Investment Rating - The report maintains a "Buy" rating for China Software International (0354.HK) [2] Core Insights - The company reported a revenue of 7.926 billion RMB for the first half of 2024, a year-on-year decline of 6.2%, primarily due to reduced demand from core clients in 2023 [1] - Gross profit for 1H24 was 1.831 billion RMB, with a gross margin of 23.1%, down 0.6 percentage points year-on-year [1] - Net profit for 1H24 was 285 million RMB, reflecting an 18.6% year-on-year decline, with a net margin of 3.6% [1] - The company is focusing on AI-driven innovations and aims to become a comprehensive AI software and service provider, enhancing collaboration with leading clients across various industries [1] - Cloud intelligence revenue increased to 42.5% of total revenue, with a 2% year-on-year growth in cloud intelligence business revenue [1] Summary by Sections Financial Performance - Revenue for 1H24 was 7.926 billion RMB, down 6.2% year-on-year [1] - Gross profit was 1.831 billion RMB, with a gross margin of 23.1% [1] - Net profit was 285 million RMB, down 18.6% year-on-year [1] Business Development - The company is enhancing its AI capabilities, focusing on natural language processing, computer vision, and predictive applications [1] - It has expanded its international business, particularly in the Middle East and Southeast Asia, collaborating with global partners like Huawei [1] Emerging Business Segments - Cloud intelligence revenue reached 33.68 billion RMB, accounting for 42.5% of total revenue [1] - The company is actively developing its ERP services and has launched several projects in key industries [1] Profit Forecast and Valuation - The net profit forecast for 2024 and 2025 has been adjusted to 720 million RMB and 870 million RMB, respectively, reflecting a decrease of 36% and 37% [1] - The company has conducted share buybacks totaling nearly 260 million shares over two years, indicating confidence in long-term growth [1]
中国软件国际：2024年中期业绩点评：新兴业务发展健康，持续回购彰显公司长期发展信心