BOC International: Domestic demand combines with overseas opportunities. It is recommended to continue monitoring DC HOLDINGS (00861).

Recently, BOC International released a report on the events in the computer industry, stating that DC HOLDINGS (00861) has shown positive mid-term performance in areas such as AI and big data. Considering that IT infrastructure is a "must-have" for modern government and enterprise management systems, coupled with the upgrade and replacement demand brought about by new technologies such as AI large models, and the opportunities for domestic enterprises to expand internationally, the bank recommends continuing to focus on competitive companies like DC HOLDINGS. The main contents of the research report are as follows: Focus on the "big data + AI" strategy, continuously build data analysis and decision-making products and intelligent applications for government and enterprise clients. According to the company's official WeChat account, DC HOLDINGS is a company dedicated to promoting the commercialization of high-quality data and AI application scenarios, focusing on empowering government and enterprises with AI technology. In the first half of 2024, excluding the impact of its subsidiary Digital China Information Service Group (listed on the A-share market), the company's revenue was 2.94 billion RMB (yoy +20%) and net profit attributable to shareholders was 40.96 million RMB (+380%). (1) The company's big data business maintained strong growth, with revenue from big data products and solutions reaching 1.277 billion RMB, a 17% increase from the previous year, with a compound annual growth rate of 26% over the past four years. Excluding the impact of Digital China Information Service Group, revenue from big data products and solutions saw a year-on-year growth of 31%, with a compound annual growth rate of 51% over the past four years. Gross profit increased by 11% year-on-year, with a compound annual growth rate of 40% over the past four years; (2) In terms of technology, the business twin body built around knowledge graph and the AI large model ecosystem platform are the dual-core technology drivers, helping companies quickly build AI intelligent applications; (3) The company's overseas revenue in the first half of 2024 was 465 million RMB, a 55% increase from the same period last year. The software industry continues to show rapid and strong growth. According to statistics from the Ministry of Industry and Information Technology, in the first half of 2024, China's software business revenue and profit both maintained double-digit growth, with the export revenue of software business turning from negative to positive, and major software provinces continuing to develop well. Specifically, software business revenue was 6.235 trillion RMB, a year-on-year increase of 11.5%; total profit was 734.7 billion RMB, a year-on-year increase of 15.7%; software export revenue was 25.46 billion US dollars, a year-on-year increase of 0.6%. Urban infrastructure construction is progressing in an orderly manner. We believe that government investment in information technology is a major part of domestic IT infrastructure investment. Taking the example of the aforementioned article on DC HOLDINGS' official website, the company has successively won bids for major projects such as the Jilin Changchun New District Artificial Intelligence New Infrastructure (Smart Calculation Center) project, the Changchun City Computing Center Phase II AI+ Industry Model Software and Service project, and the Jilin Province Smart Water Conservancy project in the first half of 2024; and will continue to iterate industry-specific software models on its independently developed Smart Calculation Center "Three Calculation One Brain" platform to empower various industries. It is evident that some regions are still making continuous efforts in areas such as smart computing and Digital China.