Summary of Zhongwang Software Conference Call Company Overview - **Company**: Zhongwang Software - **Industry**: CAD Software Development Key Points and Arguments 1. **Intellectual Property Defense**: Zhongwang Software asserts that its CAD products do not infringe on third-party codes and has applied for dozens of core technology patents. The company has maintained a strict source code management system for over ten years and is confident in resolving misunderstandings with Autodesk through communication or legal means [2][3][4]. 2. **Litigation Response Team**: A specialized task force has been established, comprising executives, R&D, legal, and international lawyers, to actively respond to the lawsuit. The company is open to a code comparison in a fair environment to clarify facts and seek mutually beneficial solutions [2][3][5]. 3. **Sales Continuity**: During the litigation, Zhongwang's CAD products can continue to be sold, and partnerships with distributors and ecosystem partners remain unaffected. The company believes that honest communication and legal means are effective methods for resolving disputes [2][6][9]. 4. **Market Impact**: While sales are not restricted, the lawsuit may affect customer confidence. The company has initiated marketing activities to communicate with customers and mitigate negative impacts. Domestic market recognition is high, and overseas distributors are generally accepting of the situation [2][10]. 5. **Differentiation Strategy**: Zhongwang Software emphasizes a market-oriented and international strategy, adhering to international legal rules. The company has increased R&D investment and is committed to a differentiation strategy to minimize the likelihood of similar disputes in the future [4][11]. 6. **Long-term Outlook**: The company believes that through open communication and legal means, the dispute can be resolved effectively. They are confident that the absence of large-scale code plagiarism will lead to a smoother resolution [6][10]. 7. **Potential Future Litigation**: Although Autodesk has only filed a lawsuit regarding the 2D CAD product, Zhongwang does not rule out the possibility of future litigation concerning 3D CAD products. The company has taken measures to strengthen intellectual property protection [4][11]. 8. **Sales and Financial Stability**: Zhongwang Software is aware of the potential for competitors to use litigation to undermine sales and financial health. However, they maintain that their products are distinct from Autodesk's and have no intention of infringing on third-party intellectual property [12][13]. Additional Important Content - **Customer Communication**: The company is actively engaging with customers to alleviate concerns stemming from the lawsuit, emphasizing the importance of maintaining trust and transparency [9][10]. - **Legal Preparedness**: Zhongwang Software is prepared for a potentially lengthy legal process, drawing on past experiences with similar lawsuits, and is committed to protecting its rights and interests [10][12].

Investment Rating - The report upgrades the investment rating of the company to "Strong Buy" [2][12]. Core Viewpoints - The company is positioned as a leader in the domestic CAD software market, focusing on an All-in-One CAx strategy to enhance its product offerings and market share [7][17]. - The CAD market in China is experiencing rapid growth, driven by the digital transformation of the manufacturing industry and strong policy support for domestic alternatives [8][13]. - The company has a robust competitive advantage due to its proprietary technology and comprehensive product matrix, which includes 2D CAD, 3D CAD, CAE, and CAM solutions [11][12]. Financial Summary - Projected total revenue for 2024A is 888 million, with a year-on-year growth rate of 7.3% [3]. - Expected net profit attributable to shareholders for 2024A is 64 million, reflecting a growth rate of 4.2% [3]. - The company anticipates revenue growth of 15.6%, 16.7%, and 17.3% for the years 2025E, 2026E, and 2027E, respectively [12]. Business Overview - The company has a complete product line in CAD/CAE/CAM and has successfully penetrated international markets, selling products in over 90 countries [17]. - The 2D CAD segment accounted for 47% of revenue in 2024, while 3D CAD contributed 24% [7][12]. - The company is actively investing in educational products to cultivate user habits and expand its market reach [23][24]. Market Dynamics - The CAD market in China grew from 1.3 billion in 2016 to 5.48 billion in 2023, with a CAGR of 22.82% [13]. - The market is still dominated by three major international players, but domestic companies are gaining ground due to national policies promoting self-sufficiency [13][49]. - The company holds a market share of 9.6% in the overall CAD market and 4.4% in the 3D CAD segment, ranking fourth among competitors [7][13]. Strategic Initiatives - The company is focusing on enhancing its product capabilities and expanding its global distribution network to drive future growth [12][29]. - The All-in-One CAx strategy aims to integrate design, simulation, and manufacturing processes, creating a cohesive platform that increases customer loyalty [11][12]. - The company plans to continue its overseas localization strategy to optimize its global marketing efforts [12][29].

Core Viewpoint - The collaboration between Chongqing Industrial Vocational and Technical College and Zhongwang Software aims to enhance vocational education through the integration of industrial software, addressing the challenges in talent cultivation and industry needs [1][4][6]. Group 1: Educational Initiatives - Chongqing Industrial Vocational and Technical College, established in 1956, is a national-level demonstration higher vocational college focusing on mechanical engineering and modern manufacturing [3]. - The college has launched the "Benchmark 100" case plan to share best practices in cultivating strategic talents in the education sector [1]. - The college's mechanical engineering department aims to align its curriculum with the needs of the Chongqing "33618" modern manufacturing cluster, enhancing the quality of its faculty and optimizing its professional offerings [3]. Group 2: Collaboration with Zhongwang Software - The partnership with Zhongwang Software focuses on creating a "Digital Technology + Professional Construction" collaborative system to improve vocational education quality in Western China [4][8]. - The establishment of a "Modern Industrial College" using domestic industrial software serves as a comprehensive training base, integrating teaching, skills competitions, and technical services [4][6]. - The collaboration has led to the development of specialized courses that merge industry standards and practical software applications, significantly improving students' technical skills [5]. Group 3: Outcomes and Achievements - The college achieved "Excellent" results in the national "Double High Plan" assessment, showcasing its unique vocational education model [4]. - Students participating in the collaboration have shown improved employability, with a 98% employment rate for those holding Zhongwang certification, which is 20% higher than their peers [7]. - The use of Zhongwang CAD/3D software has enhanced teaching and research efficiency, reducing design verification cycles by 40% and improving overall educational quality [7][8]. Group 4: Future Directions - The college and Zhongwang Software plan to expand their collaboration to include the development of training resources in smart manufacturing and virtual simulation [8]. - They aim to establish an "Open Education Ecological Alliance" to facilitate joint curriculum development, technical research, and talent cultivation [8]. - The partnership seeks to address common technical challenges in the industry through collaborative projects, enhancing the integration of education and industry [8].