Investment Rating - The report maintains a "Buy" rating for the company [4][9] Core Views - The company achieved a total revenue of 538 million yuan in the first three quarters of 2025, representing a year-on-year increase of 5%, with a net profit attributable to shareholders of -41 million yuan [1] - The overseas market continues to show strong growth, with a notable performance in Asia, Europe, and the Middle East, where the company has expanded its business scale significantly [1] - The domestic market remains stable despite pressure on procurement demand from manufacturing and construction sectors, as the company actively explores new business opportunities [1] Financial Performance - For the third quarter alone, the company reported revenue of 204 million yuan, which is approximately flat year-on-year, and a net profit of 12 million yuan [1] - The company’s revenue projections for 2025 to 2027 are 955 million yuan, 1.09 billion yuan, and 1.264 billion yuan respectively, with corresponding net profits of 36 million yuan, 74 million yuan, and 125 million yuan [2][3] - The company’s R&D expenses for the first three quarters totaled 327 million yuan, with an R&D expense ratio exceeding 60%, indicating a strong focus on core technology breakthroughs [2] Product Development - The company is focusing on breakthroughs in 3D CAD products while also innovating in its 2D CAD offerings, such as the launch of ZWCAD 365, which enhances its product matrix and meets customer needs for collaborative design [2] - The ongoing "All-in-One CAx" integrated strategy aims to significantly improve the performance of future 3D CAD products [2]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative performance increase of over 15% against the benchmark index in the next 6 to 12 months [9] Core Views - The company is experiencing stable revenue in the domestic market while rapidly expanding in overseas markets, leveraging competitive sales channels and brand promotion [6][8] - The company is focusing its R&D resources on key project development, which is expected to enhance the performance of its 3D CAD products significantly [6][8] - The company has adjusted its revenue and profit forecasts for 2025-2027 due to macroeconomic pressures, projecting revenues of 9.63 billion, 10.96 billion, and 12.63 billion respectively, and net profits of 0.86 billion, 1.23 billion, and 1.69 billion [6][8] Financial Summary - For 2023, the company achieved a revenue of 828 million, with a year-on-year growth rate of 38%, and a net profit of 61 million, reflecting a significant growth of 874% [2][6] - The projected earnings per share (EPS) for 2025 is 0.51, with a net profit margin expected to increase to 13.3% by 2027 [2][8] - The company’s market capitalization is approximately 13.42 billion, with a current share price of 79.16 [3][6]

Core Viewpoint - The company reported stable revenue and significant profit growth in the third quarter, focusing on long-term value creation and strategic partnerships in both domestic and international markets [2][3]. Financial Performance - The company achieved a total operating revenue of 204.26 million yuan, remaining stable compared to the same period last year [2]. - The net profit attributable to shareholders was 11.56 million yuan, representing a 141.18% increase year-on-year [3]. Business Strategy - The company is actively exploring new business opportunities arising from policy support and the transformation of the manufacturing industry, while maintaining strategic collaborations with industry leaders [2]. - In the international market, the company continues to experience rapid growth, leveraging competitive sales channels and enhanced brand promotion [2]. Research and Development - The company is committed to long-term value creation, focusing on key project development and enhancing the performance of its 3D CAD products [3]. - The official release of ZWCAD 365 has improved the 2D CAD product matrix and met the collaborative design needs of key clients [3]. Shareholder Information - The company announced the approval of the second vesting period for its 2023 restricted stock incentive plan, with 154,868 shares eligible for vesting [31][43]. - A total of 36,744 shares were canceled due to non-fulfillment of vesting conditions by certain employees [24][26]. Governance Changes - The company has made adjustments to its board committees, including the appointment of a new member to the remuneration and assessment committee [51][52].

Summary of Zhongwang Software Conference Call Company Overview - Zhongwang Software is a leading domestic CAD (Computer-Aided Design) enterprise in China, benefiting from accelerated domestic substitution and self-controllable policies, which have enhanced its strategic position and driven stock price increases [2][6][8]. Industry Insights - The industrial software sector is a core driver of value in the industrial chain, with China's industrial software output significantly lower than its industrial output, indicating substantial growth potential [2][5]. - The global CAD market is valued at approximately $10-15 billion, with the Chinese market nearing 10 billion RMB. The market is expected to grow at over 20% due to trends in manufacturing transformation, domestic substitution, and software legalization [16][19]. Key Financial Metrics - The company targets a revenue growth rate of 15-20% and anticipates faster profit growth in the future [2][7]. - Revenue reached 3.7-3.8 billion RMB in 2023, with a ninefold increase in profit [10]. - The company’s gross margin is reported at 95%, showcasing strong profitability [7]. Product and Market Position - Zhongwang's product line includes 2D/3D CAD, CCAM, and CAE, with 3D CAD experiencing a compound annual growth rate (CAGR) of 16% over the past five years, projected to generate 3.155 billion RMB in revenue by 2024 [2][12]. - The company has over 1.4 million legitimate users and operates in 90 countries, with overseas revenue growth reaching 42% in the first half of 2025 [2][11]. Competitive Advantages - Zhongwang offers competitive pricing, with subscription fees significantly lower than those of international giants like Siemens and Dassault [4][23]. - The company has increased its R&D expense ratio to 50% in 2024 and 67% in the first half of 2025, emphasizing its commitment to innovation [4][13]. Strategic Initiatives - The company has acquired the entire intellectual property of the Override geometric kernel, enabling the development of 3D and electromagnetic structure simulation products [2][22]. - Zhongwang is actively pursuing international expansion, collaborating with over 800 global channel partners and participating in major industrial exhibitions [24]. Future Outlook - Zhongwang aims to become a Chinese equivalent of Dassault Systems and is expected to complete its transition from catching up to independence and globalization within 5 to 10 years [7]. - The market currently undervalues Zhongwang, with a target price-to-sales (PS) ratio of 15, significantly lower than the industry average of 27 [4][25]. Additional Considerations - The importance of software legalization is emphasized, as it is crucial for the development of specialized software in China, which currently has a low industrial software output relative to its manufacturing value [5][18]. - The integration of solutions to avoid data silos and improve process efficiency is a growing trend in the industry, with Zhongwang promoting an integrated strategy for CAD and CECAM [17].

Investment Rating - The report maintains an "Accumulate-A" rating for the company [1][7] Core Views - The company has achieved steady revenue growth, with a significant acceleration in overseas market expansion despite short-term profit fluctuations due to pressures on core customer sales [5][6] - The company is positioned to benefit from the domestic industrial software support policies and has made continuous improvements to its core products while aggressively expanding into overseas markets [5][6] - The company’s revenue for the first half of 2025 reached 334 million yuan, a year-on-year increase of 8.24%, while the net profit attributable to shareholders was -52 million yuan, compared to 6 million yuan in the same period last year [4][5] Financial Performance - In Q2 2025, the company reported revenue of 208 million yuan, a year-on-year increase of 10.59%, but the net profit attributable to shareholders was -4 million yuan, a decrease of 114.04% year-on-year [4][5] - The gross margin for the first half of 2025 was 95.13%, down 2.58 percentage points from the previous year, primarily due to an increase in customized software and technical service revenues [5] - The company’s net profit margin for the first half of 2025 was -15.26%, a decrease of 13.19 percentage points year-on-year, but improvements are expected in the second half of the year due to ongoing cost reduction and efficiency enhancement efforts [5] Market Segmentation - The domestic commercial market saw a slight revenue decrease of 0.10% year-on-year, totaling 187 million yuan in the first half of 2025 [6] - The domestic education market experienced a significant decline, with revenue dropping 36.00% year-on-year to 21 million yuan due to policy adjustments and budget constraints [6] - The overseas market showed robust growth, with revenue increasing by 42.21% year-on-year to 126 million yuan, driven by successful localization strategies in various regions [6] Product Performance - The 2D CAD segment generated revenue of 215 million yuan, an increase of 11.82% year-on-year, supported by continuous product iterations and enhancements [7] - The 3D CAD segment saw a modest revenue growth of 3.40% year-on-year, totaling 92 million yuan, impacted by a temporary slowdown in customer promotions [7] - The CAE segment achieved a revenue increase of 25.38% year-on-year, while the BoChao series experienced a remarkable growth of 85.88% year-on-year [7] Investment Recommendations - The company is recognized as a leading player in industrial design software, with its product competitiveness expected to improve, benefiting from the trend of domestic industrial software localization [7] - The projected earnings per share (EPS) for 2025-2027 are 0.43, 0.57, and 0.70 yuan, respectively, with corresponding price-to-earnings (P/E) ratios of 160.7, 122.4, and 99.2 [7]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is a leader in the domestic CAX industrial software sector and is expected to benefit from domestic substitution opportunities and overseas expansion, maintaining a "Buy" rating [5] - The company has accelerated revenue growth in Q2, with overseas revenue showing significant performance, indicating a potential to become a world-class industrial software enterprise [6][7] Financial Performance Summary - In the first half of 2025, the company achieved operating revenue of 334 million yuan, a year-on-year increase of 8.24%, while the net profit attributable to the parent company was -52 million yuan, a decline of 976.90% [6] - For Q2 2025, the company reported operating revenue of 208 million yuan, a year-on-year growth of 10.59%, with a net profit attributable to the parent company of -4 million yuan, a decrease of 114.04% [6] - The company’s overseas market revenue growth accelerated to 42.21% in the first half of 2025, with several markets, including Japan, Thailand, Italy, Spain, Turkey, and the UAE, experiencing growth rates exceeding 50% [7] Earnings Forecast - The revised profit forecasts for 2025-2027 are as follows: net profit attributable to the parent company is expected to be 74 million yuan, 100 million yuan, and 125 million yuan respectively, with EPS projected at 0.44 yuan, 0.59 yuan, and 0.74 yuan [5] - The current stock price corresponds to P/E ratios of 177.6, 131.2, and 105.2 for 2025, 2026, and 2027 respectively [5] Stock Incentive Plan - The company announced a restricted stock incentive plan in August 2025, proposing to grant 510,000 shares at a price of 34.00 yuan per share, covering 231 employees, which is about 11.83% of the total workforce [8]

Group 1 - The 14th "China Software Cup" University Software Design Competition was held from August 25 to 28, attracting over 5,604 teams from more than 800 universities, with over 20,000 participants [1] - A total of 379 teams advanced to the finals, with 210 teams participating in the on-site finals, resulting in 18 first prizes, 100 second prizes, and 261 third prizes awarded [1] - The competition aims to accelerate the cultivation of innovative talents needed in the software industry and establish a collaborative training mechanism centered on software technology projects [1][2] Group 2 - The event included the 2025 Software Industry-Education Integration Seminar, where leaders from software industry departments, universities, and enterprises discussed core issues of industry-education integration [2] - Companies like Tongyuan Soft Control and others have established industrial software courses and joint laboratories with universities to collaboratively train students [4] - The Suzhou Industrial Park has integrated industrial software into its strategic focus, creating a collaborative innovation ecosystem to support talent development and core technology breakthroughs [5][6] Group 3 - The park has developed a comprehensive industrial software matrix covering 35 industrial categories, supporting innovation in high-end equipment, automotive, electronics, textiles, and artificial intelligence [5] - By the end of 2024, the park is expected to host six key software enterprises encouraged by the state, ten key software enterprises planned by Jiangsu Province, and 134 key software enterprises in Suzhou [5] - The collaboration between various innovation elements in the park is evolving from "physical accumulation" to "chemical reaction," indicating closer cooperation among stakeholders [6][8]

Core Viewpoint - The company, Guangzhou ZWSoft Co., Ltd., has proposed a 2025 Restricted Stock Incentive Plan aimed at attracting and retaining talent while aligning the interests of shareholders, the company, and its core team for long-term development [1][10]. Group 1: Incentive Plan Overview - The incentive tool used in this plan is restricted stock, specifically the second type of restricted stock, with shares sourced from the company's directed issuance or repurchase of A-shares [2][15]. - The total number of restricted shares to be granted is 510,080 shares, accounting for 0.30% of the company's total share capital of 1,695,845,470 shares as of the announcement date [2][16]. - The grant price for the restricted stock is set at 34.00 RMB per share [3][22]. Group 2: Eligibility and Conditions - The plan targets 231 individuals, representing approximately 11.83% of the total workforce of 1,952 employees as of the end of 2024, including directors, senior management, core technical personnel, and key employees [3][14]. - The plan stipulates that the restricted stock will not confer shareholder rights until vested and cannot be transferred or used as collateral before vesting [2][4]. Group 3: Vesting Schedule and Performance Metrics - The vesting period for the restricted stock is a maximum of 48 months, with shares vesting in stages based on the fulfillment of specific conditions [4][18]. - The performance assessment for the vesting of shares will be based on company-level metrics, including cumulative revenue from 3D CAD products and overseas revenue, with specific target values set for the years 2025 to 2027 [23][28]. Group 4: Governance and Approval Process - The plan requires approval from the company's shareholders and will be managed by the board of directors, which will also oversee the implementation and any necessary adjustments [6][30]. - The board's remuneration and assessment committee will evaluate the plan's alignment with the company's sustainable development and shareholder interests [12][30].

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 Insights - The company reported a revenue of 888 million yuan for 2024, a year-on-year increase of 7.31%, and a net profit attributable to shareholders of 63.96 million yuan, up 4.17% year-on-year [1] - In Q1 2025, the company achieved a revenue of 126 million yuan, a year-on-year growth of 4.56%, but reported a net loss attributable to shareholders of 47.7 million yuan, indicating an expanded loss compared to the previous year [1] - The domestic commercial market showed steady growth, while the overseas market experienced significant expansion, with overseas revenue reaching 202 million yuan in 2024, a year-on-year increase of 28.77% [2] Domestic Market Performance - The domestic commercial market generated revenue of 561 million yuan in 2024, reflecting a year-on-year growth of 12.13% despite macroeconomic pressures [1] - The domestic education market faced challenges, resulting in a revenue decline of over 25% year-on-year due to budget constraints and policy changes [1] Product Performance - The 2D CAD product line generated revenue of 482 million yuan in 2024, with a modest growth of 2.12% [2] - The 3D CAD product line, benefiting from previous investments, achieved revenue of 242 million yuan in 2024, marking a significant year-on-year growth of 29.21% [2] Organizational and Operational Improvements - The company has made structural adjustments to enhance service quality for key accounts (KA) and small to medium enterprises, integrating business and R&D teams [3] - The sales expenses decreased by 4.87% year-on-year in 2024, with further reductions in Q1 2025, indicating improved cost control [4] Future Outlook - Revenue projections for 2025-2027 are adjusted to 1.011 billion yuan, 1.168 billion yuan, and 1.352 billion yuan respectively, with net profits expected to be 94 million yuan, 129 million yuan, and 175 million yuan [5] - The company maintains a "buy" rating due to competitive advantages in 3D products, rapid growth in overseas markets, and ongoing improvements in management and operational efficiency [5]