Group 1 - The software leading ETF (159899) has seen a net inflow of funds for three consecutive trading days, accumulating a total scale of 290 million yuan [1] - This ETF closely tracks the CSI Software Index, covering leading companies in various segments such as basic software, application software, and industrial software, with AI application-related concepts accounting for 35% of its weight [1][2] - The top ten holdings in the index include companies like Tuowei Information and Kingsoft Office, which are expected to benefit from the industry boom driven by AI technology [1] Group 2 - The AI application sector is experiencing a new wave of technological breakthroughs and ecosystem construction, highlighted by the launch of new features in the Qianwen APP, which has surpassed 10 million monthly active users within two months of its launch [2] - Ant Group has also introduced a new product called "Wuli," further expanding the AI application ecosystem [2] - Policy support is evident, with recent publications emphasizing the importance of application-driven development in the AI industry, and successful AI implementations in regulatory systems showcasing its potential in governance [3] Group 3 - Significant progress in technological self-innovation is marked by the collaboration between Zhipu and Huawei to open-source the first multi-modal SOTA model trained on domestic chips, indicating a breakthrough in AI infrastructure [3] - Market analysis suggests a shift in algorithm mechanisms from pursuing "traffic" to building "trust," which may lead to a systematic re-evaluation of content value from official media and professional publishing companies [3] - As domestic large models penetrate multiple scenarios, the AI application sector is entering a phase of accelerated industrialization [3]

Group 1 - The cloud office concept rose by 4.52%, ranking 6th among concept sectors, with 43 stocks increasing, including Guangyun Technology which hit the daily limit up by 20% [1] - Notable gainers in the sector included Tianyuan Dike, Huichang Technology, and Liandi Information, with increases of 18.61%, 17.02%, and 13.48% respectively [1] - The sector saw a net inflow of 1.662 billion yuan, with 27 stocks receiving net inflows, and 7 stocks exceeding 100 million yuan in net inflow, led by People’s Daily with 683 million yuan [2][3] Group 2 - The top three stocks by net inflow ratio were People’s Daily at 22.86%, Tianyuan Dike at 21.02%, and Geer Software at 18.31% [3] - The trading volume for People’s Daily was 68.281 million yuan, while Tianyuan Dike had a trading volume of 58.546 million yuan [3] - Guangyun Technology had a trading volume of 31.964 million yuan with a daily increase of 20% [4]

Group 1 - The core viewpoint of the news highlights the significant surge in the A-share software sector, with the Software 50 ETF (159590) experiencing a rise of over 5% and attracting more than 270 million yuan in investments over two days [1][4] - On January 13, a government action plan was released to promote the high-quality development of industrial internet platforms, aiming to cultivate over 450 influential platforms and achieve over 120 million industrial device connections by 2028, with a platform penetration rate exceeding 55% [3] - Major components of the Software 50 ETF saw substantial gains, including a rise of over 8% for Yonyou Network, over 7% for Tonghuashun and Zhongke Xingtu, and over 6% for 360 [4][5] Group 2 - The AI industry is experiencing a continuous increase in popularity, with significant advancements in capital, application, and technology. Notably, two leading general model companies, Zhipu and MiniMax, successfully listed on the Hong Kong Stock Exchange, reflecting strong market recognition for the AI sector [6] - The integration of AI into various fields is accelerating, with AI for Science emerging as a new research paradigm and the rise of Generative Engine Optimization (GEO) emphasizing high-quality content in model outputs [6] - Securities firms predict that 2026 will be a pivotal year for AI applications, driven by continuous improvements in model capabilities, decreasing computing costs, and accelerated monetization processes [7]

Core Viewpoint - Kingsoft Office's stock price has shown significant growth this year, with a year-to-date increase of 18.36% and a recent surge of 12.35% over the past five trading days, indicating strong market interest and performance [1]. Financial Performance - For the period from January to September 2025, Kingsoft Office reported a revenue of 4.178 billion yuan, reflecting a year-on-year growth of 15.21%. The net profit attributable to shareholders was 1.178 billion yuan, which represents a year-on-year increase of 13.32% [2]. - Since its A-share listing, Kingsoft Office has distributed a total of 1.897 billion yuan in dividends, with 1.159 billion yuan distributed over the past three years [3]. Shareholder Information - As of September 30, 2025, the number of shareholders for Kingsoft Office reached 34,800, an increase of 14.09% compared to the previous period. The average number of circulating shares per person decreased by 12.35% to 13,304 shares [2]. - The top ten circulating shareholders include significant institutional investors, with Hong Kong Central Clearing Limited holding 10.2761 million shares, a decrease of 6.924 million shares from the previous period [3].

Core Viewpoint - The total margin balance of the Sci-Tech Innovation Board reached 288.907 billion yuan on January 13, showing an increase of 1.127 billion yuan compared to the previous trading day [1] Group 1: Margin Balance - The financing balance amounted to 287.888 billion yuan, increasing by 1.178 billion yuan from the previous trading day [1] - The margin trading balance decreased to 10.19 billion yuan, down by 0.051 billion yuan from the previous trading day [1] Group 2: Individual Stock Performance - On January 13, 311 stocks on the Sci-Tech Innovation Board experienced net financing inflows, with 10 stocks having net inflows exceeding 100 million yuan [1] - Kingsoft Office topped the list with a net financing inflow of 276 million yuan [1] - Other notable stocks with significant net financing inflows include Chengdu Xian Dao, Zhongke Xingtu, Zhongxin International, Rongchang Bio, Western Superconducting, and Green Harmony [1]

与前一交易日相比，科创板融资余额环比增加的共有311只，融资净买入超千万元的共有123只，融资净 买入在500万元至1000万元的有55只，融资净买入在100万元至500万元的有97只，融资净买入不足百万 元的有36只。融资余额环比减少的科创板股中，减少金额超千万元的有88只，减少金额居前的有寒武 纪、华虹公司、芯源微等，融资余额分别减少3.35亿元、1.84亿元、1.80亿元。 融资净买入金额最多的是金山办公，该股最新融资余额31.61亿元，环比上一日增加2.76亿元，该股当日 下跌2.16%，融资净买入金额居前的还有成都先导、中科星图、中芯国际等，净买入金额分别为2.07亿 元、1.71亿元、1.56亿元。 科创板融资余额环比前一日增加11.78亿元，其中，24股融资余额环比增加超5000万元，融资净买入居 前的有金山办公、成都先导、中科星图等股。 证券时报·数据宝统计显示，截至1月13日，科创板两融余额合计2889.07亿元，较上一交易日增加11.28 亿元，其中，融资余额合计2878.88亿元，较上一交易日增加11.78亿元。 科创板股中，最新融资余额超亿元的有501只，其中，融资余额在10亿元以上的 ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Software and IT Services - **Growth Forecast**: The sector is expected to achieve a revenue growth of **12% YoY in 2026E**, slightly down from **13% YoY in 2025E** due to macroeconomic factors and soft demand in various verticals [18][20]. Core Insights - **AI Monetization**: Accelerated AI monetization is anticipated to drive growth, alongside trends in software import substitution [18][20]. - **Employee Count**: A **5% YoY decline** in employee numbers was observed in 2025, with expectations for a **1% YoY increase** in 2026, leading to an average **4.6 percentage points (ppts)** improvement in operating profit margin (OPM) [2]. - **Valuation**: Current average trading at **5.4x 12-month forward P/S**, which is **1 standard deviation (SD) below historical averages**, indicating an undemanding sector valuation despite solid share price performance [13][14]. Company-Specific Insights - **Top Picks**: - **Kingdee**: Expected to benefit from resilient top-line growth and improved profitability [3][8]. - **Meitu**: Strong earnings growth anticipated due to rising subscription revenue and productivity tools expansion [3][8]. - **Kingsoft Office**: Upgraded to Buy due to better growth outlook driven by WPS 365 and import substitution trends [3][8]. - **Downgrades**: - **Kingsoft Corp** downgraded to Neutral due to weaker game business growth [3]. Financial Performance - **2025 Recap**: Share prices of covered software companies rose by **16% on average** in 2025, underperforming the MSCI China Index which rose by **23%** [11][12]. - **Revenue Estimates**: Revenue forecasts for 2025-2027 have been revised down by **2% on average** for 16 companies under coverage [10]. Sector Spending Breakdown - **Major Sectors**: Software spending is concentrated in manufacturing & natural resources (28%), financials (25%), government (14%), and communications/media/services (12%), collectively accounting for **75% of total software spending in 2026E** [20][21]. Risks and Cautions - **Cybersecurity and Property Software**: Cautious outlook on cybersecurity and property software due to muted demand and declining property sales [1][48]. - **SOE Revenue Growth**: SOE revenue growth was **1.0% YoY** in 11M25, indicating stable demand for software despite slight declines in growth rates [24][25]. Conclusion - The China software and IT services sector is poised for solid growth driven by AI and import substitution, but faces challenges from macroeconomic volatility and sector-specific demand issues. Key companies like Kingdee, Meitu, and Kingsoft Office are highlighted as strong investment opportunities, while caution is advised in areas like cybersecurity and property software.

Accessible version Rating Change: BUY | PO: 408.00 CNY | Price: 325.50 CNY More positive on growth outlook; upgrade to Buy We upgrade Kingsoft Office to Buy from Neutral, as we are turning more positive on its growth outlook, driven by 1) rapid WPS 365 business growth with client base expansion (e.g., POEs and local SOEs) and product upgrade into a one-stop AI collaborative office platform, 2) WPS to-C business revenue recovery with accelerated AI monetization in domestic market and strong user base growth ...

Economic News - The Ministry of Commerce stated that multiple rounds of consultations have been held between China and the EU to address the EU's case against Chinese electric vehicles, agreeing to provide general guidance on price commitments for Chinese exporters [1] - The U.S. has escalated sanctions against Iran, imposing a 25% tariff on any country conducting business with Iran [1] - The National Development and Reform Commission issued guidelines to strengthen government investment fund planning, focusing on supporting emerging industries such as new information technology and new energy [1] - The Ministry of Agriculture aims to increase soybean oil production capacity and self-sufficiency, promoting higher yields in grain and oil crops [1] - The U.S. Federal Reserve chair candidates are being interviewed, with Rick Rieder from BlackRock being a notable candidate [1] - Tianjin's housing authority has mandated that new home prices cannot fluctuate more than 10% from the registered price to prevent rapid price declines [1] - The official confirmation of the J-10CE fighter jet achieving combat success, marking a significant milestone for China's export aircraft [1] - The Ministry of Health and other departments released regulations on the management of deceased patients' services, emphasizing that medical institutions should not engage in funeral services [1] - The Ministry of Industry and Information Technology plans to enhance the role of enterprises in technological innovation and implement new policies to support high-quality development of specialized small and medium-sized enterprises [1] - The State Administration for Market Regulation released 160 national standard samples to improve product quality and promote technological advancement [1] Company Insights - WuXi AppTec expects to achieve a revenue of 45.456 billion yuan in 2025, a year-on-year increase of 15.84%, with a net profit of 19.151 billion yuan, up 102.65% [4] - Zhitex New Materials' stock has seen a continuous rise, with a 198.57% increase over six trading days, leading to a temporary suspension of trading [4] - Jinlongyu plans to invest approximately 1.2 billion yuan in a new solid-state battery production line in Shenzhen [4] - Yonghui Supermarket anticipates a negative net profit for 2025, indicating a potential operational loss [4] - Blue Arrow Electronics intends to acquire at least 51% of Chengdu Xinyi Technology Co., with a valuation not exceeding 675 million yuan [4] Industry Analysis - The securities industry is expected to see improved performance in 2026 due to supportive policies and accelerated consolidation, despite challenges from global geopolitical events and trade issues [5][6] - The average daily trading volume has increased since early 2025, indicating improved market activity and investor engagement [6] - Regulatory support for technology growth companies has led to increased IPO and financing activities, benefiting brokerage revenues [7] - The stability and sustainability of proprietary investments are crucial for brokerage performance, with a focus on balancing high returns and risk management [8] - The securities industry is likely to experience further consolidation, with notable mergers already occurring among major firms [10]

Core Insights - The report from CICC highlights a significant surge in AI model development and application, driven by the listing of independent model vendors and upcoming model releases, indicating a robust investment opportunity in the AI sector [1][2]. AI Model Layer - Domestic models such as DeepSeek and ByteDance's Doubao are expected to update their foundational models around the Spring Festival, with DeepSeek's open-source model V4 anticipated to be released in mid-February, showcasing capabilities comparable to Anthropic's Claude [2]. - Major overseas models like Anthropic, OpenAI, and Gemini are also expected to enhance their model capabilities in the first two quarters of the year, with leading model vendors focusing on breakthroughs through reinforcement learning and long-context engineering, which is likely to accelerate revenue growth [2]. AI Application Layer - Despite not exceeding market expectations in the past year, AI applications are increasingly integrating with models and scenarios to accelerate revenue realization. The report anticipates a rise in AI application penetration rates this year due to improved model capabilities and the integration of vertical scenario data [3]. - Key areas of focus for investment include AI Coding with high revenue certainty, AI Health with strong user payment willingness, and AI Pharmaceuticals within the AI for Science sector [3]. - Currently, AI revenue constitutes a small portion of total revenue for application companies, suggesting that the market may apply a Sum of the Parts (SOTP) valuation to these companies, potentially reshaping the overall valuation framework [3]. AI Infra Layer - Ongoing research in academia and industry is focused on enhancing models' continuous learning and long-context memory capabilities, which are essential for achieving Artificial General Intelligence (AGI) [4]. - The need for increased memory capacity due to long-context requirements is driving demand for storage and database solutions, as model vendors explore ways to optimize memory for continuous and online learning [4]. Related Companies - Recommended AI application-related companies include Kingsoft Office (688111.SH), Dingjie Zhizhi (300378.SZ), Foxit Software (688095.SH), and Tax Friend (603171.SH) [5]. - Recommended AI infrastructure-related company is Sangfor Technologies (300454.SZ) [5].