| Yonyou Network Releases 2022 Annual Report, Highlights of Achievement in 2022 in One Chart
Yonyou Network Technology Co., Ltd. (hereinafter referred to as “Yonyou” or “the company”, Company Code: 600588) officially disclosed 2022 Annual Report to the public. In 2022, the company continued to firmly implement Youyon 3.0-II Strategy that was aimed to transition towards cloud services, and seized the market opportunities of enterprise digital intelligence and localization of IT application innovation to achieve gross revenue of RMB 9.26 billion. In terms of it, the cloud service business maintained a high growth, achieving revenue of RMB 6.35 billion that was up 19.4% year over year and accounted for 69.0% of the company’s revenue from cloud service and software, which had become the main revenue stream and continued to lift its share.
The company continued to upgrade the revenue structure of quality business as the strategic direction, and the subscription to related indicators increased significantly. Contract liabilities amounted to RMB 2.46 billion, which means double-digit growth and up 14.4% year over year. Contract liabilities of cloud services amounted to RMB 1.92 billion, up 21.5% year over year. Contract liabilities of subscription reached RMB 1.32 billion that was up 55.8% year over year. ARR, business of cloud services, generated revenue of RMB 2.04 billion and was up 23.8% year over year.
| Yonyou BIP, The Pillars of a Great Power
During 2022, the company invested RMB 2.92 billion in R&D, which means an increase of 24.5% year over year that accounted for 31.6% of the operating revenue. Over 9,000 R&D staff, accounting for 35.7% of the total number of the employees. Continuously increasing investment helped the company make a significant breakthrough in cloud service product development. After the successful innovation of financial and ERP software, it took the company 7 years of hard work and dedication to go through the development process from pre-research to prototype product, and then to small-scale customer validation, and then to function improvement and large-scale application across industries. From BIP 1, BIP 2 to BIP 3, the company launched the landmark “Yonyou BIP 3” in August 2022, making a comprehensive breakthrough and becoming a global leader in 3 aspects: platform technology and application architecture, field and industry application, and ecological system.
Yonyou BIP built a new base for enterprise digital intelligence, Yonyou iuap, in which there are much pioneering technology in the world, and is more business-oriented:
- Created YMS cloud middleware technology, making cross-cloud technology breakthrough and having multi-cloud compatibility
- Created an integrated on-cloud and under-cloud payment system, allowing enterprises to have the update efficiency of public cloud on private cloud and making updates easier
- The leading multi-customer and multi-data center technology, making “management on cloud and operation under cloud”, which is multi-cloud and heterogeneous
- The self-developed multi-dimensional data engine (integration of storage and calculation), which is 100% autonomous, safe and manageable, supporting fast merging and one-click report generation that are “multi-criterion, multi-currency and primary-secondary table” in the scale of enormous data
- The secure and trustworthy nationalized adaption of IT application innovation, providing enterprise customers with stable, reliable, autonomous and manageable digital intelligence platform services
Yonyou BIP covers 10 aspects: finance, human resources, supply chain, procurement, manufacturing, marketing, R&D, projects, assets, and collaboration, offering application that covers enterprise business and manages integration in main areas. It is now an enterprise application service cluster with the largest coverage in the world, and it meets the requirement that “eliminating isolation and integrating application” after the new stage of enterprise digital intelligence
Yonyou BIP has over 600 core patents, over 1,400 software copyrights, over 2,300 enterprise service application models, and over 1.3 billion daily requests (public cloud). Since the launch, it has been chosen and used by more than 33,000 large and medium enterprises including many state-owned enterprises, and has become the first platform for digital intelligence of a great number of leading enterprises from different industries in China and all over the world, and has been hailed as “the Pillars of a Great Power” by China central media.
| Focus on and Lead the Development of Enterprise Digital Intelligence Services Persistently
As the world’s leading provider of enterprise digital intelligence services, the company has been focused on the enterprise software and services industry since the founding in 1988. With 35 years of development and cultivation, the company has acquired many innovation capabilities in enterprise software products and gained rich experience in serving customers in 30 industries, including manufacturing, energy, transportation, finance, telecommunication, automotive, tobacco, consumer goods, and military, providing professional, leading and high customer value cloud services and software products for global enterprises in over 40 countries and regions.
According to Gartner, the company ranked 8th and is the only Asia Pacific vendor in the TOP 10 of the Global ERP SaaS Market. Meanwhile, according to IDC, the company continues to lead in the cloud service market of Chinese enterprises, and it is the No.1 in China’s Application Platform-based Cloud Services APaaS Market Share and China’s Enterprise Application SaaS Market Share. The company is also the No.1 in EA SaaS Market Share for Mega and Large Enterprises in China, as a national brand of digital intelligence services and software localization and innovation for Chinese enterprises.
As a member of the drafting committee, the company participated in the formulation of the national standard GB/T 23011-2022 “Digital Transformation Integrated with Informationization and Industrialization, Reference Model of Value and Benefit”, which is the first national standard for digital transformation published in China and is a milestone for the standardization in digital transformation.
| Serve Large Central and State-owned Enterprises with Digital Intelligence, Sign with 27 Tier 1 Central Enterprises
In 2022, the company achieved revenue of RMB 6.25 billion from business and cloud services for large enterprises and was up 6.5% year over year. In terms of the revenue, cloud services business achieved revenue of RMB 4.39 billion that was up 17.6% year over year, and renewal rate of core products reached 105.5%.
Based on Yonyou BIP 3, the company provided cloud service products with hybrid deployment mode for large enterprises. Promoting the business subscription development and revenue structure transformation of large enterprises while maintaining continuous growth in the number of central and SOE customers. Since its launch in August 2022, the contract amount of Yonyou BIP 3 had exceeded RMB 1 billion in only 4 months.
By the time the report was released, the company had signed contracts with 27 Tier 1 central enterprises, including China State Shipbuilding Corporation Limited, China Electronics Corporation, China Unicom, China National Machinery Industry Corporation, Angang Steel Group Limited, China National Cereals, Oils and Foodstuffs Corporation, State Development & Investment Corporation, China International Engineering Consulting Corporation, China Coal Technology Engineering Group, China National Chemical Engineering Group Corporation Ltd., China National Salt Industry Corporation, China International Intellectech Group, China Metallurgical Geology Bureau, China National Gold Group, China Logistics Group, etc. and some famous enterprises and pubic organizations such as Zoomlion, Geely Technology Group, Country Garden Services, People’s Daily, etc. The number of similar systems and projects from other countries replaced by Yongyou BIP had increased sharply, laying a foundation for the further localization of central and state-owned enterprises’ IT application innovation.
| Medium Enterprises Customer Market: Shoot Three Arrows at One Time to Constantly Exert
In 2022, the company strategically improved the business of subscription to Public Cloud in the medium enterprise customer market, achieving revenue of RMB 1.14 billion from cloud services and software business, which was up 25.8% year over year, including revenue of RMB 630 million from cloud services business that was up 60.6% year over year, and the renewal rate of core products reached 82.0%.
In the medium enterprise customer market, the company promoted YonSuite, U9 Cloud and U8 Cloud at the same time. Now the cloud service products have been fully supported in IT application innovation, which are ahead of other competitors in the industry in terms of product’s advancement and ease of use. In 2022, YonSuite updated to launch a series of new services, adding nearly 7,000 paying customers and doubling the year-over-year growth in contract signing amount. U9 Cloud added 5 functions that meet the needs of manufacturing enterprises’ digital transformation and upgrade, and doubled the year-over-year growth in the number of new customers and project contract amount. U8 Cloud had been successfully contracted by more than 400 CIC clients and hundreds of well-known enterprises and public organizations. With the gradual recovery of private economy, cloud services to medium enterprises will contribute more subscription revenue growth to the company.
| Small Business Cloud Service Business: Cumulative number of paid enterprises exceeds 500,000
During 2022, the company continued to focus on the two major areas of digital intelligence, finance and taxation and digital intelligence business in the small and micro enterprise customer market, and realized cloud service and software business revenue of RMB 0.68 billion, a year-on-year growth of 15.0%. Among them, SaaS subscription revenue reached RMB 0.38 billion, with a year-on-year growth of 47.2%. As of the end of the reporting period, the cumulative number of paid enterprise users of the cloud service business reached 503,000, maintaining an absolute leading position in the small and micro enterprise finance, taxation, and business cloud service market. The company ranks first in terms of market coverage, cloud service growth, and customer satisfaction.
| Continue to Create the Symbiotic Business Ecosystem
In 2022, the company continued to upgrade and optimize its ecosystem partner development strategy, accelerating the construction of a globally leading integrated enterprise service ecosystem, and achieving rapid growth in the scale of Yonyou BIP ecosystem. Yonyou BIP has nearly 2,500 ISV partners, 419 professional service partners, over 1.08 million active developers, and connected to 2,108 banks around the world. In the trend of localization, a group of professional service partners that originally collaborated with foreign ERP vendors have also joined the Yonyou BIP ecosystem one after another.
Yonyou BIP adheres to the principle of cloud neutrality, allowing it to operate on different cloud computing platforms such as Alibaba Cloud, Chinatelecom Cloud, Huawei Cloud, Tencent Cloud, and enterprise self-built IDC, based on customer requirements. It enables convenient cross-cloud migration and supports enterprises to have an open and autonomous digital intelligence infrastructure environment.
The company actively promotes the IT application innovation development of enterprise software and cloud services and serves as the leading unit of the IT application innovation Working Committee WG22 ERP and Financial Software Group, deeply participating in the construction of the information technology application innovation ecology. Based on Yonyou BIP, the company has built a digital intelligence platform for IT application innovation solution that covers 23 major industries and 68 sub-industries. It has completed the adaptation work for 299 adaptation items and obtained 237 adaptation certificates. From chipsets, servers, operating systems, databases, middleware to security, the full stack adapts to the four major IT application innovation technology systems of China Electronics PKS, China Electronics Technology Group Corporation (CETC), Chinese Academy of Sciences (CAS), and Huawei Kunpeng.
“Driving business and societal progress through creativity and technology” is the company’s corporate mission. In the new era, under the guidance of the corporate mission, the company will popularize BIP, serve the digital intelligence of Chinese and global enterprises. To empower customers’ business innovation and progressive development, enhance and develop a more professional and powerful talent team, provide customers with more in-depth industry business products and services, fully leverage the enabling value of digital intelligence technology. Through thematic innovation capabilities, the company will help thousands of industries accelerate their digital transformation, ensuring the success of digitalization in more businesses and public organizations.