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GEONG International Limited Wade Wang, CEO Amit Thakar, CFO March 2012, Beijing
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22 GEONG is a leading independent internet software solutions provider and operator for large enterprises in China Founded in August 2000, quoted on LSE AIM in June 2006 GEONG Offerings: Smart Internet Solution IaaS (Information as a Service) solution: GEONG/IBM and GEONG/Oracle Smart Internet Platform SaaS (Software as a Service) solution: Social Business is operational enterprise social business solution powered by cloud computing technologies Long-term business relationship with blue chip clients in the banking, telecom, manufacturing and automotive sectors Long-term strategic partnerships with IBM and Oracle in Asia Pacific IBM China: Strategic partner in IaaS business 1 of the 5 Core Service Suppliers (CSP) of IBM Business Service (GBS) and IBM Global Delivery (GD) 1 of the Top 20 Independent Software Vendors (ISV) of IBM Software Group (SWG) Oracle China: Strategic partner of Oracle Fusion Middleware (OFM) Strategic partnership in the new SaaS solution Experienced international and local management team Key Facts, 31 Dec 2011 430 Employees 4 core markets - Financial service sector - Telecom - Automotive - Manufacturing & Consumers 3 new sectors - Energy - Digital economy - Transportation 1 SaaS solution – Enterprise Social Business - Social Marketing - Social Commerce - Social CXM 200+ IaaS clients and 16 SaaS clients -200+ IaaS solution clients -16 SaaS Solution clients 2 Strategic partners -IBM and Oracle 4 Offices, 2 Countries GEONG International An active player to capture internet growth in China
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33 China Internet key facts, 2011 Social Business 216m SNS users by 2010, forecasted 425m SNS users by 2013 Source: Enfodesk Mobile Internet 431m mobile internet users by 2011, forecasted 600m mobile internet users by 2012 Source: Enfodesk eBusiness Rmb6trillion trading volume of B2C/B2B/C2C in 2011, YOY growth around 33%, forecasted CAGR 40% YOY growth by 2012 Source: MINISTRY OF COMMERCE PEOPLES REPUBLIC OF CHINA Social Business Social Business will become a must-have business application in 3 years Large enterprises are seeking the operational partners to help design, establish, perform and manage their social business Mobile Internet Chinese mobile internet users will exceed traditional internet users in 3 years Mobile internet applications are shifting from consumer based applications to business based applications Digital Experience Economy eBusiness will become the core competencies for traditional businesses Continuous new online offerings to enhance user/customer online experience have become a new driving force for Chinese digital economy GEONG strategy is driven by internets trends and usage growth China Internet Usage and Trends social business, mobile internet and digital economy
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44 Smart Internet Solution Industry Specific Solutions FSSTelecomAutoManufacturingGeneral Businesses -Internet Transaction & Portal -Wealth Management -Social Marketing -Social CRM -Services Portal -Customer Relationship Mgt. -Sales Force Automation -Social CXM -Dealer Management Sys. -Electronic Procurement Sys. -Employee Portal -Social Marketing -Channel Management -Employee Portal -Social Commerce -Social CRM -Sales Force Automation - Social Marketing -Social CRM -Project Management Consulting, implementation and maintenance Social business operation on cloud computing Smarter Internet Platform with IBM/Oracle middleware IaaS Solution – Smart Internet Portal Customer Portal Enterprise Portal B2B Portal Social Marketing Social Commerce Social CXM (customer Experience Management) Consulting Service Application Integration AMS Product Support Customization Our products and new solutions SaaS Solution - Social Business
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55 IaaS revenue model and collection 1 Product Smarter Internet Platform 2 Services Consulting Customization 3 AMS Application Management Service 20% - 25% 70% - 60% 10% - 15% Revenue StreamRevenue MixGross Margin 15% - 20% 45% - 55% 55% - 60% 40% - 45%100% Day 0Day 60 - 90 1 st Milestone achieved Accrued Income Day 400 invoices issued Trade receivables Day 460 collection Collection Timeline
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66 SaaS revenue model and collection 3 Performance fee Performance fee 2 Annual operation fee Biz operation IT operation 1 Subscription fee Subscription fee for solution 15% - 20% 75% - 65% 10% - 15% Revenue StreamRevenue MixGross Margin 80% - 90% 45% - 50% 70% - 80% 50% - 60%100% Day 0 Day 90 1 st Quarterly invoice Trade receivables Day 150-165 Collection Collection Timeline
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77 GEONG has a market leading position in internet software solutions in China GEONGs USP: Smart Internet Platform integrates GEONG products and IBM/Oracle middleware technologies Smart Internet Solution is Industry specific solution combines best industrial practices with technology innovations New business model offers traditional IaaS solution plus innovative SaaS solution on cloud computing Sales effectiveness significantly enhanced by the strategic partnership with IBM and Oracle in Asia Pacific GEONG will maintain its position as a leading internet software solutions provider and operator for large enterprises in China
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88 GO BROAD GO DEEP SaaS business IaaS business Internet IT Capex at CAGR: 20%-30% Internet business growth at CAGR: 50%-70% Go Deep - Industry: From blue chip clients to 2 nd tier clients - Client: From IaaS solution to SaaS solution Go Broad - Geography: From China to Asia Pacific with IBM/Oracle - Industry: From core markets to new industries with IBM/Oracle - Client: From current business units to new business units Corporate Strategy Maximise business and profit through repeatable business from the same client Partner with clients internet business growth Grow with Internet IT Capex growth Sales Strategy – Go Deep & Broad
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99 GEONGs future Social Commerce Social Marketing Mobility apps Social CXM Social CRM …… To become the largest enterprises social business solution provider utilizing cloud computing technologies in China by 2016 To aim to perform and manage social business clouds for over 1,000 large enterprises and to serve more than 200m of their users or customers We are aiming to build the biggest enterprises social business network in China utilizing cloud computing technologies Revenue grows with the clients internet businesss growth Gross margin will steadily increase when more clients utilize our public clouds The cross industries social networking service will help our clients extend their businesses and build a higher entry barrier to market followers Objective: No. of customers Cost per customer
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10 Trading outlook Healthy balance sheet: £4.1m collection in Q3, net cash balance of £6.1m Accrued income will however remain at a high level as we hold back on issuing invoices to coincide with customer payment cycle to minimise VAT paid awaiting recovery Current order book £14m Confident of a satisfactory outturn for the full year
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