Qi An Xin Technology (SH:688561) Goldman Sachs·2025-07-09 02:40Investment Rating - The report maintains a "Sell" rating on both Sangfor and Venustech, indicating a cautious outlook on the cybersecurity sector [2][17]. Core Insights - The management of Qi An Xin sees generative AI as a significant opportunity in the cybersecurity market, which could lead to increased demand for upgraded cybersecurity solutions due to the intensification of cyber attacks [4][9]. - The integration of generative AI is expected to enhance the accuracy and efficiency of cybersecurity software, particularly in risk detection and analysis, which could attract more clients [4][7]. - There is a noted trend of clients shifting their software budgets from functional tools to generative AI software, which is anticipated to drive average revenue per user (ARPU) and attract new paying customers [2][4]. Summary by Sections Company Profile - Qi An Xin, founded in 2014, specializes in cybersecurity, providing software and services to government and enterprise clients. The company has advanced capabilities in endpoint security, cloud security, threat intelligence, and situation awareness [3]. Generative AI Opportunities - Management believes that generative AI will trigger an increase in cyber attacks, creating a potential for upgrading cybersecurity solutions. The company plans to launch the QAX-GPT Security Robot in 2024, which will utilize its self-developed QAX security foundation model to assist security professionals [4][7]. Integrated Cybersecurity Framework - Establishing an integrated cybersecurity framework is deemed more critical than deploying standalone security products. Management emphasizes that platform-based solutions with broad coverage and interoperability will enhance user experience [8]. 2025 Performance Outlook - The management expresses low visibility on near-term demand recovery in the cybersecurity market due to macroeconomic constraints affecting client budgets, particularly in government sectors. However, there is a positive outlook for demand from certain enterprise clients, such as financial institutions and telecom operators [9]. The company is focusing on leveraging generative AI to enhance product offerings and reduce operational costs while improving cash flow [9].