A securities research report indicates that CHINASOFT INT'L (00354) is a leading domestic IT service provider and a key strategic partner of Huawei, with Huawei contributing over 40% of the company's revenue. The company's cloud intelligent business has shown significant growth, and the HarmonyOS ecosystem closed loop has been initially completed. As cooperation with Huawei Cloud deepens, the company is expected to continue benefiting from this partnership.
Considering that both HarmonyOS ecosystem and AI business development are in early stages, analysts have adjusted their 2025 profit forecast and added projections for 2026-2027. The company is expected to achieve net profit attributable to shareholders of 564 million yuan, 628 million yuan, and 708 million yuan for 2025-2027 respectively (compared to the original 2025 forecast of 1.342 billion yuan), corresponding to EPS of 0.21, 0.23, and 0.26 yuan per share. Based on current stock prices, the P/E ratios are 26.9, 24.1, and 21.4 times respectively. The "buy" rating is maintained.
**Cloud Intelligent Business Shows Significant Growth, Full-Stack AI Products Demonstrate Growth Potential**
(1) Foundation Business: ICT services constitute the company's foundation business, contributing primary revenue and profits. In the second half of 2024, foundation business revenue recovered, total employee count rebounded, and the number of major clients reached the second highest level since 2020, demonstrating significant effectiveness in major client expansion.
(2) Cloud Intelligent Business: Market volatility triggered by the pandemic has returned to normal. With the deep integration of cloud computing with native artificial intelligence, large models, and computing resources, downstream demand is expected to grow rapidly. The company holds advantages in industry scenario applications and deeply collaborates with Huawei Cloud capabilities, expanding possibilities for full-stack AI product implementation. In 2024, the company's full-stack AI product revenue reached 957 million yuan, with initial growth trajectory emerging, which will accelerate cloud intelligent business growth in the future.
**Highest-Level Huawei Partner, Expected to Benefit from HarmonyOS Ecosystem Development**
(1) The company is Huawei Cloud's "mutual assistance" partner: The partnership with Huawei began in 2009, with deep participation in Huawei's various strategic deployments, making it one of Huawei's most core domestic IT service outsourcing providers.
(2) Deep integration with HarmonyOS IoT ecosystem construction: In 2024, Huawei's terminal business performance recovered. Following the release of native HarmonyOS and HarmonyOS PC, the "1+8+N" IoT ecosystem achieved closed loop, driving rapid growth in software ecosystem reconstruction demand. Native HarmonyOS software reconstruction and continuous development of intelligent IoT devices are driving surging demand for the HarmonyOS ecosystem. The company serves as a core service provider for the open-source HarmonyOS ecosystem, launching tools suitable for open-source HarmonyOS developers and partnering with institutions such as Shenzhen Angel Mother Fund to support entrepreneurial HarmonyOS developers. The company occupies first-mover advantages in the HarmonyOS ecosystem and is expected to continue benefiting.
**Risk Warnings:** Cloud intelligent business development may fall short of expectations; AI business development may fall short of expectations; HarmonyOS ecosystem development may fall short of expectations; company R&D and downstream expansion may fall short of expectations.