Core Viewpoint - The article discusses the evolution and current state of the EDA (Electronic Design Automation) industry in China, highlighting the significant progress made by domestic companies like Huada Jiutian, while also acknowledging the ongoing challenges and competition from international giants [2][5][12]. Group 1: Historical Context and Development - In the 1980s, China's EDA development was hindered by foreign technology restrictions, prompting a national effort to create domestic EDA systems, leading to the launch of the first self-developed EDA system, "Panda System," in 1993 [3][4]. - After the dissolution of the Paris Coordinating Committee in 1994, foreign EDA companies entered the Chinese market, which negatively impacted the growth of domestic EDA products [3][4]. - Huada Jiutian was established in 2009, inheriting the technology of the "Panda System" and focusing on EDA tool development, despite facing significant challenges and financial difficulties in its early years [4][5]. Group 2: Current Market Position - By 2019, the importance of domestic EDA became evident as major international EDA providers ceased collaboration with Huawei, marking the beginning of a golden era for domestic EDA companies [5][6]. - Currently, domestic EDA can meet approximately 70% to 80% of local industry needs, up from 30% to 40% in 2019, with Huada Jiutian capturing about 20% of the domestic market [5][6]. - Huada Jiutian has become the only company in China capable of providing a full range of EDA tools for analog circuit design, achieving global advanced levels in circuit simulation tools [6][7]. Group 3: Competitive Landscape and Challenges - The top three international EDA companies—Synopsys, Cadence, and Siemens EDA—hold over 70% of the domestic market, creating a significant competitive challenge for local firms [8][9]. - The reliance on foreign EDA tools is partly due to their early integration into educational institutions, which has led to a workforce that is accustomed to these tools [8][9]. Group 4: Future Directions and Innovations - The future of EDA is expected to be influenced by AI technology, which can enhance automation, optimize computational efficiency, and provide technical support [11][12]. - Huada Jiutian is actively developing a one-stop automated generation platform for analog circuit design, aiming to improve efficiency and automation in EDA tools [11][12]. - The company is focused on talent development, recognizing the need for skilled professionals who can utilize and develop domestic EDA tools, and has established partnerships with over 400 universities to foster this talent [10][9].

Investment Rating - The report maintains a "Buy" rating for the company, with a market price of RMB 50.30 and an industry rating of "Outperform" [1][4][6]. Core Insights - The company is expected to benefit from the increasing demand for domestic products in the context of integrated circuit self-sufficiency, leading to significant growth in its software business revenue in 2024 [1][4]. - The company reported a revenue of RMB 547 million in 2024, a year-on-year increase of 14.5%, while the net profit attributable to the parent company decreased by 37.68% to RMB 80 million [4][8]. - The first quarter of 2025 showed a revenue increase of 51.43% year-on-year, amounting to RMB 66 million, with a narrowing loss compared to the previous year [9]. Financial Performance Summary - The company’s revenue projections for 2025-2027 are RMB 684 million, RMB 861 million, and RMB 1,094 million, respectively, with a compound annual growth rate (CAGR) of 25% [6][8]. - The net profit attributable to the parent company is expected to recover to RMB 148 million in 2025, with further growth to RMB 190 million in 2026 and RMB 253 million in 2027 [6][8]. - The earnings per share (EPS) are projected to be RMB 0.74 in 2025, RMB 0.95 in 2026, and RMB 1.26 in 2027, reflecting a significant recovery from the previous year's decline [6][8]. Business Segment Performance - The company has diversified its offerings into EDA software and hardware testing equipment, with software development and licensing revenue reaching RMB 159 million in 2024, a substantial increase of 70.33% [9]. - The hardware testing equipment and accessories segment generated RMB 386 million in revenue, a slight increase of 0.63%, while the testing services and other business segments saw a remarkable growth of 360.63% [9]. Market Trends and Opportunities - The domestic EDA market is expected to grow due to the increasing demand for semiconductor products driven by advancements in AI and local procurement strategies [9]. - The company is positioned to capture market share as the U.S. imposes restrictions on certain EDA software, which may benefit domestic EDA manufacturers [9].

Core Viewpoint - Huada Semiconductor is selling its 11.97% stake in Quanxin Zhizao Technology Co., Ltd. for 506.9 million yuan, valuing the company at approximately 4.235 billion yuan [1][4]. Company Overview - Quanxin Zhizao is a rising player in the domestic EDA (Electronic Design Automation) sector, rapidly growing into an industry unicorn due to its unique industrial background and technological strength [4]. - The company was established with investments from global EDA leader Synopsys, well-known domestic investment firm Wuyuefeng Capital, and other notable entities, creating a unique advantage of "industry + capital + research" [4]. - The founder and CEO, Ni Jie, has extensive experience in the integrated circuit manufacturing EDA field, previously serving as the Deputy General Manager of Synopsys China [4]. Financial Performance - For the fiscal year 2024, Quanxin Zhizao is projected to generate revenue of 515 million yuan, but it is still operating at a loss with a total profit of -456 million yuan and a net profit of -347 million yuan [5]. - As of December 31, 2024, the company's total assets are approximately 2.224 billion yuan, with total liabilities around 2.086 billion yuan [5]. Shareholding Structure - The largest shareholder of Quanxin Zhizao is Beijing Wuyuefeng Yihe High-tech Industry Investment Partnership, holding 13.5% of the shares, followed by Huada Semiconductor with 11.97% and the National Integrated Circuit Industry Investment Fund Phase II with 11.11% [6]. - Other significant shareholders include Jiaxing Yixin Enterprise Management (7.41%), Changzhou Wuyuefeng Hengxin (7.20%), and Shanghai Jimai Jia (6.91%), with 23 other shareholders collectively holding 26.72% [6].