Investment Rating - The investment rating for Chinasoft International is Neutral, with a target price of HK$5.50, reflecting a potential upside of 11.8% from the current price of HK$4.92 [10][13]. Core Insights - The company is optimistic about growth driven by the HarmonyOS ecosystem and generative AI opportunities, while traditional IT services remain modest [1][8]. - Management emphasizes the transition from traditional IT services to intelligent cloud services, which is expected to enhance profitability through higher gross margins and efficiency improvements [7][8]. Summary by Sections HarmonyOS Ecosystem - Chinasoft International is collaborating closely with Huawei on HarmonyOS initiatives, focusing on application migration and developing Harmony-version virtual machines. Increased adoption of Harmony PCs is anticipated to create more business opportunities [2][3]. Generative AI Opportunities - As a full-stack AI service solutions provider, the company is capitalizing on the growing demand for generative AI in China. Their services span AI infrastructure, foundation models, and application software development. The establishment of AI computing centers with local governments is also highlighted [3][7]. 2025 Outlook - Management expects traditional IT services to see better growth from sectors such as financial institutions, internet companies, automotive, and state-owned enterprises. The company anticipates a higher profit level due to the expansion of intelligent cloud services and AI deployment [7][8].

Core Viewpoint - The company is positioned as a core partner of Huawei, focusing on the development of the HarmonyOS ecosystem and AI computing capabilities, which are expected to drive revenue recovery and growth in the coming years [1][2]. Group 1: Business Strategy and Growth - The company anchors its strategy on the "1+3" business matrix, which includes cloud intelligence, HarmonyOS, MetaERP, and computing power, aiming to build a unique ecological position in the wave of self-reliance and AI industrialization [1]. - The company has contributed over 4.85 million lines of code to the open-source HarmonyOS, ranking second in the community, and has developed over 6,000 native applications covering six major industries [1][2]. - The first HarmonyOS PC is set to launch in May 2025, with over 150 dedicated applications and 2,000 integrated ecological applications already adapted [2]. Group 2: AI Development and Market Position - The company positions itself as a "computing power operator + Agent implementer" in the AI sector, operating multiple Ascend intelligent computing centers across cities to enhance utilization through computing power scheduling and model optimization [2]. - The AI business covers the entire stack from cloud to edge, with expectations that AI-related value-added service revenue will become a new growth engine by 2025 [2]. - The company has launched the DeepSeek integrated machine in collaboration with Huawei, combining Ascend computing power with large model capabilities, targeting sectors such as government and finance [2]. Group 3: Financial Projections - Revenue projections for the company are estimated at 17.8 billion, 19.46 billion, and 22.14 billion yuan for the years 2025, 2026, and 2027, respectively, with net profits attributed to ordinary shareholders expected to be 610 million, 730 million, and 890 million yuan for the same years [3]. - The company is compared to peers in the Huawei supply chain, with an average PE ratio of 50x for 2025E, and a target market value of 17 billion yuan is set after applying a 56% discount due to its Hong Kong listing [3].

Core Insights - The open-source HarmonyOS has made significant progress in its ecosystem development, with the release of version 5.1 and the launch of AI Agent technology for ecosystem collaboration [1][2] - The codebase has grown to over 130 million lines with contributions from more than 8,600 developers, and over 1,100 hardware and software products have passed compatibility testing [1][2] - The development of open-source HarmonyOS is seen as a key turning point for China's foundational software to participate in global competition, indicating a rapid evolution of domestic operating systems [1][2] Group 1 - The newly released HarmonyOS 5.1 emphasizes distributed capabilities and AI integration, introducing spatial audio technology to support industrial upgrades and AR/VR scenarios [2] - The project has released eight major versions and built over 1,100 open-source third-party libraries, accelerating application and device development [2] - The ecosystem's growth signifies a substantial breakthrough for China in the global operating system market, with expectations for rapid development in the coming years [2][3] Group 2 - The open-source HarmonyOS was officially launched by Huawei in 2019, with the OpenAtom Foundation taking over its open-source management in 2020 [3] - Various policies have been implemented to promote the development of open-source HarmonyOS, including a 2024 action plan from Shenzhen to establish a native application software ecosystem [3] - The OpenAtom Foundation is focused on project introduction, cultivation, technological innovation, and ecosystem expansion to provide diverse resources for developers [4] Group 3 - The rapid development of open-source HarmonyOS has attracted ecosystem partners, leading to innovative applications and a global expansion of the ecosystem [6] - Shenzhen Kaihong Digital Industry Development Co., Ltd. announced a five-year investment of 500 million yuan to create a complete support loop for application development and commercialization [6] - Major companies are actively participating in the construction of various independent ecosystems, indicating a shift towards self-sufficiency in China's software and hardware industries [6]

Core Viewpoint - The article highlights the rapid development and expansion of the OpenHarmony operating system, showcasing its growing ecosystem and the commitment of various stakeholders, particularly Huawei, to foster innovation and commercialization in the open-source domain [2][3][5]. Group 1: OpenHarmony Development - The OpenHarmony project has reached over 130 million lines of code with contributions from more than 8,600 developers, and over 1,100 software and hardware products have passed compatibility testing across various industries [2]. - The release of OpenHarmony 5.1 marks the continuous iteration of the operating system, with a total of 8 major versions released since its inception [2]. - The OpenAtom OpenHarmony project has successfully created numerous industry application cases and is focused on project cultivation, technological innovation, and ecosystem expansion [3]. Group 2: Ecosystem and Community Engagement - Shenzhen, as the birthplace of OpenHarmony, is actively promoting its development by establishing a talent cultivation system that integrates innovation centers, industrial parks, and enterprises [3]. - The establishment of the AI Model SIG and the Robotics PMC working group aims to accelerate the application of AI and robotics technologies within the OpenHarmony ecosystem [2]. Group 3: Commercialization and Future Plans - Deep Hong, a company involved in the OpenHarmony ecosystem, has launched the first open-source Harmony-based robot operating system, M-Robots OS, and plans to release a series of intelligent robots in the next three months [6]. - The Kaihong "1+1" security digital foundation 5.0 was introduced, combining KaihongOS with a super device management platform, and a five-year investment plan of 500 million yuan is set to support developers and foster innovation [8]. - The future support for X86 architecture in the KaihongOS desktop version signifies advancements in cross-platform capabilities for domestic operating systems [8].

Core Insights - The OpenHarmony project has made significant progress in the past four years, with over 130 million lines of code and more than 8,600 contributors, making it one of the fastest-growing open-source operating systems [1][2] - The release of OpenHarmony 5.1 marks the eighth major version since its inception, with over 1,100 open-source libraries developed to accelerate application and device development [1][2] - The Shenzhen government emphasizes the importance of talent cultivation for the growth of OpenHarmony, establishing a three-tiered training system to support developers [2][4] Group 1 - OpenHarmony aims to expand its global ecosystem and promote large-scale commercial applications across various industries [2] - The OpenAtom OpenHarmony Foundation has successfully created numerous industry application cases since its establishment in September 2020 [2][3] - The foundation plans to focus on project introduction, cultivation, technological innovation, and ecosystem expansion to provide diverse resources for developers [2] Group 2 - Companies can develop their commercial versions of OpenHarmony, with Huawei launching HarmonyOS 5 and other companies like Shenzhen Kaihong Digital Industry Development Co., Ltd. introducing their own systems [3] - The OpenHarmony project group includes various companies, indicating a collaborative ecosystem for development [3] - Shenzhen Kaihong announced the launch of the first open-source Harmony learning platform and a robot operating system, M-Robots OS, aimed at developers [4] Group 3 - Shenzhen Kaihong plans to invest 500 million yuan over the next five years to support developers through a comprehensive service system [4] - The recent launch of Huawei's Harmony computer signifies a breakthrough for domestic operating systems in the desktop sector [5] - Analysts predict that the accelerated development of the Harmony ecosystem will lead to rapid growth in domestic operating systems in the coming years [5]