The low-profile company posted strong double-digit profit growth last year on rising demand for its data-transfer services
Key Takeaways:
Tianju Dihe said its net profit last year increased as much as 51% on the back of solid revenue growth
Demand for the company’s services is on the rise as China’s digital economy expands, helped by favorable government policies
Tianju Dihe (Suzhou) Data Co. Ltd. (2479.HK) is a hardly a name that rolls off the tongue. But this low-key company is happy to stay behind the scenes, where its data-transfer services are powering strong profit growth as it thrives in the current upbeat climate for higher-profile Chinese tech companies that are some of its key customers.
In a filing last Friday, Tianju Dihe said it expects to post a net profit of 50 million yuan ($6.9 million) to 53 million yuan for last year, up 43% to 51% from 2023, when it reports its first annual results since going public in Hong Kong last June. Tianju Dihe shares rose 2.7% on Monday after the announcement.
The company didn’t provide much detail in its announcement, other than attributing the earnings jump to a big revenue increase, especially from its core application programming interface (API) business. But the company’s midyear report released last August helps to explain what likely propelled the large profit gain.
Tianju Dihe’s revenue increased 48% year-on-year to 259 million yuan in the first six months of last year, while its gross profit grew by an even faster 62% to 56 million yuan, indicating that its margins improved. The company’s net profit for the six months, after the deduction of listing expenses, totaled 20 million yuan, up 42% from a year earlier.
Tianju Dihe earns the bulk of its revenue from API services that facilitate exchanges of data. An API is essentially a …