Yucheng Technologies Limited (Nasdaq: YTEC), a leading provider of IT solutions to China's banking industry, today announced a joint venture with NTT Data Corporation, a leading provider of IT services and solutions in Japan, that will rapidly develop Yucheng's E-Banking ASP into an unparalleled leader in hosted e-banking for China.
The joint venture expands the scope of the E-Banking ASP and allows it to grow more rapidly than Yucheng's resources and expertise alone permitted. The platform will continue to maximize economies of scale by providing limited customization; however, the forecasted increase in clients and significant capital investments necessary to support the platform will result in a 2012 breakeven target.
The E-Banking ASP target market includes hundreds of small to medium-sized banks in China. Navigating the operational complexity of serving this market is where NTT DATA's core competency in hosted IT systems will add value to the joint venture. NTT DATA will contribute to the joint venture with its experiences from its ANSER Unit Operation Center and Core Operating System Data Center, as well as experience operating outsourced platforms.
Yucheng will contribute its E-Banking ASP technology, existing client base and local market expertise. In 2009, Yucheng firmly established the market for the E-Banking ASP, which focuses on the specific needs of Rural Credit Unions and smaller City Commercial Banks in China. Under Yucheng's stewardship, the E-Banking ASP effectively grew the number of contracts by 275% compared to the previous year. Yucheng's strong reputation and deep understanding of the Chinese banking industry will ensure that the joint venture continues to utilize local best practices in developing and marketing the E-Banking ASP.
After the official launch of the joint venture on January 19, 2010, NTT DATA will hold a controlling interest of 51% in the joint venture and Yucheng will hold the minority interest of 49%. To ensure continuity until appropriate appointments are made, Yucheng's COO, Shuo Zeng, will act as interim CEO.
Mr. Toshio Iwamoto, Senior Executive Vice President of NTT DATA CORPORATION, stated, "NTT DATA has been interested in expanding into the Chinese financial services industry for some time; however, we understand the value of local expertise when entering a new country. When the opportunity arose to collaborate with Yucheng, we knew this would be a winning combination."
Mr. Weidong Hong, CEO and Chairman of Yucheng Technologies, stated, "NTT DATA is globally renowned for its caliber of outsourced solutions, which will be a true asset as the E-Banking ASP continues to grow and serve a rapidly expanding client base."