Summary of Century Information Conference Call Company Overview - **Company**: Century Information - **Industry**: Hotel Management Systems and SaaS Solutions Key Points and Arguments 1. **Revenue and Financial Performance**: Century Information's distribution business revenue decreased due to the cancellation of low-margin agency brands, but overall financial metrics remained stable. The strategic focus continues to be on platformization and globalization [2][4] 2. **Cloud Restaurant System**: The cloud restaurant system has signed contracts with the top five international hotel groups, with nearly 4,600 clients. The new Daylight PMS has been certified by Marriott and is operational in 755 hotels, with a year-on-year growth of 7% in hotel bookings [2][4] 3. **SaaS Business Growth**: As of June 2025, the Annual Recurring Revenue (ARR) reached 540 million yuan, a year-on-year increase of 21.4%, with a renewal rate exceeding 90%. The growth is primarily driven by an increase in the number of rooms launched by high-end clients [2][4] 4. **Integration Experience**: After completing CRS system integration with large international hotel groups, the integration experience can be reused for other similar groups, enhancing the scalability and reusability of the Daylight API integration solution [2][4][5] 5. **Global Deployment Strategy**: Major international hotel groups prefer to launch the Daylight system in China first due to advanced mobile applications and stringent data security compliance requirements. Successful implementation in China can facilitate global rollout [2][8][9] 6. **Enterprise Platformization**: The trend of enterprise-level platformization in hotel management systems is reflected in centralized management and unified configuration, allowing large groups like Marriott to manage thousands of hotels effectively [2][10] 7. **Competitive Landscape**: Despite holding a 90% market share in IT, competition remains fierce, particularly from established players like Oracle. The company focuses on high-end international hotel groups that prioritize product quality over price [2][12] 8. **Market Demand**: The demand for hotel information systems continues to grow despite a decline in retail sector demand. Leading hotel groups are replacing systems even during economic downturns [2][13] 9. **Acquisition Strategy**: The acquisition of a 13% stake in an information software company was driven by its quality asset status rather than strategic value, providing a return exceeding 7% [2][13] 10. **Future Integration Plans**: The company aims to integrate its hotel, restaurant, and retail business segments to create a comprehensive consumer platform, leveraging advancements in AI and Web 3.0 technologies [2][14] 11. **Customer Retention**: The customer renewal rate is exceptionally high, with most clients remaining loyal to the core cloud products [2][15] 12. **AI Integration**: AI technology is being integrated into hotel management systems to enhance operational efficiency and marketing automation, with over 30 AI application scenarios developed [2][17] 13. **Profitability Outlook**: The company currently incurs an annual loss of approximately 200 million yuan but has cash reserves of 4 billion yuan. The loss is gradually decreasing, with expectations of reaching breakeven through cross-selling and signing more framework agreements [2][19][20] 14. **R&D Focus**: Key R&D directions include migrating traditional systems to the new Daylight platform and integrating global payment systems. The R&D team is primarily based overseas, with a focus on localization and AI application [2][21] 15. **Project Development Cycle**: After securing large contracts, the company enters a phase of intensive development, with integration costs covered by client contracts, leading to stable R&D expenses and growing revenue as client numbers increase [2][22][23] 16. **Investment in R&D**: The company invests approximately 100 million USD annually, with expectations of revenue growth as client numbers increase and AI technology develops [2][24] Additional Important Insights - The company is strategically positioned to leverage its experience with high-end clients to attract smaller regional hotels, enhancing its market presence [2][5] - The focus on digital transformation in the hotel industry is a significant driver for the company's growth, despite fluctuations in other sectors [2][13]

Group 1: Business Development and Market Position - The company has signed a series of hotel group contracts since October last year, impacting revenue based on the number of hotel rooms going live and monthly billing [2] - Integration with complex hotel groups like Marriott and InterContinental requires longer setup times, but offers significant platform advantages for digital transformation [2][3] - The company aims to leverage existing integrations with major hotel groups to reduce development costs and enhance reusability across other high-end hotel groups [3] Group 2: Competitive Landscape - Competitors may adopt low-price strategies to attract hotel group clients, while the company maintains a higher pricing strategy based on advanced technology and architecture [4][5] - The company emphasizes that top clients prioritize product capability over price, necessitating flexible tactics to counteract competitors' pricing strategies [5] Group 3: Financial Performance and Strategic Acquisitions - The acquisition of Sihon Software is viewed as a strategic investment, with annual cash dividends exceeding potential bank investment returns [6] - The company's SaaS business has a renewal rate exceeding 90%, with non-renewals primarily due to brand changes among hotels [6] Group 4: Technological Advancements - AI is being integrated into hotel management systems, with two main applications: marketing tools generating revenue and predictive analytics within PMS and POS products [7] - The company is focused on migrating applications to the DAYLIGHT PMS architecture, including localizing for the Chinese market and implementing AI solutions [8] Group 5: Project Management and Development - For large contracts, the company anticipates that system integration development costs will be covered by fees from major hotel groups like Marriott, leading to a break-even point as ARR accumulates [9]