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SCMP Reporter

Rising demand has Neusoft Corp, the mainland's largest information technology outsourcing company, targeting greater growth this year amid the economic slowdown.  
Chairman and chief executive Liu Jiren has forecast Shenyang-based Neusoft to be on pace to grow about 20 per cent this year.  
'We are very focused on the domestic market,' Mr Liu said. 'We think China will be our great opportunity for the next 20 years.'
Neusoft, which has more than 15,000 staff worldwide, last year posted an 18.2 per cent increase in net profit to 491 million yuan (HK$557.73 million). Its revenues reached 3.71 billion yuan, a rise of 10.3 per cent from 2007.
The Shanghai-listed company saw  steady growth last year from product engineering and application system development projects with clients in Japan, Europe and the United States, translating to a 29.6 per cent  increase in outsourcing revenue to US$182 million. That accounted for 33.9 per cent of its total sales.
Zhang Xia, the chief technology officer at Neusoft, said the economic crisis had had little impact on  business as most  of its revenue was still generated from the mainland. 
According to global advisory firm KPMG, Neusoft commands a leading market share in terms of supplying information technology services to several strategic mainland industries. For example, Neusoft has a 35 per cent share in the energy sector and 30 per cent in telecommunications.
Neusoft, however, lags behind in the financial services industry, with a 10 per cent market share. Mr Liu said the company was 'a little bit late' in entering this sector.
Research firm International Data Corp predicted the information technology services market in the Asia-Pacific, excluding Japan, would  grow to US$49.4 billion this year. It would be driven mainly by greater demand for managed services and outsourcing, as enterprises sharpened their focus on cost management.
 Ning Wright, a partner-in-charge for KPMG China's sourcing advisory practice, said the mainland authorities had been active in providing incentives, including tax breaks and financial support, to build a viable information technology outsourcing services market.
Mr Liu also noted that the country was moving from a manufacturing-based economy to more innovative digital services,  creating a growing need for more sophisticated information technology services.
According to KPMG, the mainland's technology outsourcing market segment remains highly fragmented with more than 3,000  providers vying for contracts.
Neusoft, which counts more than 8,000 corporate customers, has quietly built its infrastructure to operate on a scale that has made it a domestic leader. It has set up eight regional headquarters, four software parks, 16 technical support centres, five software research and development hubs, a nationwide sales network and three training institutes.
The company, which was founded in 1991 and counts almost  20 per cent of staff as shareholders, has so far faced few setbacks, according to KPMG. But in February, it terminated a deal to acquire and merge with Dalian Hi-Think Computer Technology Corp because of disagreements over price.
In demand
Outsourcer says the China market will be key for next 20 years 
Neusoft's pace of growth as forecast by the company's chief executive: 20%




Neusoft targets greater growth on mainland despite financial crisis