Investment Rating - The report maintains a "Buy-A" rating for the company [4][7]. Core Insights - The company has shown strong revenue growth, with a 31.90% year-on-year increase in revenue for the first three quarters of 2025, reaching 830 million yuan. The net profit attributable to shareholders increased by 89.11% year-on-year to 330 million yuan [4][5]. - The company's gross margin improved to 96.26%, up 9.93 percentage points from the previous year, driven by a higher proportion of high-margin software product licensing revenue [5]. - The company is benefiting from the acceleration of domestic innovation demand in key sectors such as energy, finance, and transportation, leading to significant revenue growth [5][6]. Financial Performance Summary - For the first three quarters of 2025, the company achieved a net profit margin of 39.33%, an increase of 12.19 percentage points year-on-year [5]. - The company’s earnings per share (EPS) for 2025 is projected to be 4.46 yuan, with expected EPS growth of 6.01 yuan in 2026 and 7.68 yuan in 2027 [7][9]. - The projected revenue for 2025 is 1.338 billion yuan, with a year-on-year growth rate of 28.1% [9][11]. Market Position and Strategy - The company is positioned as a leading domestic database provider, benefiting from government policies promoting self-reliance in technology and increased procurement of innovative products [6]. - The company has successfully completed compatibility testing for its products with a major domestic cloud platform, enhancing its service offerings across various transportation sectors [6].

Group 1 - The fifth Digital Economy Investment and Financing Institutions event in Sichuan, themed "Digital Tianfu, Smart Investment Future," was held in Dazhou, promoting the development of the Sichuan internet and information industry [2] - Eight internet companies, including Chengdu Jinggong Huayao Technology Co., Ltd. and Chengdu Chenxian Optoelectronics Co., Ltd., presented their projects, covering sectors such as smart rail transit equipment, new displays, domestic databases, semiconductor manufacturing, AI+AR hardware, vertical e-commerce, and service robots [2] - A total of 18 internet companies expressed financing needs amounting to 2.61 billion yuan, with 46 well-known investment institutions providing on-site feedback and engaging in discussions during the investment and financing exchange salon [2] Group 2 - Eight departments, including the Sichuan Provincial Internet Information Office, jointly released a 2025 development opportunity list for the digital economy in Sichuan, which includes 82 scene demand projects, 259 supply projects, and 35 quality investment promotion projects across various fields [3] - Significant agreements were signed during the event, with a total signing amount exceeding 1 billion yuan, involving partnerships in equity capital increase, AI digital rights application, and the construction of a drone remote sensing data operation center [3] - Attendees also visited the digital economy achievement exhibition and the Dazhou Digital Economy Industrial Park to experience the development results and innovative vitality of digital Dazhou [3] Group 3 - The Dazhou Digital Economy Industrial Park is the only park in the northeastern Sichuan economic zone capable of constructing internal data centers with fewer than 3,000 standard racks, serving as a key platform for developing a digital industry cluster worth billions [4] - Dazhou has made significant progress in digital development, establishing the Sichuan East Big Data Center and the first super-intelligent integrated data center in the West, with an expected intelligent computing scale exceeding 1,600P by the end of 2025 [4] - The Sichuan Provincial Internet Information Office aims to accelerate the construction of a national hub node for integrated computing power networks, leveraging this event to boost regional economic coordination and stimulate innovation in the northeastern Sichuan economic zone [4]

Summary of the Conference Call on Domestic Database Industry Industry Overview - The domestic database industry is benefiting from national technology development plans and the Xinchuang project, presenting significant growth opportunities [1][3] - Major players in the domestic database market include Dameng, JKC (JianKe JinCang), Nanda General, and Aerospace Shenzhou, but they still lag behind international giants like Oracle and IBM [1][4] - The market is expected to reach $70 billion by 2025, with growth rates significantly higher than those in foreign markets [1][7] Key Points and Arguments - **Market Dynamics**: The domestic database market is complex, with competition from internet giants, traditional relational database vendors, telecom operators, and emerging companies [1][4] - **Technological Advancements**: Future trends include breakthroughs in technology (high concurrency and high-frequency data processing), market expansion into IoT and big data analytics, policy support, and international cooperation [1][5][8] - **Shift in Architecture**: The industry is transitioning from centralized to distributed systems, with cloud deployments increasing significantly; currently, cloud databases account for 40% of the market [10][11] - **Financial Performance**: - Dameng reported revenue of 523 million yuan in H1 2025, a 48.65% increase year-on-year, with net profit of 205 million yuan, up 98.36% [14][15] - JKC achieved revenue of 150 million yuan in H1 2025, a 66.11% increase, particularly excelling in the healthcare and transportation sectors [16][17] - Haima Data reported revenue of 232 million yuan in H1 2025, a nearly 14% increase, but remains in a loss position [18] Challenges and Opportunities - **Challenges**: The domestic database industry faces challenges such as insufficient supply capacity and high dependency on foreign vendors, particularly in critical sectors like finance and telecommunications [2][7] - **Opportunities**: The Xinchuang initiative and national policies are expected to continue supporting the growth of domestic databases, creating a favorable environment for local companies to thrive [6][12] Future Outlook - The domestic database industry is poised for rapid development, with expectations of narrowing the gap with international leaders due to policy support, technological innovation, and a broad market outlook [6][13] - The competitive landscape is anticipated to evolve, with leading companies gaining more advantages while smaller firms may grow into larger entities [12][19]

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.

Group 1 - The core value added of Hubei's digital economy reached 574.29 billion yuan in 2024, which is 2.4 times that of 2020, and is expected to exceed 10% of GDP this year [1] - Hubei has over 6,000 "Four Up" enterprises in the digital economy sector, including 92 national-level specialized and innovative "little giant" companies and 48 listed companies on A-shares [1] - Wuhan's digital economy core industry value added is projected to reach 308.7 billion yuan in 2024, with an annual growth rate of over 10% [1] Group 2 - The optical electronic information industry in Hubei surpassed 1 trillion yuan last year, with software business revenue accounting for nearly half of the total in Central China [2] - Hubei has established significant projects for computing power infrastructure, including the Wuhan Supercomputing Center and various data centers, with a total computing power scale exceeding 15,000 P [2] - A 400G computing power corridor has been built, creating a low-latency network centered around Wuhan, with latency times of 1 millisecond within the city and 5 milliseconds within the province [2] Group 3 - Hubei is focusing on developing a trusted data space system to enhance data infrastructure and promote efficient data circulation, with 15 provincial pilot projects recently announced [3] - The province aims to accelerate the construction of a dual hub for computing power and data elements, striving to elevate the level of digital development in Hubei [3]

Group 1 - China Unicom's 2025 general server procurement demand has been announced, with a domestic production ratio exceeding 90%, significantly higher than previous levels [1] - The total procurement scale amounts to 87,020 servers, with a total value of approximately 7.963 billion yuan [1] - The procurement includes 8,625 Intel CPU servers, 30,245 Haiguang servers, and 48,150 Kunpeng servers, reflecting a substantial increase in domestic chip server share compared to 40% in 2020 and 2022 [1] Group 2 - The demand for domestic innovation in the government and key industries has been deepening, with a notable increase in bidding activities since the fourth quarter of last year [2] - In the first half of this year, there were 60 projects with budgets exceeding 20 million yuan, totaling over 3 billion yuan, indicating a recovery in the bidding landscape [2] - Database-related companies in the domestic innovation sector have reported significant revenue growth, with increases of 41-46% and 66% year-on-year for various domestic database vendors [2]

Core Insights - The financial industry's digital transformation is entering a critical phase, with technological architecture innovation and intelligent application becoming key drivers of competitive advantage [1] - Self-innovation has become a "mandatory course" for financial IT infrastructure, with a clear focus on domestic production and intelligent upgrades [2] - The AI large model technology is shifting from exploratory phases to practical applications, emphasizing the need for quantifiable efficiency improvements in core business scenarios [4] Group 1: Digital Transformation and Technological Innovation - The financial sector is experiencing a significant shift towards cloud-native and distributed modular architectures for core system upgrades, driven by self-innovation [2] - The demand for domestic databases and cloud platforms is surging, particularly among securities and insurance firms, indicating a robust trend towards localized IT solutions [2] - The complexity of long-term operations and iterations in core systems is being addressed through microservices, which decouple functional modules and enhance agility [2] Group 2: Database Development and Market Dynamics - The number of domestic database vendors has decreased by over 60 in the past year, leading to a "stronger becomes stronger" dynamic in the market [3] - Financial institutions are increasingly opting for top-tier products that have undergone rigorous security assessments and large-scale business validations [3] Group 3: AI Applications in Finance - AI technologies, particularly large models, are fundamentally changing financial service models, with a notable increase in the accessibility of model applications due to the emergence of quality open-source models [4] - Current applications of AI in finance are focused on low-precision scenarios such as code assistance, customer service, and marketing content generation, with ongoing exploration in more complex areas like trading strategies and credit decisions [4] - Challenges such as model hallucination and resonance risks remain, with companies employing various engineering methods to mitigate these issues, although complete resolution is still a challenge [4]

Group 1 - The core viewpoint emphasizes the integration of technological innovation, industrial upgrading, and capital empowerment to promote the cultivation of companies for listing in Hubei [1] - Hubei has a significant number of high-tech enterprises and specialized small and medium-sized enterprises, with a total of 1,355 "gold and silver seed" companies reserved for potential listing [1] - The province has established a comprehensive cultivation system for companies, including a full-chain service mechanism for value discovery, standardized cultivation, financing connection, and listing support [1] Group 2 - Hubei's new implementation plan aims to create a "data + industry" mechanism for precise selection and dynamic management of companies for listing, with differentiated admission standards for technology-driven and specialized enterprises [2] - The province will provide a combination of "step-by-step cultivation + customized guidance" services tailored to the different stages of development, industry characteristics, and financing needs of enterprises [2] - The Hubei Provincial Enterprise Listing Development Promotion Association has made significant achievements in organizing training, research visits, and investment roadshows to enhance the quality of listed companies and promote healthy capital market development [2]

Core Insights - The third Software Innovation Development Conference was held in Wuhan, where 24 software investment projects were signed, totaling over 4.5 billion yuan [1] - Wuhan has over 42,000 software-related enterprises, including 79 national-level specialized "little giant" companies, 21 listed companies, and 5 renowned Chinese software companies [1] - The software industry in Wuhan is projected to reach a scale of 352.1 billion yuan in 2024, maintaining the highest growth rate among national software cities for three consecutive years [1] Group 1 - Wuhan is promoting deep integration of technological and industrial innovation to enhance its "soft power" and accelerate its development as a leading digital economy city [1] - The city is focusing on building innovation platforms such as the Xiaomi super-large R&D center and an industrial software ecosystem [2] - By 2030, Wuhan aims to exceed 800 billion yuan in software industry scale, with a focus on key areas like basic software, industrial software, and artificial intelligence [1][2] Group 2 - The Ministry of Industry and Information Technology emphasizes the upcoming transformation and opportunities in the software industry due to a new wave of technological revolution [2] - Key initiatives include promoting "AI + software," enhancing the open-source Harmony ecosystem, and establishing incentives for first-version software applications [2] - The central six provincial capital cities are collaborating to sign an industrial software pilot verification cooperation agreement, focusing on high-end sectors like aerospace and automotive [3]

Investment Rating - The industry investment rating is "Positive" and maintained [6] Core Viewpoints - The report highlights that the A-share computer sector has a low dependence on sales to the US, indicating limited impact from the recent tariff measures. The overall foreign revenue for the computer industry in 2023 is approximately 10%, with an even smaller percentage for the US market [9] - The intensifying competition between China and the US is accelerating the construction of a domestic independent software and hardware ecosystem. The report notes that the domestic market for key foundational software and hardware remains underdeveloped, presenting significant market opportunities [9] - A new round of domestic procurement in the information technology sector is beginning, driven by both order catalysts and tariff conflicts, suggesting that the industry is poised for acceleration. The report recommends focusing on domestic CPU chips, AI chips, operating systems, databases, and leading security firms [2][9] Summary by Sections Event Description - On April 2, the US government announced "reciprocal tariffs" on Chinese goods, followed by a series of countermeasures from China on April 4, including a 34% tariff on all imports from the US starting April 10, 2025 [4] Industry Analysis - The report emphasizes that the domestic independent software and hardware ecosystem is being forced to accelerate due to increased US tariffs and technology restrictions. The report also notes that the domestic market for foundational software and hardware has a low localization rate, indicating vast potential for growth [9] - The report anticipates that the new round of procurement will lead to increased orders and industry growth, with a focus on domestic products supported by government subsidies [9]