Summary of Key Points from the Equity Research Report on China Software Sector Industry Overview - The report focuses on the China software industry, particularly highlighting the performance of 18 covered software companies in the third quarter of 2025 (3Q25) [3][11]. - There is a noted recovery in earnings, with total net profit rising by 92% year-on-year (y-o-y) for the covered companies [10][11]. Core Insights - **Earnings Recovery**: The significant recovery in earnings is attributed to limited downside from tighter IT budgets, as the base is low, and ongoing cost control measures are expected to continue driving earnings recovery [3][4]. - **Market Dynamics**: The competitive landscape is improving, with smaller players exiting the market, which may benefit larger firms [3]. - **Revenue Drivers**: AI and localization are identified as key revenue drivers, with specific companies like Yonyou and Kingdee expected to benefit from AI monetization [4][9]. Company-Specific Highlights - **Sangfor**: - Rated "Buy" with a target price of RMB 144.00, implying an 18% upside. The company is expected to benefit from improved demand for HCI and software-defined storage amid AI adoption [24]. - **Yonyou**: - Rated "Buy" with a target price of RMB 21.00, indicating a 43% upside. The company is projected to grow at a CAGR of 12% from 2025 to 2027 [24]. - **Kingdee**: - Rated "Buy" with a target price of HKD 18.20, suggesting a 24% upside. Expected revenue growth at a CAGR of 12.5% over 2024-2027 [24]. - **Kingsoft Office**: - Rated "Buy" with a target price of RMB 353.00, indicating a 7% upside. The company is well-positioned in software localization and AI function optimization [24]. - **ThunderSoft**: - Rated "Buy" with a target price of RMB 82.00, suggesting a 25% upside. The company is expected to see robust demand for on-device AI [24]. Investor Sentiment - Investors are showing strong interest in AI applications and their monetization potential, particularly in ERP systems [4][9]. - There is a focus on high-quality AI A-share software names seeking H-share listings, such as Yonyou and Intsig, due to their valuation discounts [4]. Risks and Challenges - **Sector Risks**: Potential risks include a weak macroeconomic environment leading to tighter IT budgets, intense competition, and policy support falling short of expectations [6][24]. - **Valuation Concerns**: Some investors express concerns regarding high valuations, particularly for companies like Kingsoft Office, although others believe the valuations are reasonable given the earnings visibility [5]. Conclusion - The China software sector is experiencing a notable recovery, driven by AI and localization trends. Key players are positioned to benefit from these trends, although risks related to macroeconomic conditions and competition remain pertinent. Investors are advised to consider these dynamics when evaluating opportunities in the sector.

Investment Rating - The overall industry rating is positive, expecting returns to exceed the CSI 300 index by more than 5% in the next six months [33] Core Insights - The computer industry index fell by 3.03% during the week of November 10-16, 2025, ranking 29th among 31 first-level industries, but has risen 18.24% year-to-date, outperforming the CSI 300 index by 0.62 percentage points [3][27] - OpenAI launched the GPT-5.1 series flagship model, focusing on enhancing user experience and conversation engagement, with two models: GPT-5.1 Instant for daily interactions and GPT-5.1 Thinking for advanced reasoning [4][11] - Alibaba and Tencent are actively developing AI intelligent agents, with Alibaba's "Qianwen" project aiming to compete directly with ChatGPT, and Tencent planning to introduce an AI agent within WeChat to assist users [15][17] - Kimi K2 Thinking, a new generation of open-source thinking agent, has achieved significant advancements in reasoning and tool usage capabilities, outperforming other models in various benchmarks [20][23] Summary by Sections Industry Key Events Review - OpenAI released GPT-5.1, optimizing user experience with enhanced models for different interaction types [11] - Alibaba initiated the "Qianwen" project to create a personal AI assistant, leveraging its leading position in the open-source model market [15] - Tencent is exploring AI capabilities within WeChat, aiming to enhance user task completion through AI [17] Market Review - The computer industry index decreased by 3.03% for the week, but has increased by 18.24% since the beginning of the year, outperforming the CSI 300 index [27] - The top five gainers in the computer industry for the week included Haixia Innovation (+33.1%) and Yingfang Software (+19.3%), while the top five losers included Fangzhi Technology (-19.91%) and Chunzong Technology (-17.43%) [29][31] Investment Recommendations - The report recommends focusing on companies like Kingsoft Office, Feng Assistant, and Yonyou Network, as well as those involved in AI applications and computing power demands, such as Haiguang Information and Lenovo Group [5][31]

Summary of the Conference Call on China IT Services & Software Industry Industry Overview - The conference call focused on the **China IT Services & Software** industry, specifically the performance of A-share companies in **3Q25**. - **60%** of the covered companies reported a **miss** in results for 3Q25, compared to **27%** in 2Q25, indicating a trend of muted growth in the sector [1][2][4]. Key Insights - **Revenue Trends**: The overall revenue growth for IT service/software companies remained soft, with a **3% YoY decline** in the IT Services/Cybersecurity sub-sector. In contrast, the AI sector experienced the highest revenue growth at **13% YoY** [3][20]. - **Opex Control**: Companies are exercising ongoing operational expenditure (Opex) control, which has led to a **5% YoY decline** in Opex for the ERP SaaS sector [23]. - **AI Monetization**: Companies with capabilities to monetize AI-related applications, such as **Kingdee** and **iFlytek**, are expected to see better growth prospects [2][4]. Company Performance - **Kingdee**: Maintained as the top pick due to its resilient ERP SaaS business and potential for AI monetization. Reported a **3Q25 subscription ARR** increase of **18% YoY** to **Rmb3.86 billion** [4][23]. - **VenusTech**: Identified as the least preferred pick, with a **45% YoY revenue decline** in 3Q25 due to soft downstream demand. The company's recovery path is uncertain [4][28]. - **Yonyou**: Reported a **4% YoY revenue growth** but faced operational losses. The company is expected to struggle to reach break-even this year [23]. Sector Performance - **Overall Sector Growth**: The IT services industry recorded a **14.3% YoY revenue growth** in 9M25, while the software products and information security sectors posted **10.9%** and **6.9%** growth, respectively [9][12]. - **Cybersecurity Sector**: Revenue declined by **3% YoY** in 3Q25, indicating ongoing challenges in demand [28]. - **Automobile Software Services**: Companies like **ThunderSoft** reported a **43% YoY revenue increase**, driven by smart IoT demand, although gross margins were under pressure [26]. Market Outlook - The near-term outlook for the sector remains cautious, with expectations of continued soft demand from downstream customers. Actual recovery is anticipated to take time [2][20]. - The AI sector is expected to continue its growth trajectory, but traditional business budgets are likely to be constrained, impacting overall IT spending [2][20]. Additional Insights - **Revenue Growth by Segment**: The AI sector's revenue growth was the strongest at **13%**, while IT services and cybersecurity sectors faced declines [20]. - **Cost Control Measures**: Companies are focusing on stringent cost control, with Opex in the ERP SaaS sector declining by **5% YoY** [23]. - **Future Expectations**: Companies are optimistic about AI deployment and its potential to drive future growth, but they remain cautious about traditional business segments [2][20]. This summary encapsulates the key points discussed during the conference call, highlighting the current state and future outlook of the China IT Services & Software industry.

Investment Rating - The report maintains an "Outperform the Market" rating for the company [6][4][17] Core Insights - The company experienced a revenue decline of 2.7% year-on-year for the first three quarters of 2025, with total revenue reaching 5.584 billion yuan. However, it achieved a net profit attributable to shareholders of -1.398 billion yuan, marking a 3.9% year-on-year improvement in losses [1][10] - In Q3 alone, the company reported revenue of 2.003 billion yuan, a 3.7% increase year-on-year, continuing the growth trend observed since Q2 [1][10] - The cloud service revenue for the first three quarters was 4.298 billion yuan, accounting for 77% of total revenue, with a year-on-year increase of 2.3 percentage points [2] - The company’s core product, Youyou BIP, generated 2.15 billion yuan in revenue for the first three quarters, reflecting a 15.8% year-on-year growth, with Q3 growth reaching 31.9% [2] Revenue and Profitability - Revenue from large enterprise clients grew by 13.5% year-on-year in Q3, totaling 3.617 billion yuan for the first three quarters, a 2.4% increase year-on-year [3] - The company’s small and medium-sized enterprise segment turned profitable, with Q3 revenue growth of 6.8% [3] - The government and public organization segment faced a 29% decline in revenue year-on-year, primarily due to tightened budgets and extended project cycles [3] Future Projections - The company is expected to benefit from increasing AI demand and a growing share of cloud services, with projected revenues of 9.963 billion yuan, 10.903 billion yuan, and 12.169 billion yuan for 2025, 2026, and 2027 respectively [4][13] - The forecasted net profit attributable to shareholders is expected to improve from -554 million yuan in 2025 to 2.56 billion yuan in 2026 and 10.51 billion yuan in 2027 [4][13] Financial Metrics - The report provides detailed financial forecasts, including revenue growth rates and profit margins, indicating a gradual recovery in profitability over the next few years [5][15]

Core Points - On November 11, 2025, the company received a notification from its controlling shareholder, Beijing Yonyou Technology Co., Ltd., regarding the release of part of the shares held by Zhaofeng Investment [1] - The number of shares released from pledge amounts to 75,000,000 shares, which represents 8.14% of the shares held by Zhaofeng Investment and 2.19% of the company's total share capital [1]

股票简称：用友网络 股票代码：600588 编号：临 2025-084 用友网络科技股份有限公司 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担个别及连带责任。 重要内容提示： 一、本次股份解除质押基本情况 2024 年 11 月 7 日，北京用友科技将其持有公司 75,000,000 股无限售流通股 质押给云南国际信托有限公司，详见公司于 2024 年 11 月 12 日披露的临 2024-079 号公告。 公司于 2025 年 11 月 11 日接到北京用友科技通知，获悉上述股份已解除质 押，具体情况如下： | 股东名称 | 北京用友科技有限公司 | | --- | --- | | 本次解质股份（股） | 75,000,000 | | 占其所持股份比例（%） | 8.14 | | 占公司总股本比例（%） | 2.19 | 关于控股股东部分股份解除质押的公告 经与北京用友科技确认，北京用友科技本次解除质押的股份将根据资金需要 用于后续质押，并根据后续质押情况及时履行告知义务，公司将及时予以披露。 二、控股股东及其一致行动人累计质押股份 ...

Core Viewpoint - The announcement reveals that the controlling shareholder of the company, Beijing Yonyou Technology Co., Ltd., has released a pledge of 75,000,000 shares, impacting the overall pledged shares held by the shareholder [1] Summary by Relevant Sections Shareholding Structure - Beijing Yonyou Technology holds 921,161,630 shares, accounting for 26.96% of the total share capital of the company [1] - After the release of the pledge, the total number of pledged shares by Beijing Yonyou Technology is 370,220,000, which represents 40.19% of its holdings and 10.83% of the company's total share capital [1] Pledged Shares - As of November 11, 2025, Beijing Yonyou Technology and its concerted parties hold a total of 1,421,079,511 shares, making up 41.59% of the company's total share capital [1] - Following the release of the pledge, the cumulative number of pledged shares by Beijing Yonyou Technology and its concerted parties is 446,720,000, which constitutes 31.44% of their holdings and 13.07% of the company's total share capital [1]

Core Viewpoint - Yonyou Network's stock has experienced fluctuations, with a year-to-date increase of 35.79% but a recent decline of 6.48% over the past five trading days, indicating potential volatility in investor sentiment [1] Financial Performance - For the period from January to September 2025, Yonyou Network reported a revenue of 5.584 billion yuan, a year-on-year decrease of 2.68%, while the net profit attributable to shareholders was -1.398 billion yuan, reflecting a year-on-year increase of 3.93% [2] - The company has cumulatively distributed 5.509 billion yuan in dividends since its A-share listing, with 204 million yuan distributed over the past three years [3] Shareholder Information - As of September 30, 2025, Yonyou Network had 198,300 shareholders, an increase of 7.71% from the previous period, with an average of 17,235 circulating shares per shareholder, a decrease of 7.15% [2] - The top ten circulating shareholders include Hong Kong Central Clearing Limited, which holds 93.5425 million shares, a decrease of 46.6474 million shares from the previous period [3] Market Activity - On November 11, Yonyou Network's stock price fell by 2.02%, trading at 14.57 yuan per share, with a total market capitalization of 49.786 billion yuan [1] - The stock has appeared on the "Dragon and Tiger List" four times this year, with the most recent instance on August 8, where it recorded a net buy of -172 million yuan [1]

Summary of Yonyou Network (600588 CH) Research Report Company Overview - **Company**: Yonyou Network - **Ticker**: 600588 CH - **Industry**: Software - **Market Cap**: CNY 53.68 billion (USD 7.54 billion) [7][15] Key Financial Highlights - **3Q25 Performance**: - Revenue: CNY 2,003 million, up 4% year-on-year (y-o-y) [19] - Net Loss: Narrowed by 31% y-o-y, but still below expectations [19] - Operating Cash Flow: Close to breakeven at CNY -6 million, best since 2021 [22] - Gross Margin: Improved to 44% from 42% in 3Q24 [20] - **AI Orders**: - 3Q25 AI orders reached approximately CNY 410 million, up from CNY 320 million in 1H25, indicating strong enterprise demand [4] - AI orders accounted for 13% of total revenue in 9M25 [21] - **Subscription Transition**: - Active push towards subscription model, with 3Q25 Annual Recurring Revenue (ARR) growing 16% y-o-y [4] - Subscription contract liabilities grew 27% y-o-y, indicating acceleration [28] Strategic Insights - **AI as Growth Driver**: - AI is expected to be a significant revenue growth driver, with projections of AI orders reaching CNY 2.4 billion by 2027, constituting 20% of total revenue [3] - **Long-term Potential**: - Transition to a subscription model may cause short-term revenue pressure but is expected to enhance revenue visibility and margins in the long run [4] Earnings Forecast Adjustments - **Revenue Forecasts**: - 2025-27 revenue estimates cut by 2% due to aggressive subscription transition [5] - Expected revenue CAGR of 12% for 2025-27 [6] - **Earnings Estimates**: - Earnings estimates for 2025-27 reduced significantly due to subscription transition impacts [32] - Expected to turn profitable in 2027, previously anticipated in 2026 [5] Valuation and Target Price - **Target Price**: Adjusted to CNY 21.00 from CNY 22.00, implying a potential upside of approximately 34% from the current share price [6][45] - **Valuation Multiples**: - Yonyou trades at 5.2x 1-year forward Price-to-Sales (PS) compared to Kingdee's 5.8x, with expectations for Yonyou's valuation to catch up [3] Risks and Considerations - **Downside Risks**: - Weaker-than-expected macroeconomic conditions could impact demand [56] - Intense competition in the cloud business may affect market share and margins [56] - Potential loss of key customers could lead to earnings volatility [56] Conclusion - Yonyou Network is positioned for long-term growth driven by AI and subscription transitions, despite facing short-term challenges. The company maintains a "Buy" rating with a revised target price reflecting optimistic future performance.

2025 年第二次临时股东会会议资料 用友网络科技股份有限公司 2025 年第二次临时股东会 会议资料 二零二五年十一月十七日 1 2025 年第二次临时股东会会议资料 用友网络科技股份有限公司 2025 年第二次临时股东会 会议须知 根据《用友网络科技股份有限公司股东会议事规则》有关规定，为维护投资者的合法 权益，确保公司本次股东会的顺利召开，特制定会议须知如下，望出席股东会全体人员遵 守： 一、 本次股东会设秘书处，具体负责会议有关程序方面的事宜。 二、 股东会期间，全体出席人员应以维护股东的合法权益，确保会议正常秩序和议 事效率为原则，认真履行法定职责。 三、 出席本次股东会的股东及股东代表依法享有发言权、咨询权、表决权等各项权 利。股东要求发言或就有关问题提出咨询时，应在会议开始后的 15 分钟内向会议秘书处 登记，并填写《股东发言申请表》。股东会秘书处将按股东登记时间先后，安排股东发言。 四、 股东发言时应首先报告其姓名和所持有的公司股份数。为了保证会议的高效率， 每位股东发言应简洁明了，发言内容应围绕本次股东会的议题。 五、 本次股东会共有 1 项议案。 二零二五年十一月十七日 2 2025 年第 ...