Summary of Conference Call for Zhongsoft International Company Overview - Zhongsoft International is a key player in the development and deployment of the Harmony operating system, focusing on both B-end and C-end markets. The company has established partnerships with various hardware manufacturers and is actively involved in smart city projects and AI applications. Key Points Industry and Company Involvement - Zhongsoft International has a significant stake in Deep Kaihong, which recently completed a Series B financing round with a post-investment valuation of 5.4 billion yuan, planning to list on the Sci-Tech Innovation Board in 2026 [2][3] - The company is heavily investing in smart city projects, with planned investments in Xi'an of over 10 billion to 20 billion yuan annually for the next three years, and approximately 10.5 billion yuan in Longgang District, Shenzhen [2][3] Harmony Operating System Developments - Zhongsoft International holds over 60% of the contract share for Huawei's Harmony OS, with device connections reaching 1.19 billion units. Revenue from native application migration is expected to reach 400 to 500 million yuan by the end of the year, excluding Huawei's outsourcing projects [2][3][8] - The company plans to collaborate with hardware manufacturers like Loongson and Yisiwei to create an integrated model of chips, operating systems, and ecosystems, aiming for a scale of interconnected devices in the hundreds of billions [2][4] AI and Business Growth - The AI and Harmony business revenue is projected to double year-on-year by 2025, reaching approximately 2 billion yuan, primarily through computing power leasing, domestic patent sales, and the AI Agent platform [2][6] - Zhongsoft International is developing an atomic service platform in collaboration with cultural tourism departments, which has already generated revenue in 2025 [5] Market Strategy and Competition - The Harmony virtual machine is currently free for C-end users, with plans to commercialize it for B-end clients alongside PC hardware launches in 2026 [7] - The company has a competitive edge in the open-source Harmony field due to its founding team from Huawei, leading code contributions, and extensive application capabilities across various sectors [9] Future Projections and Industry Trends - The company anticipates significant growth in the Harmony ecosystem by 2026, driven by government support and a focus on B-end device replacements in sectors like military and public security [12] - Zhongsoft International aims to become a core application supplier, leveraging new business opportunities through its atomic traffic platform [10] Additional Insights - The company is actively involved in AR and AI integration, enhancing operational efficiency and reducing costs through AI assistants in various industries [14][16] - Zhongsoft International is positioned to benefit from national policies promoting the development of domestic operating systems, with Harmony OS being specifically highlighted [11] This summary encapsulates the critical insights and developments discussed during the conference call, highlighting Zhongsoft International's strategic initiatives and market positioning within the Harmony operating system landscape.

Business Overview - In the first three quarters of 2025, the company achieved a revenue of CNY 4.971 billion, a slight decrease of 2.50% year-on-year, while the net profit attributable to shareholders was CNY 183 million, an increase of 2.65% year-on-year [3][9]. - The overall gross margin for the first three quarters was 23.09%, remaining stable compared to the previous year [9]. Industry Performance - In the financial sector, the application of big data and AI has driven steady growth, with revenue from financial services reaching CNY 1.345 billion, accounting for 27.05% of total revenue [4][12]. - The internet and high-tech sectors generated CNY 1.905 billion and CNY 1.067 billion in revenue, representing 38.33% and 21.46% of total revenue, respectively [12]. - New contracts signed in agriculture, energy, and chemical industries totaled approximately CNY 350 million from January to September 2025 [5][17]. Cost Management and Efficiency - The company has implemented comprehensive cost reduction and efficiency enhancement measures, resulting in a decrease in various costs and an improvement in operational quality [3]. - The net cash flow from operating activities was -CNY 48.54 million, but this represented a significant year-on-year increase of 73.33% [9]. Innovation and AI Integration - The company is leveraging its AI platforms to deploy AI applications across various industries, establishing innovation centers in Tokyo, Beijing, and Singapore to enhance global innovation networks [6][7]. - AI is being utilized to improve research and development efficiency, optimize customer management, enhance production processes, and facilitate human-machine collaboration [13][14]. Future Outlook - The company aims to continue expanding its new business and innovation sectors, with expectations for stable overall revenue in 2025 and increased orders in new business areas [8][16]. - The focus will be on sectors such as agriculture, energy, and chemicals, with a goal to enhance the overall solution capabilities and create a complete service chain [17]. Strategic Partnerships - The company has a long-standing partnership with Alibaba, providing development, operation, and digital technology support for Alibaba's products [18]. - Recent collaborations include the launch of AI-driven financial solutions and a comprehensive overseas service system based on Alibaba Cloud's infrastructure [19].