CLPS Incorporation Stock

CLPS Incorporation (CLPS) operates as a global information technology (IT), consulting and solutions service provider focused on delivering services to global institutions, including banking, wealth management, ecommerce, and automotive areas both in China and globally.

The company serves as an IT service provider to a growing network of clients in the global financial industry, including large financial institutions in the U.S., Europe, Australia, Asia, and their PRC-based IT centers. The company has created and developed a particular market niche by providing turn-key financial solutions.

The company has aimed to build one of the largest sales and service delivery platforms for IT services and solutions in China. The nature of the company's services is such that it provides a majority of services to its banking and credit card clients in order to build new or modify existing clients' own proprietary systems. The company is fully committed of delivering digital transformation services with a focus on the fintech within the areas of banking, wealth management, e-commerce, and automotive, among others, through the utilization of innovative technology to achieve its client's goals. The company maintains 20 delivery and/or R&D centers, of which 10 are strategically located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi'an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and 10 are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, Vietnam, and Canada). The company's extensive network enables it to serve different clients across various geographic locations. By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, the company is able to meet client demands in a manner while retaining significant operational flexibility. By serving both Chinese and global clients on a common platform, it is able to leverage the shared resources, management proficiency, industry expertise and technological know-how to attract new business and remain cost competitive.

The company's primary focus is in the following key operational areas:

Banking

Providing professional IT consulting and solutions for the banking industry is one of the traditional competitive advantages of CLPS. With more than 15 years of experience in helping leading global banks to implement banking systems, CLPS is committed to innovating and optimizing traditional banking system by utilizing cutting-edge fintech technology to enable institutions embrace banking.

CLPS has formed strategic partnerships with several global financial MNCs to provide banking IT services, help leading global banks to implement banking system and to enable them to test and enhance multiple functions, such as loans, saving, deposit, general ledger, account management, anti-money-laundering, risk control and credit card system. Whether traditional or online banking, CLPS has a wide array of business modules at its disposal.

CLPS has a deep understanding of the market supply and demand buoyed by its more than a decade experience in traditional banking business. CLPS provides IT services in the banking industry, including but not limited to bank channel services such as mobile banking and online banking; business services, such as marketing and risk control, among others; management services, such as customer relationship management, business intelligence, and information security management, to name a few.

By integrating its internal resources, CLPS has been able to continue to invest and develop series of R&D products, including credit card system, integrated transaction acquiring platform, reward points terminal, and virtual bank training platform, among others. These products have achieved positive feedback from the market.

Significant portion of the company's services caters the banking clients.

Credit Card Area

The company offers more than ten years of experience in IT consulting services across key credit card business areas, including credit card applications, account setup, authorization and activation, settlement, collection, promotion, point system, anti-fraud, statement, reporting and risk management. In the past years, it has successfully helped its China and global clients manage their credit card IT systems, such as VisionPLUS. The company offers expertise in customizing these credit card tools and platforms to suit a variety of business models. The company's highly experienced team possesses the requisite expertise in providing service in the credit card area. The IT consulting professional teams provides service in the credit card area from Shanghai, Dalian and Hong Kong. The company offers this experience and expertise in various currencies, across different geographical regions, including but not limited to China, Singapore, the U.K., the Philippines, Indonesia, and Latin America. In addition, the company has developed a series of credit card solutions in order to meet the needs of its clients better.

Core Banking Area

The company is one of China's largest core banking system services providers for global banks. Most global banks establish their IT development centers and gradually expand their business in China. Those banks require significant core banking IT services. The company offers more than ten years of experience in providing leading global banks with the support and expertise needed to implement their core banking system, including business analysis, system design, development, testing services, system maintenance, and global operation support. The company provides services across multiple functions, including loans, deposit, general ledger, wealth management, debit card, anti-money-laundering, statement and reporting, and risk management. The company also provides architecture consulting services for core banking systems and online and mobile banking. The company successfully transformed the centralized core banking system for one of its US-based clients to a service-oriented architecture and integrated it into a global unified version, which successfully satisfied its business needs in various markets. In addition, the company engages the cloud-native solution of core banking system with micro services architecture, which can serve both Chinese and global banks to meet the ever-changing demands of the market with high flexibility, high scalability, high reliability and multichannel connectivity.

Wealth Management

CLPS has in-depth industry knowledge and solutions in the field of wealth management, and constantly develops and innovates according to the needs of clients. The company has successfully developed and managed a variety of IT systems for Chinese and global clients, including the development of asset management system, core insurance system, pension system for well-known international investment bank, large international insurance group, and leading asset management corporation. The company also provided development, operation, and maintenance for data analysis and business management systems of China's national financial information platform, China's national clearing house, stock exchange, and several large security institutions in China. In addition, the company has developed mobile terminal for multiple comprehensive financial service providers and consumer finance platforms both in China and globally.

E-Commerce

By constantly improving its capabilities, the company has gradually extended its main service offerings from banking and financial institutions to e-Commerce industry. The company has rapidly developed and accumulated certain skills in online platforms, cross-border e-commerce, logistics, and back-end technology, such as big data analysis, and intelligent decision-making among others. The company provides IT system development delivery for domestic and international clients, including a global online trading project for a top US e-Commerce company. The company developed the global terminal, payment, and risk control system for a well-known online ticketing website. In addition, CLPS has developed the website and product market data analysis for a leading and international travel e-commerce platform, and the e-Commerce platform for a large investment holding group in China.

Automotive

With the extensive experience of CLPS in the IT services application in the financial and e-commerce industries, and its innovative implementation of cutting-edge technology, such as big data, artificial intelligence and robotic process automation (RPA), it has also extended its business to automotive industry.

The company's business scope in terms of services:

Consulting Services

Revenues from consulting services are recognized from time-and-expense basis contracts as the related services are rendered assuming all other basic revenue recognition criteria are met. Under time-and-expense basis contracts, the company is reimbursed for actual hours incurred at pre-agreed negotiated hourly billing rates.

The company provides consulting services to its clients in the banking, wealth management, e-commerce, and automotive industries, among others.

Solution Services

Revenues from fixed-price customized solution contracts require the company to perform services for systems design, planning and integrating based on customers' specific needs which requires significant production and customization. In the same contract, the company is generally required to provide post-contract customer support (PCS) for a period from three months to one year (PCS period) after the customized application is delivered.

CLPS provides customized solution services to the company's clients in the banking, wealth management, e-commerce, and automotive industries, among others.

The company is also an IT solution services provider in China and globally. The company offers its clients over a decade of experience providing Chinese and global financial institutions with business and technological know-how, including cloud computing and big data. The company has accumulated an in-depth knowledge base that enables it to provide end-to-end customized solutions for its clients. The performance from the company's R&D center supports its ability to offer its clients creative solution design, especially in the areas of new information technology such as blockchain.

The company offers software project development, maintenance and testing solution services, including COBOL, Java, .NET, Mobile and other technology applications. Specifically, the company assists its clients in three aspects adopting and applying the most suitable technologies to ensure that software solutions are designed with information security and intellectual property rights protection in mind, building and managing a dedicated or leveraged software development, maintenance and testing quality, and efficiency testing, and providing onshore and offshore IT solution services to ensure turn-key delivery.

The company launched its scenario-based digital currency application solution, which aims to enable financial institutions to drive growth in the digital economy. Gaining traction in the recent years, global financial institutions have accelerated the creation of financial ecosystems that can support digital currency, which led for CLPS to launch such solution. This solution leverages CLPS's global services delivery capability and its expertise in banking, e-commerce, payment, risk control, digital marketing, and mobile development, among other areas. In addition, by integrating bank-enterprise interaction, smart contract, aggregate payment, retail settlement, supply chain management, marketing and promotion as an end-to-end service platform, a trading platform based on digital currency payment scenarios can be developed, helping financial institutions accelerate adoption and widespread use of digital currency.

A key strategic target of the People's Bank of China, digital RMB has achieved significant progress in terms of application scenarios, transaction volume, number of accounts opened, and an expanded pilot scheme to more areas. Launching the pilot version of digital RMB application in major app stores, its introduction at the Beijing 2022 Winter Olympics, and its intended use in the 19th Asian Games all indicate that digital RMB are becoming more mature. Through this solution, CLPS will be able to facilitate Chinese financial institutions create a better digital RMB application ecosystem, penetrate the market opportunity quickly, and expand customer acquisition channels. In addition, the solution can be customized based on corporate client's demands, enabling a wide range of application scenarios.

The company will continue to develop its new IT solutions to meet the evolving needs of its Chinese and global financial institutional clientele drawing upon the forward-looking research of its R&D center.

Other Services

CLPS Virtual Banking Platform (CLB)

CLB is a unique and successful training platform for IT talents owned by CLPS. For more than ten years, the company has been focusing on recruiting, training, developing and retaining human capital and talents. The company has been developing and continuously upgrading its CLB to train specialized financial IT personnel in order to differentiate itself from general IT developers. CLB is one of the crucial components of its TCP. It contains a full set of banking application modules covering areas, such as core banking, credit cards, and wealth management, incorporated with cutting-edge technologies, such as JAVA, Android & iOS, HTML, blockchain, cloud computing and big data.

Recruitment and Headhunting

As per client's request, the company is capable of providing the most suitable person for a position. The company maintains more than 100 talent acquisition staff with rich industry background and knowledge. The company's recruitment centers are well equipped of advanced technology, such as cloud platforms, big data, and robotic process automation (RPA), to accelerate the talent acquisition process.

Fee-For-Service Training

Under the fee-for-service training, the company incurs charges for clients based on their training needs. Generally, it includes domain knowledge, technology skills, data security and management compliance training, soft skills for personnel; and English language skills including verbal and business correspondence for all level, especially for those who need to communicate with global customers directly on a daily basis. However, the training content and approach can be customized based on the client's training needs.

Strategy

The key elements of the company's strategy are to continue to invest in research and development, deepen domain expertise and develop specific solutions for target industry verticals; capture new growth opportunities through strategic alliances and acquisitions; and continue to implement its global expansion strategy. The company intends to pursue additional revenue opportunities from existing Chinese and global clients, which include many of the leading companies in its financial industry.

Customers

The company's clients include large corporations headquartered in China and globally which include, among others:

Banking or their China-based IT centers - Citibank, HSBC, Standard Chartered Bank (China) Ltd., The Bank of East Asia, Limited, Bank of China (Hong Kong) Limited, ANZ Bank, and Bank of Communications.

Wealth Management - AIA, CUP Data, First Data, and Orient Securities.

E-Commerce - eBay, PayPal, Greendot Shanghai, Stubhub, and Gumtree.

Automotive and Technology - SAIC Motors, Rising Auto, Sony, Cisco, AGFA Healthcare, Neusoft, and Kodak.

By serving both Chinese and global clients on a common platform, the company is able to leverage the shared resources, management, industry expertise and technology know-how to attract new business and remain cost competitive.

Sales and Marketing

The company has invested in building a broad sales force and marketing team. As of June 30, 2023, the company's business development teams consisted of full-time sales and marketing personnel, including sales managers, each of whom is responsible for a designated sales region or client account.

Research and Development (R&D)

The company's research and development expenses were $8.3 million for the year ended June 30, 2023.

Competition

Domestically, the company faces competition from the following major competitors: Shenzhen Forms Syntron Information Co., Ltd., Sunline Tech, Amarsoft and CSII. These competitors are all domestic listed companies and possess a considerable market share in IT services industry. Internationally, the company's competitors include Wipro, TCS Consultancy, and Infosys Limited.

Intellectual Property Rights

The company's primary trademark portfolio consists of five trademarks. In addition to trademark protection, the company owns 3 URL designations and domain names, including clps.com.cn, clpsglobal.com, and clpsgroup.com.cn.

History

CLPS Incorporation was founded in 2005. The company was incorporated under the laws of the Cayman Islands in 2017.