Investment Rating - The report maintains a "Recommended" rating for China Software (600536) [2][8] Core Views - The company has shown significant improvement in its core business performance, with a focus on its "OS + Database" dual-core strategy [2][8] - In the first half of 2025, China Software achieved a revenue of 2.242 billion yuan, representing a year-on-year growth of 13.01%. The total profit reached 17 million yuan, a year-on-year increase of 105.7%, while the net profit attributable to the parent company was a loss of 75 million yuan, significantly narrowing the loss by 72.67% [2][8] - The company has effectively controlled costs, leading to a notable improvement in operational quality, with the sales net profit margin improving from -13.72% to -0.11% year-on-year [8] Financial Summary - Revenue projections for 2025-2027 are 5.835 billion yuan, 6.436 billion yuan, and 6.806 billion yuan, with year-on-year growth rates of 12.2%, 10.3%, and 5.7% respectively [4][8] - The net profit attributable to the parent company is forecasted to be 92 million yuan, 241 million yuan, and 322 million yuan for 2025-2027, with year-on-year growth rates of 122.3%, 160.9%, and 33.8% respectively [4][8] - The company’s total assets are projected to grow from 9.127 billion yuan in 2025 to 11.786 billion yuan in 2027 [9] Market Position and Strategy - China Software is positioned as a key player in the software industry, particularly in the development of operating systems and databases, which are crucial components of the national "PKS" independent ecosystem [8] - The launch of the Galaxy Kirin Operating System V11, which is based on the Linux 6.6 kernel, highlights the company's commitment to innovation and its strategic importance in various sectors, including finance and government [8]

Core Viewpoint - The company, Rigol Technology (002322), has confirmed its ongoing collaboration with Kirin Software, focusing on technology cooperation in the cybersecurity field and the adaptation of software applications for power engineering cost estimation [1] Group 1 - The cooperation agreement was signed in September 2020, outlining the scope of collaboration between the company and Kirin Software [1] - The collaboration includes the adaptation of applications based on the Galaxy Kirin operating system, specifically in areas such as smart energy and smart environmental protection [1] - The company has successfully completed the adaptation of its series of products with Kirin Software, with performance details to be disclosed in official announcements and periodic reports [1]

Group 1 - The company Tianrongxin (002212) has initiated the adaptation of its products to the newly released Galaxy Kirin operating system [1] - The products being adapted include situation awareness, big data analysis, data leakage prevention, EDR, adaptive security defense, and host monitoring and auditing [1]

Market Overview - The A-share market experienced significant fluctuations, with the Sci-Tech 50 index rising over 4% at one point but ultimately closing down, except for a slight increase in the Sci-Tech 50 index [1] - The market's trading volume reached 3.19 trillion yuan, marking the third-highest trading volume in A-share history, following a drop from 3.14 trillion yuan to 2.68 trillion yuan [1] - Despite 2,800 stocks rising, a structural opportunity is emerging within the market [1] Market Dynamics - A broad market decline occurred, affecting both leading sectors like AI and optical modules, as well as lower-performing sectors, shifting from a structural bull market to a general downturn [2] - Analysts noted significant risks associated with long-term bonds [3] - Recent substantial gains in the A-share market have led to signs of overheating, prompting some funds to take profits and increasing the volatility between bulls and bears [4] Institutional Insights - Most institutions believe that a slower pace could lead to longer-term gains, suggesting that the market may continue to experience fluctuations before rising again [5] - CITIC Securities indicated that the REITs market has reached a turning point, anticipating stabilization and potential new highs within the year [6] Investment Focus Areas AI+ - The "Artificial Intelligence+" policy from the State Council is expected to catalyze growth, with Huawei's AI SSD technology launch serving as a significant event [7] - The policy outlines three key phases for AI integration across various sectors, with specific goals set for 2027, 2030, and 2035 [8] Rare Earths and Strategic Resources - Ongoing reforms in the rare earth sector are being reinforced by new regulations from the Ministry of Industry and Information Technology, which include total quantity control for imported minerals [10] Domestic Operating Systems - The Galaxy Kirin operating system has been deployed in over 16 million sets and has played a crucial role in major national projects, maintaining a strong presence in the government sector [11]

Core Viewpoint - The launch of the new generation of the Chinese operating system, Galaxy Kirin V11, marks a significant advancement in the domestic operating system sector, showcasing China's progress in foundational software [1][2]. Group 1: Product Development - Galaxy Kirin V11 is developed by Kirin Software, a subsidiary of China Electronics Corporation, based on the Linux kernel, and has evolved into a diversified product matrix including desktop, server, and industrial operating systems [2]. - The new version employs a self-developed architecture that enhances security, performance, and ecosystem compatibility, supporting various chip architectures and computing platforms [2]. - As of now, Galaxy Kirin has been deployed over 16 million times, demonstrating its extensive adoption [1]. Group 2: Market Position and Impact - Galaxy Kirin V11 supports major national projects such as the Chang'e lunar exploration and Tianwen Mars mission, achieving over 70% market coverage in the government sector [2]. - The operating system is positioned as a "digital foundation" for China's digital infrastructure, contributing to the country's information technology development and security [3][6]. - The market for domestic operating systems is projected to reach 58.6 billion yuan by 2025, driven by policy and market forces [5]. Group 3: Ecosystem and Industry Collaboration - The ecosystem surrounding Galaxy Kirin has expanded significantly, with over 1 million compatible applications and partnerships with more than 20 leading brands [5]. - The release of Galaxy Kirin V11 has prompted rapid responses from upstream and downstream companies in the industry, accelerating ecosystem development [5]. - The successful establishment of a self-controlled operating system ecosystem is crucial for national cybersecurity and information technology infrastructure [6].

Core Viewpoint - The Tianjin Binhai New Area High-tech Zone is accelerating the high-quality construction of the "China Xinchuang Valley," focusing on developing a complete Xinchuang industry ecosystem and enhancing innovation capabilities [2][3]. Group 1: Industry Development - The High-tech Zone has established over 200 key Xinchuang enterprises, including Feiteng, Kirin, and Shuguang, creating a comprehensive Xinchuang industry system covering CPU, operating systems, databases, servers, and cloud computing [2]. - In 2024, the Xinchuang industry revenue in the High-tech Zone is expected to exceed 72 billion yuan, marking a 30.1% year-on-year increase, with the first half of the year achieving 37.3 billion yuan in revenue, a 28% increase [2]. - The High-tech Zone is focusing on four key areas: chip design, integrated circuit equipment and materials, basic software, and AI services, with plans to introduce 30 key projects [2]. Group 2: Company Initiatives - Kirin Software plans to invest 3 billion yuan in core technology research and development for operating systems, focusing on terminal operating systems, cloud server operating systems, and embedded operating system platforms [3]. - Xunlin Technology has achieved breakthroughs in advanced manufacturing technologies for glass substrates, addressing core technology and cost issues in semiconductor processes and display modules [4]. - The Tianjin Information Technology Application Innovation Association aims to support the Xinchuang industry through standard formulation, platform construction, and industry application promotion [5]. Group 3: Policy and Support - The High-tech Zone is implementing a "333" work strategy to enhance the Xinchuang industry chain, focusing on enterprise services, investment attraction, and technological innovation [6]. - There is a strong emphasis on supporting key enterprises and nurturing startups to create a healthy growth environment for leading and innovative companies [6]. - The High-tech Zone is enhancing policy support for various sectors, including integrated circuits, AI, and digital services, to strengthen the core competitiveness of the industry [6][7].

Group 1 - The 32nd Beijing International Radio, Film and Television Exhibition (BIRTV2025) will be held from July 23-26, 2025, at the China International Exhibition Center in Beijing, under the guidance of the National Radio and Television Administration and the China Central Radio and Television Station [1] - Sony (China) Co., Ltd. will showcase its theme "Boundless Creation of New Entertainment" at the exhibition, presenting innovative products, breakthrough technologies, and multi-scenario industry solutions [3] - Sony's VideoIPath, the first and only SDN control system fully compatible with domestically developed CPU server platforms and the domestic operating system (Kylin OS), will be featured, highlighting Sony's professional software development integration capabilities [5] Group 2 - The collaboration between Sony's R&D team and Kylin Software's R&D team involved several months of integration, testing, and validation, resulting in the successful operation of VideoIPath on the Kylin OS without errors [7] - VideoIPath passed 15 core use cases during rigorous testing by Kylin Software, confirming the system's stability, reliability, and high performance [7][8] - The successful operation of Sony's VideoIPath on Kylin OS marks a significant breakthrough in the compatibility and maturity of domestic operating systems in the high-end professional broadcasting field [10]

Group 1 - Huawei officially launched the world's first foldable HarmonyOS computer, marking a significant step towards an independent and controllable computer operating system in China [1][4] - The HarmonyOS computer features a unique design with a dual-screen setup that eliminates the physical keyboard, instead offering an invisible keyboard option [2][3] - The operating system's interface differs from Windows, providing a more user-friendly experience with a top status bar and bottom dock for quick access to applications [3][9] Group 2 - The rise of domestic operating systems is supported by government initiatives aimed at breaking the reliance on foreign technology, with HarmonyOS being a prominent example [4][8] - Jiangsu province has seen rapid development in domestic operating systems, with significant advancements in core technology and a focus on addressing critical software issues [5][6] - The market for Chinese operating systems is projected to reach 25 billion yuan by 2025, indicating a growing trend towards domestic solutions [8] Group 3 - Despite the advancements, challenges remain in achieving full compatibility with existing software ecosystems, as many users still rely on Windows alongside domestic systems [8][9] - HarmonyOS faces hurdles in application ecosystem development, with only 12,000 applications available compared to over 35 million for Windows, highlighting the need for further growth [9] - The compatibility of HarmonyOS with professional software is limited, with only a 62% adaptation rate for key applications, which may hinder its acceptance in the market [9]