Orient: OpenAI launches a major model o1 to improve reasoning ability, and the prosperity of the computing power industry continues to be validated.

Orient released a research report stating that OpenAI has launched the o1 model, which has made significant progress in complex reasoning tasks using reinforcement learning methods, representing a new level of AI capabilities. This will help alleviate investors' concerns about model iteration speed, and unlocking complex reasoning will also bring possibilities to many large model applications, including code generation, smart agent applications, and vertical industry applications, all of which are expected to see new development opportunities. Concerns about the negative impact on the computing power industry have been eliminated by positive news, with domestic chip manufacturers set to introduce or mass produce a new generation of chips in the second half of the year, significantly improving performance and competitiveness, making domestic chips worth paying attention to and planning for. The computer sector rose by 0.3% last week, with the financial IT and information technology sectors performing relatively well, while the car cloud sector experienced a noticeable pullback. After the mid-year disclosures, investors' focus on policy trends has increased, and they are actively seeking out individual stock opportunities from the bottom up. Last week, OpenAI launched the o1 model, which enhanced the logical reasoning ability of large models to a new height using reinforcement learning methods, thereby boosting investor confidence in AI applications and the computing power industry. Additionally, there will be two heavyweight industry conferences next week, the Huawei Full Connection Conference and the Cloud Computing Conference, which are expected to increase investor attention on the ICT sector. OpenAI's o1 model raises the logical reasoning ability of large models to new heights. On September 12, OpenAI released the o1 model, which made significant progress in complex reasoning tasks using reinforcement learning methods, representing a new level of AI capabilities. Orient believes that the introduction of the o1 model will alleviate investors' concerns about model iteration speed, and unlocking complex reasoning will bring possibilities to many large model applications, including code generation, smart agent applications, and vertical industry applications. Negative concerns about the computing power industry continue to be alleviated, and the prospects for the domestic computing power industry remain positive. Recently, investors have had some doubts about the sustainability of AI computing power demand and the pace of domestic smart computing center construction. However, both NVIDIA CEO Huang Renxun's participation in the Goldman Sachs conference and Oracle's plan to purchase 131,000 NVIDIA B series chips to build a Zettascale computing power cluster highlight the strong demand for computing power. Looking at the domestic market, various domestic chip manufacturers are set to introduce or mass produce a new generation of chips in the second half of the year, significantly improving performance and competitiveness, making domestic chips worth paying attention to and planning for. The information technology and innovation sector is expected to see a turnaround. Self-reliance in technology was once again emphasized in the Third Plenum communique, and in terms of the domestic technology industry chain, Huawei undoubtedly holds a leading position in both software and hardware. As the Huawei Full Connection Conference approaches and more product releases are expected in the second half of the year, the market is watching Huawei's progress and changes in the semiconductor and computing industry chain. Due to insufficient funding in the past two years, the demand for government and corporate information technology innovation projects has slowed down, but with safety as the main priority of the new Plenum, and the overall work goal for information technology innovation staying unchanged until 2027, it is likely that fiscal funds will provide special support for these projects, leading to a turnaround in the industry. A new action plan for the electricity system has been released, recommending a continued focus on the electricity IT field. The National Development and Reform Commission and the Energy Bureau jointly issued the "Accelerating the Construction of a New Electricity System Action Plan (2024-2027)", which includes 9 specific actions to promote the construction of a new electricity system, covering areas such as coal power, new energy, power grid systems, smart dispatch, electric vehicles, and demand-side response. The implementation of the action plan demonstrates the country's determination and specific steps to promote electricity marketization and the construction of a new electricity system, making digital companies in the power grid, distribution network, and electricity market sectors worth watching. Investment recommendations and targets Computing power sector: It is recommended to focus on Hygon Information Technology (688041.SH), Cambricon (688256.SH), Digital China Group (000034.SZ), Dawning Information Industry (603019.SH), Unisplendour Corporation (000938.SZ), and Inspur Electronic Information Industry (000977.SZ). Information technology and innovation industry: It is recommended to focus on Wuhan Dameng Database (688250.SH), China National Software & Service (600536.SH), iSoftStone Information Technology (301236.SZ), Jilin University Zhengyuan Information Technologies (003029.SZ), Empyrean Technology (301269.SZ), Semitronix Corporation (301095.SZ), Fujian Apex Software (603383.SH), Jiangsu Hoperun Software (300339.SZ), and ZWSOFT (688083.SH). Digital energy sector: It is recommended to focus on State Power Rixin Technology (301162.SZ), State Grid Information & Telecommunication (600131.SH), Willfar Information Technology (688100.SH), Ygsoft Inc. (002063.SZ), and Acrel Co., Ltd. (300286.SZ).Dongfang Electronics (000682.SZ) and others.AI application field: It is recommended to pay attention to Beijing Kingsoft Office Software, Inc (688111.SH), Iflytek Co., Ltd. (002230.SZ), Thunder Software Technology (300496.SZ), ArcSoft Corporation (688088.SH), Richinfo Technology (300634.SZ), Fujian Foxit Software Development Joint Stock (688095.SH). Low-altitude economy and autonomous driving field: It is recommended to pay attention to Nanjing Les Information Technology (603803.SH), Jiangsu Tongxingbao Intelligent Transportation Technology (301339.SZ), NavInfo Co., Ltd. (002405.SZ), China TransInfo Technology (002373.SZ), VanJee Technology (300552.SZ), Shenzhen Genvict Technologies (002869.SZ), Gosuncn Technology Group (300098.SZ). Risk warning: Risks of policy implementation falling short of expectations; Risks of technological development falling short of expectations.