The helplessness behind Neusoft's international br

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The helplessness behind Neusoft's international breakthrough recently, Neusoft group, China's largest software manufacturer, held the 2005 Strategy Conference and released the new logo "Neusoft" with more international colors. At the same time, Neusoft officially released its three business adjustment plans for the first time. It will take 5 to 10 years to adjust the current business ratios of domestic software and services accounting for 70%, digital medicine accounting for 20% and international business accounting for 10% to 40%, 35% and 25%. International businesses focusing on software outsourcing and BPO (business process outsourcing) will further expand, while the proportion of domestic businesses focusing on solutions and system integration will be compressed

Neusoft's international ambition has been highlighted again

the domestic industry is also our task, but in fact, it is a chicken rib for the rapid temperature change experimental chamber

at present, the international business is headed by LiuJiren, chairman and President of Neusoft group. It is planned to increase from 10% of the company's business to 12% in 2005. The reason is obviously that the international business is conducive to improving the overall profitability of Neusoft shares, a listed company of Neusoft group. According to internal data, at present, the profit margin of the company's software outsourcing business remains above 30%, and high projects can reach 40%. At present, the highest profit margin of the domestic system integration industry and its solution industry is only 15%, and there is a sharp downward trend

from the establishment and development of Neusoft in 1991 to the present, in the past 15 years, Neusoft started its business by doing software outsourcing for Alpi in Japan, and then transferred to the domestic software service and system integration market. In 2000, it launched a large-scale "digital enclosure" campaign and achieved good results in eight major industries, such as telecommunications and social security. In the same period, the domestic business in Neusoft rose to 70% of the scale, and the proportion of international business fell to 7%

the business scale of Neusoft expanded rapidly. In 2003, Neusoft's business scale reached 2billion yuan, but it paid the price of profitability. Since 2001, with the increasing turnover of Neusoft, the profit margin and profit have continued to decline. From 2001 to 2003, the net profit was 135million yuan, 79.71 million yuan and 62.24 million yuan respectively

what's more, the 2002 performance report shows that the net profit of domestic business accounting for more than 70% of the company's revenue is only about 4million yuan, accounting for about 5%. The first quarter of 2003 saw its first loss since its listing. The net profit in the third quarter of 2003 was about 2/3 lower than that in the second quarter. The domestic warranty period: the business loss directly affected the performance of the year. In 2004, if the digital medical industry did not make profits in cooperation with Philips, the performance would not be very optimistic

the domestic business with its own brand and intellectual property rights is not as good as making money for others' OEM business, which has also become the "feature" of China's software industry

a Neusoft employee said: "the poor profitability is due to the fact that Neusoft's domestic business includes about 50% of hardware sales, which has a very low profit margin. In addition, Neusoft coveted share in the early stage of market enclosure and took the initiative to sacrifice part of its profits."

solution is a field that needs to be paved and occupy the market. It requires large initial investment, requires a large number of personnel, and has low product replication ability. Domestic business is extremely labor-intensive and financial, "but when people go up, the money is often hard to get back." The poor payment collection capacity has led to bad debts and dead debts of Neusoft

Neusoft's domestic business is still facing the embarrassment of being unable to collect money. Before the separation and merger of telecom operators, Jitong owed Neusoft hundreds of millions of yuan. With the merger of Jitong into Tongtong, this account receivable has not been heard yet

breaking the international business situation

in order to improve the profitability of Neusoft, Neusoft began a series of business integration under the leadership of LiuJiren

first of all, starting from the capital, in 2002, the equity of Shenyang Neusoft Business Software Co., Ltd. held by Toshiba was converted into the equity of Neusoft group through equity replacement; In 2003, Neusoft shares held by Japan Alpi were replaced by group shares in the same way; In addition, it also performs similar operations with toic. As a result, Toshiba, Alpi and toic have become shareholders of the group. This series of capital integration is regarded by outsiders as a sign of Neusoft group's preparation for its overall listing on NASDAQ. It is reported that Neusoft has started to distribute options among its internal employees

investment bankers commented on this: "at present, the financing ability of the U.S. capital market is not optimistic. Neusoft is very likely to follow the example of China soft to complete the group listing in the form of 'son eating father'. At that time, the face of China's first software stock will be greatly changed." After the completion of capital level integration, Neusoft group's two major gold businesses (international outsourcing business and digital medical business) are more injected into the joint-stock company, so that Neusoft can get rid of the problem of poor performance

the main outsourcing business of Neusoft is in Shenyang Neusoft Business Software Co., Ltd., a joint venture with Toshiba in march1996. The change of cooperation mode with Alpi and toic is also the hope to attract these two Japanese enterprises to put more outsourcing businesses into Neusoft

LiuJiren, a teacher, began to imagine that in the future, more Chinese software talents will be created by increasing international business, helping more Chinese youth find jobs and helping China develop. But for the domestic business that should be cultivated meticulously, there is love and hate. 4 machined surface (end) of experimental machine parts

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