Core Viewpoint - Oracle's dominance in the Chinese market has led to its eventual exit due to its refusal to adapt and respect local needs, resulting in a backlash from Chinese companies and a shift towards domestic alternatives [1][27]. Group 1: Oracle's Initial Success in China - Oracle entered the Chinese market in 1989, capitalizing on the financial system's information technology wave, quickly becoming the preferred choice for major banks with a 70% market share by 2000 [3][12]. - The company leveraged its advanced relational database technology, which was critical for Chinese financial institutions [3][5]. Group 2: Exploitative Practices - Oracle imposed exorbitant fees on Chinese companies, such as a 20% annual service fee on a 20 million yuan software contract with China Mobile, forcing companies to comply despite the high costs [5][7]. - Instances of punitive measures against companies that did not comply with Oracle's demands, such as fines imposed on China Unicom, highlighted Oracle's aggressive business tactics [7][9]. Group 3: Chinese Companies' Response - The turning point for Chinese companies came in 2008 when Alibaba, facing Oracle's price hikes, decided to develop its own database, OceanBase, which later outperformed Oracle's technology [14][15]. - Other companies like Huawei and Tencent followed suit, creating competitive products that addressed the limitations of Oracle's centralized architecture [19][21]. Group 4: Policy Changes and Market Shift - Government policies mandated a shift towards domestic software, with a requirement for a minimum of 70% procurement of local software, significantly reducing Oracle's market share in key government projects [21][25]. - By 2024, domestic databases captured 80% of the market, while Oracle's share plummeted to 5% [25]. Group 5: Oracle's Decline - Oracle's refusal to acknowledge its declining position led to further isolation, including lawsuits against Chinese tech firms for alleged intellectual property theft [27][30]. - The company's global market share fell to 5% by 2024, with significant losses in key contracts, including a $100 billion cloud computing bid from the U.S. Department of Defense [30][32].

Investment Rating - The report maintains an "Outperform" rating and adjusts the target price to RMB 290.30 [4][10]. Core Views - The company is expected to benefit from the localization of the database industry, with significant growth projected in revenue and net profit for 2024 and 2025 [4][10]. - The report highlights strong performance in the energy and transportation sectors, with notable increases in revenue and net profit in Q1 2025 [4][10]. - The company is focusing on technological innovation, particularly in distributed databases, AI, and cloud-native technologies, which are driving product upgrades [4][10]. Financial Summary - Revenue is projected to grow from RMB 794 million in 2023 to RMB 1,044 million in 2024, representing a year-on-year increase of 31.5% [3]. - Net profit attributable to shareholders is expected to rise from RMB 296 million in 2023 to RMB 362 million in 2024, a growth of 22.2% [3]. - The earnings per share (EPS) forecast for 2025 is RMB 4.32, with a projected price-to-sales (PS) ratio of 25x [4][10]. Business Performance - In 2024, the company's main business segments, including government, energy, transportation, and finance, are expected to see growth, particularly in energy and transportation [4][10]. - The operating cash flow for 2024 is anticipated to increase by 36.95% year-on-year, driven by higher sales returns and order growth [4][10]. - Revenue from software authorization is projected to grow by 22.79%, while maintenance services revenue is expected to increase by 38.50% [4][10]. Technological Development - The report notes successful R&D progress in distributed databases, with practical applications and further developments in high concurrency and multi-tenancy technologies [4][10]. - The company aims to enhance its database technology through AI and cloud-native innovations, focusing on integrated distributed architecture and multi-modal data fusion [4][10].

Core Insights - Huawei officially launched the HarmonyOS 5-powered Harmony PC on May 19, marking a significant milestone in the development of domestic operating systems for PCs, filling a 30-year gap in fully self-developed domestic operating systems [1][4] - The introduction of Harmony PC is not just a new product but a symbol of the advancement of domestic operating systems, potentially improving the "strong outside, weak inside" structure of China's database market [1][4] - The trend towards self-control and independence in technology is evident, with domestic database solutions like Kylin Software's SUNDB emerging to meet the demand for data security and self-reliance [1][4] Domestic Database Market Dynamics - According to IDC 2023 data, the top three players in China's relational database software market are Alibaba, Tencent, and Huawei, with market shares of 26.2%, 14.9%, and 11.1% respectively, indicating a strong presence of domestic companies [1][4] - The domestic database replacement rate in key sectors is increasing, with the party and government sectors achieving an 80% replacement rate, while the banking and insurance sectors are at 40% [5][6] Security and Performance Advantages - The TEE microkernel security architecture of Harmony PC has achieved CC EAL5+ certification, providing robust data security [6] - In the financial sector, the collaboration between the domestic database and Harmony OS has significantly reduced data encryption loss rates from 12% on Windows to below 3% [7] - A provincial government cloud platform reported an 82% reduction in vulnerability discovery after adapting Harmony PC with a domestic database [7] Industry Trends and Future Outlook - The push for domestic database solutions is expected to accelerate, with a target for 100% domestic replacement in key sectors by 2027 as outlined by the State-owned Assets Supervision and Administration Commission [8] - The data ETF (516000) is positioned to benefit from the domestic data industry growth, tracking the China Securities Big Data Industry Index and including key players across the data value chain [9][12] - The development of domestic databases is anticipated to enhance the overall competitiveness of the big data industry, leading to a policy and industry resonance that could favor data ETFs [12]

Core Insights - The company reported a revenue of 1.044 billion yuan for 2024, representing a year-on-year growth of 31.49%, and a net profit attributable to shareholders of 362 million yuan, up 22.22% [1] - In Q1 2025, the company achieved a revenue of 258 million yuan, a significant increase of 55.61% year-on-year, with a net profit of 98 million yuan, reflecting a growth of 76.39% [2] Revenue Breakdown - Software product licensing revenue for 2024 reached 894 million yuan, growing by 22.79% year-on-year, while operation and maintenance service revenue was 38 million yuan, up 38.50% [2] - The revenue from data and industry solutions surged to 98 million yuan, marking a remarkable increase of 204.51% year-on-year, and database integrated machine sales revenue was 13 million yuan, up 179.59% [2] R&D Investment - The company has been increasing its R&D investment, which accounted for 19.79% of revenue in 2024 and 21.21% in Q1 2025 [3] - The company has developed advanced technologies in database management systems, cloud computing, and big data, and is also focusing on the integration of databases with artificial intelligence [3] Market Positioning and Partnerships - The company is expanding its ecosystem by achieving compatibility with over 11,000 products and forming deep collaborations with more than a thousand top ISVs and channel partners [4] - The company is strategically focusing on the financial sector and implementing differentiated market strategies based on industry characteristics and customer needs to drive steady growth [4]