人工智能助力软件货币化

China Software Al to supercharge software monetisation Al is creating opportunities for thesoftwaresector,andwedon'tseeAlasathreat likethe marketdoes WepreferAlapplications likesmarttextrecognition and softwareintegratedinAi hardware,and are excited byglobalexpansion In today's accompanyingreports,weinitiate Intsig (smarttext recognition)and Arcsoft (imaging algorithms)withBuy ratings Why read this report? +Weprefer software applications like smarttext recognition andsoftware integrated in Al hardware like photography algorithms+ China software is going global; still in early stage but shows potential Wetake a differentiated view on whether Al will replace software companies amid all the rapid Head of A-share iT SoftwareHSBC Qianhai Securities Limitedcqh.com.cn+861057952349 upgrades to Al models and their capabilities. We believe 1) Al is unlikely to understandbusiness workflows while software names have years of experience in this area; 2) Alrapidly launch and monetise new products; 3) corporates using Al have high security andcompliance requirements, while Al start-ups are young with a limited track record; and 4) thepotential business model change to Result as a Service (RaaS)-where software providerscharge for the outcome, notfor the software license-is positivefor software earnings growth. Securities (USA) Inc, and is not registeredlqualified pursuant to FINRA regulations Al monetisation: we prefer software applications and embedded software providersIn the Al era, traditional software vendors are embracing Al, thereby transforming their products with Al agent-based capabilities; and some have received robust Al order growth. In short, Alhas become adriverfor China's software sector.We prefer:1)software names that haveindustry know-how and can leverage Al, such as those that offer Enterprise Resource Planning(ERP) services; 2) Al can create new products and functions and drive faster revenue growth,such as for smarttext recognition players; and 3) embedded software solutions providers thatbenefit from risingpenetrationof Al hardware fromphone toglasses. Newgrowthdriver:overseasexpansionComparedto thedomesticmarket, overseas Al users have a higherwillingness topay andare more familiar with the subscription business model. China software players are expandingoverseas and somehavedelivered robust revenue growth.We prefernichevertical softwareapplications, such as smart text recognition, which have a limited number of direct globalintegrated software solutions as they can go global with their hardware clients and need limitedinvestment.Separately,asChina'sAlmodelpricingisonlyc20%ofglobalpeers(Exh.5),thetokenconsumptioninoverseasshowsrobustgrowth,benefitingAlinfrastructuresuppliers We prefer Buy-rated Intsig (smart text recognition), ArcSoft (imaging algorithms), Sangfor (Alinfrastructure software),Baosight (data centre operator),Kingdee and Yonyou(ERP software),Kingsoft Office (office productivity software), and Thundersoft (on-device Al deployment). Seevaluation and risks on pages 6-7. In today's accompanying reports, we initiate Intsig (smart text recognition) and Arcsoft (imagingalgorithms) with Buy ratings. index only rose by 2% YTD vs CSI 300 up 5%. The software index is trading at 3.6x TTM PS,belowitshistoricalaverageof3.8x.Ourviewisthatthis riskis nowpricedin.Lookingahead,webelieve solid Al order growth and an earnings recovery can lead to a valuation re-rate. bad user experience as current multi-agent systems are immature (may perform wrongoperations and cause inconvenience); cybersecurity risks such as data leakage. Contents Why read this report?1 Facts and figures4 Related research5Valuationand risks9 We focus on Al applicationinvestment opportunities8Domestic Al LLMs -intense competition; prefer applications8 Enterprise services: multi-agentsystem is the monetisation trend11 Al consumer hardware seespotential14 Going global is the next step17 Prospects for token exports benefitAl software infrastructure providers17 Applications going global - Al is thehook22 Disclosure appendix25 Disclaimer28 Facts and figures USD228bn 37% Global Al softwareproduct TAMin2029e Global Al software product TAMCAGR over 2024-29e 142% Our selected China software suppliers' Alcontract value grew robustly and Alcontract as a % of total revenue haveimproved to 7% in 2025 on average (vs 6%in 1H25). Al contract value h-o-h growth in 2H25 of ourselected China Software companies 71% 20-30% 24 trillion Token usage share of Chinesemodels in the top 9 models onOpenRouter in the week of 27 April2026 Leading Chinese models' averageAPI cost is only c20-30% of USmodels' Weekly token usage onOpenRouter surged c3.3x since thebeginning of 2026 and reached23.9trn in the week of 27 April 2026 152,677 peta IDC and HSBC also estimates worldwideagent task execution numbers will grow ata CAGR of 524% over 2025-30e, andreach415tera (10^12)in2030e PerIDC andourestimates,worldwideannual token usa