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Inspur cuts losses on growth of software business

Chinese information technology company Inspur International reported a net loss of HK$5.18 million in the first half of 2016, an improvement on the same period last year as the revenue and gross margin on the company’s enterprise resource planning software maintained stable growth.

The figure compared with a loss of HK$16.70 million in the January to June period a year ago.

“We put more efforts to contact the potential domestic market, and expand size in the domestic business,” Inspur said in a filing to the Honk Kong stock exchange.

“China’s large enterprises and local governments have begun to outsource some parts of the innovation and RD work.”

The company said it is dedicating research and development capabilities to provide cloud computing and big data research services to traditional enterprises under the Chinese government’s Internet Plus strategy to modernise industry.

In the first half of the year, Inspur signed agreements to provide IT services to the China Grain Reserve and Jilin province to track warehouses and provide technology including grain sales management software.

The company’s revenue for the period rose 20.72 per cent year-on-year to HK$521.70 million.

Inspur’s software development and solution segment posted a gain of 21.19 per cent to HK$359.65 million, while the software outsourcing business recorded an increase in revenue of 19.59 per cent to HK$162.05 million.

The company’s stock rose 0.62 per cent on Friday to HK$1.63 a share, up 14.79 per cent on the year.

Inspur took fifth place globally for estimated server vendor shipments in the first quarter, with 109,390 units shipped, up 19 per cent on the previous year, according to research firm Gartner.