# OVERALL RESULTS

In 2018, the Company maintained a healthy growth in revenue from continuing operations and the revenue from the software business maintained a stable growth, which amounted to approximately RMB5,192.0 million, representing an increase of 7.6% as compared with last year, which was the greatest increase in the last three years. In particular, the data-driven operation services achieved a rapid growth, almost doubling that of last year.

The adjusted net profit for 2018 amounted to approximately RMB602.2 million, representing a significant increase of 29.9% as compared with last year, and the adjusted net profit margin was 11.6%, achieving a good profitability level. The use of adjusted net profit from continuing operations is to easily compare the operating performance of the Company between periods. In view of this, we have eliminated the impacts of certain non-recurring, non-cash or non-operating items. Such impacts include share-based compensation, amortization of intangible assets arising from acquisition, interest expenses from the Privatization Syndicated Loan1, exchange gain and loss, and the listing expenses. The adjusted net profit and adjusted net profit margin referred to in this annual report were adjusted pursuant to the principles as set out above.

Net cash generated from operating activities amounted to approximately RMB583.3 million, representing an increase of 14.3% as compared with last year, and the cash generating ability continued to strengthen.

# BUSINESS REVIEW

# Further reinforcing our leading position in the telecom operators market to maintain positive growth

We served as the provider of China’s first-generation telecom software and services, and accumulated experience of more than 20 years in the telecom operators market. With leading research and development (“R&D”) capabilities, products and services within the industry, we have collaborated extensively with the three major telecom operators in the PRC, supporting over one billion subscribers nationwide. We maintained an absolute leading position in the industry.

In 2018, the Company continued to expand its input on business support, 5G intelligent network, data-driven operating services, big data and artificial intelligence (“AI”), developing over 500 types of software products for telecom operators. We actively participated in the centralized reform of telecom operators, supporting the R&D of various large-scale information technology (“IT”) projects. We took the initiative to grasp development opportunities provided by newly established specialized companies and participated in early business model design phase to provide a variety of software products and services. We actively explored the development opportunities of telecom operators in new business sectors such as IoT, data-driven operation, intelligent customer services and 5G intelligent network, and continuously develop the telecom operators market. As of December 31, 2018, the Company provided services to 214 telecom operator customers, representing an increase of 10.9% as compared with last year, and achieved a customer retention rate of over 99%.

REVENUE FROM THE SOFTWARE BUSINESS

ADJUSTED NET PROFIT

NET CASH GENERATED FROM OPERATING ACTIVITIES

Note 1: Refers to the loan borrowed in connection with the delisting of AsiaInfo Holdings, LLC (“AsiaInfo Holdings”) from National Association of Securities Dealers Automated Quotations (“NASDAQ”) Global Market of the United States, which was transferred to our Group in December 2015 and refinanced in 2018.