Market Overview - The total market size for PLM software in China is projected to reach 3.51 billion RMB in 2024, with a year-on-year growth rate of 21.6%, an increase of 5.6 percentage points from the previous year [1] - The market is experiencing intensified competition, leading to a decline in average transaction prices and longer decision-making cycles [1] Competitive Landscape - Siemens, Dassault Systèmes, and PTC remain the top three players in the market, although their growth rates are slowing. Siemens' market share decreased from 14.3% in 2023 to 11.3%, while Dassault Systèmes' share fell from 10.2% to 8.0% [1] - Other notable companies include Yonyou, Kingdee, Dingjie Zhizhi, Supcon Software, Huaten Software, and Digital Dafa, which rank from fourth to ninth in market share [1] SaaS PLM Market - The SaaS PLM software sub-market in China is expected to reach 181 million RMB in 2024, with a growth rate of 21.9%, slightly higher than the overall PLM market growth rate, but it only accounts for 5.25% of the total PLM market [3] - There is a growing trend of manufacturers launching cloud-native PLM products, with an increasing adoption rate among end-users despite concerns about storing design and R&D data on public clouds [3] Industry Segmentation - The PLM market is segmented into eight major industries: high-tech electronics and computers, equipment manufacturing, automotive, aerospace and shipbuilding, consumer goods, raw materials, home appliances, and new energy [5] - The total market size for PLM solutions (including software and services) is projected to reach 5.32 billion RMB in 2024, with the top three industries being high-tech electronics, equipment manufacturing, and automotive [5] Market Share by Industry - In the high-tech electronics and computer communication PLM solutions market, Dingjie Zhizhi holds a market share of 12.2%, followed by Yonyou and Supcon Software [6] - In the equipment manufacturing PLM solutions market, Dingjie Zhizhi leads with a 6.2% market share, followed by Digital Dafa and Supcon Software [7] - In the automotive PLM solutions market, Huaten Software has a dominant share of 77.2%, with other players like Supcon Software and Kingdee following [8] - In the new energy PLM solutions market, Kingdee leads with an 11.3% market share, followed by Meiyun Zhishu and Huaten Software [9] Key Market Trends - Major market changes for 2024 include AI reshaping industrial software, the globalization of Chinese manufacturing, large-scale equipment updates, and the integration of industrial software with the industrial internet [11] - The research indicates that the intensity of R&D investment by Chinese enterprises is increasing, with a long-term trend of moving from price competition to innovation [11]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage in the market [4][7]. Core Views - The company has been deeply engaged in the digital transformation of the manufacturing industry for over 40 years and is now embracing AI to build a second growth curve [13]. - The company is expected to see stable revenue and profit growth, particularly from 2025 onwards, as industrial economic transformation and demand recovery in manufacturing sectors take place [6][9]. - The company is well-positioned to benefit from the ongoing trend of domestic software replacement, with strong customer loyalty and high barriers to entry [9][34]. - The company is actively promoting AI applications across various manufacturing sectors, which is anticipated to generate additional revenue and open new growth avenues [9][45]. Financial Summary - Revenue projections for the company are as follows: - 2023: 2,228 million RMB - 2024: 2,331 million RMB - 2025: 2,530 million RMB - 2026: 2,771 million RMB - 2027: 3,072 million RMB - The expected growth rates for revenue are 11.65% in 2023, 4.62% in 2024, and 8.56% in 2025 [5][51]. - The forecasted net profit attributable to the parent company for 2025-2027 is projected to be 206 million RMB, 281 million RMB, and 362 million RMB, respectively, with growth rates of 32.34%, 36.43%, and 28.70% [5][54]. Business Operations - The company has a diverse product matrix that provides comprehensive software and solutions for the entire production process, integrating AI for innovation [16][20]. - The company has established a strong presence in various manufacturing sectors, including equipment manufacturing, automotive parts, and electronics, with a significant market share in ERP, MES, and PLM solutions [13][41]. - The company is expanding its operations in Southeast Asia, with a focus on local talent and partnerships to enhance its market presence [22][27]. AI Integration - The company is leveraging its Athena platform to integrate AI applications across multiple scenarios, enhancing operational efficiency and customer engagement [45][49]. - AI applications are expected to contribute significantly to the company's revenue growth, with various tailored solutions being developed for specific industry needs [45][50].

Core Viewpoint - The industrial software sector, particularly research and design software, plays a crucial role in enhancing design efficiency, reducing costs, and achieving goals such as visualization, remote operation, and intelligent control. The market for EDA, CAD, and CAE software in China is projected to grow significantly by 2024, indicating a robust demand for these technologies in various industries [1][5][9]. Group 1: Market Size and Growth - The Chinese EDA software market is expected to reach approximately 13.59 billion yuan in 2024, up from 11.56 billion yuan in 2022, reflecting an 11.80% growth from the previous year [5][9]. - The CAD software market in China is projected to grow to around 6.07 billion yuan in 2024, increasing from 4.86 billion yuan in 2022, which represents a 15.4% growth year-on-year [7][9]. - The CAE software market is anticipated to reach about 4.92 billion yuan in 2024, up from 3.76 billion yuan in 2022, marking a 17.1% increase from the previous year [9]. Group 2: Industry Definition and Classification - Industrial software is essential for automation, information technology, and intelligent manufacturing, with research and design software being a key tool for innovation and development of new equipment [2][5]. - Research and design software includes CAD, CAE, CAM, and PLM, covering the entire lifecycle of industrial products from concept design to production and after-sales service [2][5]. Group 3: Industry Development Status - The industrial software sector is a foundational and strategic industry that significantly impacts national economic and social development [5]. - The domestic research and design software industry has established a relatively complete system, with notable companies like Zhongwang Software, Haocen Software, and Digital Dafa emerging as key players [11][17]. Group 4: Competitive Landscape - Major foreign players in the research and design software market include Dassault, Siemens, PTC, and Autodesk, which collectively hold over half of the domestic market share, particularly in high-end segments [15][16]. - Domestic companies are rapidly gaining market share, with Zhongwang and Huachen achieving significant penetration in both low-end and mature foreign markets [11][17]. Group 5: Development Strategies and Recommendations - The integration of research and design software with industrial elements is crucial for enhancing innovation capabilities and efficiency in enterprises [18]. - The industry is expected to evolve towards cloud-based, AI-driven, and domestically produced solutions, necessitating breakthroughs in core technologies and the establishment of a complete ecosystem [18].