Summary of the Conference Call Company and Industry Involved - The conference call involved China Aviation Information Technology Co., Ltd. (中国航信) and was hosted by招商证券 (Zhongshan Securities) [1] Core Points and Arguments - The call was led by three key executives from the company, including the investor relations manager, the finance department accounting manager, and another investor relations executive [1] - The meeting aimed to facilitate communication between the company and investors, indicating a focus on transparency and engagement with stakeholders [1] Other Important but Possibly Overlooked Content - The format of the meeting included an opening statement from the company's leadership followed by a Q&A session, which suggests an interactive approach to addressing investor concerns [1]

Financial Performance - For the fiscal year ending December 31, 2023, the company reported total revenue of RMB 6,983,847,000, an increase from RMB 5,210,106,000 in the previous year, representing a growth of approximately 34%[5] - The total profit for the year was RMB 1,612,136,000, up from RMB 735,139,000 in 2022, indicating a growth of about 119%[5] - Net profit attributable to shareholders was RMB 1,398,952,000, compared to RMB 627,052,000 in the prior year, reflecting an increase of approximately 123%[5] - Basic and diluted earnings per share for the year were RMB 0.48, up from RMB 0.21 in 2022, indicating a growth of approximately 128%[5] - In 2023, the company achieved total revenue of RMB 6.98 billion, a year-on-year increase of 34.0%[9] - Net profit attributable to shareholders reached RMB 1.40 billion, representing a year-on-year growth of 123.1%[9] - Earnings per share increased to RMB 0.48, up 128.6% compared to the previous year[9] - The company’s pre-tax profit was approximately RMB 1,612.1 million, an increase of about 119.3% compared to 2022[30] - The total operating costs for the fiscal year 2023 amounted to RMB 5,300.8 million, an increase of RMB 571.3 million or 12.1% compared to RMB 4,729.5 million in 2022[34] Assets and Liabilities - The company's total assets as of December 31, 2023, reached RMB 27,500,129,000, up from RMB 25,237,623,000 in 2022, marking a growth of about 9%[6] - Total liabilities increased to RMB 6,481,535,000 from RMB 5,495,393,000, which is an increase of approximately 18%[6] - The total equity of the company rose to RMB 21,018,594,000, compared to RMB 19,742,230,000 in the previous year, representing an increase of about 6.5%[6] - The asset-liability ratio of the group as of December 31, 2023, is 23.6%, up from 21.8% in the previous year[57] - Total liabilities increased to RMB 6,481,535,099.77, up from RMB 5,495,393,104.48, representing a growth of approximately 18% year-over-year[186] - Total assets reached RMB 27,500,129,430.98, compared to RMB 25,237,623,430.91 in the previous year, indicating an increase of about 9%[188] Operational Highlights - The company processed approximately 620.1 million passenger trips through its electronic travel distribution (ETD) system, a growth of about 148.7% year-on-year[14] - Domestic passenger traffic exceeded pre-pandemic levels, growing by 1.5% compared to 2019, while international routes recovered to 62.8% of 2019 levels[13] - The company expanded its distribution network to reach 33 countries and regions, supporting the recovery of Chinese airlines in international markets[9] - The group processed approximately 1,017.7 million transactions in its settlement and clearing system, representing a year-on-year growth of 78.1%[18] - Revenue from agency settlement for passenger, cargo, and postal transport exceeded 47.53 billion RMB, marking a year-on-year increase of 116.2%[18] Research and Development - The company achieved significant advancements in technology innovation, including the establishment of a national enterprise technology center and a national postdoctoral research station[28] - Research and development expenses for 2023 were RMB 863,038,653.00, up from RMB 701,713,632.36 in the previous year, indicating a 23% increase[192] Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange Listing Rules, ensuring effective governance policies are in place[62] - The company deviated from the code regarding the separation of roles between the Chairman and CEO, with the same individual currently holding both positions as a transitional arrangement[62] - The company has established four specialized committees: Audit and Risk Management Committee, Remuneration and Assessment Committee, Nomination Committee, and Strategic and Investment Committee[68] - The company emphasizes a corporate culture focused on safety, service, and innovation, aiming to create value through information services[64] - The company has implemented strict anti-corruption policies and established transparent reporting channels for whistleblowers[67] Shareholder Information - The company proposed a final cash dividend of RMB 468.2 million for the fiscal year 2023, which equates to RMB 0.16 per share based on 2,926,209,589 shares outstanding[41] - As of December 31, 2023, the reserves available for distribution to shareholders amounted to RMB 8,200.3 million, up from RMB 7,419.5 million as of December 31, 2022[42] - The company reported a total issued share capital of 2,926,209,589 shares as of December 31, 2023, with a par value of RMB 1.00 per share[116] - Domestic shares account for 68.13% of the total share capital, while H shares represent 31.87%[116] Compliance and Risk Management - The company has established a comprehensive risk management and internal control system to ensure the effectiveness of its operations, with the board responsible for its implementation and management[93] - The internal control system is subject to annual evaluations to identify and rectify any deficiencies, ensuring continuous improvement and compliance with external regulations[97] - The company has a dedicated internal audit department that assesses the effectiveness of the risk management and internal control systems annually[98] - The audit report confirmed that the financial statements fairly reflect the company's financial position as of December 31, 2023[174] Employee Information - The company has a workforce of 6,620 employees as of December 31, 2023[2] - The company has a total of 6,620 employees, with a gender ratio of approximately 6:4, which aligns with regional and industry standards[101] Investor Relations - The company has responded to nearly 3,500 investor inquiries throughout the year, achieving a 100% response rate for investor hotline and email inquiries[109] - The company has conducted extensive communication with nearly 900 domestic and international shareholders and investors through various channels, including performance briefings and one-on-one meetings[109] - The company has maintained effective communication policies to ensure transparency and compliance with shareholder and investor needs[107]

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 12, indicating a potential upside of 21% from the previous closing price [2][3]. Core Views - The company's performance in 2023 met expectations, with revenue reaching RMB 6.98 billion, a year-on-year increase of 34%, and net profit attributable to shareholders at RMB 1.40 billion, up 123% year-on-year [2][3]. - The company is expected to benefit from the recovery of the civil aviation industry in China, with significant growth in its core aviation information services segment [2][3]. - The report highlights the need for improved dividend payouts, as the company proposed a final cash dividend of HKD 0.16 per share for 2023, resulting in a payout ratio of 33%, up from 25% in the previous year [2][3]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of RMB 6.98 billion, a 34% increase from 2022, and net profit of RMB 1.40 billion, reflecting a 123% growth [2][3]. - Earnings per share (EPS) for 2023 was RMB 0.48, with a proposed dividend of HKD 0.16 per share [2][3]. - The company’s operating cash flow for 2023 was RMB 1.37 billion, with cash and cash equivalents totaling RMB 7.28 billion, indicating a healthy financial position [2][3]. Business Segments - The aviation information services segment generated RMB 3.85 billion in revenue, a 149% increase year-on-year, with a total processing volume of 620 million passengers, up 148.7% from 2022 [2][3]. - Revenue from settlement and clearing services reached RMB 450 million, a 52.1% increase, while system integration services revenue decreased by 41.4% to RMB 990 million due to fewer projects meeting completion criteria [2][3]. - Data network revenue declined by 5.2% to RMB 390 million, primarily due to reduced demand for distribution information technology services [2][3]. Cost Management - Total operating costs for 2023 were RMB 5.3 billion, a 12.1% increase, driven by rising labor costs and increased commission and promotion expenses [2][3]. - The report emphasizes the company's commitment to stricter cost control measures moving forward to enhance profitability [2][3]. Market Outlook - The report anticipates that the civil aviation industry in China will continue to recover, with the Civil Aviation Administration of China targeting a passenger transport volume of 690 million in 2024, aiming to restore the international passenger market to 80% of pre-pandemic levels by the end of 2024 [2][3]. - The company is positioned to benefit from this recovery due to its established presence in the aviation information technology service sector [2][3].

Financial Performance - Total revenue for the fiscal year ended December 31, 2023, was approximately RMB 6,983.8 million, an increase of about 34.0% compared to the previous year[5] - Net profit attributable to shareholders of the parent company was approximately RMB 1,399.0 million, representing an increase of about 123.1% year-over-year[5] - Earnings per share for the fiscal year was RMB 0.48, up from RMB 0.21 in the previous year[10] - The company reported a total profit of RMB 1,612.1 million, compared to RMB 735.1 million in the previous year[8] - The company achieved a significant increase in investment income, reporting RMB 81.6 million compared to RMB 30.6 million in the previous year[6] - The revenue from aviation information technology services accounted for 55.1% of total revenue in 2023, up from 29.7% in 2022, with a significant increase of 149.0% to RMB 3,850.8 million[80] - The revenue from settlement and clearing services increased by 52.1% to RMB 447.3 million in 2023, accounting for 6.4% of total revenue[83] Dividends and Shareholder Returns - The board proposed a final cash dividend of RMB 0.16 per share for the fiscal year 2023[5] - The company declared a cash dividend of RMB 0.053 per share for the 2022 final dividend, totaling RMB 155,089 thousand, and proposed a cash dividend of RMB 0.16 per share for the 2023 final dividend, totaling RMB 468,194 thousand, pending shareholder approval[47] - As of December 31, 2023, the reserves available for distribution to shareholders amounted to RMB 8,200.3 million, up from RMB 7,419.5 million as of December 31, 2022[94] Operating Costs and Expenses - Total operating costs for the year were RMB 5,300.8 million, compared to RMB 4,729.5 million in the previous year[6] - The company’s operating costs for the current period were RMB 3,316,519 thousand, compared to RMB 3,089,871 thousand in the previous period, representing an increase of approximately 7.3%[42] - Total operating costs for 2023 were RMB 5,300.8 million, an increase of RMB 571.3 million or 12.1% from RMB 4,729.5 million in 2022[82] - The company achieved a 14.4% increase in labor costs due to higher employee compensation and social insurance expenses[82] - The company experienced a 212.6% increase in commission and promotion expenses, primarily due to a significant year-on-year increase in passenger volume[86] Assets and Liabilities - The total assets as of December 31, 2023, amounted to RMB 27,500.1 million, up from RMB 25,237.6 million in the previous year[14] - Total liabilities increased to RMB 6,481,535,000 from RMB 5,495,393,000, representing a growth of 18% year-over-year[16] - Current liabilities rose to RMB 6,193,494,000, up from RMB 5,142,697,000, marking an increase of 20%[16] - Non-current liabilities decreased to RMB 288,042,000 from RMB 352,696,000, a decline of 18%[16] - Total equity increased to RMB 21,018,594,000 from RMB 19,742,230,000, reflecting an increase of 6.5%[17] - The asset-liability ratio as of December 31, 2023, is 23.6%, up from 21.8% on December 31, 2022[112] Research and Development - Research and development expenses increased to RMB 863.0 million from RMB 701.7 million, reflecting a focus on innovation[6] - The company was recognized as a national-level enterprise technology center and established a national-level postdoctoral research workstation, enhancing its innovation capabilities[75] Operational Highlights - The company processed approximately 620.1 million passenger transactions through its electronic travel distribution (ETD) system, a growth of about 148.7% compared to the previous year[57] - In 2023, the company processed approximately 1,017.7 million transactions in its settlement and clearing system, representing a year-on-year growth of 78.1%[61] - The company signed contracts with 19 airlines for its digital retail platform solution, supporting a customer-centric business model[58] - The company established connections with 142 foreign and regional commercial airlines, expanding its distribution network to over 400 cities and reaching 33 countries and regions[63] Future Outlook - The outlook for 2024 indicates a focus on high-quality development in the civil aviation industry, driven by increased domestic demand and structural reforms[126] - The company plans to enhance safety levels, improve operational quality, accelerate strategic industry layout, and increase technological innovation efforts in 2024[128] - The company aims to deepen reforms, enhance talent incentive mechanisms, and optimize business structures to promote high-quality development[128] Governance and Compliance - The board of directors includes executive, non-executive, and independent non-executive members, ensuring a diverse governance structure[130] - The Audit and Risk Management Committee has reviewed the accounting policies and practices adopted by the group, discussing matters related to audit, risk management, and internal controls[122] - The company appointed Lixin Certified Public Accountants as the auditor for the fiscal year 2023, with a recommendation to reappoint them for 2024[123]

Financial Performance - In the first half of 2023, the total profit of the group was RMB 1,346.9 million, an increase of approximately 191.1% compared to RMB 462.7 million in the same period of 2022[24]. - The net profit attributable to the parent company's shareholders was RMB 1,200.4 million, up approximately 171.0% from RMB 443.0 million in the first half of 2022[24]. - Total revenue for the first half of 2023 was RMB 3,307.6 million, representing an increase of RMB 1,035.6 million or 45.6% from RMB 2,272.0 million in the same period of 2022[25]. - Operating profit for the first half of 2023 was RMB 1,338,680,209.07, compared to RMB 418,235,787.17 in the previous year, indicating a substantial increase of about 219.5%[87]. - Net profit for the first half of 2023 amounted to RMB 1,207,653,920.80, up from RMB 455,820,238.46 in the prior year, reflecting an increase of approximately 164.5%[87]. Revenue Breakdown - Revenue from agency settlement for passenger, cargo, and postal transport, as well as miscellaneous fees and international and domestic clearing fees exceeded $2.57 billion, reflecting a year-on-year increase of 100.8%[18]. - Revenue from aviation information technology services accounted for 57.1% of total revenue in the first half of 2023, up from 35.3% in the same period of 2022, with an increase from RMB 801.9 million to RMB 1,890.1 million, a growth of 135.7%[25]. - Settlement and clearing revenue increased by 31.4% to RMB 185.4 million in the first half of 2023, compared to RMB 141.1 million in the same period of 2022[27]. Cost and Expenses - Total operating costs for the first half of 2023 were RMB 2,178.2 million, an increase of RMB 354.8 million or 19.5% from RMB 1,823.4 million in the same period of 2022[30]. - Labor costs increased by 13.1% due to higher employee compensation and social insurance expenses[30]. - Research and development expenses for the first half of 2023 were RMB 275,217,130.34, up from RMB 216,765,622.61 in the same period last year, indicating an increase of about 27%[86]. Cash Flow and Liquidity - The net cash inflow from operating activities for the first half of 2023 was RMB 1,011.2 million[35]. - Cash and cash equivalents amounted to RMB 4,933,610,343.78, an increase from RMB 4,646,870,810.21, showing a rise of about 6.2%[83]. - The cash flow from operating activities for the first half of 2023 was RMB 1,011,222,951.49, compared to RMB 496,670,492.62 in the previous year, marking an increase of about 103%[94]. Assets and Liabilities - As of June 30, 2023, the total assets of the company amounted to RMB 28,181,129,502.66, an increase from RMB 25,262,644,119.55 at the end of the previous year, representing a growth of approximately 7.6%[80]. - Total liabilities increased to RMB 7,377,501,262.35, up from RMB 5,520,413,793.01 year-over-year, representing a growth of approximately 33.6%[81]. - The asset-liability ratio as of June 30, 2023, was 26.2%, compared to 21.9% as of December 31, 2022[47]. Share Capital and Equity - The issued share capital as of June 30, 2023, was 2,926,209,589 shares, with domestic shares accounting for 68.13% and H shares for 31.87%[59]. - The total equity attributable to the parent company increased to RMB 20,283,507,913.86 from RMB 19,229,378,570.23, showing a growth of approximately 5.5%[82]. - The company reported a profit distribution of RMB 155,089,108.22 to shareholders during the period, which reflects a decrease in retained earnings[101]. Corporate Governance and Compliance - The company has made amendments to its articles of association to enhance corporate governance and comply with regulatory requirements[58]. - The company confirmed that all directors complied with the standard code regarding securities trading during the six months ending June 30, 2023[74]. - The company is committed to maintaining high levels of corporate governance and transparency to all market participants and regulatory bodies[72]. Technological Developments - The group has established a third-generation passenger revenue management platform in line with new distribution capabilities (NDC) and One Order trends[18]. - The group has deployed facial recognition boarding at 54 major airports and has promoted the One ID passenger service platform to over 20 domestic airports[19]. - The group launched the first airport digital RMB solution at Changsha Huanghua International Airport, becoming a pioneer in the civil aviation industry[20]. Market and Business Strategy - The company plans to focus on enhancing core system autonomy and promoting "dual carbon" technology innovation in the second half of 2023[54]. - The company aims to maximize fund returns by selecting principal-protected financial products with higher interest rates than bank deposits[38]. - The company plans to focus on market expansion and new product development in the upcoming quarters[100].

[Financial Statements](index=1&type=section&id=財務報表) [Consolidated Income Statement](index=1&type=section&id=合併利潤表) Driven by aviation market recovery, the company's H1 2023 total operating revenue grew 45.6% to **RMB 3.31 billion**, with net profit attributable to parent company shareholders surging 171.0% to **RMB 1.20 billion** and basic EPS rising to **RMB 0.41** Key Income Statement Data for H1 2023 | Metric | Current Period Amount (RMB Thousand) | Prior Period Amount (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 3,307,556 | 2,271,991 | +45.6% | | Operating Profit | 1,338,680 | 418,236 | +219.9% | | Total Profit | 1,346,864 | 462,658 | +191.1% | | Net Profit | 1,207,654 | 455,820 | +164.9% | | Net Profit Attributable to Parent Company Shareholders | 1,200,385 | 443,034 | +171.0% | | Basic Earnings Per Share (RMB/share) | 0.41 | 0.15 | +173.3% | [Consolidated Balance Sheet](index=3&type=section&id=合併資產負債表) As of June 30, 2023, total assets increased 11.5% to **RMB 28.18 billion**, total liabilities rose 33.6% to **RMB 7.38 billion**, and net assets attributable to parent company owners grew 5.5% to **RMB 20.28 billion**, with the asset-liability ratio increasing from 21.9% to 26.2% Key Balance Sheet Item Changes | Metric | Period-End Balance (RMB Thousand) | Prior Year-End Balance (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 28,181,130 | 25,262,644 | +11.5% | | Total Liabilities | 7,377,501 | 5,520,414 | +33.6% | | Equity Attributable to Parent Company Owners | 20,283,508 | 19,229,379 | +5.5% | - Current assets increased from **RMB 16.78 billion** to **RMB 19.29 billion**, primarily due to a **RMB 1.10 billion** increase in cash and cash equivalents and a **RMB 650 million** increase in accounts receivable[5](index=5&type=chunk) - Current liabilities increased from **RMB 5.14 billion** to **RMB 7.01 billion**, mainly due to new short-term borrowings of **RMB 550 million** and an increase of **RMB 1.54 billion** in other payables[6](index=6&type=chunk) [Notes to Financial Statements](index=6&type=section&id=財務報表附註) [Company Overview and Basis of Preparation](index=6&type=section&id=公司基本情況與編製基礎) The company, China National Aviation Information Network Corporation Limited, established in Beijing in 2000, provides IT solutions and services for the aviation travel industry, with its financial statements prepared under Chinese Accounting Standards on a going concern basis - The company primarily operates in aviation passenger business processing, electronic distribution, airport passenger processing, data processing, and settlement and clearing services[8](index=8&type=chunk) - Financial statements are prepared in accordance with Chinese Accounting Standards and comply with the disclosure provisions of the Hong Kong Stock Exchange Listing Rules[9](index=9&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=會計政策變更) Effective January 1, 2023, the group adopted Interpretation No. 16 of Accounting Standards for Business Enterprises regarding deferred income tax on assets and liabilities arising from a single transaction, impacting deferred tax assets, liabilities, and income tax expense - The adoption of new provisions in Interpretation No. 16 of Accounting Standards for Business Enterprises primarily impacts the recognition of deferred tax assets and liabilities[11](index=11&type=chunk) Impact of Accounting Policy Changes (January-June 2023) | Affected Statement Item | Impact Amount (RMB Thousand) | | :--- | :--- | | Deferred Tax Assets | 3,729 | | Deferred Tax Liabilities | 3,043 | | Income Tax Expense | -660 | [Taxation](index=8&type=section&id=稅項) The company's main taxes are VAT and corporate income tax, enjoying a 15% preferential income tax rate as a high-tech enterprise, with potential for a 10% rate as a key software enterprise, which has been reflected in H1 2023 financial statements - As a high-tech enterprise, the company accrues corporate income tax for H1 2023 at a preferential rate of **15%**[15](index=15&type=chunk) - The company may also enjoy a lower **10%** tax rate as a key software enterprise, with related tax benefits reflected in the current period's financial statements[16](index=16&type=chunk) [Notes to Major Items in Consolidated Financial Statements](index=9&type=section&id=合併財務報表主要項目註釋) This section details key consolidated financial statement items, including accounts receivable increasing to **RMB 4.74 billion**, operating revenue growing 45.6% driven by aviation IT services, significant growth in investment income, and notable increases in personnel, technical support, and commission expenses [Revenue and Costs](index=13&type=section&id=收入與成本) In H1 2023, main business revenue grew 46.1% to **RMB 3.28 billion**, primarily driven by a 135.7% increase in aviation IT services revenue, while system integration services revenue decreased 46.5% Operating Revenue Details (RMB Thousand) | Item | Current Period Amount | Prior Period Amount | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Aviation Information Technology Services | 1,890,118 | 801,913 | +135.7% | | Settlement and Clearing Services | 185,361 | 141,082 | +31.4% | | System Integration Services | 320,895 | 600,325 | -46.5% | | Data Network Services | 201,682 | 232,282 | -13.2% | | Other Income | 709,499 | 496,389 | +42.9% | | **Total** | **3,307,556** | **2,271,991** | **+45.6%** | [Accounts Receivable](index=9&type=section&id=應收賬款) As of June 30, 2023, accounts receivable increased to **RMB 4.74 billion**, with the highest proportion being less than one year old, while impairment allowance decreased to **RMB 580 million** due to a **RMB 120 million** reversal of impairment losses Accounts Receivable Movement | Metric (RMB Thousand) | Period-End Balance | Prior Year-End Balance | | :--- | :--- | :--- | | Accounts Receivable Subtotal | 5,315,163 | 4,780,758 | | Less: Impairment Allowance | 578,423 | 696,351 | | **Total** | **4,736,740** | **4,084,407** | - A reversal of **RMB 120 million** in accounts receivable impairment losses was recognized in the current period, compared to an impairment loss of **RMB 99 million** in the prior period[28](index=28&type=chunk) [Financial Asset Investments](index=11&type=section&id=金融資產投資) The company holds a 13.26% equity stake in China Merchants Renhe Life Insurance Co., Ltd., classified as other equity instrument investment with a fair value of **RMB 836 million**, and an investment in China Mobile Equity Fund accounted for as other non-current financial assets with a carrying value of **RMB 603 million** - The company holds a **13.26%** equity stake in China Merchants Renhe Life Insurance, with a stable period-end fair value of **RMB 836 million**[20](index=20&type=chunk) - Investment in China Mobile Equity Fund has a carrying value of **RMB 603 million**, with the fund primarily investing in the 5G and information and communication industry chains[21](index=21&type=chunk)[22](index=22&type=chunk) [Liability Items](index=12&type=section&id=負債項目) As of period-end, accounts payable decreased to **RMB 1.99 billion**, with the majority less than one year old, while contract liabilities slightly increased to **RMB 660 million**, primarily related to system integration service contracts Key Liability Items (RMB Thousand) | Item | Period-End Balance | Prior Year-End Balance | | :--- | :--- | :--- | | Accounts Payable | 1,990,589 | 2,183,484 | | Contract Liabilities | 657,229 | 614,312 | [Profit and Loss Items](index=14&type=section&id=損益項目) Investment income surged 254.8% to **RMB 44.64 million**, driven by gains from financial assets held for trading, while credit impairment losses turned into a **RMB 117 million** gain due to accounts receivable impairment allowance reversals, and asset impairment losses also became a **RMB 2.45 million** gain Key Profit and Loss Item Changes (RMB Thousand) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Investment Income | 44,643 | 12,583 | | Credit Impairment Losses | 116,978 | -97,971 | | Asset Impairment Losses | 2,453 | -5,230 | [Earnings Per Share and Dividends](index=15&type=section&id=每股收益與股息) In H1 2023, basic and diluted earnings per share both significantly increased to **RMB 0.41**, and the company approved a final cash dividend of **RMB 0.053** per share for 2022, totaling **RMB 155 million** - Basic and diluted earnings per share both reached **RMB 0.41**, representing a **173.3%** year-on-year increase[31](index=31&type=chunk) - A final dividend for 2022 totaling **RMB 155 million** has been distributed[32](index=32&type=chunk) [Share-based Payments](index=16&type=section&id=股份支付) The company's H-share share appreciation rights incentive plan was terminated in December 2021, with remaining rights not remeasured at period-end due to ongoing termination document signing, resulting in a cumulative liability of **RMB 23.5 million** - The H-share share appreciation rights plan has been decided for termination, with related termination documents currently being signed[35](index=35&type=chunk) - As of period-end, the cumulative liability arising from cash-settled share-based payments amounted to **RMB 23.5 million**[35](index=35&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=管理層討論與分析) [Business Review](index=17&type=section&id=業務回顧) In H1 2023, driven by the robust recovery of China's civil aviation market, the company's electronic travel distribution system processing volume surged 143.0%, while significant progress was made in airline digitalization, smart airport construction, settlement and clearing services, and innovative solutions like digital RMB - Electronic Travel Distribution (ETD) system processed approximately **284 million** passengers, a **143.0%** year-on-year increase, recovering to **84.2%** of 2019 levels[36](index=36&type=chunk) - Progress in smart airport construction includes facial recognition boarding deployed at **54** airports nationwide and the One ID passenger service platform extended to over **20** airports[37](index=37&type=chunk) - Settlement and clearing systems processed approximately **446 million** transactions, a **64.6%** year-on-year increase, with agency settlement amounts exceeding **USD 2.57 billion**, up **100.8%**[37](index=37&type=chunk) - Launched the civil aviation industry's first airport digital RMB solution, 'Shu Bi Tong', which was put into operation at Changsha Huanghua International Airport[38](index=38&type=chunk) [Financial Position and Operating Performance Analysis](index=20&type=section&id=財務狀況與經營業績分析) In H1 2023, the group achieved significant profit growth, with total profit increasing 191.1% to **RMB 1.35 billion** and net profit attributable to parent company surging 171.0% to **RMB 1.20 billion**, driven by increased system processing volumes from recovering passenger traffic and demonstrating strong operating leverage [Overall Performance](index=20&type=section&id=總體業績) In H1 2023, the group's total profit reached **RMB 1.347 billion**, a 191.1% year-on-year increase, with net profit attributable to parent company shareholders at **RMB 1.20 billion**, up 171.0%, primarily due to increased system processing volumes from recovering domestic and international passenger traffic H1 2023 Performance Overview | Metric | Amount (RMB Million) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Profit | 1,346.9 | +191.1% | | Net Profit Attributable to Parent Company | 1,200.4 | +171.0% | | Earnings Per Share | 0.41元 | +173.3% | [Revenue Analysis](index=21&type=section&id=收入分析) Total revenue grew 45.6% to **RMB 3.31 billion**, primarily driven by a 135.7% increase in aviation IT services revenue, while system integration services revenue decreased 46.5% and data network revenue declined 13.2% - Aviation information technology services revenue was the primary growth driver, increasing by **RMB 1.088 billion**, a **135.7%** year-on-year increase[41](index=41&type=chunk) - System integration services revenue decreased by **46.5%** year-on-year, mainly due to fewer projects meeting completion and acceptance criteria[41](index=41&type=chunk) [Cost Analysis](index=22&type=section&id=成本分析) Total operating costs increased 19.5% to **RMB 2.18 billion**, with commissions and promotion expenses surging 122.4% and technical support and maintenance fees rising 64.6%, while software and hardware sales costs decreased 38.7% Key Cost Item Changes | Cost Item | Year-on-Year Change | | :--- | :--- | | Personnel Costs | +13.1% | | Depreciation and Amortization | -3.7% | | Software and Hardware Sales Costs | -38.7% | | Commissions and Promotion Expenses | +122.4% | | Technical Support and Maintenance Fees | +64.6% | [Liquidity and Capital Structure](index=23&type=section&id=變現能力與資本結構) The company's working capital primarily stems from operating activities, with H1 net cash inflow of **RMB 1.01 billion**, period-end cash and cash equivalents of **RMB 8.58 billion**, total borrowings of **RMB 750 million**, and an asset-liability ratio of **26.2%**, reflecting prudent financial management and strategic investments [Cash and Liabilities](index=23&type=section&id=資金與負債) As of June 30, 2023, the group's cash and cash equivalents totaled **RMB 8.58 billion**, with total borrowings of **RMB 750 million**, and net cash inflow from operating activities of **RMB 1.01 billion**, indicating strong cash generation - Net cash inflow from operating activities amounted to **RMB 1.011 billion**[47](index=47&type=chunk) Period-End Cash and Borrowings (RMB Million) | Item | Amount | | :--- | :--- | | Cash and Cash Equivalents | 8,576.6 | | Total Borrowings | 753.4 | [Details of Financial Asset Investments](index=24&type=section&id=金融資產投資詳情) The company holds **RMB 3.5 billion** in structured bank deposits and **RMB 650 million** in time deposits, with an **RMB 836 million** fair value investment in China Merchants Renhe Life Insurance, which incurred a **RMB 217 million** loss in H1, and an actual contribution of **RMB 575 million** to China Mobile Equity Fund - The company holds a total of **RMB 3.5 billion** in financial assets held for trading (structured deposits)[51](index=51&type=chunk) - The investment in China Merchants Renhe Life Insurance has a fair value of **RMB 836 million**, with the company reporting a **RMB 217 million** loss in H1 2023, primarily due to increased reserves from falling interest rates and capital market volatility[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - An actual contribution of **RMB 575 million** has been made to China Mobile Equity Fund, which primarily invests in the 5G and information and communication industries[57](index=57&type=chunk) [Other Financial Information](index=26&type=section&id=其他財務信息) As of June 30, 2023, the group had no asset pledges or significant contingent liabilities, with an asset-liability ratio of **26.2%**, H1 total capital expenditure of **RMB 363 million** for daily operations, and period-end capital expenditure commitments of approximately **RMB 1.09 billion** - The asset-liability ratio increased to **26.2%** from **21.9%** at the end of the prior year[58](index=58&type=chunk) - Total capital expenditure for H1 amounted to **RMB 363 million**, representing a year-on-year increase[60](index=60&type=chunk) [Staff Information](index=27&type=section&id=員工情況) As of June 30, 2023, the group had **6,721** employees, with H1 personnel costs of approximately **RMB 712 million**, accounting for **32.7%** of total operating costs, providing comprehensive compensation and benefits Staff and Personnel Costs | Metric | Value | | :--- | :--- | | Total Employees (number) | 6,721 | | Personnel Costs (RMB Million) | 712.2 | | Percentage of Total Operating Costs | 32.7% | [Outlook and Other Matters](index=28&type=section&id=展望與其他事項) [Future Outlook](index=28&type=section&id=未來展望) For H2 2023, despite global economic uncertainties, the group aims to ensure system security, enhance core system autonomy, unlock main business potential, explore emerging businesses, and deepen reforms to build a world-class enterprise, leveraging China's long-term economic growth and the civil aviation industry's recovery - The company will continue to ensure the secure operation of civil aviation information systems and enhance the autonomy and control of core systems[63](index=63&type=chunk) - Strategic priorities include fostering high-quality development of core businesses, exploring technology empowerment for emerging businesses, and advancing initiatives to benchmark against world-class enterprises[63](index=63&type=chunk) [Dividends and Share Repurchases](index=28&type=section&id=股息與證券回購) The Board recommends no interim dividend for H1 2023, and neither the company nor its subsidiaries repurchased, sold, or redeemed any listed securities during the period - The Board recommends no interim dividend for 2023[64](index=64&type=chunk) - There were no repurchases, sales, or redemptions of the company's listed securities during the period[64](index=64&type=chunk) [Corporate Governance](index=28&type=section&id=企業管治) The company maintains high corporate governance standards, adopting HKEX's Corporate Governance Code, with two deviations noted during the reporting period: the combined roles of Chairman and General Manager as a transitional arrangement, and delayed board re-election due to incomplete nominations - There was a deviation from Code Provision C.2.1, where the roles of Chairman and General Manager (President) were not separated, with Mr. Huang Rongshun holding both positions, which the company states is a transitional arrangement[66](index=66&type=chunk) - There was a deviation from Code Provision B.2.2, as the re-election of the Board of Directors was postponed due to incomplete nomination of new board candidates[66](index=66&type=chunk)

Business Overview - TravelSky's core business includes aviation IT services, distribution IT services, and aviation settlement and clearing services, catering to various industry participants [2]. - The group has over 20 subsidiaries in China and wholly-owned subsidiaries in regions such as Hong Kong, Singapore, and Ireland [3]. - The company is a leading supplier of information technology solutions for the aviation tourism industry in China, focusing on aviation IT services, distribution IT services, and settlement services [134]. Shareholder Information - As of December 31, 2022, the largest shareholder is China Civil Aviation Information Group, holding approximately 29.29% of the shares [3]. - As of December 31, 2022, the company's issued share capital was 2,926,209,589 shares, with domestic shares accounting for 68.13% and H shares for 31.87% [136]. - The percentage of shares held by major shareholders is calculated based on the total number of shares issued as of December 31, 2022 [142]. Financial Performance - Operating revenue for 2022 was RMB 5,210,106 thousand, a decrease of 4.9% compared to RMB 5,476,177 thousand in 2021 [41]. - Total profit for 2022 reached RMB 735,139 thousand, reflecting an increase of 10.8% from RMB 663,883 thousand in 2021 [41]. - Net profit attributable to shareholders for 2022 was RMB 626,499 thousand, up 13.6% from RMB 551,301 thousand in 2021 [41]. - Basic and diluted earnings per share for 2022 were RMB 0.21, compared to RMB 0.19 in 2021, representing a growth of 10.5% [41]. - Total assets as of December 31, 2022, amounted to RMB 25,236,452 thousand, an increase of 4.7% from RMB 24,111,139 thousand in 2021 [42]. - Total liabilities for 2022 were RMB 5,495,296 thousand, up 12.6% from RMB 4,881,056 thousand in 2021 [42]. Operational Highlights - The ETD system processing volume has ranked first globally for six consecutive years, with a processing volume of nearly 700 million passengers in 2021 [28]. - In 2022, the group processed approximately 249.3 million passenger trips through its electronic travel distribution (ETD) system, a decrease of about 42.4% compared to 2021 [50]. - The processing volume for domestic commercial airlines decreased by approximately 42.9%, while the processing volume for foreign and regional commercial airlines increased by approximately 81.5% [50]. - The group’s CRS system is directly connected to 154 foreign and regional commercial airlines, with a direct sales ratio of approximately 99.9% [50]. Technological Advancements - The "Aggregation" platform based on New Distribution Capability (NDC) received the highest NDC Level 4 certification from the International Air Transport Association [28]. - The company was recognized as a high-tech enterprise for 22 consecutive years and received multiple awards for technological advancements in 2022 [43]. - The company completed significant tasks related to passenger information systems during major events such as the Beijing Winter Olympics and the 20th National Congress of the Communist Party [26]. Employee and Corporate Governance - As of December 31, 2022, the group employed 6,570 staff members [3]. - The board of directors consists of nine members, with external directors accounting for more than half, including at least three independent non-executive directors [94]. - The company has established a transparent complaint and reporting management process to prevent bribery and corruption [93]. Risk Management and Compliance - The company has established a comprehensive risk management and internal control system to ensure the effectiveness of its strategic goals [116]. - The board believes that the internal control system is effective and sufficient, with no significant deficiencies identified during the evaluation period [117]. - The company conducts at least one internal control effectiveness check and risk assessment annually, addressing any identified deficiencies and significant risks [120]. Market and Future Outlook - The international passenger market is recovering rapidly, with the adjustment of pandemic control policies leading to an increase in international flights [48]. - Future outlook includes potential market expansion and new product development initiatives to drive growth in the upcoming fiscal periods [200]. Dividend and Shareholder Returns - The proposed final cash dividend for the year 2022 is RMB 155.1 million, which equates to RMB 0.053 per share, based on a total of 2,926,209,589 shares issued [74]. - The company has a consistent dividend policy, proposing a final cash dividend of RMB 0.053 per share for the year 2022, which represents approximately 30-40% of the company's after-tax profit [156]. Supplier and Customer Relations - The largest supplier for the company in 2022 was China Civil Aviation Information Group, accounting for 1.5% of the total operating costs (excluding depreciation and amortization) for the year [164]. - The largest customer, China Southern Airlines, contributed 8.4% to the company's revenue from goods sold or services provided in 2022 [165].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對 其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內 容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 （在中華人民共和國註冊成立的股份有限公司） （股份編號：00696） 截至二零二二年十二月三十一日止 財政年度全年業績公佈 業績摘要： • 總收入約為人民幣5,210.1百萬元，較二零二一年度減少了約4.9%。 • 本集團歸屬於母公司股東淨利潤約為人民幣626.5百萬元，較二零二一年度增 加了約13.6%。 • 每股盈利為人民幣0.21元。 • 董事會建議派發二零二二年度以現金支付的末期股息每股人民幣0.053元。 茲提述中國民航信息網絡股份有限公司（「本公司」）所發佈的日期為二零二三年三月二 十三日之二零二二年度業績公告（「原業績公告」）和日期為二零二三年四月十日之有關 二零二二年度業績公告之澄清公告（「澄清公告」）。 ...

Financial Performance - The net profit for the year ended December 31, 2022, is clarified to be 679,277, not 679,227 as previously reported[1] - The board confirms that the clarification does not affect any other information in the annual performance announcement[1] - The announcement maintains all other data unchanged in both English and Chinese versions[1] - The document serves as a clarification rather than a new announcement, emphasizing accuracy in financial reporting[1] Governance and Leadership - The board of directors includes both executive and non-executive members, ensuring diverse oversight[1] - The board includes independent non-executive directors, enhancing governance and accountability[1] - The chairman of the board is Huang Rongshun, indicating leadership continuity[1] Company Information - The company is registered in the People's Republic of China, indicating its operational jurisdiction[1] - The company operates under stock code 00696, relevant for investors tracking its performance[1] Communication - The announcement was made on April 10, 2023, reflecting timely communication with stakeholders[1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對 其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內 容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 （在中華人民共和國註冊成立的股份有限公司） （股份編號：00696） 截至二零二二年十二月三十一日止 財政年度全年業績公佈 業績摘要： • 總收入約為人民幣5,210.1百萬元，較二零二一年度減少了約4.9%。 • 本集團歸屬於母公司股東淨利潤約為人民幣626.5百萬元，較二零二一年度增 加了約13.6%。 • 每股盈利為人民幣0.21元。 • 董事會建議派發二零二二年度以現金支付的末期股息每股人民幣0.053元。 中國民航信息網絡股份有限公司（「本公司」）董事會（「董事會」）謹此公佈本公司及其附屬 公司（「本集團」）截至二零二二年十二月三十一日止年度（「二零二二年度」）的按照中國企 業會計準則（「中國企業會計準則」）編製的經審計的綜合業績。 ...