Group 1 - The three major indices rebounded collectively, with the ChiNext Index rising by 1.6%, and sectors such as precious metals, gaming, batteries, and jewelry leading the gains [1] - The Huaxia ChiNext Software ETF (159256) saw a significant increase in its holdings, particularly in companies like Zhongke Chuangda, which rose over 6%, along with other holdings such as Shenzhou Taiyue, Kunlun Wanwei, and Tonghuashun also experiencing gains [1] - Tianfeng Securities' research report highlights that while the current market is dominated by general AI agents and large industry models, specialized agents that integrate industry knowledge and workflows are expected to mature in vertical fields such as gaming, healthcare, marketing, education, finance, and office work, driving industrial intelligent transformation [1] Group 2 - The Huaxia ChiNext Software ETF (159256) tracks the ChiNext Software Index (399264), focusing on 50 high-quality AI software stocks in the ChiNext market, with a strong emphasis on AI applications in financial technology, AI agents, and AI gaming [2] - The software development and IT services sectors account for a substantial 70% of the index, with key weighted stocks including Tonghuashun, Runhe Software, Softcom Power, Guiding Compass, Kunlun Wanwei, and Deepin Technology [2] - Related products include the Huaxia ChiNext Software ETF (159256), Huaxia ChiNext 200 ETF (159573), and the Artificial Intelligence AI ETF (515070) [2]

Group 1 - Zhongke Chuangda's stock increased by 5.1%, reaching 78.17 CNY per share, with a trading volume of 750 million CNY and a turnover rate of 2.65%, resulting in a total market capitalization of 35.959 billion CNY [1] - Zhongke Chuangda, established on March 7, 2008, and listed on December 10, 2015, is a leading global provider of intelligent operating systems and edge intelligent products and technologies [1] - The company's revenue composition includes software development (37.17%), technical services (31.38%), product sales and others (29.20%), and software licensing (2.24%) [1] Group 2 - Huazhong Fund's Huazhong Chuangye 50 ETF (159949) reduced its holdings by 221,400 shares in the second quarter, now holding 3.3233 million shares, which accounts for 0.9% of the circulating shares [2] - The estimated floating profit from this transaction is approximately 12.5954 million CNY [2] - The Huazhong Chuangye 50 ETF was established on June 30, 2016, with a current scale of 25.16 billion CNY and a year-to-date return of 39.29%, ranking 651 out of 4222 in its category [2]

Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 95.04 CNY per share [2][8]. Core Insights - The company reported a significant revenue increase of 37.44% year-on-year, reaching 3.299 billion CNY in the first half of 2025, with a net profit of 158 million CNY, up 51.84% year-on-year [2]. - The smart IoT business has become the core growth engine, achieving a revenue of 1.27 billion CNY, a substantial increase of 136.14% year-on-year, driven by continuous development in the AIoT sector [8]. - The company has maintained high R&D investment, amounting to 846 million CNY in the first half of 2025, representing 25.64% of its revenue, supporting product innovation under its core strategy of "Operating System + Edge Intelligence" [8]. - The release of the AI-native vehicle operating system, Drip OS 1.0 Evo, marks a significant advancement in the company's automotive strategy, integrating AI capabilities for enhanced performance [8]. - The company expects revenues of 7.231 billion CNY, 8.873 billion CNY, and 10.581 billion CNY for 2025, 2026, and 2027 respectively, with growth rates of 34.3%, 22.7%, and 19.2% [8]. Financial Summary - The company achieved a total revenue of 5.385 billion CNY in 2024A, with projected revenues of 7.231 billion CNY in 2025E, 8.873 billion CNY in 2026E, and 10.581 billion CNY in 2027E [4]. - The net profit for 2024A is projected at 407 million CNY, with expected growth to 501 million CNY in 2025E, 608 million CNY in 2026E, and 732 million CNY in 2027E [4]. - The earnings per share (EPS) is expected to increase from 0.89 CNY in 2024A to 1.09 CNY in 2025E, 1.32 CNY in 2026E, and 1.59 CNY in 2027E [4].

Core Viewpoint - The company, Zhongke Chuangda, maintains strong collaborations with major global chip manufacturers across different chip platforms for its operating system products and technologies [1] Group 1 - The company has established a partnership with Cambricon in the field of edge computing [1]

Group 1 - Zhongke Chuangda experienced a decline of 5.12% on September 2, with a stock price of 74.30 yuan per share, a trading volume of 1.97 billion yuan, a turnover rate of 7.07%, and a total market capitalization of 34.179 billion yuan [1] - Zhongke Chuangda Software Co., Ltd. is located in Haidian District, Beijing, and was established on March 7, 2008, with its listing date on December 10, 2015. The company specializes in intelligent operating systems and edge intelligent products and technology [1] - The revenue composition of Zhongke Chuangda includes software development at 37.17%, technical services at 31.38%, merchandise sales and others at 29.20%, and software licensing at 2.24% [1] Group 2 - According to data from the top ten heavy stocks of funds, one fund under Caitong Fund has a significant holding in Zhongke Chuangda. The Caitong CSI 500 Index Enhanced A (018633) held 21,900 shares in the second quarter, accounting for 1.01% of the fund's net value, ranking as the fourth-largest heavy stock [2] - The Caitong CSI 500 Index Enhanced A (018633) was established on July 13, 2023, with a latest scale of 37.779 million yuan. Year-to-date returns are 26.72%, ranking 1704 out of 4222 in its category; the one-year return is 48.81%, ranking 1830 out of 3781; and since inception, the return is 22.56% [2] - The fund managers of Caitong CSI 500 Index Enhanced A include Zhu Haidong, Gu Hongyuan, and Guo Xin, with varying tenures and performance records [2]

Core Insights - The company reported a significant increase in revenue and net profit for the first half of 2025, with total revenue reaching 3.299 billion yuan, a year-on-year growth of 37.44% [1] - The net profit attributable to shareholders was 158 million yuan, reflecting a year-on-year increase of 51.84% [2] - The company is experiencing accelerated growth in overseas markets, with notable revenue increases in Europe and America [2] Revenue Breakdown - Revenue from China was 1.742 billion yuan, up 12.96% year-on-year [2] - Revenue from Europe and America reached 1.105 billion yuan, showing a remarkable increase of 151.11% [2] - Revenue from Japan was 279 million yuan, with a year-on-year growth of 11.11% [2] Business Segments Performance - Smart Automotive segment generated 1.189 billion yuan in revenue, a growth of 7.85%, accounting for 36.03% of total revenue, with a gross margin of 46.02% [2] - Smart Software segment achieved 841 million yuan in revenue, up 10.52%, with a gross margin of 37.14% [2] - Smart IoT segment saw revenue of 1.270 billion yuan, a significant increase of 136.14%, representing 38.49% of total revenue, with a gross margin of 18.48% [2] Cost Structure and Profitability - The company optimized its cost structure, leading to improved profitability, with sales, management, and R&D expense ratios at 3.38%, 8.42%, and 17.23%, respectively, all showing year-on-year decreases [2] Product Development and Innovation - The company launched the "滴水OS 1.0 Evo" for smart vehicles, integrating AI and cockpit technologies, and collaborating with major firms like Qualcomm [3] - In the industrial automation sector, the company introduced new autonomous mobile robots and forklifts, enhancing its product offerings [3] AIoT Platform and New Products - The company’s AIoT platform combines AI, software, computing architecture, and smart hardware, with new products like TurboX AI glasses and Blink II MINI video conferencing machine [4] Future Outlook - The company is expected to see continued growth in net profit, with projections of 512 million yuan, 579 million yuan, and 686 million yuan for 2025, 2026, and 2027, respectively [4]

Summary of China Software 2Q25 Conference Call Industry Overview - The conference call focused on the **China Software** industry, particularly the performance of various software companies in the second quarter of 2025 (2Q25) and the first half of 2025 (1H25) - Average revenue growth for the covered companies was **9% YoY** in 1H25, with an average net margin of **-3%** due to weak seasonality in the first half [1][2] Key Company Performances - **Kingsoft Office, Thundersoft, and Sensetime** reported revenues in 2Q25 that exceeded expectations due to increased AI spending - **Glodon and Sangfor** showed better-than-expected net income in 2Q25, attributed to improved employee productivity [1] - **Yonyou** reported a revenue growth of **7% YoY** in 2Q25, recovering from a **-21% YoY** decline in 1Q25, supported by small and medium business (SMB) growth [9] - **Thundersoft** experienced a **50% YoY** revenue increase, driven by strong growth in its AIoT business [26] - **Glodon** faced a **-5% YoY** revenue decline, but net margin improved to **13%** due to product mix upgrades and cost management [17] Core Insights and Trends - Companies are focusing on: 1. **Monetization of AI tools** to provide value-added features [2] 2. **Diversification** into overseas markets or new categories to counteract slower IT spending in certain segments [2] 3. **Integration of AI** with core software products to capture a larger share of clients' budgets [2] - The average **P/E ratio** for China software companies increased to **55x-60x**, indicating early signs of AI monetization, while the average **EV/Sales** ratio rose to **8x-9x** [2] Company Ratings and Recommendations - **Buy** ratings maintained for **Empyrean** and **Kingdee** - **Neutral** rating for **Yonyou** - **Sell** ratings for **ZWSOFT, Thundersoft, Glodon, and Sangfor** [3] Earnings Revisions - **Yonyou**: Revised down 2025 net loss to **Rmb594m** from **Rmb517m** due to lower revenues during transformation [12] - **Glodon**: Revenue estimates revised down by **1%-3%** for 2025-28E, but earnings revised up by **18%/12%/2%/1%** due to improved productivity [20] - **Thundersoft**: Revenue estimates revised up by **8%/5%/4%** for 2025-27E, reflecting higher revenues from the IoT business [30] - **Sangfor**: Revenue estimates revised down by **9%/2%/1%** for 2025-27E due to lower security software revenues [46] Other Important Insights - **ZWSOFT** launched new products with enhanced 3D CAD features, which are expected to support long-term growth despite current muted growth in 3D CAD software [39] - **Sangfor** is expanding its cloud computing product offerings, which is expected to contribute to revenue growth [45] - The overall sentiment in the industry is cautiously optimistic, with expectations of improved productivity and revenue growth driven by AI integration and new product offerings [1][2][3]

Core Insights - The automotive industry is undergoing a profound transformation driven by the rapid development of artificial intelligence (AI), with AI expected to become the main theme by 2025 [2] - AI is evolving from being limited to driving systems to permeating the entire automotive value chain, including design, production, interaction, and operation [2] Group 1: AI Applications and Trends - The automotive sector is evolving towards embodied intelligent robots, with more manufacturers applying AI technologies across various scenarios, transforming vehicles from mere "driving tools" to intelligent entities with perception, decision-making, and execution capabilities [2] - The emergence of AIBox is reshaping automotive computing architecture, as the industry shifts towards an integrated edge-cloud hybrid AI model, combining real-time response advantages of edge computing with the powerful computing capabilities of the cloud [2] - The insufficient computing power for edge AI is becoming a bottleneck for the intelligent development of vehicles, leading to the creation of AIBox as a supporting platform for edge AI operations [2] Group 2: Human-Machine Interaction and Operating Systems - The trend of humanization in AI operating systems (AIOS) is becoming increasingly evident, particularly in human-machine interaction (HMI), with AI-driven voice assistants, predictive navigation, and personalized content making vehicles more like "intelligent partners" [3] - The launch of the AI-native vehicle operating system, Drip OS 1.0 Evo, marks a significant step towards a fully AI-driven era in automotive operating systems, integrating cockpit, intelligent driving, and cabin driving functionalities [3] - Drip OS is gradually embedding AI capabilities throughout the vehicle, exemplified by the AI cockpit solution based on the Qualcomm Ride SA8775 chip platform, which integrates multi-modal AI capabilities and AI Agent technology [3] Group 3: Innovative AI Deployments - The GUI Agent can intelligently recognize various screen components and convert natural language commands into executable interface operations without manual input [4] - The AI-enhanced sentinel utilizes external cameras for visual analysis, distinguishing between false alarms and real threats, providing all-day driving safety alerts and proactive protection [4] - The cabin has achieved intelligent perception and proactive recommendation services for occupants and the external environment through multi-modal technology [4] - The company aims to provide global automakers with diverse application scenarios, including intelligent cockpits, cabin-driving integration, and cabin-parking unification, focusing on core technologies in chip computing architecture and operating systems [4]

Summary of Zhongke Chuangda Conference Call Company Overview - Zhongke Chuangda focuses on integrated hardware and software solutions in the Internet of Things (IoT) sector, developing platform solutions that leverage various chip architectures and AI capabilities across multiple product categories, including handheld devices, edge computing, and AI conference video systems [1][2][4] Key Points and Arguments IoT Business Performance - In the first half of 2025, Zhongke Chuangda's IoT business generated revenue of 1.27 billion yuan, driven by handheld devices, edge computing, and AI products [1][6] - The company has maintained a competitive edge despite a decline in gross margin, attributed to the lower margins associated with hardware products [2][8] AI Native System - The launch of the first central computing AI native system, Drip Water OS, integrates large model capabilities with automotive interaction, emphasizing the trend of warehouse integration [1][3] - Collaboration with ByteDance has enabled 50-millisecond voice feedback and multimodal recognition capabilities, enhancing the automotive user experience [3] Automotive Sector Focus - Zhongke Chuangda is concentrating on in-car human-machine interaction systems, with significant applications of its 8,255 and 8,295 chips in the cockpit, and the 8,155 chip maintaining a strong presence in overseas markets [9] - The company anticipates substantial growth in the automotive sector, particularly in the areas of embodied intelligent robots and mixed AI demands [9] Global Market Expansion - The company has expanded its overseas presence to 16 countries and regions, leveraging its comprehensive software development and chip integration capabilities [10][11] - Zhongke Chuangda's strategy emphasizes technology-driven growth, ecosystem development, and a strong commitment to globalization [11] Future Outlook - While no specific numerical guidance was provided for the second half of 2025, Zhongke Chuangda remains optimistic about opportunities in the AI and large model industries, as well as the demand for edge computing [12] Additional Important Insights - The integration of supply chain, technology, and customer resources through partnerships, such as with Qualcomm, enhances Zhongke Chuangda's overall IoT platform capabilities [1][7] - The company's platform strategy ensures that fluctuations in individual product margins do not undermine its overall competitive advantage [8]

Core Insights - The AI sector experienced a general adjustment, with the ChiNext AI index showing a slight decline, while some stocks in the computing power segment remained active, such as Tianfu Communication, which surged over 10% to reach a historical high [1] - The ChiNext AI index has achieved an eight-week winning streak, with a monthly increase of 37.84%, outperforming other AI indices [3] - The performance of the ChiNext AI index has been driven by strong earnings and valuation improvements, suggesting potential investment opportunities in the future [3] Market Performance - The ChiNext AI index has increased by over 79% year-to-date, outperforming similar AI indices [3] - The index has recorded significant trading volumes, with over 60 billion yuan in transactions in a single week, marking a new high since its listing [1] Earnings Reports - Among the 49 disclosed mid-year earnings of the ChiNext AI index constituents, 30 companies reported positive net profit growth, driven by high demand for AI and computing power [5] - Notable performers include Xinyi Sheng and Ruijie Networks, with net profit growth rates exceeding 355% and 194%, respectively [5] ETF Insights - The ChiNext AI ETF (159363) saw a net subscription of 254 million units in a single day, indicating strong market interest [1] - The ETF has reached a new scale of over 4.2 billion yuan, with an average daily trading volume exceeding 500 million yuan in the past month [7] Future Outlook - The AI sector is expected to continue its growth trajectory, with recommendations to focus on AI applications and computing power segments [7] - The light module sector is seen as entering a critical phase of valuation enhancement, with leading companies transitioning from profit realization to value reassessment [6]