ChinaNetCenter Announces 2016 Net Profit Rose by 50%, Reaches Expectations

Judy| 2017-03-15 CDN, News Comments( 0 )

ChinaNetCenter, the leading CDN, IDC, and cloud solution provider in China, officially unveiled its annual report for 2016 on 13th March, 2017, showing that the company’s main business has maintained an overall fast growth in the past year. ChinaNetCenter is reporting revenue of 4.45 billion yuan, increasing by 51.67 percent year-on-year. Additionally, the company reports a net income of 1.25 billion yuan for shareholders of the listed company, with year-on-year growth of more than 51.41%; among which the main business revenue overseas accounts for 14 percent, reaching 632.72 million yuan with year-on-year growth of 95.91 percent. 

Analysts say that ChinaNetCenter assumes absolute superiority in China’s content delivery network and keeps benefiting from the dividends of rapidly growing global traffic. Though the share price of ChinaNetCenter started to fall in Q4 2016, it creates an excellent opportunity for the long-term investors to buy stocks midway through the trade, the most prominent example being the Gates Foundation having made a big gallon in the fourth quarter. 

On the same day, ChinaNetCenter launched an announcement that it planned to increase the reserve transferred from 10 to 20 for unit stock, therefore all shareholders receiving a cash dividend of 2.5 yuan (tax included). Also in the announcement, the company officially confirmed that the stakeholder Chen Baozhen and the director Chu Minjian were going to cut stocks holdings to less than 500 million and 225 million respectively. 

ChinaNetCenter sees a steadily steam of market share.

According to ChinaNetCenter’s annual report for 2016, as with the continued growing demand for traditional internet applications like the videos and the games, cloud computing, internet+, and other emerging business models are becoming the driving force for sustained growth of CDN industry. ChinaNetCenter’ CDN business revenue reaching 4.45 billion yuan with the YoY growth of 51.67 percent has fully proved that the company grabbed a larger market share over the past year. According the a research on China CDN service market share made by IDC (Analyze the Future), ChinaNetCenter took up 40.6 percent of domestic market share, receiving a dominant position in China CDN service industry. 

Content delivery network enjoying steady growth is a corollary of the sustained and rapid internet traffic development in China. Earlier this year, China Academy of Information and Communication Technology (CAICT) rolled out a report on the development trend of domestic internet in 2017, indicating that the overall size of global internet users will continue to grow, the universal service will be rapidly advanced, and the network traffic will keep growing at high level.

It is bold to say that the era of mobile internet is coming and the total number of global mobile applications is expected to reach 12.34 million. Apparently, mobile data traffic has become the mainstream service channel. China has quite prominent scale advantage in terms of both the numbers and distributions of the third-party mobile app stores. 

Just as Li Wei, the principal analyst at Zhongtai Securities, stated that successful CDN markets usually bear some common features, like scale effects as the leading factor and “market of winner taking all game”. And ChinaNetCenter’s fast growing in domestic third-party CDN market is a good example of scale effect. And this is also the reason why the company accelerates overseas expansion recently, for instance, ChinaNetCenter acquired 97% of the shares in CDNetworks

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