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Chinese software, information and telecoms service provider AsiaInfo Wednesday posted strong revenue growth in the fourth quarter after acquiring the IT service business unit of Lenovo Group, the country's biggest computer vendor.
The NASDAQ-listed firm saw its net revenues grow 43 percent year-on-year in the fourth quarter to US$23 million, US$2 million higher than its previous estimates.
It also booked net profits of US$810,000 in the quarter and earnings per diluted share stood at 2 US cents, compared with a US$200,000 loss in the same period last year.
"During the quarter, we expanded our high margin software business and strengthened our strategic focus on serving enterprise customers across a diverse range of industries," said Zhang Xingsheng, CEO of the Beijing-based company.
The growth mainly came from increased sales of its operating supporting system (OSS) solutions to telecoms operators and the growth of IT services and consulting after the acquisition of Lenovo's IT service unit, now called Lenovo-AsiaInfo.
Lenovo-AsiaInfo contributed US$7.6 million in revenue to AsiaInfo, after the company completed the US$36.3 million transaction in October.
Zhang said that with the contribution of Lenovo-AsiaInfo, more than one-third of his company's revenues came from non-telecoms industries, thus successfully diversifying its business.
The company also said its operating cash flow reached US$8 million, including US$450,000 from Lenovo-AsiaInfo.
The stocks of AsiaInfo on the NASDAQ in New York fell 2.76 percent to US$4.94 on Tuesday and shed another 6.5 percent in after-hours trading, when the results were announced.
AsiaInfo's net revenues in 2004 reached US$68.1 million, representing a 18 percent year-on-year growth.
Zhang believed Lenovo-AsiaInfo will account for more than 40 percent of the company's revenues this year, compared to 11 percent in 2004.
(China Daily February 3, 2005)
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