Investment Rating - The investment rating for the company is "Buy," indicating a potential return exceeding 10% relative to the CSI 300 index over the next six months [20]. Core Insights - The company is focusing on a multi-dimensional layout in the "AI + HarmonyOS" market, leveraging its partnership with Huawei to enhance its service offerings across various sectors including finance, government, and energy [2][3]. - The company has experienced a revenue growth decline during the transition period from 2023 to 2024, with expected growth rates of -14.44% and -0.97% respectively, but anticipates a recovery with growth rates of 6.74% and 9.37% in the following years [2][13]. - The company aims to build a comprehensive AI technology stack, including AI-native ERP solutions and various AI applications tailored for key industries [2][3]. Summary by Sections 1. IT Services and Business Outlook - The company is stabilizing its IT service core business, focusing on AI and HarmonyOS integration, and has maintained its leading position in the Huawei cloud ecosystem for seven consecutive years [2][3]. - Revenue projections for 2024 show a total of approximately 16,950.73 million, with a slight decline expected, followed by a recovery in subsequent years [11][16]. 2. Revenue Forecast - The Technical Professional Services Group (TPG) is expected to see a revenue decline of 1.7% in 2024, while the Internet Information Technology Services Group (IIG) anticipates a 4.0% increase due to growth in Agent products and HarmonyOS solutions [13][16]. - Revenue growth rates for TPG are projected at 7.00%, 10.00%, and 10.00% from 2025 to 2027, while IIG is expected to grow at 5.00% annually during the same period [14][15]. 3. Financial Performance - The company's net profit attributable to shareholders is projected to decline by 28.10% in 2024, with subsequent growth rates of 19.46%, 18.21%, and 12.77% in the following years [11][19]. - Earnings per share (EPS) are expected to increase from 0.19 in 2024 to 0.30 by 2027, reflecting a positive trend in profitability [11][19].

Market Overview - On July 17, the Hang Seng Index fell by 0.08%, closing at 24,498.95 points, with a total net inflow of HKD 1.855 billion through the southbound trading channel [1] - The total trading volume for the southbound trading was HKD 134.723 billion, with a net buy of HKD 1.855 billion [1] Southbound Trading Details - In the Shanghai Stock Exchange southbound trading, the total trading amount was HKD 85.121 billion, with a net buy of HKD 1.668 billion [1] - In the Shenzhen Stock Exchange southbound trading, the total trading amount was HKD 49.602 billion, with a net buy of HKD 0.187 billion [1] Active Stocks - The most actively traded stock in the Shanghai Stock Exchange southbound trading was Xiaomi Group-W, with a trading amount of HKD 38.09 billion, despite a closing price drop of 2.01% [1][2] - Other notable stocks included Guotai Junan International and Alibaba-W, with trading amounts of HKD 37.54 billion and HKD 34.26 billion, respectively [1] - In the Shenzhen Stock Exchange southbound trading, Xiaomi Group-W also led with a trading amount of HKD 26.80 billion [2] Net Buy/Sell Analysis - The highest net buy was for Xiaomi Group-W at HKD 6.06 billion, while the highest net sell was for Pop Mart at HKD 4.78 billion, which closed down by 0.87% [1][2] - In the Shenzhen Stock Exchange, Meituan-W had the highest net buy at HKD 3.30 billion, closing up by 1.13%, while Tencent Holdings had the highest net sell at HKD 3.79 billion, closing up by 0.10% [2]

Group 1 - The Hang Seng Index fell by 0.08% on July 17, with southbound trading totaling HKD 134.72 billion, including HKD 68.29 billion in buying and HKD 66.43 billion in selling, resulting in a net inflow of HKD 1.85 billion [1] - The southbound trading through Stock Connect (Shenzhen) had a total turnover of HKD 49.60 billion, with net buying of HKD 0.19 billion, while Stock Connect (Shanghai) had a turnover of HKD 85.12 billion, with net buying of HKD 1.67 billion [1] - The most actively traded stock by southbound funds was Xiaomi Group-W, with a total turnover of HKD 64.88 billion, followed by Alibaba-W and Guotai Junan International with turnovers of HKD 52.03 billion and HKD 50.25 billion respectively [1] Group 2 - Among the stocks with net buying, Meituan-W led with a net inflow of HKD 6.06 billion, while China Construction Bank and Xiaomi Group-W followed with net inflows of HKD 5.91 billion and HKD 3.15 billion respectively [1][2] - The stock with the highest net selling was Pop Mart, with a net outflow of HKD 8.44 billion, and Tencent Holdings and Kangfang Biotech also experienced significant net selling of HKD 3.79 billion and HKD 0.76 billion respectively [1][2] - Meituan-W has seen continuous net buying for 9 days, with a total net inflow of HKD 72.14 billion during this period [2]

Group 1 - Southbound funds recorded a total transaction of 134.72 billion HKD with a net inflow of approximately 1.86 billion HKD on July 17 [1] - Major net purchases included Meituan-W (6.06 billion HKD), China Construction Bank (5.91 billion HKD), and Xiaomi Group-W (3.15 billion HKD) [1] - Significant net sales were observed in Pop Mart (844.33 million HKD), Tencent Holdings (379.45 million HKD), and Kangfang Biotech (76.18 million HKD) [1] Group 2 - Meituan-W saw a price increase of 1.13% with net purchases of 2.76 billion HKD from the Shanghai-Hong Kong Stock Connect [1] - China Construction Bank experienced a price drop of 0.95% with net purchases of 5.91 billion HKD [1] - Xiaomi Group-W declined by 2.01% with net purchases of 6.06 billion HKD from the Shanghai-Hong Kong Stock Connect and net sales of 290.13 million HKD from the Shenzhen-Hong Kong Stock Connect [1] Group 3 - Guotai Junan International fell by 0.16% with net purchases of 1.45 billion HKD from the Shanghai-Hong Kong Stock Connect [2] - Li Auto-W increased by 9.73% with net sales of 204.21 million HKD from the Shanghai-Hong Kong Stock Connect and net purchases of 2.91 billion HKD from the Shenzhen-Hong Kong Stock Connect [2] - Pop Mart decreased by 0.87% with net sales of 47.79 million HKD from the Shanghai-Hong Kong Stock Connect and 36.64 million HKD from the Shenzhen-Hong Kong Stock Connect [2]

Core Insights - On July 17, 2025, Xiaomi Group-W (01810), Guotai Junan International (01788), and Alibaba-W (09988) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 3.809 billion, 3.754 billion, and 3.426 billion respectively [1] - In the Shenzhen-Hong Kong Stock Connect, Xiaomi Group-W (01810), Alibaba-W (09988), and Li Auto-W (02015) led the trading volume, with amounts of 2.680 billion, 1.777 billion, and 1.720 billion respectively [1] Southbound Stock Connect - Top Active Companies - Xiaomi Group-W (01810) had a trading amount of 3.809 billion with a net buying amount of +606 million [2] - Guotai Junan International (01788) recorded a trading amount of 3.754 billion with a net buying amount of +145 million [2] - Alibaba-W (09988) had a trading amount of 3.426 billion with a net buying amount of +30.17 million [2] - Other notable companies included Pop Mart (09992) with a trading amount of 2.162 billion and a net selling amount of -478 million, and Li Auto-W (02015) with a trading amount of 1.997 billion and a net selling amount of -204 million [2] Shenzhen-Hong Kong Stock Connect - Top Active Companies - Xiaomi Group-W (01810) had a trading amount of 2.680 billion with a net selling amount of -290 million [2] - Alibaba-W (09988) recorded a trading amount of 1.777 billion with a net buying amount of +51.36 million [2] - Li Auto-W (02015) had a trading amount of 1.720 billion with a net buying amount of +29.1 million [2] - Other significant companies included Tencent Holdings (00700) with a trading amount of 1.627 billion and a net selling amount of -379 million, and Pop Mart (09992) with a trading amount of 1.316 billion and a net selling amount of -366 million [2]

Company Overview - China Software International is a leading global software and IT service provider, established in 2000 and listed on the Hong Kong Stock Exchange since 2003, with a compound annual revenue growth rate of 28.7% [2] - The company employs approximately 70,000 staff and serves clients in 47 countries and regions, consistently ranking in the top 100 of Gartner's global IT service market share [2] - In 2023, the company ranked 12th among China's top software and information service enterprises [2] Financial Performance - As of December 31, 2024, the company reported total revenue of 16.951 billion yuan, a year-on-year decrease of 0.97%, and a net profit attributable to shareholders of 513 million yuan, down 28.1% year-on-year [1] - The gross profit margin stood at 22.07%, with a debt-to-asset ratio of 37.94% [1] Market Position and Valuation - The company's price-to-earnings (P/E) ratio is 25.16, ranking 39th in the industry, while the average P/E ratio for the software services sector is -10.97 [1] - Other companies in the industry have significantly lower P/E ratios, such as Luyou Technology at 3.68 and Jingtou Transportation Technology at 3.75 [1] Strategic Focus - The company positions itself as a "digital transformation service expert," focusing on cloud-driven AIGC applications, AIoT, digital twin technology, ERP consulting, and digital transformation services [2] - It aims to enhance its business quality and efficiency through innovation in next-generation AI technologies, contributing to the development of China's digital society and economy [2] - The company is aligned with national technology strategies, focusing on key information infrastructure and promoting domestic innovation in various sectors, including finance, smart cities, and intelligent vehicles [2]

Investment Rating - The report maintains a positive investment rating for the domestic computing power and AI application sectors, highlighting significant growth potential in these areas [6]. Core Insights - A new round of AI "arms race" has commenced globally, with the release of major models like Grok4 and Kimi K2 expected to significantly boost domestic computing power demand and application ecosystems [4][10]. - The report emphasizes the importance of focusing on domestic AI computing power, particularly in chip design, advanced wafer manufacturing, and liquid cooling technologies [4]. - Various AI application sectors are highlighted, including office automation, programming, terminal AI, ERP/CRM, judicial applications, financial/taxation services, education, healthcare, and customer service [4]. Summary by Sections Market Review - During the week of July 7-11, the CSI 300 index rose by 0.82%, the SME index increased by 0.73%, and the ChiNext index saw a rise of 2.36%. The computer sector (CITIC) experienced a growth of 3.37% [2]. Industry News - Notable company developments include Zhuoyi Information's plan to reduce its shareholding by up to 2,271,445 shares, representing no more than 1.88% of total shares [3]. - Wanjie Technology received nine invention patent certificates from the National Intellectual Property Administration [3]. Weekly Insights - The report suggests focusing on key players in the domestic AI computing power sector, such as Cambrian and Haiguang Information in chip design, and SMIC in advanced wafer manufacturing [4]. - The report also identifies various AI application companies across different sectors, including Kingsoft Office, Hehe Information, and Keda Xunfei in office automation and education [4]. Recent Developments - The report outlines significant investments and acquisitions in the AI sector, including Amazon's potential additional investment in Anthropic and Google's acquisition of AI programming startup Windsurf's core talent and technology [16][17]. - The report notes that xAI, led by Elon Musk, is negotiating a new funding round that could value the company at up to $200 billion, reflecting the growing interest and investment in AI technologies [10][18]. AI Application Ecosystem - The report highlights the rapid growth of AI applications, with OpenAI and Anthropic achieving annual recurring revenues (ARR) of $10 billion and $3 billion, respectively [22]. - Domestic AI applications like deepseek and Doubao are showing significant commercial potential, with user engagement metrics comparable to leading international AI applications [22]. Global AI Company Rankings - The report provides a ranking of global AI companies based on their ARR, with OpenAI leading at $10 billion, followed by Anthropic at $3.008 billion [23].

Group 1: Policy and Development - The State Council issued an opinion to enhance the "efficient handling of key matters" mechanism, emphasizing efficient resource allocation and the prevention of waste in government services [1] - The opinion aims to promote the application of new technologies like AI in government services while ensuring safety and improving user experience [1][2] - China's digital government development index (EGDI) improved from 0.8119 in 2022 to 0.8718 in 2024, ranking 35th globally, an increase of 8 places from 2022 [2] Group 2: Market Growth and Trends - The overall market size for government cloud services in 2024 is projected to be 93.94 billion RMB, with a year-on-year growth of 18.4% [2] - The dedicated government cloud market is expected to reach 66.33 billion RMB, growing by 19.0% year-on-year, while the public government cloud market is projected at 17.24 billion RMB, with a growth of 12.2% [2] - The cloud operation service market is anticipated to grow by 26.1%, reaching 10.36 billion RMB [2] Group 3: Industry Insights - The government cloud market is experiencing stable growth, with infrastructure holding a significant market share, driven by increased demand for computing power due to AI model development [3] - The integration of AI in government services is expected to enhance efficiency and reduce costs, with a broad market potential across various sectors like procurement, finance, and taxation [3] - The push for AI in government services is largely driven by top-down initiatives, indicating a rapid implementation of AI+government services [3] Group 4: Key Companies and Innovations - China Telecom is focusing on "AI + digital government" initiatives, leveraging data value and enhancing security in public services [4] - SenseTime, a leading AI algorithm provider, is applying its technology in smart city and public management projects, improving service efficiency through AI solutions [4] - China Software International is providing comprehensive AI + government services, helping governments transition to intelligent operations through AI, big data, and cloud computing [4] - Tencent is utilizing its social media platforms and cloud capabilities to create digital solutions for public services, integrating various government services into its ecosystem [5]

Core Viewpoint - The strategic partnership between ChinaSoft International and Beijing Silicon Flow Technology marks a significant step in addressing industry pain points and advancing digital transformation in enterprises, indicating a new phase of collaborative efforts in the digital intelligence wave [1][2]. Group 1: Partnership Overview - ChinaSoft International has over 20 years of experience in various industries, including finance, telecommunications, and manufacturing, with a portfolio of more than 1,000 large-scale projects [2]. - Silicon Flow Technology, established in August 2023, focuses on AI infrastructure and has made notable achievements in adapting domestic chips, enhancing model efficiency on Ascend chips [2][3]. - The collaboration aims to tackle the "last mile" issue in enterprise digital transformation by leveraging the complementary strengths of both companies [2]. Group 2: Technological Developments - In February 2025, Silicon Flow launched the DeepSeek R1/V3 inference service in collaboration with Huawei Cloud, achieving performance comparable to high-end GPU deployments [4]. - The partnership has developed four core platforms that address key aspects of enterprise digital transformation, creating a complete ecosystem from computing power support to application implementation [4][5]. Group 3: Platform Features - The high-performance AI platform integrates AI algorithms and computing resources to assist enterprises in data analysis, particularly beneficial in the financial sector for investment decision-making and risk assessment [5]. - The model service platform offers various AI model resources for customized development, enabling businesses to create tailored solutions, such as product recommendation models in e-commerce [6]. - The knowledge management platform organizes internal and external knowledge for efficient employee access, enhancing problem-solving capabilities in manufacturing [7]. - The intelligent application development platform allows enterprises to automate business processes, such as developing intelligent customer service applications to handle high volumes of inquiries during peak sales periods [8]. Group 4: Future Directions - The partnership is expected to expand into sectors like energy, transportation, and education, focusing on AI-driven solutions such as intelligent grid scheduling and personalized learning platforms [10]. - This collaboration not only addresses current digital transformation challenges but also proposes a replicable and scalable model for other enterprises, encouraging further exploration in the digital intelligence landscape [11].

Core Viewpoint - China Software International (00354) has signed a strategic cooperation agreement with Beijing Silicon Flow Technology Co., Ltd. to jointly develop solutions that accelerate computing power and AI full-stack services, empowering enterprises in their digital transformation [1][2]. Group 1: Strategic Cooperation - The agreement aims to create a solution that integrates high-performance AI platforms with heterogeneous computing power, vector databases, graph databases, and search engines [1]. - The joint solution includes four core platforms: high-performance AI platform, model service platform, knowledge management platform, and intelligent application development platform [1][2]. Group 2: Implementation and Support - The "Three Stages and Nine Steps" AI professional service will be utilized to optimize customer model development efficiency and performance [2]. - Silicon Flow will provide product and technical support, while China Software International will handle project implementation and custom AI application development [2]. Group 3: Future Collaboration - The two companies will deepen their strategic collaboration to help enterprises seize AI opportunities and accelerate the large-scale application of technology [2]. - Key industries targeted for intelligent transformation include energy, finance, government, transportation, manufacturing, and public services [2].