataplatformproject,achieving functions includingdataacquisitionandprocessing,corporatecustomertagsystem,andcorporatecustomerportrayal. Ithasalsosuccessfully implementeda ruralcommercialbank’saccuratemarketingproject.Theaboveprogramscanbequicklycopiedtothesametypeofcustomers,providinggreatbusinessoutlooks.


10



For Internetpayment, theGroupcovered traditionalPOS transactions,onlineandhomerangeO2Oorderbusinessconnectingcoreaccountingsystem,mobilebanking,aggregatingbankingchannels,andmainstreamInternetthird-partypaymentchanneltoformentireserviceincludingacceptance, riskcontrol,accountchecking,and liquidation tobeapplied inover30customers.Forunifiedpaymentplatform, functionshavebeencontinuously improvedwithpromotionof two-dimensionalcodepayment,networkconnectionpaymentandotherderivativeproducts.

During the reportingperiod, theGrouphasbeenpraisedbymanycustomers.TheGroupwon2017ChinaTopTenInternetFinancialInnovationAwardforthebigdatariskcontrolandindividualizedbigdataapplicationproject fora largestate-ownedbank.A foreignbank’sRMBcentralizedclearingsystemgoingonlinehashelped itquicklyprovidehighbusinessprocessingefficiency,playingapromotingroleforthedevelopmentofitsagentbankstothusobtaintheheadoffice’sfullrecognition,foreignmainstreammedia’sreportingandpraisefromtheindustry.

• Insurance and Securities Industry:During the reportingperiod,under theguidanceofinsurance regulator,Data Specification for Insurance Business Factors,completedby theGroup’sconsulting team,hasbeenofficially released.Thisaims tounify thedatasemanticsofthedomesticinsuranceindustryandachieving“unifiedcharactersandstandardizeddata”.TheGroupcontinuedworkingwithmajorcustomersuchasCPICwith thenew insuranceverificationcorebusinesssystem,sawstablegrowth inpersistencebusinesssystem,andstartedacomprehensivecooperation in the fieldof riskcontrol.Forbigdata in insurance,theGroupoccupied thecommandingpointof the industryandwon thebidofCIITCmegalogmanagementplatform,CPIC listmanagementbigdataplatform,Anbang InsuranceGroup’sbigdataplatform,SunshineInsuranceGroup’scustomerscontacthistoricalbigdatamanagementplatform,andetc.

During the reportingperiod, theGroup’s securitiesbusinesssuccessfully acquirednewcustomers including4core institutioncustomers in the industry includingShanghaiStockExchangeandNEEQ.ThesecuritiesinitialbusinesslayoutinBeijingandShanghaihasbeencompleted.Thesecuritiesdatabusiness teamhasoccupieda leadingposition in industryprogramaccumulationand innovation, formingeffectivecomplement to the formerbusinesssuchascoreliquidationandoutsourcingdevelopment.

• Public Services and Facilities (Transit):During the reportingperiod, rail transit ticketingandliquidationbusinessesmaintainedtheleadingpositionswithmajorbreakthroughsinnewcustomersandnewbusinessdirection.TheGroupwon thebidofJinanRailTransitACCsystem,occupying thecommandingpointofJinan rail transit ticketingsystem.TheGroupalsowonthebidofChangchunRailTransitAFCsystem,whichisanothercooperationprojectafterChangchunRailACCandLRT transformation, indicating thecustomer’shigh-degreerecognitionof theGroup’sworkandcapability.Trafficcard, Internetplus,mobilepaymentandothernewapplicationshavebeenmadeavailableinGuiyangandChangchunrailtransitindustry.Furthermore,cloudstructurehaspassedHuawei’ssolutioncertificationandobtainedcertificate.Currently the team isbased inHuaweiSuzhouResearch InstituteOpenLab,andwillparticipate inHuawei2017Beijing InternationalRailTransitExhibition,andshowcase itsChengduMetropassengerflowforecastanalysissysteminHuaweiMobileWorldConferenceShanghai


12


PBRECENT BUSINESS DEVELOPMENT

• High-Tech Business:During the reportingperiod, theGroup’scooperationwithTencentstrengthenedandbecameanA-levelsupplier inTencent’ssupplier rating.TheGroup’sAliteamhasover1,000people, ranking top in thenon-technicalcategoryofAli’ssemi-annualevaluation.ThecooperationwithBaidualsostrengthened,occupyingastableposition inBaidubusiness.For thee-commercebusiness, theGroupstartedcooperationwithHaiere-commerce,andcontinued in-depthoperation relyingone-commercecompetencecenter.In theaviation field, theGrouphassuccessfullyentered the listof top threesuppliersofEasternAirlines,achievingbreakthroughinflightplanning,control,marketingandetc.

• Europe and America Business:During the reportingperiod, theGrouphasbecomeacloudplatformpartnerofGEPredix.ForGEdigitalbusiness, theGroupprovide full-serviceincludingapplicationofcloudmigration, IOT,andclouddevelopment.WiththedevelopmentexpertcertificationfromPredixcloudplatformavailabletopeople,theGroupbecameacoresupplierofGEHealthcare’sbusinessinChina.

During the reportingperiod, theGroupprovided technical support forMicrosoft speechrecognition,andusedadvancedcloudplatformmodelingtechnologytoimprovetheaccuracyofitsspeechrecognition.ThishelpedtheGrouptoachieveamajorbreakthroughinthefieldofartificialintelligencespeechrecognition.

• Asia Pacific Business:During the reportingperiod, theGroupsigned themain frameworkservice agreementwithSingaporePower toprovide all-dimensional services coveringinfrastructuremaintenance,applicationdevelopment,product implementation/support, IOT,mobile,etc.TheGroup’sBPObusinesswithJapanhasbeengrowingsteadily.TheGroupleveraged itsBPObusinesscapabilities throughyearsofexperiencesandexpanded that todomesticcustomersand receivedhigh recognition fromtheclients.TheGrouphassignedframeworkagreementwithMitsui,andestablishedadeliverycenter toprovideservices forMitsui.

• Training (ETC) Business:Duringthereportingperiod,trainingbusinessgrewsteadily.Therearenow8ETCs(ChinasoftInternationalExcellencyTrainingCenter)and31ECCs(ChinasoftExperienceCenter)withITtrainingin28citiesinChina.

During the reportingperiod, theB2Bbusinesshas integrated resources like “ChinasoftInternationalSmartEducationCloudPlatform,MinistryofEducation Industry-AcademyCooperativeEducationProject,andHuaweiDevCloud”tointegrateintouniversities,teachingsyllabuses,andcutting-edge technologies.TheGroupalsosigned theHuawei softwaredevelopmentcloud-basedpracticalcooperationagreementwith44 institutions.Lastly, thereareover200,000registeredusersonthezhaikexueyuan.comonlinelearningplatform.


PB


13ManageMent Discussion anD analysis

Key Operating Data

During the first half of 2017, theGroup’sbusinessesachievedhighgrowths. The revenueandservice revenue increasedby43.7%and42.9%YoY.Theprofit for theperiod, theprofitattributabletotheownersof theGroupandEPSexcludingshareoptionexpenses increasedby37.9%,30.0%and16.2%YoY.

Six Months Ended 30 June2017 2016 % Change

RMB’000 RMB’000

Revenue 4,145,060 2,884,951 43.7%Service revenue 4,047,248 2,832,120 42.9%Profit for the period 240,445 218,619 10.0%Profit attributable to shareholders 245,470 236,237 3.9%Basic EPS (RMB cents) 10.26 11.04 (7.0%)Profit for the period after excluding

share option expense 311,982 226,292 37.9%Profit attributable to Owners of the Group

after excluding share option expense 317,007 243,910 30.0%Basic EPS after excluding share option

expense (RMB cents) 13.25 11.40 16.2%

Thekeyoperatingdata(unaudited)forsixmonthsended30June2017are:

Six Months Ended 30 June2017 2016 % Change

RMB’000 RMB’000

Revenue 4,145,060 2,884,951 43.7%Service revenue 4,047,248 2,832,120 42.9%Cost of Sales (3,002,387) (2,082,316) 44.2%

Gross Profit 1,142,673 802,635 42.4%Other income, gains and losses 33,879 48,113 (29.6%)Selling and distribution expenses (146,944) (112,217) 30.9%Administrative expenses (659,774) (390,651) 68.9%Allowance for doubtful debts (1,401) (11,382) (87.7%)Finance Costs (43,064) (39,039) 10.3%Amortization of intangible assets and

prepaid lease payments (41,759) (41,479) 0.7%Share of results of associates (15,509) 10,148 (252.8%)

Profit before taxation 268,101 266,128 0.7%Taxation (27,656) (47,509) (41.8%)

Profit for the period 240,445 218,619 10.0%

Profit for the period after excluding share option expense 311,982 226,292 37.9%


14



general Overview

Therevenue,servicerevenue,andresultsoftheGroup’sdifferentlinesofbusinessforthefirsthalfof2017areasfollow:

Revenue Service Revenue Results

Six Months Ended 30 June

GrowthRate


GrowthRate


Growth Rate

2017 2016 2017 2016 2017 2016

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Technical and Professional services Group (TPG)

3,511,450 2,287,883 53.5% 3,460,084 2,276,098 52.0% 368,493 249,605 47.6%

Internet ITS Group (IIG) 633,610 597,068 6.1% 587,164 556,022 5.6% 48,690 67,570 (27.9%)

Total 4,145,060 2,884,951 43.7% 4,047,248 2,832,120 42.9% 417,183 317,175 31.5%

In termsofsegment revenues,TPG’s revenueandservice revenueachievedaYoYgrowthof53.5%and52.0%.Themaingrowthcame from the large increaseofbusinesses fromcorecustomersincludingHuawei,HSBC,Tencent,Ping-An,andetc.IIG’srevenueandservicerevenueachievedaYoYgrowthof6.1%and5.6%.ThemaingrowthcamefromthelargeincreaseoftheJointforcebusiness.

Intermsofsegmentresults,TPGachievedaYoYgrowthof47.6%,slightly lessthanthegrowthof the revenuebecauseduring the reportingperiod theGroup investedmore intoR&D forcloud,bigdataandothernewbusiness.IIG’sresultexperiencedaYoYdecreaseof27.9%.Thisdecreasecame fromthe increaseofmarket investment fromassociatesand the firsthalfof theyearisconsideredtobetheoffseason,thusaffectingtheoverallresultsoftheIIG.Excludingtheassociate’sresult, IIG’sresultachievedaYoYgrowthof11.8%.ThisgrowthcamefromthehighgrowthofJointforce,whichmadeanimportantcontributiontoIIG’soverallprofitmargin.

TheGroupbelieves thatasJointforceexpands inbusinessscale,andcloudcomputingandbigdata(highprofitmargin)businessescontinuetogrow,theywillprovidetheenginefortheGroup’ssteadyrevenueandprofitmarginincrease.


14



Since listingon theGEMboard in2003, theGrouphasmaintainedhigh revenueandservicerevenuegrowth, recordingaCAGRof33.0%and43.9% from2003-2016.For the firsthalfof2017,therevenueandservicerevenueachievedaYoYgrowthsof43.7%and42.9%.Thedetailsareasfollow:

Reve

nue g

rowth

rate:

43.7%

Servi

ce re

venu

e grow

th rat

e: 42

.9%

65.1% 63.6% 16.7%24.5%12.7%38.6% 31.2% 14.2% 12.7% 4.3%7.8% 5.8% 3.1% 1.8% 2.4%6.4%

58108

107187

235

148310

45559

253

742

241

284

2003A

2004A

2005A

2006A

2007A

2008A

2009A

2010A

2011A

2012A

1,374 1,960 3,068 4,147 4,832 6,574 2,832 4,047921

227

184

2013A

1H2016

2,551

217

138

282

297

210

53

98

Total Revenue

Percentage of equipment revenue to the total revenue

Revenue CAGR: 33.0%

Service revenue CAGR: 43.9%

Equipment revenue

Service revenue

(RMB million)

!

2014A

2015A

2016A

1H2017

Customers

TheGroup’scustomers include largeenterpriseswithheadquarters in theGreaterChinaregion,Europe,America,andJapan. In theChinesemarket, theGroupholdsa largermarketshare intelecommunication,banking, financial, Internet,andhigh technology industries. In the firsthalfof2017,thetopfiveandtencustomersaccountedfor73.3%and77.8%oftheGroup’sservicerevenue.

Asof30June2017,theGrouphas79largecustomers(contributedtomorethanRMB6millionofservicerevenuewithinthepast12months).


16



Market

TheGroup’sbusinessesareconcentrated intheGreaterChinaregion.Forthefirsthalfof2017,theGroupcontinued toset theGreaterChinamarketasan importantareaofdevelopment.China’s strong economic growth andmarket potent ia ls g ive r ise to long-term growthopportunities.At thesame time, theGroup iseagerlyexpanding into theglobalmarketandsettingasolidfoundationforfuturebusinessgrowths.

Human Resources

Asof30June2017, theGrouphasa totalof50,356employees, representingan increaseof30.1%YoY.

TheGroup’sgrowthinemployeesizesincelistingontheGrowthEnterpriseMarketin2003isasfollows:

477 1,055 2,382 4,363 4,8167,759

10,94014,496

18,94623,607

31,504

47,188

38,718

50,356

2003A

2004A

2005A

2006A

2007A

2008A

2009A

2010A

2011A

2014A

2016A

2015A

2017 Ju

ne End

2016 Ju

ne End

2013A

2012A

238

25,856

Staff of the Group


16



Operating Results

Thefollowingchart is theGroup’sconsolidatedstatementofcomprehensive incomefor the firsthalfof2016and2017(unaudited):

2017 2016For the

first half

RMB’000

% of

Revenue

% of

Service

Revenue

For thefirst half

RMB’000% of

Revenue

% of Service

Revenue

Revenue 4,145,060 N/A N/A 2,884,951 N/A N/AService revenue 4,047,248 N/A N/A 2,832,120 N/A N/ACost of Sales (3,002,387) (72.4%) N/A (2,082,316) (72.2%) N/A

Gross Profit 1,142,673 27.6% 28.2% 802,635 27.8% 28.3%Other income, gains and loss 33,879 0.8% 0.8% 48,113 1.7% 1.7%Selling and distribution costs (146,944) (3.5%) (3.6%) (112,217) (3.9%) (4.0%)Administrative expenses (659,774) (15.9%) (16.3%) (390,651) (13.5%) (13.8%)Allowance for doubtful debts (1,401) (0.03%) (0.03%) (11,382) (0.4%) (0.4%)Amortization of intangible assets (41,759) (1.0%) (1.0%) (41,479) (1.4%) (1.5%)Finance costs (43,064) (1.0%) (1.1%) (39,039) (1.4%) (1.4%)Share of result of associates (15,509) (0.37%) (0.38%) 10,148 0.35% 0.36%

Profit for the period 268,101 6.5% 6.6% 266,128 9.2% 9.4%Taxation (27,656) (0.7%) (0.7%) (47,509) (1.6%) (1.7%)

Profit for the period 240,445 5.8% 5.9% 218,619 7.6% 7.7%

The Group’s profit attributable to

owners 245,470 5.9% 6.1% 236,237 8.2% 8.3%

Profit for the period after excluding share option expense 311,982 7.5% 7.7% 226,292 7.8% 8.0%

Profit attributable to owners of the Group after excluding share option expense 317,007 7.6% 7.8% 243,910 8.5% 8.6%


18



Revenue

For the first half of 2017, theGroup’s revenuewasRMB4,145.060mill ion, representingaYoYgrowthof 43.7% (2016H1:RMB2,884.951mill ion). TheGroup’s service revenuewasRMB4,047.248million, representingaYoYgrowthof42.9% (2017H1:RMB2,832.120million).Themaingrowthcame from increasedbusinesses fromcorecustomers,cloudcomputing,bigdata,andJointforcebusinesses.

Forthefirsthalfof2017,thesegment’srevenuetototalrevenueandgrowthareasfollow:

Six Months Ended

30 June 2017RMB’000 % of Total

Six Months Ended

30 June 2016RMB’000 % of Total Growth Rate

Technical and Professional Services Group (TPG) 3,511,450 84.7% 2,287,883 79.3% 53.5%

Internet ITS Group (IIG) 633,610 15.3% 597,068 20.7% 6.1%

Total 4,145,060 100% 2,884,951 100% 43.7%

Forthefirsthalfof2017,thesegment’sservicerevenuetototalrevenueandgrowthareasfollow:

Six Months Ended

30 June 2017 RMB’000 % of Total

Six Months Ended

30 June 2016 RMB’000 % of Total Growth Rate

Technical and professional Services Group (TPG) 3,460,084 85.5% 2,276,098 80.4% 52.0%

Internet ITS Group (IIG) 587,164 14.5% 556,022 19.6% 5.6%

Total 4,047,248 100% 2,832,120 100% 42.9%

Cost of Sales

Forthefirsthalfof2017,theGroup’scostofsaleswasRMB3,002.387million,representingaYoYincreaseof44.2%(2016H1:2,082.316million).

Gross Profit

Forthefirsthalfof2017,theGroup’sgrossprofitwasRMB1,142.673million,representingaYoYgrowthof42.4%(2016H1:802.635million).TheGroup’sgrossmarginwas27.6%,representingaYoYdecreaseof0.2%(2016H1:27.8%).ThedecreaseisbecauseduringthereportingperiodtheTPG’soutsourcingbusinessgrewrapidly,andtheoutsourcingbusinessistypicallyalowermarginbusiness.


18



Other Income, Gains, and Losses

Forthefirsthalfof2017,theGroup’sother incomewasRMB33.879million,representingaYoYdecreaseof29.6% (2016H1:48.113million).Themain reason for thedecrease isbecause lastyearCatapultSystemsfailedtomeettheconditions(aspromisedintheM&Aagreement),whichexempted theGroupofapproximatelyRMB20million.Excluding this, theGroup’sother incomeincreasedby20.5%,duetotheincreaseofgovernmentsubsidies.

Operating Expenses

Forthefirsthalfof2017,theGroup’ssellinganddistributionexpenseswereRMB146.944million,representingaYoY increaseof30.9% (2016H1:RMB112.217million).TheGroup’ssellinganddistributionexpensesaccounted for3.5%of the revenue, representingaYoYdecreaseof0.4%(2016H1:3.9%).TheGroup’ssellinganddistributionexpensesaccountedfor3.6%oftheservicerevenue,representingaYoYdecreaseof0.4%(2016H1:4.0%).

For the f irst half of 2017, theGroup’s administrative expensewasRMB659.774mil l ion,representingaYoYincreaseof68.9%(2016H1:RMB390.651million).TheGroup’sadministrativeexpenseaccounted for15.9%of the revenue, representingaYoY increaseof2.4% (2016H1:13.5%).TheGroup’sadministrativeexpensesaccounted for16.3%of theservice revenue,representingaYoY increaseof 2.5% (2016H1:13.8%). Themain reason for the increasedexpenseisbecause1)theGroupissued215millionshareoptionsendoflastyearandbeginningofthisyearinordertoincentivizecoretalents,resultinginincreaseofshareoptionexpensesand2)increasedofR&Dforcloudcomputingandbigdatabusinesses.

Finance Expense and Income Tax

For the firsthalfof2017, theGroup’s financeexpensewasRMB43.064million, representingaYoYgrowthof10.3%(2016H1:RMB39.039million).TheGroup’sfinanceexpenseaccountedfor1.0%oftherevenue,representingaYoYdecreaseof0.4%(2016H1:1.4%).

Forthefirsthalfof2017,theincometaxwasRMB27.656million,representingaYoYdecreaseof41.8%(2016H1:RMB47.509million).Themainreasonforthedecreaseisbecauseofaone-timeincome taxexpense for thedividend issuance fromasubsidiaryof theGroupduring thesamereportingperiodoflastyear.

Other Non-Cash Expenses

For the firsthalfof2017, theGroup’samortizationof intangibleassetswasRMB41.759million,almost thesameas thatof lastyear (2016H1:RMB41.479million).TheGroup’samortizationof intangibleassetsaccounted for1.0%of the revenue, representingaYoYdecreaseof0.4%(2016H1:1.4%).

For the first half of2017, theGroup’sallowance fordoubtfuldebtswasRMB1.401million,representingaYoYdecreaseof87.7%(2016H1:RMB11.382million).


20



Forthefirsthalfof2017,theGroup’sshareoptionexpenseaccountedfor1.7%oftherevenue,representingaYoY increaseof1.4% (2016H1:0.3%).TheGroup’sshareoptionexpensewasRMB71.537million, representingaYoY increaseof832.3% (2016H1:RMB7.673million).Themainreasonisbecauseinordertoincentivizethecoretalents,theGroupissued215millionshareoptionsattheendof2016andthebeginningof2017.

Profit for the Period and Earnings Per Share (EPS)

Forthefirsthalfof2017,theGroup’sprofitwasRMB240.445million,representingaYoYgrowthof10.0%(2016H1:RMB218.619million).TheGroup’sprofitaccountedfor5.8%oftherevenue,representingaYoYdecreaseof1.8%(2016H1:7.6%).TheGroup’sprofitaccountedfor5.9%oftheservicerevenue, representingaYoYdecreaseof1.8%(2016H1:7.7%).Excludingtheshareoptionexpenses, theGroup’sprofitwasRMB311.982million, representingaYoYgrowthof37.9%(2016H1:RMB226.292million).

TheGroup’sprofitattributabletotheownersoftheGroupwasRMB245.470million,representingaYoYgrowthof3.9% (2016H1:236.237million).Excluding theshareoptionexpenses, theGroup’sprofitattributable to theownersof theGroupwasRMB317.007million, representingaYoYgrowthof30.0%(2016H1:RMB243.910million).

BasedontheprofitattributabletotheownersoftheGroup’sEPSwasRMB10.26cents(2016H1:RMB11.04cents), representingaYoYdecreaseof7.0%.Excluding theshareoptionexpenses,theGroup’sEPSwasRMB13.25cents,representingaYoYgrowthof16.2%(2016H1:RMB11.40cents).

Fundraising Activities

During thecurrent and last interimperiods, theGrouphadconductedseveral fund raisingactivitieswhichdetailsaresummarizedasbelow:

(1) On18April2017and18May2017,theGroupenteredintotheSubscriptionAgreementandSupplementalAgreementrespectivelywithDanCapitalManagementLtd.(the“DanCapital”)pursuant towhich theCompanyhasconditionallyagreed to issue,andDanCapitalhasconditionallyagreedtosubscribefor,theConvertibleNotesinanaggregateprincipalamountofHK$900,000,000duein2022(“2017CN”).

The2017CNhavebeen issuedon3July2017under thegeneralmandategranted to theDirectorsat theannualgeneralmeetingof theCompanyheldon18May2016.TheGroupintends touse theproceeds for the followingpurposes:1.ApproximatelyHK$600,000,000formergersandacquisitionsandestablishinganM&A fund toupgradenewtechnologicalcapabilityandstrengthentheecologicalconstructionofthecloudservices;2.ApproximatelyHK$100,000,000 forupgrading theJointforce to forgeacomprehensiveplatform for theIT industrychain;and3.ApproximatelyHK$200,000,000 for replenishing theCompany’sworkingcapitalandrepayingcertainbankloanswithrelativelyhigherinterestrates.


20



Asat30June2017, the2017CNwith theprincipalamountofHK$90,000,000wasnot inissueyet,noordinarysharescouldbeconverteduponfullconversion.

(2) On3February2016, theGroupentered into theSubscriptionAgreementwithHuarongInternational AssetManagementGrowth Fund (the “Huarong”) pursuant towhich theCompany has conditionally agreed to issue andHuarong has conditionally agreed tosubscribe for the total amountof theprincipal amount isUS$70,000,000 (equivalent toapproximatelyRMB458.649million)of theConvertibleNotesdue in2019 (“2016CN”).The2016CNwasissuedintwoinstallments,namelytheFirstTrancheConvertibleNotesandtheSecondTrancheConvertibleNotes.

The totalamountof theFirstTrancheConvertibleNotes isUS$30,000,000 (equivalent toapproximatelyRMB196.564million)andtheSecondTrancheConvertibleNotestotalprincipalamountofUS$40,000,000 (equivalent toapproximatelyRMB262.085million)havebeenissuedon15February2016and10March2016under thegeneralmandategrantedtotheDirectorsattheannualgeneralmeetingoftheCompanyheldon18May2015.Approximately90%ofthegrossproceedswasusedtorepaybankborrowingsand10%wastransferredtothePRCsubsidiariesasworkingcapital.

During the year ended31December2016, the2016CNwith theprincipal amount ofUSD30,000,000wereconverted into77,994,690ordinaryshares.Asat31December2016and30June2017, theoutstanding2016CNwith theprincipalamountofUSD40,000,000couldbeconverted into103,992,922ordinarysharesupon fullconversionataconversionpriceofHK$3.00pershare.


22


23

interiM reSUltSTheboardofDirectors(the“Board”)ofChinasoftInternationalLimited(the“Company”)ispleasedtoannouncetheunauditedconsolidatedresultsoftheCompanyanditssubsidiaries(the“Group”)forthesixmonthsended30June2017withcorrespondingfiguresasfollows:

COnSOliDateD StateMent OF COMpreHenSive inCOMe (UnaUDiteD)

For the six monthsended 30 June

2017 2016Notes RMB’000 RMB’000

Turnover 3 4,145,060 2,884,951Cost of sales (3,002,387) (2,082,316) Gross profit 1,142,673 802,635Other income, gains and losses 33,879 48,113Selling and distribution costs (146,944) (112,217)Administrative expenses (659,774) (390,651)Allowance for doubtful debts (1,401) (11,382)Amortisation of intangible assets (41,759) (41,479)Finance costs 4 (43,064) (39,039)Share of result of associates (15,509) 10,148 Profit before taxation 268,101 266,128Taxation 5 (27,656) (47,509) Profit for the period 240,445 218,619 Other comprehensive income

Exchange differences arising on transaction of foreign operations (8,712) (1,469)

Total comprehensive income for the period 231,733 217,150

Profit for the period attributable to:Owners of the Company 245,470 236,237Non-controlling interests (5,025) (17,618)

240,445 218,619

Total comprehensive income attributable to:Owners of the Company 236,758 234,768Non-controlling interests (5,025) (17,618)

231,733 217,150

Earnings per share 7– Basic (cents) 10.26 11.04

– Diluted (cents) 10.19 10.63


22


23COnSOliDateD StateMent OF FinanCial pOSitiOn (UnaUDiteD)

(Unaudited) (Audited)30 June 31 December

2017 2016Notes RMB’000 RMB’000

Non-current assetsProperty, plant and equipment 852,634 819,799Intangible assets 201,848 231,075Goodwill 1,008,479 1,008,479Interests in associates 93,946 104,190Available-for-sale investment 61,970 61,965Prepaid lease payments 38,290 38,723Other receivable 30,000 30,000Deferred tax assets 7,589 7,646

2,294,756 2,301,877

Current assetsInventories 54,500 20,893Trade and other receivables 8 2,749,266 2,092,700Bill receivable 6,299 23,186Prepaid lease payments 860 860Amounts due from customers for contract work 1,547,993 1,430,206Amount due from related companies 50,334 59,939Pledged deposits 1,008 670Bank balances and cash 1,054,511 1,298,972

5,464,771 4,927,426

Current liabilitiesAmounts due to customers for contract work 44,442 122,271Trade and other payables 9 1,208,866 1,203,843Bills payable 24,516 812Amounts due to related companies 20,089 37,983Dividend payable to shareholders 81 83Taxation payable 132,945 130,450Borrowings 10 1,160,682 922,452Consideration payable on acquisition

of a subsidiary – 21,035

2,591,621 2,438,929

Net current assets 2,873,150 2,488,497

Total assets less current liabilities 5,167,906 4,790,374


24


25COnSOliDateD StateMent OF FinanCial pOSitiOn (UnaUDiteD)


2017 2016Notes RMB’000 RMB’000

Non-current liabilitiesDeferred tax liabilities 17,746 18,943Convertible loan notes 248,592 244,296Borrowings 10 127,300 194,496

393,638 457,735

4,774,268 4,332,639

Capital and reservesShare capital 11 110,283 106,387Share premium 2,809,330 2,652,697Reserves 1,791,255 1,505,130

Equity attributable to equity holders of the Company 4,710,868 4,264,214

Non-controlling interests 63,400 68,425

Total equity 4,774,268 4,332,639


24


25

Attributable to the owners of the company

Convertible Statutory Statutory

Share loan General enterprise surplus Accu- Non-

Share Share Hedging Translation options notes reserve expansion reserve mulated controlling

capital premium reserve reserve reserve reserve fund fund fund profits Total interests Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2016 95,645 2,106,029 25,989 1,960 50,605 13,676 15,793 26,749 87,133 823,626 3,247,205 239,065 3,486,270

Profit for the period – – – – – – – – – 236,237 236,237 (17,618) 218,619Exchange differences arising from

translation of overseas operations – – – (1,469) – – – – – – (1,469) – (1,469)

Total comprehensive income for the period – – – (1,469) – – – – – 236,237 234,768 (17,618) 217,150

New issue of shares upon exercise of share option 310 12,289 – – (1,813) – – – – – 10,786 – 10,786

Recognition of equity-settled share based payments – – – – 7,673 – – – – – 7,673 – 7,673

Cancellation of share options – – – – (784) – – – – (784) – (784)Issue of ordinary shares upon subscription 3,602 197,048 – – – – – – – – 200,650 – 200,650Capital contribution from non-controlling

shareholders of a subsidiary – – – – – – – – – – – 100 100Acquisition of additional equity

interest in subsidiary – (66,781) – – – – – – – – (66,781) (134,947) (201,728)

At 30 June 2016 99,557 2,248,585 25,989 491 55,681 13,676 15,793 26,749 87,133 1,059,863 3,633,517 86,600 3,720,117

At 1 January 2017 106,387 2,652,697 (122,769) 21,457 88,340 23,544 15,793 26,749 129,901 1,322,115 4,264,214 68,425 4,332,639

Profit for the period – – – – – – – – – 245,470 245,470 (5,025) 240,445Exchange differences arising from

translation of overseas operations – – – (8,712) – – – – – – (8,712) – (8,712)

Total comprehensive income for the period – – – (8,712) – – – – – 245,470 236,758 (5,025) 231,733

New issue of shares upon exercise of share option 3,896 181,652 – – (22,167) – – – – – 163,381 – 163,381

Recognition of equity-settled share based payments – – – – 71,537 – – – – – 71,537 – 71,537

Cancellation of share options – – – – (3) – – – – – (3) – (3)Dividend paid (2016 final dividend) – (25,019) – – – – – – – – (25,019) – (25,019)

At 30 June 2017 110,283 2,809,330 (122,769) 12,745 137,707 23,544 15,793 26,749 129,901 1,567,585 4,710,868 63,400 4,774,268

COnSOliDateD StateMent OF CHangeS in eQUity (UnaUDiteD)


26


27

Six months ended30 June

2017 2016RMB’000 RMB’000

Net cash used in operating activities (618,007) (560,976)

Net cash used in investing activities (122,736) (132,364)

Net cash generated from financial activities 497,835 173,240

Net decrease in cash and cash equivalents (242,908) (520,100)

Effect of foreign exchange rate changes (1,553) 1,003

Cash and cash equivalents at the beginning of the period 1,298,972 1,265,831

Cash and cash equivalents at the end of the period 1,054,511 746,734

COnSOliDateD StateMent OF CaSH FlOwS (UnaUDiteD)


26


27

1. BASIS OF PRESENTATION

Theunauditedcondensedconsolidated financialstatementshavebeenprepared inaccordancewith theapplicabledisclosure requirementsofAppendix16 to theRulesGoverning theListingofSecurities (“ListingRules”)onTheStockExchangeofHongKongLimited (“StockExchange”)andwiththeHongKongAccountingStandard (“HKAS”)34“InterimFinancialReporting” issuedbytheHongKongInstituteofCertifiedPublicAccountants(“HKICPA”).

2. PRINCIPAL ACCOUNTING POLICIES

Thecondensedconsolidated financialstatementshavebeenpreparedonthehistoricalcostbasisexceptforcertainfinancialinstruments,whicharemeasuredattheirfairvalues.

TheaccountingpoliciesusedinthesecondensedconsolidatedfinancialstatementsareconsistentwiththosefollowedinthepreparationoftheGroup’sconsolidatedfinancialstatementsfortheyearended31December2016.

In thecurrent interimperiod, theGrouphasapplied the followingamendments toHKFRSs issuedbytheHongKongInstituteofCertifiedPublicAccountants(“HKICPA”)forthefirsttime.

Amendments to HKAS 11 Accounting for Acquisitions of Interest in Joint OperationsAmendments to HKAS 1 Disclosure InitiativeAmendments to HKAS 16

and HKAS 38Clarification of Acceptable Methods of Depreciation and

AmortisationAmendments to HKAS 16 Agriculture: Bearer Plants

and HKAS 41Amendments to HKFRS 10, Investment Entities: Applying the Consolidation Exception

HKFRS 12 and HKAS 28Amendments to HKFRSs Annual Improvements to HKFRSs 2012–2014 Cycle

Exceptasdescribedbelow,theapplicationoftheamendmentstoHKFRSsinthecurrentyearhashadnomaterialimpactontheGroup’sfinancialperformanceandpositionsforthecurrentandprioryearsand/oronthedisclosuressetoutintheseconsolidatedfinancialstatements.

3. TURNOVER AND SEGMENT INFORMATION

Turnoverrepresentsthenetamountsreceivedandreceivableforgoodssoldandservicesrenderedduringtheperiod.

Information reported to theChiefExecutiveOfficerof theCompany,being thechiefoperatingdecisionmaker, for thepurposesof resourceallocationandassessmentofsegmentperformancefocusesonthecategoryofcustomersbytheGroup’soperatingdivisions.

TheGroup’soperatingandreportablesegmentsareasfollows:

1. TechnicalProfessionalGroup (“TPG”)–Targeting large industryverticalenterprisecustomers,providingservicesincludingverticaldomainsolutions,productengineering,applicationsystemdevelopmentandtesting.

2. Internet ITServiceGroup (“IIG”)–Targeting“long tail”markets in ITservices, includingSMEsandlocalgovernments,andindividualprogrammersandsmallprogrammingteams.IIG’smainservicesprovidedinclude:membershipmanagement,transactionfacilitation,paymentservices,socialblogs/mediaandclouddeliveryprocesssoftwarerental.

Informationregardingtheabovesegmentsisreportedasbelow.

nOteS tO tHe UnaUDiteD COnSOliDateD FinanCial StateMentS


28


29

Segment revenues and results

ThefollowingisananalysisoftheGroup’srevenuesandresultsbyreportableoperatingsegment:

For the six months ended 30 JuneSegment revenue Segment results

2017 2016 2017 2016RMB’000 RMB’000 RMB’000 RMB’000

Technical professional services business (TPG) 3,511,450 2,287,883 368,493 249,605

Internet IT services business (IIG) 633,610 597,068 48,690 67,570

4,145,060 2,884,951 417,183 317,175

Segmentrevenuebyproductsandservices:

For the six monthsended 30 June2017 2016

RMB’000 RMB’000

Sale of software and hardware products 97,812 52,831

Technical professional services business (TPG) 3,460,084 2,276,098Internet IT services business (IIG) 587,164 556,022

4,047,248 2,832,120

4,145,060 2,884,951

Reconciliationofsegmentresultstoprofitbeforetaxation:


RMB’000 RMB’000

Segment results 417,183 317,175Other income, gains and losses 800 4,189Loan interest – (3,664)Corporate expenses (68,121) (31,415)Share option expenses (71,537) (7,673)Effective interest on convertible loan notes (10,224) (12,484)

Profit before taxation 268,101 266,128


28


29

Segment revenue reportedabove represents revenuegenerated fromexternalcustomers.Therewerenointer-segmentsales.

The accountingpoliciesof the reportable operating segments are the sameas theGroup’saccountingpolicies.

Segment results represent theprofit earnedbyeachsegmentwithoutallocationof corporateexpenses,shareoptionexpenses,gainarisingfromchangesinfairvalueofcontingentconsiderationpayableonacquisitionofasubsidiary, interestchargeonconvertible loannotesandcertain itemsofotherincome,gainsandlossesrecordedatcorporatelevel.Thisisthemeasurereportedtothechiefoperatingdecisionmakerforthepurposeofresourceallocationandperformanceassessment.

4. FINANCE COSTS


RMB’000 RMB’000

Interest on borrowings wholly repayable within five years 32,840 26,555Effective interest on convertible loan notes 10,224 12,484

43,064 39,039

5. TAXATION


RMB’000 RMB’000

Tax charge comprises:PRC Enterprise Income Tax 26,925 47,696Hong Kong Profits Tax – –The US Federal and State Income taxes 731 (391)Japan Income Tax – 204

27,656 47,509

Noprovision forHongKongProfitsTaxhasbeenmade forbothperiodsas theCompanyand itssubsidiarieshavenoassessableprofitarisinginHongKong.

PRCEnterpriseIncomeTaxiscalculatedattheratesprevailinginrelevantdistrictsofthePRC.

Taxationforotherjurisdictionsarecalculatedattheratesprevailingintherelevantjurisdictions.


30


31

6. DIVIDEND

Duringthesixmonthsended30June2017,a finaldividendofHK$0.012perordinaryshare fromsharepremiumaccountoftheCompanyinrespectoftheyearended31December2016(2016:Nil)wasdeclaredtotheownersoftheCompany.Theaggregateamountofthefinaldividenddeclaredduringthesixmonthsended30June2017amountedtoHK$28,827,293(2016:Nil).

Thedirectorsof theCompanyhaveresolvednot todeclarean interimdividendfor thesixmonthsended30June2017(2016:Nil).

7. EARNINGS PER SHARE

Thecalculationof thebasicanddilutedearningsper shareattributable to theordinaryequityholdersoftheCompanyisbasedonthefollowingdata:


RMB’000 RMB’000

Earnings for the purposes of calculating basic earnings per share 245,470 236,237

Effect of dilutive potential profit attributable to owners of the Company:Interest on convertible loan notes 10,224 12,484

Earnings for the purpose of diluted earnings per share 255,694 248,721

Number of shares2017 2016

Weighted average number of ordinary shares for the purpose of calculating basic earnings per share 2,391,613,132 2,139,501,783

Effect of dilutive potential ordinary shares:Share options 12,686,027 18,764,108Convertible loan notes 103,992,921 181,479,798

Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share 2,508,292,080 2,339,745,689

Thecomputationofdilutedearningspersharefortheperiodended30June2017didnotassumetheexerciseoftheCompany’sshareoptionsgrantedon11October2016and17November2016since theexercisepricesof thoseshareoptionswerehigher than theaveragemarketpriceofsharesoftheCompany.


30


31

8. TRADE AND OTHER RECEIVABLES


2017 2016RMB’000 RMB’000

Trade receivables 2,537,471 1,927,924Less: Allowance for doubtful debts (182,083) (182,171)

••• •••

2,355,388 1,745,753Trade receivables from related companies – –

••• •••

2,355,388 1,745,753Advances to suppliers 141,473 72,727Deposits, prepayments and other receivables 282,405 304,220

••• •••

2,779,266 2,122,700••• •••

Analysed for reporting purposes as:Non-current assets 30,000 30,000Current assets 2,749,266 2,092,700

••• •••

2,779,266 2,122,700•••

ThecredittermsoftheGrouprangefrom30to180days.Anagedanalysisoftradereceivables(netofallowance fordoubtfuldebts),presentedbasedon the invoicedateat theendof the reportingperiodisasfollows:


2017 2016RMB’000 RMB’000

Within 90 days 1,911,570 1,602,798Between 91-180 days 295,536 94,115Between 181-365 days 112,850 22,878Between 1-2 years 33,620 25,099Over 2 years 1,812 863

••• •••

2,355,388 1,745,753

ThefairvalueoftheGroup’stradeandotherreceivablesat30June2017wasapproximatelyequaltothecorrespondingcarryingamount.


32


33

9. TRADE AND OTHER PAYABLES


2017 2016RMB’000 RMB’000

Trade payables 515,143 552,475Deposits received from customers 46,127 17,800Other payables and accrued charges 647,596 633,568

••• •••

1,208,866 1,203,843

Anagedanalysisoftradepayables,presentedbasedontheinvoicedateattheendofthereportingperiodisasfollows:


2017 2016RMB’000 RMB’000

Within 90 days 401,778 493,523Between 91-180 days 60,456 20,484Between 181-365 days 20,136 18,791Between 1-2 years 15,272 10,770Over 2 years 17,501 8,907

••• •••

515,143 552,475

The average credit periodonpurchasesof goods is 90days. TheGrouphas financial riskmanagementpoliciesinplacetoensurethatallpayablesarewithinthecredittimeframe.

ThefairvalueoftheGroup’stradeandotherpayablesat30June2017wasapproximatelyequaltothecorrespondingcarryingamount.


32


33

10. BORROWINGS


2017 2016RMB’000 RMB’000

Unsecured bank loans (Note (i)) 853,615 925,291Secured bank loans (Note (ii)) 434,367 191,657

1,287,982 1,116,948


2017 2016RMB’000 RMB’000

Carrying amount repayable:Within one year 1,160,682 922,452More than one year, but not exceeding five years 127,300 194,496

1,287,982 1,116,948

Carrying amount of bank loans that are repayable on demand due to breach of loan covenants – –

Less: Amounts due within one year shown under current liabilities (1,160,682) (922,452)

Amounts shown under non-current liabilities 127,300 194,496


34


35

10. BORROWINGS (CONTINUED)


2017 2016RMB’000 RMB’000

Total borrowingsAt floating interest rates (Note (iii)) 878,297 715,283At fixed interest rates (Note (iv)) 409,685 401,665

1,287,982 1,116,948


2017 2016RMB’000 RMB’000

Analysis of borrowings by currencyDenominated in RMB 1,287,982 1,116,948

Notes:

(i) GuaranteedbytheCompanyandcertainsubsidiariesoftheCompany.

(ii) Tradeandbill receivableswithanetcarryingvalueofapproximatelyRMB276,916,960 (2016:RMB30,857,000)arepledgedtosecurecertainbankloansgrantedtotheGroup.TheremainingbankloansamounttoRMB157,450,000(2016:RMB160,800,000)aresecuredbythelanduserightandconstructioninprogressoftheGroup.

(iii) InterestsonRMBborrowingsarechargedatinterestratesannouncedbythePeople’sBankofChina.Theaverage interestrateduringthe firsthalfyearof2017 is4.63%(2016:5.37%)perannum.

(iv) Interestsonfixedratesborrowingsarechargedat interestratesrangedfrom4.35%to6.31%(2016:4.35%to6.31%)


34


35

11. SHARE CAPITAL

Ordinary shares of HK$0.05 each: Number Nominalof shares amount

Authorised HK$

At 1 January 2016, 30 June 2016, 1 January 2017 and 30 June 2017 4,000,000,000 200,000,000

Amountshown in the

Number of Nominal financial shares amount statements

HK$ RMB’000

Issued and fully paid

At 31 December 2015 and 1 January 2016 2,066,808,004 103,340,401 95,645

Exercise of options 7,430,000 371,500 310Issue of subscription shares 85,109,515 4,255,475 3,602

At 30 June 2016 2,159,347,519 107,967,376 99,557

Exercise of options 24,450,000 1,222,500 1,055Conversion of convertible loan notes 130,376,917 6,518,846 5,775

At 31 December 2016 and 1 January 2017 2,314,174,436 115,708,722 106,387

Exercise of options 88,100,000 4,405,000 3,896

At 30 June 2017 2,402,274,436 120,113,722 110,283

12. CAPITAL COMMITMENTS


2017 2016RMB’000 RMB’000

Capital expenditure contracted for but not provided in the consolidated financial statements– acquisition of property, plant and equipment – 3,421– investment in an entity accounted for

using equity method 89,100 89,100

89,100 92,521


36


PB

13. RELATED PARTY TRANSACTIONS

During the relevantperiods in2016and2017, theGrouphad the following transactionswith thefollowingrelatedparties:

For the six monthended 30 June2017 2016

Note RMB’000 RMB’000

Provision of IT outsourcing services– Huawei Group (a) – 354,517

Note:

(a) Huaweiwas thenon-controllingownerofChinasoft InternationalTechnologyServiceCo.,Limited(“CSITS”),anon-whollyownedsubsidiaryoftheCompany.FollowingtheestablishmentofCSITS inApril2012.HuaweiGroupbecamea relatedpartyof theGroup thereafter.AndHuaweiGroupceased tobea relatedpartyof theGroupsince25February2016after itdisposeditsentireequityinterestinCSITS.

TheDirectors areof theopinion that the above transactionswere conductedunder normalcommercialtermsintheusualcourseofbusinessoftheCompany.

14. EMPLOYEE AND OTHER INFORMATION

TheremunerationfortheemployeesoftheGroupamountedtoapproximatelyRMB2,987,106,000,includingthedirectors’emolumentsofapproximatelyRMB5,487,000duringthesixmonthsended30June2017 (2016:approximatelyRMB2,069,392,000, including thedirectors’emolumentsofapproximatelyRMB7,605,000).The increase inemployee remuneration resulted fromthe increaseinthenumberofemployeesfrom38,718to50,356.

Theamortisationchargeof intangibleassetsanddepreciationduring thesixmonthsended30June2017oftheGroupamountedtoapproximatelyRMB41,759,000(2016:RMB41,479,000)andapproximatelyRMB43,698,000(2016:RMB23,300,000),respectively.


PB


37OTHER INFORMATION

tHe CODe On COrpOrate gOvernanCe praCtiCeSDuring thesixmonthsended30June2017, theboardofdirectorsof theCompanybelievesthatcorporategovernanceisessentialtothesuccessoftheCompanyandhasadoptedvariousmeasures toensure thatahighstandardofcorporategovernance ismaintained.Thecodeprovisions in theCorporateGovernanceCode (the “CGCode”)assetout inAppendix14 totheListingRuleshaveservedasguideposts for theCompany to follow in its implementationofcorporategovernancemeasures.

KeycorporategovernanceprinciplesandpracticesoftheCompanyaswellasdetailsrelatingtotheforegoingdeviationaresummarizedbelow.

In theopinionof theBoard, theGrouphascompliedwith theCGCode from1January2017to30June2017,except that (i) theChairmanof theBoardwasnotable toattend theannualgeneralmeetingof theCompanyheldon18May2017 (the“2016AGM”) (deviated fromcodeprovisionE.1.2oftheCGCode)duetootherbusinesscommitment.However,anotherexecutiveDirectorDr.TangZhenmingattendedandactedastheChairmanofthe2016AGM;(ii) therolesofchairmanandchiefexecutiveofficershouldbeseparateandshouldnotbeperformedbythesameindividual(deviatedfromcodeprovisionA.2.1oftheCGCode).Dr.ChenYuhongcurrentlyassumes the rolesofboth theChairmanand theChiefExecutiveOfficeof theCompany.TheBoardbelievesthatbyholdingbothroles,Dr.ChenwillbeabletoprovidetheGroupwithstrongandconsistent leadership,and itallows formoreeffectiveandefficientbusinessplanninganddecisionsaswell asexecutionof long-termbusinessstrategiesof theGroup.Assuch, thestructureisbeneficialtothebusinessprospectsoftheGroup.

TheBoardwill continue toenhance its corporategovernancepracticesappropriate to theconductandgrowthofitsbusinessandtoreviewsuchpracticesfromtimetotimetoensurethattheycomplywithstatutoryandprofessionalstandardsandalignwiththelatestdevelopments.

DireCtOrS’ SeCUritieS tranSaCtiOnS

TheCompanyhasadopted theModelCode forSecuritiesTransactionsbyDirectorsofListedIssuers (the“ModelCode”) inAppendix10of theListingRule relating todealings issecurities.Havingmadespecificenquiryofall theDirectors, theDirectorscompliedwith theModelCoderegardingsecuritiestransactionsbytheDirectorsthroughouttheyearended30June2017.


38


39OTHER INFORMATION

DireCtOrS’ intereStS in SHareS

As30June2017, the followingDirectorshad interests in thesharesandunderlyingsharesoftheCompanyandshares inanassociatedcorporation (asdefined inPartXVof theSecuritiesandFuturesOrdinance (Chapter571of theLawsofHongKong) (“SFO”))of theCompanyassetoutbelowandrecordedintheregisterrequiredtobekeptundersection352oftheSFO,orasotherwisenotified to theCompanyand theStockExchangepursuant to theModelCode forSecuritiesTransactionsbydirectorsoflistedissuers.

Long positions in the Shares of the Company

Name CapacityNumber of

shares

Number ofissued ordinary

shares held

Number ofunderlying

shares heldpursuant to

share options

Totalapproximate

% of theissued sharecapital as at

30 June 2017

Chen Yuhong Beneficial owner, through controlled corporation, founder of discretionary trust and beneficiary of trust

264,392,861 264,392,861 – 11.01%

Tang Zhenming Beneficial owner and beneficiary of trust

11,827,765 11,827,765 – 0.49%

Zhang Yaqin Beneficial owner 3,000,000 – 3,000,000 0.01%

Options to subscribe for Shares

Percentage Percentageof total issued of total issued

No. of No. of No. of ordinary share ordinary shareshare options share options share options capital of the No of capital of the

outstanding exercised outstanding Company underlying CompanyExercise as at during as at as at ordinary shares as at

Name of Director Price 1 January 2017 the period 30 June 2017 30 June 2017 interested in 30 June 2017 Note(HK$)

Chen Yuhong 2.15 10,000,000 (10,000,000) – – – – (2)

Tang Zhenming 1.78 2,000,000 (2,000,000) – – – – (1)2.15 10,000,000 (10,000,000) – – – – (2)

Zhang Yaqin 3.27 3,000,000 – 3,000,000 0.14% 3,000,000 0.14% (3)

Saveasdisclosedabove,asat30June2017,noneof theDirectorsof theCompanyhadanyinterestsorshortpositions in theshares,underlyingsharesanddebenturesof theCompanywhichhadtobenotifiedtotheCompanyandtheStockExchangepursuanttoDivisions7and8ofPartXVoftheSFO(includinginterestsandshortpositionswhichhe/shewastakenordeemedtohaveundersuchprovisionsof theSFO)orwhichwere required,pursuant toSection352oftheSFO,tobeenteredintheregisterreferredtothereinorwhichwererequired,pursuanttotheModelCode,tobenotifiedtotheCompanyandtheStockExchange.


38


39OTHER INFORMATION

Notes:

(1) Theseshareoptionswereofferedon10April2007undertheshareoptionschemeoftheCompanyadoptedon2June2003andacceptedon8May2007.Theseshareoptionsareexercisableforaperiodof10yearsfromthedateofoffer,subjecttothefollowingconditions:

Exercisable PeriodCommencing Ending Number of share options exercisable

10/04/2007 09/04/2017 25% of the total number of share options granted10/04/2008 09/04/2017 25% of the total number of share options granted10/04/2009 09/04/2017 25% of the total number of share options granted10/04/2010 09/04/2017 25% of the total number of share options granted

(2) Theseshareoptionswereofferedon23January2014under theshareoptionschemeof theCompanyadoptedon20May2013andacceptedon31January2014.Theshareoptionsareexercisableforaperiodof3yearsfromthedateofoffersubjecttothefollowingconditions:


23/01/2014 22/01/2017 30% of the total number of share options granted23/01/2015 22/01/2017 30% of the total number of share options granted23/01/2016 22/01/2017 40% of the total number of share options granted

Thisbatchofshareoptionsaresubject toavestingconditionthat themarketcapitalizationof theCompanyshall reachHK$10billionorhigher for5consecutive tradingdaysduring theexerciseperiod.

(3) Theseshareoptionswereofferedon16December2015under theshareoptionschemeof theCompanyadoptedon20May2013andacceptedon31December2015.Theshareoptionsareexercisableforaperiodof3yearsfromthedateofoffersubjecttothefollowingconditions:


16/12/2015 15/12/2018 30% of the total number of share options granted16/12/2016 15/12/2018 30% of the total number of share options granted16/12/2017 15/12/2018 40% of the total number of share options granted


40


41OTHER INFORMATION

SHare OptiOn SCHeMeAsat30June2017, therewereshareoptions tosubscribe foranaggregateof253,000,000Sharesgranted tocertainDirectorsandemployeesof theGrouppursuant to theShareOptionSchemeandtheNewShareOptionSchemeoutstanding,representing10.53%ofthetotalissuedordinarysharecapitaloftheCompanyasat30June2017.

During thesixmonthsended30June2017,anaggregateof88,100,000shareoptionswereexercised,5,000shareoptionswere lapsedand85,000,000shareoptionshasbeengrantedundertheShareOptionSchemeandtheNewShareOptionScheme.

DireCtOrS’ rigHtS tO aCQUire SHareSSaveasdisclosedabove,duringthesixmonthsended30June2017noneoftheDirectorswasgrantedoptions tosubscribe forsharesof theCompanyandasat30June2017noneof theDirectorshadanyrightstoacquiresharesintheCompany.

reQUireD StanDarD OF SeCUrit ieS DealingS By DireCtOrSDuring thesixmonthsended30June2017, theCompanyhadadoptedTheModelCode forSecuritiesTransactionsbyDirectorsofListed Issuers (the“ModelCode”) inAppendix10of theListingRulesrelatingtodealingsinsecurities.HavingmadespecificenquirywithalltheDirectors,theDirectorshadcompliedwiththeModelCoderegardingsecuritiestransactionsduringthesixmonthsended30June2017.

SUBStantial SHareHOlDerS

So faraswasknown to theDirectors,asat30June2017, the followingpersons (notbeingaDirectororchiefexecutiveof theCompany)had interestsorshortposition in thesharesof theCompanywhichwerenotifiedtotheCompanyandtheStockExchangepursuanttotheprovisionsofDivisions2and3ofPartXVoftheSFOasrecordedintheregisterrequiredtobekeptundersection336oftheSFOwereasfollows:


40


41OTHER INFORMATION

Long positions/short positions in Shares

Approximate Approximatepercentage of percentage of

Approximate total issued total issuednumber of ordinary share of share* of

Name Nature of interest Shares the Company the Company

Rainbow Faith Limited (Note 1) Trustee 149,430,690 (L) 6.22% 5.96%

Prime Partners Development Limited (Note 2)

Beneficial interest 139,072,725 (L) 5.79% 5.55%

UBS Group AG (Note 3) Person having a security interest in shares

2,599,000 (L) 0.11% 0.10%

Interest of controlled corporations

117,709,924 (L) 4.90% 4.70%

Interest of controlled corporations

17,724,304 (S) 0.74% 0.71%

UBS AG (Note 3) Beneficial interest 15,273,924 (L) 0.64% 0.61%

Beneficial interest 16,966,304 (S) 0.71% 0.68%

UBS Asset Management (Hong Kong) Ltd (Note 3)


UBS Asset Management Trust Company (Note 3)

Beneficial interest 90,000 (L) 0.00% 0.00%

UBS Fund Management (Luxembourg) S.A. (Note 3)


UBS Fund Management (Switzerland) AG (Note 3)

Beneficial interest 40,000 (L) 0.00% 0.00%

UBS Securities LLC (Note 3) Beneficial interest 758,000 (L) 0.03% 0.03%

(Note 3) Beneficial interest 758,000 (S) 0.03% 0.03%

* The total number of issued share consists of 2,402,274,436 Ordinary Shares and Convertible Notes which could be converted into 103,992,922 Ordinary Shares.

Abbreviations: “L” stands for long position “S” stands for short position

Note:

1. RainbowFaithLimitedisdeemedtobeinterestedin149,430,690sharesintheCompanyasbeinga trustee .

2. Dr.ChenYuhong isdeemed tobe interested in139,072,725OrdinarySharesand throughPrimePartnersDevelopmentLimited,whichiswhollyownedbyDr.ChenYuhong.

3. UBSAG,UBSAssetManagement (HongKong)Ltd,UBSAssetManagementTrustCompany,UBSFundManagement (Luxembourg)S.A.,UBSFundManagement (Switzerland)AGandUBSSecuritiesLLCarethewholly-ownedsubsidiariesofUBSGroupAG.Accordingly,UBSGroupAGisdeemedtobeinterestedinthelongpositionsof120,308,924sharesintheCompanyandtheshortpositionsof17,724,304sharesintheCompanyheldbythesecompaniesasdisclosedabove.


42


PBOTHER INFORMATION

Saveasdisclosedabove,asat30June2017,nootherinterestorshortpositionintheSharesorunderlyingsharesoftheCompanywererecordedintheregisterrequiredtobekeptundersection336oftheSFO.

COMpeting intereStS

Asat30June2017,noneoftheDirectorsorthemanagementshareholdersoftheCompanyandtheir respectiveassociates (asdefinedunder theListingRules)hadany interest inabusinesswhichcompetedormightcompetewiththebusinessoftheGroup.

aUDit COMMittee

TheCompanyestablishedanauditcommitteeon2June2003andamendeditswrittentermsofreferenceincompliancewiththerequirementsassetout intheCodeonCorporateGovernancePracticesof theListingRules.Theprimarydutiesof theauditcommitteeare to reviewand tosupervise the financial reportingprocessand internalcontrolsystemof theGroup.Theauditcommitteecomprisesof three independentnon-executivedirectors,namelyMr.ZengZhijie,Dr.LeungWingYinPatrickandDr.LaiGuanrong.Dr.LeungWingYinPatrickistheChairmanoftheauditcommittee.

Theauditcommitteeof theCompanyhas reviewed the Interim resultsof theGroup for thesixmonthsended30June2017.

pUrCHaSe, Sale Or reDeMptiOn OF tHe COMpany’S liSteD SeCUritieS

Neither theCompanynoranyof itssubsidiarieshavepurchased,soldor redeemedany listedsecuritiesoftheCompanyduringthesixmonthsended30June2017.

SUFFiCienCy OF pUBliC FlOat

Basedon thepublicly available information and to thebest of theDirectors’ knowledge,informationandbelief, theCompanyhasmaintainedsufficientpublic float for thesixmonthsended30June2017.

OnbehalfoftheBoardDr. Chen Yuhong

Chairman and Chief Executive Officer

22August2017,HongKong

chinasoft international limited 中軟國際有限公司 report... · chinasoft international...

Documents