China Software Industry to See ‘Huge’ Growth, Pansoft CFO Says
According to Pansoft Co, China’s software industry has “huge” growth potential due to the nation’s economic expansion and government policies. “The Chinese government has issued a preferential policy to foster the development and expansion of software companies, and this preferential tax policy has been applied to software and other high-tech companies. We expect the software industry to maintain higher- than-average growth rates versus other sectors of the economy,” Allen Zhang, chief financial officer of New York-listed Pansoft Co., said in a phone interview. Through measures such as providing beneficial policies, China will expand outsourcing in the software and information services industries, Xinhua News Agency reported June 22, citing unidentified officials with the Ministry of Commerce. In order to reduce the negative influence brought by slowing exports, the government is steadily increasing investment in technology and domestic consumption. China’s economic expansion dropped to 10.3 percent the second quarter from 11.9 percent the first quarter of the year. Pansoft, which is based in Shandong province, provides business-management software that tracks purchases and handles payroll for the oil and gas industry. Zhang said its customers included PetroChina Co. and China Petroleum & Chemical Corp. and its competitors in China included International Business Machines Corp. and SAP AG. In accordance with a statement delivered by the Ministry of Industry and Information Technology on its website July 26, for the first six months of the year, the nation’s software industry increased 29 percent to 604.8 billion yuan ($89.3 billion). Industry Growth China’s software services market is expected to grow about 34 percent this year, while overall industry growth is around 25 percent, Zhang said with citing data from the China Software Industrial Association. Demand for Chinese software services will be supposed to increase in that the government promotes mergers of state-owned enterprises, including coal producers to cut capacity and expands the development of affordable housing across the country, Zhang said. The reforms will demand better cost accounting that software can provide, he added. A gauge of Chinese technology companies has increased 8.3 percent this year, the most among the 10 industry groups in the CSI 300 Index. UFIDA Software, making financial software, has gained 4.9 percent in 2010 compared with a 21 percent decline for the CSI 300. Pansoft’s shares have declined 1 percent this year on the Nasdaq Composite Index, compared with a 0.4 percent advance for the Nasdaq. The company that plans acquisitions as it expands into software services outsourcing, expects earnings to increase as much as 35 percent this year on revenue growth of 40 percent, Zhang said. [Source] Software Outsourcing Blog Section: http://www.unisoftchina.com
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