China Securities Co., Ltd.: Multiple data elements to exert greater effort, second half of the year may see a flurry of policy implementations.

China Securities Co., Ltd. released a research report stating that multiple elements of data are making efforts and accumulating strength, substantial progress has been made in data resourcing and data assetization. In the first half of 2024, 52 listed companies carried out data asset entry work, with a total amount of 1.389 billion yuan, an increase of 1248% compared to the first quarter. In the second half of 2024, data elements are about to enter a stage of intensive policy implementation, accelerating into a new development period with clear rules, systems, and application scenarios. In the first half of 2024, the national data work system centered around the National Bureau of Statistics and the Ministry of Finance continued to strengthen, promoting theoretical research, policy formulation, and collaborative exploration in practice, accumulating strength and making substantial progress in data resourcing and assetization. It actively released positive signals, such as the rapid introduction of a series of heavyweight policies represented by the development and utilization of public data, signaling potential investment opportunities in the second half of the year. 1. Multiple efforts and accumulation of strength, data elements may undergo positive changes Since the Fujian Digital Summit on May 24, 2024, with continuous promotion from the national data system led by the National Bureau of Statistics and the Ministry of Finance, data elements have accelerated from the stage of data resourcing to the stages of data assetization and data capitalization. Among them, data resourcing and assetization are key areas of focus for the development of data elements. The institutional framework and implementation path of data resourcing are gradually becoming clear, data assetization is accelerating, and the exploration of data capitalization paths is beginning to show initial signs. (1) In terms of data resourcing, led by the National Bureau of Statistics, important work deployments have been made focusing on key areas such as data infrastructure, data supply, data circulation and trading, data development and utilization, and data industry development, constantly releasing positive signals to society. (2) In terms of data assetization, in the first half of 2024, led by the Ministry of Finance, efforts were made to accelerate the entry, evaluation, mortgage loans, and other aspects of data assets, especially substantial progress has been made in the entry of data assets. (3) In terms of data capitalization, the national government has not yet started explorations on a planned scale, but institutions such as the Shanghai Data Exchange and the Hong Kong Monetary Authority have made innovative explorations, proposing new paths such as tokenization of data assets, securitization, and tokenization of real-world assets, laying the foundation for the future scale development of data capitalization. 2. The institutional framework for data resourcing is basically formed, series of heavyweight policies are expected to be implemented Recently, the National Bureau of Statistics has released positive signals several times regarding the development of data elements at the 20th Third Plenary Session on "Promoting High-Quality Development" and the 2024 China International Big Data Industry Expo held by the National Bureau of Statistics for the first time. Overall, the institutional framework for data resourcing focusing on core areas such as data infrastructure, data supply, data circulation and trading, data development and utilization, and data industry development is gradually taking shape. According to incomplete statistics, the National Bureau of Statistics has explicitly mentioned in public statements that more than nine policy documents that are about to be introduced or in the process of drafting, some of which may be implemented within the year. With the implementation of these intensive policies, the value release path of data elements may become clearer. (1) In terms of data infrastructure, construction guidelines may be implemented, and data spatial experiments have been put on the agenda. Since the Director of the National Bureau of Statistics first proposed the concept of data infrastructure at the Global Data Commerce Conference in 2023, the concept of data infrastructure has evolved continuously and has gradually formed various technological solutions such as privacy computing, data spatiality, blockchain, and the Internet of Things. At the 20th Third Plenary Session in July, the Director of the National Bureau of Statistics Digital Technology and Infrastructure Construction Department mentioned that the National Bureau of Statistics is organizing the compilation of the "Data Infrastructure Construction Guidelines," with the aim of clarifying the concept, development vision, and construction goals of data infrastructure under the current circumstances, mobilizing social consensus, defining the direction of construction, and promoting the establishment of a coordinated, scalable, efficient, and trustworthy data infrastructure service system. At the end of August, at the Big Data Expo, the National Bureau of Statistics announced that it will accelerate the release of the national data infrastructure construction guidelines, focusing on enhancing six capabilities including data aggregation, processing, circulation, application, operation, and security from four aspects: network facilities, computing facilities, circulation facilities, and security facilities, clarifying the direction of national data infrastructure construction. Compared to traditional digital infrastructure, circulation infrastructure is a new link. In 2023, the Director of the National Bureau of Statistics proposed that circulation infrastructure includes data spatiality, the Internet of Things, blockchain, and privacy-secure computing. At the expo, the National Bureau of Statistics has initiated data spatial experiments and trials, which mainly include implementing five categories of data spatial development, solidifying the foundation for data spatial development (standards and technologies), and strengthening international cooperation. (2) In terms of data supply, public data leads, followed by enterprise and personal data. Public data development and utilization, as an entry point and important part of the data element market nurturing, is actively explored in various cities, but top-level special policies at the national level are still urgently needed. At the expo, the National Bureau of Statistics announced that the public data document will soon be issued, while the development and utilization of enterprise data resources is currently seeking widespread opinions, and policies regarding the development and utilization of personal data resources are also being intensively studied. With clear rules for three types of data resources in the future, the data supply side is expected to be fully activated. (3) In terms of data circulation and trading, the data infrastructure system is expected to fully implement and refine the "Data Twenty Articles." As a top-level framework policy for the development of data elements, the "Data Twenty Articles" lays the foundation for data circulation and trading, but further operational policy details are still needed. Since the beginning of this year, the National Bureau of Statistics has emphasized several times that it will further implement the "Data Twenty Articles," and will accelerate the introduction of data property rights, data circulation, revenue distribution, and security governance, among other data infrastructure systems, based on its framework. (4) In terms of data development and utilization, the promotion of the "Data Element X" typical cases and competitions continues, leading to the continuous release of exemplary effects. In 2023, the national level took the lead in initiating data development and utilization, issuing the "Three-Year Action Plan for 'Data Element X' (2024-2026)," which includes plans for promoting data development and utilization."Element X" pilot projects, competitions, and typical cases are the three major pathways for implementation. Since the beginning of this year, the National Bureau of Statistics has held a national-level "Element X" competition during the digital summit, and subsequently, local cities have actively responded by organizing provincial and municipal "Element X" sub-competitions. In addition, the National Bureau of Statistics has released two batches of typical cases of Element X, with the first batch released in May covering 12 industries and fields, totaling 20 cases; and the second batch released at the International Fair for Data covering 10 industries and fields, totaling 28 cases. This includes companies like Zhejiang China Commodities City Group and Shanghai Ganglian E-Commerce Holdings. With the continuous progress of the Element X competition and typical cases, the Element X pilot project is worth looking forward to.5) In the development of the data industry, policies related to the data industry are widely soliciting opinions, and the construction of standards for identifying data enterprises has been put on the agenda. At the China International Big Data Industry Expo, the National Bureau of Data stated that in order to accelerate the planning and layout of the data industry, data industry policies have been formulated. This document is currently undergoing further extensive solicitation of opinions according to procedures and will soon be implemented. The data industry policy document primarily focuses on strengthening the planning and layout of the data industry, fostering diversified industry entities, flourishing the data industry ecosystem, and optimizing the development environment of the data industry. In addition, the National Bureau of Data has also initiated the establishment of standards for identifying data enterprises, which will provide guidance for precise support for the development of data enterprises. III. Positive progress in data assetization, the three major operators become the main force in entry Since the official implementation of the "Interim Regulations on Accounting Treatment of Enterprise Data Resources" on January 1, 2024, various enterprises across the country have actively responded, gradually promoting the entry of data assets, and accelerating the evolution of data from resources to assetization. As of August 31, 2024, according to the Enterprise Warning Tong statistics, a total of 64 companies disclosed the entry of enterprise data assets in their semi-annual reports, totaling 1.402 billion yuan, covering listed companies, New Third Board companies, and non-listed companies. Based on the more accurate disclosures of listed companies and New Third Board companies, this report analyzes the relevant data from listed companies and New Third Board companies in the Enterprise Warning Tong statistics. Among them, there are a total of 41 A-share listed companies, with a total amount of data assets entered of 1.361 billion yuan; 1 B-share company with an entry amount of 5.1875 million yuan; 1 Hong Kong-listed company with an entry amount of 77.921 million yuan; and 9 New Third Board companies with an entry amount of 15.8442 million yuan. The total assets of the above-mentioned analyzed companies amount to 7.349401 trillion yuan, with a total entry amount of data assets of 1.389 billion yuan, accounting for 0.0189% of the total assets. Overall, compared with the entry of data assets in the first quarter of 2024, the following characteristics are presented in the semi-annual report: (1) The scale of entry and the number of covered entities have increased rapidly. In the first quarter of 2024, a total of 18 listed companies disclosed the entry of data resources, with a total entry amount of approximately 103 million yuan. In the first half of 2024, the number of listed companies implementing data asset entry reached 52, a year-on-year increase of 189%; the total amount of data entered reached 13.89 billion yuan, a year-on-year increase of 1248%. Overall, the number of listed companies entering data assets in the semi-annual report and the entry amount both show a significant increase trend. (2) Increase in the inclusion of inventory items. In the first quarter of 2024, among the listed companies that implemented the entry of data assets, only Beijing Haitian Ruisheng Science Technology Ltd. included data resources in the "inventory" item. In the first half of 2024, in addition to Beijing Haitian Ruisheng Science Technology Ltd., there were also 6 companies including Shandong Hi-Tech Spring Material Technology, Xuancheng Valin Precision Technology, HUAYANG, Huijie Design, and Guandian Defense Technology included data resources in the "inventory" item, with a total entry amount of 476 million yuan. In addition, the total amount of data resources included in "intangible assets" was 608 million yuan, and the total amount included in "development expenses" was 3.06 billion yuan. From the scale of entry and the number of companies, including data resources in "intangible assets" is still the mainstream path, but the inclusion of "inventory" items has significantly increased. The inclusion of "inventory" items requires higher standards for data resources, mainly for holding items held for production or sale of goods, provision of services, or business operations, and their costs can be reliably measured, with a clearer performance path and cycle. (3) Strengthened continuity of entry. According to the Enterprise Warning Tong statistics, 16 listed companies including Merit Interactive, Sublime China Information, Ucap Cloud Information Technology Co., Ltd, Shandong Hi-speed, Piesat Information Technology, Nanjing Iron & Steel (600282.SH), QINGDAO PORT disclosed data resources continuously in two reporting periods, and many listed companies showed a significant increase in the entry amount. For example, Piesat Information Technology increased from 17.725 million yuan to 367.42 million yuan, an increase of 114.1%; TRS Information Technology increased from 628,000 yuan to 17.3227 million yuan, an increase of 176.8%. (4) Entry of the three major operators. In the first half of 2024, the three major operators successively disclosed the entry of data resources, which is of great significance for listed companies to carry out the entry of data assets, and has a leading and demonstrative effect. Among them, China Telecom Corporation (00728) entered an amount of 105 million yuan; China United Network Communications entered an amount of 85 million yuan; China Mobile Limited entered an amount of 70 million yuan. In particular, Chen Zhongyue, Secretary of the Party Committee and Chairman of China United Network Communications, stated at the Data Expo China that China United Network Communications (00762) actively implemented the "Data Element X" action and played a leading role.Advantages in technology, building high-quality datasets, it is expected to generate data assets worth around 500 million yuan throughout the year. With the gradual refinement of data asset entry standards and the maturation of practical explorations, giant enterprises in various industries with continuous high-value data resources may gradually carry out data asset entry work, further solidifying the positioning of data as assets.Risk Warning: (1) Macro-economic downturn risk: Data elements as an emerging industry are in the early stages of development and require more policy and financial support. Since 2023, the macroeconomic environment has been showing signs of weak recovery. If the subsequent macroeconomic recovery process is slow, it will have a certain impact on the development of data elements. (2) Policy promotion of data elements falls short of expectations: Data elements are currently transitioning from policy-driven to a stage of "political-production resonance". If the promotion and implementation of policies related to data infrastructure, public data, data assets, etc. fall short of expectations, it will have a certain impact on the development of data elements. (3) Digital technology development falls short of expectations: The development and breakthrough of technologies such as artificial intelligence, blockchain, privacy computing are crucial for the efficient and secure circulation of data elements. If the development of relevant digital technologies falls short of expectations, it will be difficult to solve key difficulties and blockages in the development process of the data element industry, which will have a certain impact on the development of the data element industry.