As part of a few articles we'll do on the subject, let’s dive into the first of the financial technology companies’ disclosures and see what we can learn about the industry and how local business have been developing their strengths.
Brilliance Technology Co.: Business Scope and Top Clients
Brilliance Technology Co. is engaged in software development, systems integration, and consultancy services. Also, the company has a long-term experience as IBM solutions distributor (currently holds direct order placement rights), it is a Golden Partner of Cisco and Oracle, HP’s certified distributor. The issuer boasts to have signed five out of the Big Five banks, four out of four policy banks (PBoC, China Export-Import Bank, Agriculture Development Bank of China and China Development Bank), nine out of twelve joint-stock commercial banks and a somewhat less impressive proportion for city commercial banks: 19 out of 185.
It took the company 15 years to achieve the success - it was founded in 1998 in Beijing. Initially Brilliance Technology was primarily setup to develop a retail banking switching system. The product proved to be a success and multiple versions followed, with the most current 7.2 version released in 2013.
On the revenue side, software development comprised 25% of all revenue and amounted to RMB104.86 million in 2013. The systems integration line of business brought RMB261.49 million, RMB53.11 million for consulting services at the same period. Total revenue grew 11% in 2013.
On an industry focus note, Brilliance Technology is increasing its engagement with the finance sector, where revenue input grew from 38% in 2011 to 52% (RMB 217.72 million) in 2013. The company also serves the aerospace management industry and government entities. Top five banking clients in 2013 are China Citic Bank (RMB43 million revenue), Postal Savings Bank of China (RMB41 million revenue), Bank of China (RMB35.96 million revenue), HuaXia Bank (RMB23.51 million revenue) and Jiangsu Rural Credit Union (RMB20.11 million).
Brilliance also showed strong growth in new contracts signed in the last three years, where the figure is RMB517.34 million, RMB410.92 million and RMB375.57 million in years 2013, 2012 and 2011, respectively.
Beijing Futong Technology, Brilliance's top supplier in 2013, shipped RMB26.75 million worth of IBM product and Oracle’s Exadata machines in the period. The supplier was closely followed by CNBM Technology, which sold IBM servers and Huawei switches to the amount of RMB23.43 million.
The IPO proceedings will be used for development of several projects: Banking Integrated Channel Platform (total investment of RMB34.92 million), New Generation Trade Finance Clearance System (RMB43.98 million), New Generation Switching Platform (RMB32.36 million) and projects in non-banking sector.
Brilliance Technology is one of the Chinese banking technology companies that started from distributing core fintech products by global giants like IBM and Oracle and was developing its own solutions in the meantime. As other similar companies, the company has has considerable experience in applying solutions from the international vendors to the needs of Chinese clients, and has its own advanced proprietary technologies. Whether you want to compete with these companies or have a good product offering for them, new pre-IPO disclosures provide valuable information about these companies.