中国式现代化要靠科技现代化作支撑。 习近平总书记指出："实现高水平科技自立自强，是中国式现代化建设的关键。" 从"十四五"规划纲要提出"把科技自立自强作为国家发展的战略支撑"，到"十五五"规划建议提出"加快 高水平科技自立自强，引领发展新质生产力"，是坚持创新驱动发展的衔接传承，更是立足"十五五"关 键时期，面对新一轮科技革命和产业变革加速突破的乘势而上。 过去5年，中国科技创新成果丰硕，新质生产力稳步发展，科技实力跃上新台阶，为进一步"强基攀高向 新"奠定坚实基础。 "十五五"规划建议提出，"要巩固拓展优势、破除瓶颈制约、补强短板弱项，在激烈国际竞争中赢得战 略主动"。未来5年，持续推进高质量发展，必须以科技创新引领新质生产力发展，不断塑造发展新优势 新动能。 变局蕴含机遇，挑战激发斗志。充分发挥新型举国体制优势，抓住新一轮科技革命和产业变革历史机 遇，不懈努力、接续奋斗，共识在凝聚，行动更坚定。 强 基 进一步筑牢自立自强的根基 今年3月，中国科学院物理研究所宣布，该所研究员张广宇带领团队，研制出单原子层金属，在国际上 首次实现大面积二维金属材料的制备，更打破了"金属必须以三维形式存在"的传统认知。金属成 ...

Core Viewpoint - Jiangsu Runhe Software Co., Ltd. has signed a strategic cooperation agreement with the Guangzhou Institute of Biomedicine and Health, focusing on enhancing biological research processes through digital technologies [1] Group 1: Strategic Cooperation - The partnership will concentrate on the human cell lineage big science research facility [1] - Collaboration will involve domestic operating systems, smart IoT, big data analysis, and artificial intelligence [1] Group 2: Technological Enhancement - The aim is to improve the standardization, intelligence, and visualization of biological research processes through digital technology [1]

Market Overview - The market experienced a decline on October 31, 2025, with all three major indices closing lower: Shanghai Composite Index down 0.81%, Shenzhen Component Index down 1.14%, and ChiNext Index down 2.31% [1] Sector Performance - Biopharmaceuticals, chemical pharmaceuticals, and cultural media sectors showed the highest gains, while insurance, small metals, and semiconductors faced the largest declines [1] ETF Performance - Innovation drugs, film and television, and software-related ETFs performed well, likely driven by relevant news [2] Biopharmaceutical Sector - The National Medical Insurance negotiation began on October 30, 2025, introducing a "commercial insurance innovative drug catalog" mechanism, which includes innovative drugs with high clinical value that are not yet part of the basic medical insurance catalog [2] - According to Industrial Securities, the ongoing business development (BD) in the innovative drug sector is expected to sustain the current industry prosperity, with a focus on "innovation + internationalization" [2] Cultural Industry - Cultural enterprises reported a net profit of 909.3 billion yuan in the first three quarters, a year-on-year increase of 14.2%, with an operating income profit margin of 8.30% [2] - The cultural industry is experiencing a transformation driven by AI-generated content (AIGC), which is expected to create new opportunities in the industry [3] Software Industry - The software and information technology service industry in China saw a revenue of 1,111.26 billion yuan in the first three quarters, reflecting a year-on-year growth of 13.0% [4] - Longjiang Securities highlighted the importance of achieving complete autonomy in key areas, particularly in the domestic operating system and chip industries, as a response to global technological competition [4]

Core Insights - The company reported a revenue of 159.02 million yuan for the first three quarters of 2025, marking a year-on-year growth of 6.06% [1] - In the third quarter, revenue reached 64.96 million yuan, with a year-on-year increase of 7.33% [1] - The company emphasizes research and development, with total R&D investment amounting to 68.37 million yuan, a year-on-year increase of 20.43% [1] - The R&D expense ratio is at 43%, up by 5.14 percentage points year-on-year [1] - As of June 30, 2025, the company has obtained 63 authorized patents and 214 software copyrights, indicating strong technological accumulation and innovation capability [1] Industry Engagement - The company is actively involved in the power sector, participating in the construction of next-generation scheduling, distribution, and substation systems, leading to steady revenue growth in this industry [2] - The company has secured contracts for new generation scheduling system projects in multiple cities, including Zhejiang and Shenyang, as well as operating system projects for major state-owned enterprises [2] - In addition to the power sector, the company has won orders in new market areas, including smart campus procurement projects for schools [2] - In the third quarter, the company successfully won contracts for domestic operating system projects with the National Pipeline Network Group and signed strategic cooperation agreements with various partners, indicating a strong market presence [2] - The recent strategic cooperation with a "little giant" enterprise in AI and operating systems further enhances the company's development path in health and medical sectors [2]

Core Insights - The company reported a revenue of 159 million yuan for the first three quarters of 2025, marking a year-on-year growth of 6.06%, with Q3 revenue reaching 64.96 million yuan, up 7.33% year-on-year, indicating a steady growth trend [1] - The company is experiencing a golden opportunity for domestic software replacement, driven by increased R&D investment and technological breakthroughs, which are expanding market space in the信创 (Xinchuang) sector [1] Financial Performance - For the first three quarters of 2025, the company's total R&D investment reached 68.37 million yuan, a year-on-year increase of 20.43%, with an R&D expense ratio of 43%, up 5.14 percentage points year-on-year [1] - In Q3 alone, R&D investment was 24.08 million yuan, showing a significant year-on-year growth of 37.52% [1] Industry Positioning - The company is a leading player in the domestic operating system sector, focusing on the electric power industry, which is seen as a stabilizing force for revenue growth [2] - The company successfully won bids for major projects with State Grid and Southern Power Grid, contributing to steady revenue growth in the electric power sector [2] Market Expansion - The company has made breakthroughs in emerging markets such as finance, education, and government, with notable projects including a successful bid for a core IT infrastructure project with Zhongtai Securities [2] - In the education sector, the company has deployed over 500 cloud desktop terminals in various schools, enhancing resource management and integration [3] Ecosystem Collaboration - The company is actively participating in the national open-source technology foundation, pledging 3 million yuan to support the openEuler project group [4] - A strategic partnership has been established with Wisdom Eye Technology to explore intelligent terminal solutions in health and medical scenarios, expanding product application boundaries [4] - The company is transitioning from a "replacement-type信创" to an "innovation-driven ecological collaboration" phase, building a solid technological barrier and market network [4]

Core Viewpoint - The domestic operating system leader, Kirin Xin'an, is poised to enter a prosperous period in the信创 industry, driven by technological innovation and market expansion. Group 1: Financial Performance - In the first three quarters of 2025, the company achieved revenue of 159 million yuan, a year-on-year increase of 6.06% [1] - In Q3, the revenue reached 64.96 million yuan, growing by 7.33% year-on-year, indicating a steady growth trend [1] - The total R&D investment for the first three quarters amounted to 68.37 million yuan, up 20.43% year-on-year, with a R&D expense ratio of 43%, an increase of 5.14 percentage points year-on-year [1] Group 2: Technological Innovation - The company has accumulated 63 authorized patents and 214 software copyrights as of June 2025, showcasing its enhanced technological capabilities and innovation [1] - In Q3, R&D investment was 24.08 million yuan, a significant increase of 37.52% year-on-year [1] Group 3: Market Expansion - Kirin Xin'an has made breakthroughs in both traditional and emerging markets, particularly in the electric power sector, where it has participated in the construction of next-generation scheduling and distribution systems [2] - The company has secured contracts for smart campus projects in various schools, marking its success in multiple sectors including energy, finance, and education [3] - Recent strategic partnerships with companies like Wisdom Eye Technology and collaborations in the "AI + operating system" integration further deepen its market expansion in health and medical fields [3] Group 4: Industry Outlook - The信创 industry is expected to experience a new wave of development in 2025, with the market scale likely to exceed 1.8 trillion yuan, accelerating the construction of a domestic digital ecosystem [1] - As a leading enterprise in the domestic operating system sector, Kirin Xin'an is actively participating in open-source communities like openEuler, which is crucial for the development of the信创 industry [3]

Group 1: Software ETF Performance - The Software ETF has a turnover rate of 4.42% and a transaction volume of 253 million yuan, ranking first among comparable funds as of October 17 [3] - The latest scale of the Software ETF reached 5.642 billion yuan, also ranking first among comparable funds [3] - Over the past five trading days, there were net inflows on four days, totaling 537 million yuan, with an average daily net inflow of 107 million yuan [3] - The net value of the Software ETF has increased by 13.21% over the past three years [3] - Since its inception, the Software ETF has recorded a highest monthly return of 39.35%, with the longest consecutive monthly gains being three months and a maximum increase of 69.40% [3] - The average return during the months of increase is 10.06% [3] Group 2: Key Holdings in Software Sector - As of September 30, 2025, the top ten weighted stocks in the CSI Software Service Index include iFlytek, Tonghuashun, Kingsoft Office, Zhinan Zhen, Hengsheng Electronics, Runhe Software, 360, Tuo Wei Information, Yonyou Network, and Deepin Technology, collectively accounting for 62.41% of the index [3] Group 3: Market Trends and Opportunities - Microsoft announced that Windows 11 23H2 Home and Professional editions will stop receiving security updates on November 11, 2025, affecting over 500 million users globally [3] - In the context of Microsoft's service contraction, domestic operating systems are experiencing rapid growth, with the market size surpassing 80 billion yuan and a replacement rate exceeding 70% in government, finance, and industrial sectors [4] - The domestic operating system's market share in server operating systems has reached 35% [4] - The urgency for domestic software innovation is highlighted, with opportunities in domestic operating systems, industrial software, databases, office software, enterprise management software, and security software being noteworthy [4] Group 4: Stock Performance of Key Companies - The stock performance and weight of key companies in the software sector include iFlytek (0.35%, 13.93%), Kingsoft Office (-0.05%, 8.15%), Tonghuashun (2.56%, 7.39%), Hengsheng Electronics (0.83%, 6.39%), Runhe Software (2.34%, 5.09%), 360 (0.78%, 4.49%), Softcom Power (0.57%, 3.92%), Tuo Wei Information (2.04%, 3.91%), Zhinan Zhen (0.14%, 3.62%), and China Software (-0.04%, 3.50%) [6] - Investors can also consider the Software ETF linked fund (012620) for AI software investment opportunities [6]

Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the **domestic software industry** in China, particularly focusing on the **localization of key software** and the **信创 (Xinchuang) industry** which is expected to accelerate by 2026 due to government mandates [1][4][3]. Key Software Localization - The **localization rate** of domestic operating systems in the government sector has reached **65%**, but the overall rate is only **4.55%**. By the end of 2025, the localization rate in the government sector is expected to exceed **80%**, with a market size of over **1 trillion yuan** [1][6]. - The **localization rate** for databases is low across various industries, with financial non-core systems at **40%**, energy at **15%**, and many sectors below **5%**. The domestic database market is projected to reach **668 billion yuan** by 2025, growing to over **800 billion yuan** by 2027, with a compound annual growth rate (CAGR) of approximately **12%** [1][9]. - Middleware localization has increased to **45%**, with financial, telecommunications, and government sectors exceeding **70%**. The middleware market is expected to reach **160 billion yuan** by 2025, with a year-on-year growth rate of **17%** in 2023 [1][11]. Market Dynamics - The **Office software** localization rate in the government and civilian B-end is around **40%-50%**, with Kingsoft WPS holding a significant market share. The government sector has achieved **100% localization** [1][14]. - The **ERP market** has the highest localization rate among industrial software, exceeding **70%**. The market size is expected to be around **500-600 billion yuan** by 2025, growing at **10%-15%** annually [1][17]. - The **R&D design software** sector, including EDA, CAD, and CAE, has low localization rates of **10%-15%** for EDA and CAE, and **25%-30%** for CAD. The market space for these segments is significant, with EDA alone estimated at **120-140 billion yuan** [1][19]. Company Performance and Valuation - Representative companies in the **database sector** include **达梦数据 (Dameng Data)**, with a projected PS ratio of **22x** in 2025, and **太极股份 (Taiji Co.)**, with a PS ratio of **1.9x** [1][10]. - In the **middleware sector**, companies like **宝兰德 (Baolande)** and **普元信息 (Puyuan Information)** are highlighted, with PS ratios of **8.94x** and a competitive market landscape [1][12]. - The **R&D design software** companies are experiencing varied growth rates, with **华大九天 (HuaDa JiuTian)** expected to grow by **20%** due to reliance on a single client, while others like **广立微 (Guangliwei)** are expanding rapidly [1][21]. Regulatory Impact - The **79th document** from the State-owned Assets Supervision and Administration Commission mandates that state-owned enterprises complete the localization of information systems by **2027**, which is expected to drive significant growth in the domestic software market [1][4]. Conclusion - The conference call emphasizes the rapid development and localization of key software in China, driven by government policies and market demand. The potential for growth in various software sectors, particularly in databases, middleware, and ERP systems, presents significant investment opportunities. The performance of leading companies in these sectors indicates a robust market environment, despite challenges in localization rates across certain software categories.

Core Insights - The emphasis on technological modernization as a foundation for national strength and high-quality development is highlighted, with a focus on breakthroughs in "bottleneck" technologies during the 14th Five-Year Plan period [1][2] - The transformation of external pressures into opportunities for innovation and self-reliance is underscored, showcasing advancements in domestic technologies such as operating systems and high-end bearings [2][3] - The importance of a coordinated effort in tackling key technological challenges is emphasized, with a call for reforms to enhance the innovation ecosystem and empower enterprises [3][4] Group 1 - The breakthroughs in "bottleneck" technologies enhance national confidence and collective spirit, reflecting a resilient attitude towards external challenges [1][3] - The development of domestic operating systems and high-end bearings strengthens strategic autonomy in key industries, contributing to a more robust digital economy [2][3] - The shift from dependency to self-sufficiency in technology is evident, with significant advancements in lithium battery production and laser radar technology [2][3] Group 2 - The coordinated national effort in addressing technological challenges is crucial, leveraging the advantages of the new type of national system to focus on critical areas like integrated circuits and basic software [3][4] - The resilience of the Chinese industrial and supply chain is demonstrated through examples such as Huawei's recovery in chip development and Zhejiang Yiwu's export growth despite external pressures [3][4] - The recognition of China's innovation capabilities is reflected in its ranking in the Global Innovation Index, marking a significant milestone in the country's modernization journey [4]

Investment Rating - The report maintains a "Positive" investment rating for the software and services industry [7] Core Insights - The State Council issued a notice on September 30, 2023, regarding the implementation of domestic product standards in government procurement, effective from January 1, 2026. This aims to create a unified and competitive government procurement market, enhancing fairness and transparency in procurement policies, and is expected to accelerate the domestic substitution trend in key industries [2][5] - The notice provides a 20% price evaluation advantage for domestic products in government procurement, which may significantly alter the current market competition landscape. For instance, if a domestic product quotes 100,000 yuan, it will be evaluated at 80,000 yuan, giving it a competitive edge over foreign products [11] - A transition period of 3-5 years is established to gradually implement the domestic product standards, allowing companies to initially meet domestic production requirements before increasing the domestic component cost ratio [11] - The notice emphasizes that key components and processes must be completed domestically for certain products, ensuring that core manufacturing remains within the country and promoting self-sufficiency in the supply chain [11] - The introduction of domestic product standards is expected to enhance the domestic substitution trend, particularly benefiting the domestic chip industry, domestic operating systems, and the Huawei supply chain [2][11] Summary by Sections - **Government Procurement Policy**: The new policy aims to create a fair and transparent procurement system, enhancing the participation of various business entities [2][5] - **Price Evaluation Advantage**: Domestic products will receive a 20% price evaluation advantage, significantly impacting market competition [11] - **Transition Period**: A 3-5 year transition period will allow gradual implementation of domestic standards, facilitating the domestic production process [11] - **Key Manufacturing Requirements**: Specific products must have key components produced domestically, ensuring core manufacturing is retained within the country [11] - **Investment Focus Areas**: The report suggests focusing on industries benefiting from domestic substitution, particularly in the chip and operating system sectors [2][11]