Core Insights - The establishment of the China Electronics Spring Research Institute was announced on October 28 in Shenzhen, with key officials in attendance [1] Group 1: Research Focus - The Spring Research Institute will focus on integrated circuits and advanced computing [1] - It aims to create research centers, verification centers, capability centers, and standards centers [1] Group 2: Service Capabilities - The institute will promote new technologies and product selection, verification, and testing [1] - It will develop service capabilities in patent licensing, product incubation, project research, consulting, and testing verification [1]

Core Viewpoint - China Software's stock has shown a positive trend with a year-to-date increase of 11.69%, reflecting strong market interest and performance in the IT services sector [1][2]. Financial Performance - For the first half of 2025, China Software reported revenue of 2.242 billion yuan, representing a year-on-year growth of 13.01% [2]. - The company experienced a net profit loss of 74.5263 million yuan, but this was an improvement with a year-on-year reduction in losses of 72.67% [2]. Stock Market Activity - As of October 28, the stock price was 52.15 yuan per share, with a trading volume of 972 million yuan and a turnover rate of 2.24% [1]. - The stock has seen significant trading activity, with a net inflow of 33.4813 million yuan from main funds and notable large orders [1]. Shareholder Structure - As of June 30, the number of shareholders decreased by 9.92% to 156,200, while the average number of circulating shares per person increased by 11.02% to 5,401 shares [2][3]. - Major shareholders include Hong Kong Central Clearing Limited and Southern CSI 500 ETF, both of which increased their holdings [3]. Business Segmentation - The company's revenue composition includes 42.43% from industry solutions, 33.08% from proprietary software products, and 23.86% from service-oriented business [1].

Group 1 - The company has successfully signed a three-year operation project for the Wuhan Cybersecurity Base Intelligent Computing Center, advancing its intelligent computing business nationwide [1] - The project will leverage the geographical advantages of the Wuhan National Cybersecurity Talent and Innovation Base to build an intelligent computing platform that integrates computing power services, ecological aggregation, and technological innovation [1] - As the exclusive domestic operating service provider for the Cybersecurity Intelligent Computing Center, the company will manage resources such as computing power, storage, and networks, supporting the construction of a domestic AI large model training and deployment center [1] Group 2 - The company aims to provide comprehensive intelligent computing services, including "computing power + algorithms + data + scenarios," to support the development of the AI industry cluster in Wuhan [1] - The company will integrate computing resources and industry solutions to offer full lifecycle services covering model development, training, and inference deployment for governments, enterprises, and research institutions [1] - The company plans to utilize the talent and research advantages of the Cybersecurity Intelligent Computing Center to promote deep integration of computing resources, technology platforms, and talent pools, fostering a virtuous development ecosystem in Wuhan [1] Group 3 - In the context of rapid AI technology development, the company is committed to building a product, solution, and service capability that deeply integrates software and hardware, efficiently connecting various components from intelligent IoT terminals to agent applications [2] - The company will continue to focus on intelligent computing operations, following a path of "technology-driven, industry-enabled," optimizing its service system and strengthening ecological collaboration [2] - The company aims to provide high continuity and high availability of computing power to promote the large-scale implementation of AI technology in the industry and deepen digital transformation [2]

Core Insights - China Software International has signed a three-year operation project for the Wuhan Cybersecurity Base Intelligent Computing Center, enhancing its intelligent computing business nationwide [1] - The project aims to create an intelligent computing platform that integrates computing power services, ecological aggregation, and technological innovation, leveraging the advantages of the Wuhan National Cybersecurity Talent and Innovation Base [1] Group 1 - The company will operate the intelligent computing center as the exclusive domestic agent, managing resources such as computing power, storage, and network [1] - The center will support the construction of a domestic AI large model training and deployment center, providing comprehensive intelligent computing services including "computing power + algorithms + data + scenarios" for the AI industry cluster in Wuhan [1] - The company plans to integrate computing resources and industry solutions to offer lifecycle services covering model development, training, and inference deployment for government, enterprises, and research institutions [1] Group 2 - The company is committed to a "full-stack, full-scenario AI strategy," focusing on deep collaboration between software and hardware to meet diverse scene demands [2] - The company aims to deepen its intelligent computing operations along the path of "technology-driven, industry-enabled," optimizing service systems and strengthening ecological collaboration [2] - The goal is to provide high continuity and high availability of computing power, facilitating the large-scale implementation of AI technology in industries and promoting digital transformation [2]

Core Insights - China Software International has signed a three-year operation project for the Wuhan Cybersecurity Base Intelligent Computing Center, enhancing its intelligent computing business nationwide [1] - The project aims to create an intelligent computing platform that integrates computing power services, ecological aggregation, and technological innovation [1] Group 1: Project Overview - The company will serve as the exclusive domestic operating service provider for the Intelligent Computing Center, managing resources such as computing power, storage, and network [1] - The center will focus on building a domestic AI large model training and deployment center, providing comprehensive intelligent computing services including "computing power + algorithms + data + scenarios" for the AI industry cluster in Wuhan [1] Group 2: Strategic Direction - The company is guided by a "full-stack, full-scenario AI strategy," aiming to develop deep collaboration between software and hardware, covering diverse scene requirements [2] - The company plans to deepen its intelligent computing operations, optimizing service systems and strengthening ecological collaboration to provide high continuity and availability of computing power [2]

Group 1: Software ETF Performance - The software ETF has a turnover rate of 4.16% and a transaction volume of 238 million yuan, with a total scale of 5.677 billion yuan, ranking first among comparable funds [3] - The software ETF experienced a net outflow of 54.0446 million yuan recently, but over the past 10 trading days, it has attracted a total of 417 million yuan [3] - As of October 24, 2025, the software ETF's net value has increased by 14.66% over the past three years, with the highest monthly return since inception being 39.35% and an average monthly return of 10.06% [3] Group 2: Key Holdings in Software Sector - As of September 30, 2025, the top ten weighted stocks in the CSI Software Service Index (930601) include iFlytek, Tonghuashun, Kingsoft Office, and others, accounting for a total of 62.41% of the index [3] Group 3: Industry Trends and Developments - The domestic operating system market is expected to reach 25 billion yuan by 2025, with significant growth in domestic IDE tools, such as SnapDevelop, which has attracted over 20,000 registered users [4] - The core industrial software market in China is projected to grow from 31.86 billion yuan in 2024 to 76.5 billion yuan by 2029, with a compound annual growth rate of approximately 19.1% [4] - The development of the domestic software industry is accelerating due to the national push for localization in the context of major technological competition [4]

Investment Rating - The report maintains an "Accumulate" rating for the industry [5] Core Insights - The domestic computer industry is experiencing accelerated localization, driven by national strategies aimed at establishing a technology powerhouse by 2035, with R&D investment expected to exceed 3.6 trillion yuan in 2024, a 48% increase from 2020 [1][10][13] - The domestic computing power sector is entering a performance explosion phase, with significant year-on-year growth in inventory and revenue for key companies like Cambrian and Haiguang Information [3][24] - The market for domestic information technology (IT) is projected to reach 2.66 trillion yuan by 2026, with a steady push for localization across various sectors, including finance and telecommunications [2][19] Summary by Sections Section 1: National Strategy and R&D Investment - The "14th Five-Year Plan" emphasizes high-quality development and technological self-reliance, with a focus on enhancing the national innovation system and increasing R&D investment [1][10][14] - China ranks first globally in high-level international journal publications and patent applications for five consecutive years [1][13] Section 2: Market Demand and Localization - The domestic IT market is witnessing a shift towards localization, with significant demand from both government and commercial sectors [2][18] - The "2+8+N" strategy is being implemented for the replacement of IT systems, with rapid progress in the financial sector [2][20] Section 3: Performance of Domestic Computing Power Companies - Cambrian reported a revenue of 1.727 billion yuan in Q3 2025, a 1333% increase year-on-year, with a net profit of 567 million yuan [3][24] - Haiguang Information achieved a revenue of 9.490 billion yuan in the first three quarters of 2025, reflecting a 54.65% year-on-year growth [3][24] Section 4: Key Software Companies - Key software companies such as China Software and Kingsoft have shown recovery in their performance, with significant increases in revenue and net profit in Q2 2025 [3][26] - The report highlights the importance of software in supporting the growth of the domestic computing power sector [4][30]

Group 1: Software ETF Performance - The Software ETF has a turnover of 3% during trading, with a transaction volume of 1.69 billion yuan [3] - Over the past month, the Software ETF has an average daily transaction volume of 604 million yuan, ranking first among comparable funds [3] - In the last two weeks, the Software ETF's scale increased by 410 million yuan, achieving significant growth and ranking first in new scale among comparable funds [3] - In the last 10 trading days, there were net inflows of funds for 7 days, totaling 1.017 billion yuan [3] - As of October 22, 2025, the net value of the Software ETF has increased by 12.43% over the past three years [3] - The highest monthly return since inception was 39.35%, with the longest consecutive monthly gains being 3 months and a maximum increase of 69.40% [3] - The average return during the months of increase is 10.06% [3] Group 2: Key Holdings and Market Insights - As of September 30, 2025, the top ten weighted stocks in the CSI Software Service Index include iFlytek, Tonghuashun, Kingsoft Office, and others, accounting for a total of 62.41% [3] - Huatai Securities indicates that the AI application ecosystem is becoming increasingly complete, with rapid penetration of large model technology in finance, healthcare, and education [3] - The commercialization process of AI is exceeding market expectations, supported by increased policy backing and accelerated domestic computing power construction [3] - Key enterprises in the AI industry chain are expected to continue benefiting, with investment opportunities in computing infrastructure and AI application software [3] Group 3: Manufacturing Sector Insights - CITIC Construction Investment believes that China's manufacturing sector has largely achieved its 2025 phase goals and will continue to develop towards a medium-level position in the global manufacturing power by 2035 [4] - The industrial sector has become a core driver of GDP growth, with high prosperity in equipment manufacturing, high-tech manufacturing, and digital products [4] - As manufacturing PMI continues to improve and industrial AI accelerates, the importance of technological self-reliance is highlighted against the backdrop of increased US tariffs and software export restrictions [4] - Key areas such as CAD, CAE, and industrial operating systems are expected to see continuous breakthroughs [4] - Investors can also consider the Software ETF linked fund (012620) to capitalize on AI software investment opportunities [4]

Core Viewpoint - China Software's stock price has shown a mixed performance in recent trading sessions, with a year-to-date increase of 8.01% but a decline of 2.83% over the last five trading days [1] Financial Performance - For the first half of 2025, China Software achieved operating revenue of 2.242 billion yuan, representing a year-on-year growth of 13.01% [2] - The company reported a net profit attributable to shareholders of -74.5263 million yuan, which is a significant year-on-year increase of 72.67% in losses [2] Shareholder Information - As of June 30, 2025, the number of shareholders for China Software was 156,200, a decrease of 9.92% from the previous period [2] - The average number of circulating shares per shareholder increased by 11.02% to 5,401 shares [2] Dividend Distribution - Since its A-share listing, China Software has distributed a total of 415 million yuan in dividends, with 13.8956 million yuan distributed over the past three years [3] Institutional Holdings - As of June 30, 2025, the top ten circulating shareholders included Hong Kong Central Clearing Limited, which increased its holdings by 535,800 shares to 12.5531 million shares [3] - Southern CSI 500 ETF and other funds also increased their holdings, indicating growing institutional interest [3]

Group 1 - The three major indices opened lower, with the CSI Computer Theme Index rising by 0.05%, driven by gains in China Software (over 2%), Kingsoft Office, and Runhe Software (over 1%) [1] - The CSI Hong Kong-Shenzhen Cloud Computing Industry Index fell by 0.64%, with Runhe Software and Kingsoft Office both increasing by over 1% [1] - The Computer ETF (159998) experienced a pullback, with a latest circulation of 2.703 billion shares and a circulation scale of 2.811 billion yuan as of October 23 [1] - The Hong Kong-Shenzhen Cloud Computing ETF (517390) also declined by 0.64%, with a latest circulation of 279 million shares and a circulation scale of 478 million yuan [1] Group 2 - The China Communications Standards Association announced the authorization of the China Academy of Information and Communications Technology to conduct testing and verification of computing power interconnectivity capabilities based on industry standards [2] - The Computer ETF (159998) tracks the CSI Computer Theme Index, which includes stocks from companies involved in IT services, application software, system software, and computer hardware [2] - The Hong Kong-Shenzhen Cloud Computing ETF (517390) closely follows the CSI Hong Kong-Shenzhen Cloud Computing Industry Index, with major holdings including Tencent Holdings and Zhongke Shuguang [2] Group 3 - Huatai Securities projects a 15% year-on-year growth in net profit attributable to shareholders for the telecommunications sector in Q3 2025, with a 73% growth expected when excluding major operators and ZTE [3]