HiSoft Technology International

Hisoft on Thursday continued its upward trend that started around last week of December 2011. The stock surged 19.84% to notch $14.62 at 1:30PM EST, NewYork after they announced unaudited financial results for the 4^th quarter and year ended 31^st December 2011yesterday.

The quarterly net revenues were USD 64.9 million; up 52.8% QoQ basis also the yearly net revenues were USD 219 million up 49.4% YoY basis. They successfully surpassed their expected yearly revenues of USD 216 million announced in November 2011, this estimate was then considered to be on the higher side as analyst were expecting the revenues to be USD 210 million but now when we look back its justified that Hisoft kept its promises thus taking their expected performance in 2012 to a new level.

This strong growth is revenues were driven by strong demand across all service lines and geographic markets. Hisoft’s CEO and Director Mr. Loh announced that “the robust results reflect the initial yield from this strategy as well as the disciplined execution to expand our significant client base, deepen levels of client penetration and accelerate inroads into Greater China, ending the fourth quarter with our domestic China business contributing 20.3% of our total revenues” moreover he added that “last year, the number of significant clients with revenue contributions over USD 1 million have also increased besides the outstanding performance of Consulting and Packaged solutions services which together helped them to build on such a statistic which provides them with a strong momentum for 2012”.

Hisoft Tech. operates in the Business Software & Services industry providing outsourced information technology and development services in Asia, North America and Europe to companies in technology, financial services and insurance sectors. The company offers a wide range of services which comprises of testing and automation of software systems and developing application systems. It was established in 1996 and is currently headquartered in Dalian, the People’s Republic of China.

After Wednesday’s result announcement there is an unusual increase in intraday volume which was 0.65 million almost 7 times its average 3 month volume of 86k.

If we go by the numbers Hisoft seems to be a company which shows good prospects for future, its projected long term EPS growth is 21.7% which is higher than its competitors like Citrix Systems Inc. and Cognizant Tech. Systems Corp. also it has a decent ROE of 6.2% which is almost one third its competitors but it is still considerable seeing the pace at which its growing. The short interest of Hisoft is currently 9.4, highest in Business Software Services Industry which describes that there are huge short positions outstanding in the markets which have to covered sooner later thus pushing the stock prices up.

For 2012 Hisoft targets the net yearly revenues to be USD 285 million and commits to remain focused on execution of strategy of expanding their services portfolio with higher value-added solutions thus driving profitable and sustainable growth.