China’s software firms are seeing strong earnings and pouring that straight into R&D, according to data from the Ministry of Industry and Information Technology and reported by Yicai Global.
Upon releasing a 2019 list of China’s top 100 software company by sales revenue, the ministry said the enterprises on the list reported 821.2 billion yuan (US$118.5 billion) of revenue from software business in 2018, 6.5% up from that of the top 100 companies a year ago, the report said.
Among them, more than 30 companies saw revenue surging by more than 20%, and 14 companies earned revenue of over 10 billion yuan, the ministry said.
Huawei, the Shenzhen-based networking and telecommunications equipment and services supplier, ranked first on the list for the 18th consecutive year, followed by Qingdao-based home appliance maker Haier and Aliyun, Alibaba’s cloud computing subsidiary, the report said.
The top 100 software companies made 196.3 billion yuan in profits in 2018 with profit margin from their main businesses standing at 11.3%, the report said.
In the same period, these companies invested 174.6 billion yuan in research and development, 12.6% higher than that of the top 100 companies in 2018, the report said.
Their average R&D intensity, the proportion of R&D expenditure to main business revenue, reached 10.1%, 2.2 percentage points higher than the average level of the software industry, the ministry’s data showed.
By leading in advanced technologies such as cloud computing, industrial Internet and artificial intelligence, the top 100 companies, while accounting for only 0.3% of companies, made 13.3% of the total revenue and created 15% of jobs of the industry.