Wanlian Securities: Shenzhen Releases AI Terminal Development Policy to Promote the Prosperity of End-side Application Ecology.

Wanlian Securities released a research report stating that Shenzhen's current policy measures are aimed at supporting the empowerment of smart terminal products with artificial intelligence technology, and promoting high-quality leapfrog development in the smart terminal industry. They suggest paying attention to the following: 1) the release of new products by brand manufacturers in the AI consumer terminal industry, to accelerate investment opportunities brought about by the replacement cycle; 2) investment opportunities resulting from the widespread application of AI in typical scenarios such as government affairs, healthcare, and finance, as well as the demand for products such as "large model all-in-one machines"; 3) Shenzhen's frequent issuance of policies on the AI industry, and recommendation to focus on high-quality AI leading enterprises in Shenzhen and even Guangdong region. Wanlian Securities' main points are as follows: Industry Events Recently, the Shenzhen Municipal Bureau of Industry and Information Technology issued the "Action Plan for Accelerating the Development of Artificial Intelligence Terminal Industry in Shenzhen (2025-2026)" ('Action Plan'). By 2026, the city's artificial intelligence terminal industry is expected to reach a scale of over 800 billion yuan, striving for 1 trillion yuan, with the aggregation of no less than 10 iconic artificial intelligence terminal enterprises, the production of over 150 million units of artificial intelligence terminal products, and the launch of over 50 blockbuster artificial intelligence terminal products in areas such as mobile phones, computers, large model all-in-one machines, wearable devices, etc., as well as the creation of over 60 typical AI terminal application scenarios in fields such as smart manufacturing, smart finance, smart cities, smart elderly care, and smart government affairs. Setting targets for the number of blockbuster terminal products and production breakthroughs, accelerating the penetration of AI terminal products In December 2024, the Shenzhen Municipal Bureau of Industry and Information Technology issued the "Measures to Build Shenzhen into a Leading City for Artificial Intelligence", which proposed to "support the application of artificial intelligence products... and provide enterprises with a reward of up to 3 million yuan for annual blockbuster products with a certain sales volume". Building on this foundation, the current 'Action Plan' further sets the target for product breakthroughs as "the production of over 150 million units of artificial intelligence terminal products", as well as the launch of "over 50 blockbuster artificial intelligence terminal products" in areas such as mobile phones, computers, large model all-in-one machines, wearable devices, etc. The firm believes that open-source large models represented by DeepSeek are expected to accelerate the deployment of generative AI in end-side devices such as mobile phones and PCs, due to their low deployment costs and high performance inference capabilities. With hardware foundations reinforcing, deployment costs of models decreasing, and application ecosystems flourishing, AI deployment on the end-side is expected to accelerate, driving the penetration of AI terminal products in the traditional consumer terminal market. Expanding typical application scenarios for terminals, creating a diverse and prosperous AI terminal application ecosystem Previously, the "Measures to Build Shenzhen into a Leading City for Artificial Intelligence" only mentioned "promoting artificial intelligence to enable various industries around advanced manufacturing, modern services, and scientific research", as well as "accelerate the opening of government service scenarios"; while the current 'Action Plan' further specifies typical application scenarios for terminals, requiring the creation of "over 60 typical AI terminal application scenarios" in areas such as smart manufacturing, smart finance, smart cities, smart elderly care, and smart government affairs. For example, in the field of smart government affairs, the 'Action Plan' proposes the development of key category "large model all-in-one machines" to meet specific scenario needs for privatization, customization, and lightweight deployment, enhancing the efficient security and compliance of AI applications. The firm believes that the current 'Action Plan' is expected to further expand various typical application scenarios for AI terminals, clarify the product landing path, improve the product industry chain, and accelerate the commercialization process. Risk Factors: Policy effects below expectations; technological development below expectations; AI application development below expectations; escalation of China-US technology friction; intensification of market competition.