Hi Sun Technology (China) Limited (the "Company", together with its subsidiaries, collectively known as the "Group"; Stock Code : 0818.HK) is principally engaged in the provision of payment processing solutions, provision of financial solutions, sales of electronic power meters and solutions and provision of platform operation solutions.
Payment processing solutions
Riding on our strength in channels and risk control, the acquiring business has achieved a healthy development. As at the end of December 2016, accumulated number of domestic merchants exceeded 1.4 million with transaction volume reaching RMB76 billion in December 2016. During the year, the size of acquiring transactions and fee incomes basically maintained steady growth, while the income attributable to early settlement financial services business have exceeded 20% of the segmental turnover. On the other hand, MPOS merchants and innovative QR code payment developed rapidly, and the QR code payment business has established reputation in the industry forming in a trend of more diversified business revenue structure and steady business development. The preparation for license renewal of the payment business has completed and the renewal is expected to complete successfully in the middle of the 2017. Following the People's Bank of China's approval of the filling for cross-order RMB payment business during the year, the crossborder payment commercial business was officially launched, generating a new source of income while expanding our reach to customers. Smart POS, whose installation has already embarked in cities such as Beijing, Shanghai and Shenzhen has not only enhanced the expansion of payment fields and the scopes of application, but also laid the foundation for subsequent business layout. Levering the established channels of scale, it is bound to invite good expectations. Furthermore, upon official implementation of the reform on transaction fee rates driven by the People's Bank of China in September 2016, the market expected to usher in favorable development for innovation business, bringing positive influence to the expansion of high value-added merchants and quasi-financial business such as wealth management and financing. As such, we have introduced a number of application solutions. As one of the leading non-bank payment institutions in the industry, we will set to continue to gain more space for development.
On the basis of strengthening our market position among traditional customers such as BIG5 (five major banks in China), joint-equity banks and their overseas branches as well as in areas of core banking systems, we actively gained breakthrough in city commercial banks as an emerging market. In the traditional customers markets, in 2016, we have put into operations the core banking systems of China Guangfa Bank and China Everbright Bank (Seoul), and won the tenders of core banking systems construction projects for China Everbright Bank (Luxembourg), China Zheshang Bank (Hong Kong) and China Bohai Bank (Hong Kong). In the city commercial banks market, we have successively won the tenders of construction projects for Bank of Suzhou and Huishang Bank. In the payment and internet financial sectors, we continued to carry out new projects. Through the core construction of banks as the means, we have established connections with commercial banks and financial institutions widely distributed over all cities, laying a solid foundation for subsequent engagement in the huge FinTech innovation market.
Electronic Power Meters and Solutions
This round of smart meter reconstruction started by the State Grid in 2009 is near completion. In 2017, the tender proposals of the State Grid for smart meters and power consumption data collection devices is expected to reduce to two from three in 2016, and it is expected that the total number of tender invitations may decline to a certain extent. To construct the next-generation power consumption data collection system, we expect that the State Grid will have further in-depth research on technologies and standards such as the GB standards for construction of IR46 power energy meter, DLT698.45 object-oriented interchangeable data exchange protocol, four-in-one data collection and broadband power line carrier, and will expand the scope and scale of pilot areas. In recent years, we have closely followed new technology development of the State Grid and actively acquired technologies and talents, believing that we will be the first mover in the new round of meter and data collection construction by the State Grid.
Platform Operation Solutions
During the year, we have integrated the original telecommunication solutions and payment platform solutions into platform operation solutions to optimise our business management. This year the platform solutions business developed steadily. We continued to provide operational supporting services for the "和包" business, IVR voice conventional businesses and animation business of China Mobile, and it is expected that incomes from supporting services will remain stable in the future. China Mobile and the Hunan province government entered into a strategic cooperation agreement this year to enhance the support for e-commerce business, entailing that "和包" business will receive sound support and continue its rapid development. In the future, we will continue to maintain the steady development of our operational support business while actively exploring new business opportunities in related areas, such as cooperation with operators surrounding areas of operation and development of new business cooperation opportunities such as e-coupons. In addition, we will leverage the advantage in product technology business in the area of payment to expand new customers as well as exporting our mature products and technical services to build new business development modes apart from traditional support business, further maintaining long-term stable and healthy development.