Investment Value Analysis of the Xinchuang and Operating System Sector in A-shares: Focusing on Domestic Substitution in Government, Finance, Telecommunications, and Energy

Investment Highlights

The Xinchuang industry has become an important part of the national strategic emerging industries. With the acceleration of domestic substitution, leading enterprises in various segments of the industry chain are ushering in historic development opportunities. By 2025, the scale of China’s Xinchuang market is expected to exceed 2 trillion yuan, with continuous release of domestic substitution demand in key industries such as government, finance, telecommunications, and energy. As the core foundational software of the Xinchuang industry, operating systems such as domestic Linux distributions, HarmonyOS, and Tongxin UOS are continuously expanding their application scenarios across various industries, steadily increasing their market share.

This report focuses on the A-share market’s Xinchuang and operating system sectors, providing an in-depth analysis of the recent performance and long-term development trends of leading enterprises in the industry chain.

Research findings indicate that the operating system sector has formed a competitive landscape dominated by China Software (600536), whose subsidiary, Kylin Software, has ranked first in the domestic Linux market for 14 consecutive years; companies related to the Harmony ecosystem, such as Tuowei Information (002261) and Runhe Software (300339), have achieved rapid penetration in multiple industries through deep cooperation with Huawei; in the database sector, Dameng Data (688692), known as the “first domestic database stock,” achieved a year-on-year revenue growth of 48.65% in the first half of 2025, with a market share of 13.48% in the financial sector, ranking first among domestic manufacturers.

Investment Recommendations: Focus on four major investment lines:

1) Leading operating system China Software;

2) Leading database Dameng Data;

3) Core partners in the Harmony ecosystem Tuowei Information and Runhe Software;

4) Middleware companies Dongfang Tong (300379) and Puyuan Information (688118).

These companies occupy leading positions in their respective segments and are expected to benefit from accelerated domestic substitution and industry demand growth, with broad long-term growth potential.

1. Overview of the Development of the Xinchuang and Operating System Industry

1.1 Market Size and Development Trends of the Xinchuang Industry

The Xinchuang industry is the foundation of data security and network security, and is an important support for national strategic development. By 2025, the Xinchuang industry in China is expected to form a development pattern of “policy-driven + technological breakthroughs + ecological collaboration,” with a market size expected to exceed 2 trillion yuan. Driven by multiple factors such as domestic substitution, digital transformation, and information security needs, the Xinchuang industry is entering a period of rapid development.

From a segmented market perspective, the middleware market in China is expected to reach 12.8 billion yuan by 2025, with products adapted to emerging scenarios such as artificial intelligence and big data becoming new engines for market growth. In the database market, it is expected that by 2026, the market size of relational database software in China will reach 11.03 billion USD, with domestic databases showing strong market explosive power after breakthroughs in core technologies.

From the perspective of industry chain structure, the Xinchuang industry mainly includes four parts: basic hardware (CPU, servers, etc.), basic software (operating systems, databases, middleware, etc.), application software, and information security. Among them, the operating system, as a bridge connecting hardware and software, is the core foundational software of the Xinchuang industry.

1.2 Market Structure and Domestic Substitution Process of Operating Systems

The Chinese operating system market is showing a diversified development trend, mainly including domestic Linux distributions, HarmonyOS, and Tongxin UOS. Among them, the Galaxy Kylin operating system launched by Kylin Software, with its four major features of “good experience, secure use, ecological compatibility, and industry applicability,” has built a trusted security system with endogenous security and has been widely applied in key industries such as government, finance, transportation, telecommunications, energy, and education, ranking first in the Chinese Linux market for 13 consecutive years.

Tongxin UOS, developed by Tongxin Software Technology Co., Ltd., integrates the advantages of Deepin OS and Tongxin Desktop OS, with a large user base in government, finance, and education sectors. HarmonyOS, developed by Huawei, was initially applied to smart terminals and has now expanded to PCs, servers, and other fields, forming a unique ecological system.

By 2025, the market structure of China’s operating system is undergoing profound changes, with the domestic substitution rate continuously increasing. According to the latest 2025 best list of domestic operating systems released by CNPP, Galaxy Kylin continues to lead the domestic operating system market due to its advantages in security, ecological compatibility, and industry applicability.

1.3 Analysis of Xinchuang Demand in Key Industries

Government Sector: As a pioneer and main force in the Xinchuang industry, the demand for Xinchuang in the government sector continues to be released, with the highest requirements for domestic substitution of basic software such as operating systems, office software, and databases. Government procurement policies provide stable market space for domestic operating systems.

Financial Sector: The financial industry is an important scenario for Xinchuang applications, with banks, securities, and insurance institutions having extremely high requirements for information security and system stability. With the development of financial technology, the demand for domestic operating systems, databases, and middleware among financial institutions continues to grow. IDC data shows that in 2024, Dameng Data holds a market share of 13.48% in the centralized transactional database market for domestic manufacturers in the financial sector, ranking first.

Telecommunications Sector: As an important bearer of national information infrastructure, the domestic substitution of IT systems in telecommunications operators is a crucial part of the Xinchuang industry. The telecommunications industry has high requirements for the stability, compatibility, and security of operating systems, and the application of domestic operating systems in this field is gradually expanding.

Energy Sector: The energy industry, including electricity, oil, and natural gas, has significant implications for national energy security through the domestic substitution of its critical information infrastructure. The application scenarios of domestic operating systems in the energy sector mainly include production control, scheduling command, and management information systems.

2. Analysis of the Operating System Sector: Accelerated Domestic Substitution and Prominent Advantages of Leading Enterprises

2.1 Market Structure and Competition Analysis of Operating Systems

The Chinese operating system market presents a competitive landscape of “one strong leader and many strong competitors,” with China Software (600536) as the absolute leader in the operating system field, dominating the domestic Linux market through its subsidiary Kylin Software. According to the 2025 semi-annual report, Kylin Software is an important source of profit for the company, achieving an operating income of 590 million yuan and a net profit of 152 million yuan in the first half of 2025.

In terms of the domestic substitution process, the Chinese operating system market is undergoing a transformation from “usable” to “user-friendly.” Galaxy Kylin V11 has achieved large-scale deployment in government and energy sectors, with Xinchuang business revenue growing by 120% year-on-year in the second quarter of 2025, making it the absolute leader in government Xinchuang operating systems.

In terms of market competition, major domestic operating system manufacturers include:

Kylin Software: A subsidiary of China Software, Galaxy Kylin operating system has ranked first in the Chinese Linux market for 14 consecutive years.Tongxin Software: Focused on the development of Tongxin UOS, widely applied in government and finance sectors.Huawei: Developer of HarmonyOS, expanding from mobile terminals to PCs, servers, and other fields.Loongson Technology (688047): A domestic CPU leader with fully independent and controllable technology, covering servers and embedded fields, with high penetration in government and military informationization.

2.2 Analysis of Leading Enterprises and Core Component Stocks

2.2.1 China Software (600536): Absolute Leader in Operating Systems

Technical Strength and Product Layout: China Software is an important “national team” in the Xinchuang field and a core force under China Electronics engaged in the internet security business. Its subsidiary Kylin Software has launched the Galaxy Kylin operating system, which has ranked first in the Chinese Linux market for 14 consecutive years. The company has established a relatively complete internet security market, R&D, and technical service system, focusing on “basic software + core applications for government and party” dual-wheel drive.

Market Performance and Competitive Advantages: The company maintains an industry-leading position in the operating system segment, with significant improvement in operational quality in the first half of 2025, achieving an operating income of 2.242 billion yuan, a year-on-year increase of 13.01%; the net profit attributable to the parent company decreased by 198 million yuan year-on-year, and the net profit attributable to the parent company after deducting non-recurring gains and losses decreased by 209 million yuan year-on-year. In the core application solution business for government and party, the company focuses on advantageous areas such as finance and taxation, successfully ensuring the smooth operation of the Golden Tax Phase III and Phase IV project business systems.

Recent Performance: On August 27, 2025, the company released its 2025 semi-annual report, achieving an operating income of 2.242 billion yuan, a year-on-year increase of 13.01%; the net profit attributable to the parent company was -74.53 million yuan, a year-on-year decrease in losses; the net profit attributable to the parent company after deducting non-recurring gains and losses was -76.75 million yuan, also a year-on-year decrease in losses. The company improved its profitability significantly by strengthening cost control, with R&D expenses decreasing by 38.06% year-on-year in the first half of 2025.

Long-term Development Trends: The company continues to consolidate its market leadership position, on one hand strengthening control over Kylin Software, increasing its shareholding from 40.25% to 47.23%; on the other hand optimizing its asset structure by transferring 66% of its stake in its subsidiary Zhongruan System, recovering 463 million yuan, reflecting the company’s determination to focus on core business and improve asset quality. It is expected that the net profit attributable to the parent company from 2025 to 2027 will be 127 million, 262 million, and 352 million yuan, corresponding to PE ratios of 393X, 191X, and 142X, maintaining a “recommend” rating.

2.2.2 Tuowei Information (002261): Core Partner in the Harmony Ecosystem

Technical Strength and Product Layout: Tuowei Information is Huawei’s only strategic partner for “Kunpeng + Ascend + Harmony” soft and hard integration strategy. With this unique positioning, it is deeply bound to the Huawei ecosystem, covering the entire field of “Ascend AI + large models + open-source Harmony + HiSilicon.” On the software side, the Harmony industry-specific operating system developed by the company is applied in the power and transportation sectors, and it has also deeply adapted to Harmony PC application scenarios, serving over 1,500 government and enterprise clients.

Market Performance and Competitive Advantages: The company’s full-chain service capabilities continue to release value as the Huawei ecosystem expands, with a total market value exceeding 5.4 billion yuan by 2025. Due to cooperation in Ascend chip business and domestic substitution capabilities, it has become a Huawei concept stock, with revenue from Huawei Ascend-related businesses expected to exceed 3 billion yuan in 2025.

Recent Performance: The company’s business in the Harmony field is growing rapidly, with a year-on-year revenue growth of 38% in the first quarter of 2025, deeply participating in the development of Harmony solutions for government and finance. The Zhaohan server launched by the company uses Huawei’s Da Vinci architecture Ascend AI processor, creating a full range of products from AI inference and training servers to intelligent edge servers, which have been implemented in major computing projects such as the AI innovation centers in Changsha and Chongqing.

Long-term Development Trends: With the iteration of Huawei Ascend chips and the expansion of the Harmony ecosystem, Tuowei Information’s “end, edge, cloud” full-scenario solutions will continue to benefit. The company will continue to deepen its cooperation with Huawei, expanding the application scenarios of Harmony systems in more industries, especially in key areas such as government, finance, and energy.

2.2.3 Runhe Software (300339): Core Co-builder of the Harmony Ecosystem

Technical Strength and Product Layout: Runhe Software, as a core co-builder of the Harmony ecosystem and a key partner in the Ascend ecosystem, is a typical Huawei concept stock. In the Harmony field, the company is deeply involved in the design of the underlying architecture and is among the top ten contributors to the open-source Harmony community code, creating Harmony solutions for the finance and energy industries to assist in intelligent management and efficiency improvement of devices. At the same time, it has developed its own open-source Harmony operating system, covering eight major industries including finance and power grids.

Market Performance and Competitive Advantages: The company’s technical advantages and market position in the Harmony ecosystem have enabled it to secure a large number of orders, with order growth exceeding 50% in 2025. In terms of cooperation with Ascend, the company launched the intellicore AI solution integrated machine, combining Ascend computing power with Harmony advantages, widely applied in intelligent security and industrial automation fields, with a dual-ecosystem layout providing continuous growth momentum.

Recent Performance: In the first quarter of 2025, Runhe Software performed outstandingly in the Harmony business, with its business revenue proportion rising to 30%. The Tianxuan 2.0 MaaS platform achieved a financial fraud detection accuracy rate of 99.3%, deeply participating in the construction of the Huawei ecosystem. In 2025, the company launched its first open-source Harmony desktop operating system based on the Loongson 3A6000, supporting local deployment of large models and pre-installing applications such as WPS and WeChat, covering industrial and educational scenarios.

Long-term Development Trends: With the continuous improvement of the Harmony ecosystem and the expansion of application scenarios, Runhe Software is expected to gain more market share in areas such as Harmony PCs, industrial internet, and smart cities. The company will continue to deepen its cooperation with Huawei, strengthen technological research and development, and enhance its influence and market position in the Harmony ecosystem.

2.2.4 Softcom Power (301236): Full-Scenario Harmony Solution Provider

Technical Strength and Product Layout: Softcom Power has become a core concept stock due to its deep layout in the Harmony, Huawei Cloud, and Ascend ecosystems. In the Harmony field, the company serves over a hundred manufacturers as a full-scenario solution provider, with developed smart home appliance control applications and Harmony cockpit systems implemented in smart home and smart travel scenarios.

Market Performance and Competitive Advantages: The company has technical barriers in the intelligent transformation of government affairs, winning 12 provincial and municipal government cloud AI project bids in 2025, further consolidating its position in the government procurement market. Its “Tianxuan 2.0” MaaS platform adapts over 500 AI models, providing technical barriers in the intelligent transformation of government affairs.

Recent Performance: In the first half of 2025, Softcom Power’s revenue from Ascend-related software increased by 350%, demonstrating strong growth momentum. Its deep layout in the Harmony, Huawei Cloud, and Ascend ecosystems makes it an important participant in the Xinchuang and artificial intelligence fields.

Long-term Development Trends: With the continuous expansion of the Harmony ecosystem and the enrichment of application scenarios, Softcom Power, as a full-scenario solution provider, is expected to gain more market opportunities in smart homes, smart travel, and intelligent manufacturing. The company will continue to strengthen its cooperation with Huawei, enhance its technological research and development capabilities, and improve its solution delivery capabilities to further expand its market share.

2.3 Analysis of Related Enterprises in the Operating System Industry Chain

2.3.1 Harmony Ecosystem Industry Chain

The Harmony ecosystem industry chain mainly includes the following links:

1. Operating System Development: Huawei, China Software, Chengmai Technology (300598), etc.

1. Application Development: Runhe Software, Tuowei Information, Softcom Power, etc.

1. Hardware Adaptation: Jiulian Technology, Dongfang Zhongke, Zhiyang Innovation, etc.

1. Security Services: Tianrongxin, Weishitong, etc.

In the Harmony ecosystem industry chain, Chengmai Technology (300598), as one of the earliest operating system companies to join the Harmony ecosystem, has released the Harmony commercial distribution HongZOS, building an independent Harmony distribution system. The company is deeply involved in the commercialization of the Harmony system, providing customized, adaptation, and operation and maintenance services for enterprise clients, playing a key role in the transformation of Harmony from technology to industry.

Jiulian Technology has become a concept stock due to the establishment of the Harmony laboratory and full-scenario implementation layout, focusing on three directions: “smart city + Harmony living room + smart education.” The company is deeply bound to industry-university-research cooperation, promoting the landing of the Harmony ecosystem in B-end scenarios, with developed Harmony-related smart terminals and solutions piloted in education and home fields.

Dongfang Zhongke, with its Harmony hardware products and technical services, has become a concept stock. Its subsidiary Zhongke Honglue has launched Harmony-based tablets, entering the Harmony terminal market. As a company affiliated with the Chinese Academy of Sciences, its core technical services cover digital security and confidentiality fields, with its Harmony tablets having advantages in scenarios with high security demands in government and education.

2.3.2 Domestic Linux Distribution Industry Chain

The domestic Linux distribution industry chain mainly includes:

1. Operating System Development: China Software (Kylin Software), Tongxin Software, etc.

1. CPU Adaptation: Loongson Technology, Feiteng, Haiguang Information, etc.

1. Application Adaptation: Kingsoft Office, Dongfang Tong, Dameng Data, etc.

1. System Integration: China Great Wall, Zhongke Shuguang, etc.

In the domestic Linux distribution industry chain, China Great Wall (000066), as a leader in the “Feiteng + Kylin” full-stack domestic solution, has its “Great Wall Computer” as a core supplier for government procurement, winning the central government agency desktop procurement project (over 300 million yuan) in 2025, while also launching fully domestic ATM equipment in the financial Xinchuang field, with a market share exceeding 20%.

Zhongke Shuguang (603019), as a leader in supercomputing, covers the domestic operating system and liquid-cooled server fields, with a market value exceeding 97.3 billion yuan. The company’s liquid-cooled data center has a PUE value as low as 1.04, participating in the construction of 80% of national intelligent computing centers, with orders for intelligent computing centers exceeding 15 billion yuan in 2025.

Kingsoft Office (688111), as a leader in domestic office software, has a market value of 187.2 billion yuan, with products adapted to domestic operating systems. The company’s WPS Office has a penetration rate of over 60% in the government and enterprise market, and the WPS AI 3.0 launched in 2025 is deeply adapted to domestic operating systems, with a payment rate of 65% among government clients, making it a core target for Xinchuang office software.

3. Analysis of the Database Sector: Accelerated Domestic Substitution, with Dameng Data Leading the Way

3.1 Market Structure and Domestic Substitution Process of Databases

The Chinese database market is currently in a phase of accelerated domestic substitution. With the continuous release of domestic substitution demand for databases in key industries such as government, finance, telecommunications, and energy, domestic database manufacturers are experiencing historic development opportunities. In the first half of 2025, Dameng Data (688692), as the first domestic company focused on the database field listed on the Science and Technology Innovation Board, is expected to achieve an operating income of 495 million to 513 million yuan, a year-on-year growth of 40.63% to 45.74%. This growth rate not only far exceeds the industry average but also highlights the market explosive power of domestic databases after breakthroughs in core technologies.

In terms of the domestic substitution process, the Chinese database market is undergoing a transformation from “usable” to “user-friendly.” Dameng Data has conquered core technologies in relational databases, non-relational databases, cloud databases, database integrated machines, data governance, and big data platforms, forming a product system covering the entire data lifecycle. In 2025, the company further upgraded its distributed database DM MPP, improving the efficiency of massive data analysis by 60% through intelligent scheduling algorithms, providing domestic substitution solutions for large-scale data governance in energy, telecommunications, and other fields.

In terms of market competition structure, the Chinese database market mainly includes the following types of enterprises:

1. Domestic Database Manufacturers: Dameng Data, Renmin University JinCang, Shenzhou Tongyong, etc.

1. International Database Manufacturers: Oracle, Microsoft, IBM, etc.

1. Cloud Computing Manufacturers: Alibaba Cloud, Tencent Cloud, Huawei Cloud, etc.

3.2 Analysis of Leading Enterprises and Core Component Stocks

3.2.1 Dameng Data (688692): The First Domestic Database Stock

Technical Strength and Product Layout: Dameng Data, as the first domestic company focused on the database field listed on the Science and Technology Innovation Board, is known as the “first domestic database stock.” The company has conquered core technologies in relational databases, non-relational databases, cloud databases, database integrated machines, data governance, and big data platforms, forming a product system covering the entire data lifecycle. Dameng database products have complete independent intellectual property rights, with a self-research rate of 100% for core code.

Market Performance and Competitive Advantages: Dameng database has been widely applied in fields with high data processing requirements such as finance, government, electricity, telecommunications, transportation, healthcare, and central state-owned enterprises, building a solid and reliable foundation for the digital transformation of various industries. IDC data shows that in 2024, Dameng ranks first in the market share of centralized transactional databases among domestic manufacturers in the financial sector, with a market share of 13.48%.

Recent Performance: In the first half of 2025, Dameng Data achieved an operating income of 523 million yuan, a year-on-year growth of 48.65%; net profit reached 205 million yuan, a year-on-year growth of 98.36%, with outstanding performance. Among them, software licensing revenue was 482 million yuan, accounting for nearly 80% of total revenue, indicating customer recognition of core database products. The company’s gross margin reached 96.22%, 6.59 percentage points higher than last year; the net profit margin was 38.69%, also higher than last year by more than 4 percentage points, significantly improving profitability.

Long-term Development Trends: Dameng Data is not only deeply engaged in the relational database field but is also actively promoting comprehensive layouts in non-relational databases such as graph databases, cache databases, time-series databases, and document databases, as well as cloud databases, laying the foundation for the AI era. The company focuses on data management, multi-model training, and intelligent generation, solving scenario problems such as intelligent customer service and operation and maintenance fault analysis for users. The Dameng Qiyun database intelligent operation and maintenance platform, based on general large models such as LLaMA3.x and QWen2.5, can achieve parameter optimization, SQL generation and optimization, data exploration, and AI automatic optimization of database parameters, addressing the challenges of low efficiency and high difficulty in manual parameter tuning. It is expected that the net profit attributable to the parent company from 2025 to 2027 will be 486 million, 633 million, and 809 million yuan, with current stock prices corresponding to PE ratios of 56X, 43X, and 34X, maintaining a “recommend” rating.

3.3 Analysis of Related Enterprises in the Database Industry Chain

The database industry chain mainly includes the following links:

1. Database Development: Dameng Data, Renmin University JinCang, Shenzhou Tongyong, etc.

1. Database Management Tools: Fanruan Software, Yonghong Technology, etc.

1. Data Security: Qimingxingchen, Weishitong, etc.

1. Application Development: Yonyou Network, Kingdee International, etc.

In the database industry chain, Renmin University JinCang, as a leading domestic database manufacturer, has wide applications in government and finance sectors. The company’s products complement those of Dameng Data, jointly promoting the development of domestic databases.

Fanruan Software, as a leading provider of business intelligence and data analysis platforms in China, has established partnerships with multiple database manufacturers to provide users with data visualization and analysis solutions.

Qimingxingchen and Weishitong, as leading data security manufacturers in China, provide security protection solutions for databases, including database auditing, encryption, and access control.

4. Analysis of the Middleware Sector: Accelerated Domestic Substitution, with Leading Enterprises Reaching a Turning Point

4.1 Market Structure and Domestic Substitution Process of Middleware

The Chinese middleware market is currently in a phase of accelerated domestic substitution. With the continuous release of domestic substitution demand for middleware in key industries such as government, finance, telecommunications, and energy, domestic middleware manufacturers are experiencing historic development opportunities. Dongfang Tong, as a pioneer and leader in domestic middleware, has been deeply engaged in this field for nearly 30 years, establishing a complete product system. Its Tong series middleware products can compete with high-quality foreign counterparts in terms of functionality and performance, widely applied in thousands of domestic industries, serving over 10,000 enterprise-level users in government, finance, telecommunications, transportation, and military industries, and has ranked first in the domestic middleware market share for 16 consecutive years.

In terms of the domestic substitution process, the Chinese middleware market is undergoing a transformation from “usable” to “user-friendly.” According to the “2023-2024 China Platform Software Market Research Annual Report” by CCID Consulting, Dongfang Tong has become the only domestic manufacturer selected in the “Leader Quadrant” of the middleware industry, competing alongside international giants such as IBM and Oracle.

In terms of market competition structure, the Chinese middleware market mainly includes the following types of enterprises:

1. Domestic Middleware Manufacturers: Dongfang Tong, Puyuan Information (688118), Baolande (688058), etc.

1. International Middleware Manufacturers: IBM, Oracle, BEA, etc.

1. Cloud Computing Manufacturers: Alibaba Cloud, Tencent Cloud, Huawei Cloud, etc.

4.2 Analysis of Leading Enterprises and Core Component Stocks

4.2.2 Puyuan Information (688118): An Important Player in the Middleware Field

Technical Strength and Product Layout: Puyuan Information, as one of the leading middleware companies in Xinchuang, focuses on the R&D and sales of software infrastructure platforms, application platforms, and data middle platforms. The company’s products mainly include application servers, message middleware, transaction middleware, etc., widely applied in finance, telecommunications, energy, and other industries.

Market Performance and Competitive Advantages: Puyuan Information has certain technical strength and market share in the middleware field, being one of the main competitors of Dongfang Tong. The company’s products are widely applied in finance, telecommunications, and other industries, with strong industry customization capabilities.

Recent Performance: On September 5, 2025, Puyuan Information saw a net outflow of 7.2118 million yuan in main funds, with a net outflow of 7.7383 million yuan in large orders, a turnover rate of 4.31%, and a transaction amount of 111 million yuan. In the past seven trading days, Puyuan Information has seen declines on five days, with an overall decline of 5.92%, with a highest price of 31.85 yuan and a lowest price of 29.55 yuan, resulting in a market value decrease of 155 million yuan.

Long-term Development Trends: With the continuous development of the Xinchuang industry and the expansion of the domestic middleware market, Puyuan Information is expected to gain more market opportunities in finance, telecommunications, and other industries. The company will continue to strengthen technological R&D and ecological construction, enhancing product competitiveness and market share.

4.2.3 Baolande (688058): An Important Player in the Middleware Field

Technical Strength and Product Layout: Baolande, as one of the leading middleware companies in Xinchuang, focuses on the R&D, sales, and service of middleware software. The company’s products mainly include application servers, message middleware, transaction middleware, etc., widely applied in telecommunications, finance, and other industries.

Market Performance and Competitive Advantages: Baolande has certain technical strength and market share in the middleware field, especially strong competitiveness in the telecommunications industry. The company’s products have high reliability, high availability, and high scalability, meeting the high demands of industries such as telecommunications for middleware.

Recent Performance: On September 5, 2025, Baolande saw a net inflow of 1.3973 million yuan, with a net inflow of 2.1641 million yuan in large orders, and a transaction amount of 51.5977 million yuan. In the past seven trading days, Baolande has seen declines on four days, with an overall decline of 12.18%, with a highest price of 33.03 yuan and a lowest price of 31 yuan, resulting in a market value decrease of 276 million yuan.

Long-term Development Trends: With the continuous development of the Xinchuang industry and the expansion of the domestic middleware market, Baolande is expected to gain more market opportunities in telecommunications, finance, and other industries. The company will continue to strengthen technological R&D and industry expansion, enhancing product competitiveness and market share.

5. Analysis of Xinchuang Application Fields: Accelerated Domestic Substitution in Key Industries

5.1 Analysis of Xinchuang Applications in the Government Sector

The government sector is a pioneer and main force in the Xinchuang industry, with its demand for domestic substitution continuously released. In the government sector, Xinchuang applications mainly include the following aspects:

Office Systems: Including operating systems, office software, email systems, etc. Kingsoft Office (688111)’s WPS Office has a penetration rate of over 60% in the government and enterprise market, with the WPS AI 3.0 launched in 2025 deeply adapted to domestic operating systems, increasing the payment rate among government clients to 65%.

Business Systems: Including administrative approval, financial management, human resource management, etc. Yonyou Network (600588)’s ERP software is deeply integrated with Galaxy Kylin, benefiting from the release of enterprise-level Xinchuang demand, with the software market size expected to exceed 3.5 trillion yuan in 2025, directly benefiting the company as a leader.

Security Systems: Including firewalls, intrusion detection, security auditing, etc. 360 (601360) under 360 Enterprise Security Group won the Tianjin Xinchuang security industry cluster project, with its terminal security and situational awareness products widely applied in the government sector, with Xinchuang security business revenue growing by 72% year-on-year in the first half of 2025.

In the government sector, China Software (600536)‘s subsidiary Kylin Software has ranked first in the domestic Linux market for 14 consecutive years, making it the absolute leader in government Xinchuang operating systems. The company focuses on core application solutions for government and party, successfully ensuring the smooth operation of the Golden Tax Phase III and Phase IV project business systems, and providing data security services for the Ministry of Finance and nearly ten provincial finance departments nationwide.

5.2 Analysis of Xinchuang Applications in the Financial Sector

The financial sector is an important scenario for Xinchuang applications, with banks, securities, and insurance institutions having extremely high requirements for information security and system stability. In the financial sector, Xinchuang applications mainly include the following aspects:

Core Business Systems: Including core banking systems, securities trading systems, insurance core systems, etc. Inspur Information (000977), as the leading domestic server manufacturer, is deeply involved in the financial and telecommunications Xinchuang transformation, launching AI servers based on Kunpeng chips in 2025, winning multiple billion-level projects in the core system replacement of state-owned banks.

Payment Systems: Including online banking, mobile payments, POS terminals, etc. Guangdian Yuntong has become a Huawei concept stock due to its cooperation in both Harmony and Ascend fields, obtaining dual certification as a compatibility and development service provider for Harmony ecosystem products. The company can customize the OpenHarmony system to complete the adaptation of various financial devices, with plans to expand to social security assistance and medical insurance terminals.

Financial Security: Including transaction security, data security, network security, etc. Weishitong (002268), as a leader in the domestic encryption field, provides encryption, authentication, and other core security products for government and financial Xinchuang, participating in the formulation of multiple national standards for Xinchuang security in 2025, with a market share exceeding 30% in the electricity and military industries.

In the financial sector, Dameng Data (688692) holds a market share of 13.48% in the centralized transactional database market for domestic manufacturers, ranking first. The company’s database products have been stably running in the core business systems of institutions such as Construction Bank and China Life Insurance.

5.3 Analysis of Xinchuang Applications in the Telecommunications Sector

The telecommunications sector is an important scenario for Xinchuang applications, with telecommunications operators being important bearers of national information infrastructure, and the domestic substitution of their IT systems is a crucial part of the Xinchuang industry. In the telecommunications sector, Xinchuang applications mainly include the following aspects:

Core Network Systems: Including switching, routing, transmission, etc. ZTE, as a leading domestic communication equipment manufacturer, actively participates in the Xinchuang construction in the telecommunications field, with its products applied in multiple domestic telecommunications operators.

Business Support Systems: Including BOSS systems, CRM systems, billing systems, etc. Dongfang Tong has a solid share in the markets of China Mobile, China Telecom, and China Unicom, with security product revenue expected to reach 297 million yuan in 2024, a year-on-year growth of 28.54%.

Network Security Systems: Including firewalls, intrusion detection, security auditing, etc. Tianrongxin has become a concept stock due to its deep cooperation with Huawei in the security construction of the Harmony ecosystem, collaborating with Huawei in the network security field. The company is actively promoting the integration of security applications into the Harmony ecosystem, with its developed mobile security and vehicle networking security solutions implemented in the Harmony system, providing comprehensive protection for Harmony devices and applications.

In the telecommunications sector, Inspur Information (000977), as the leading domestic server manufacturer, is deeply involved in the financial and telecommunications Xinchuang transformation, with wide applications in the telecommunications industry.

5.4 Analysis of Xinchuang Applications in the Energy Sector

The energy sector includes sub-sectors such as electricity, oil, and natural gas, with the domestic substitution of its critical information infrastructure being of great significance for ensuring national energy security. In the energy sector, Xinchuang applications mainly include the following aspects:

Production Control Systems: Including DCS, SCADA, etc. Hengwei Technology has become a Huawei concept stock due to its embedded adaptation with Harmony and cooperation in Ascend operation and maintenance solutions. In the Harmony field, the company focuses on embedded system migration and low-level driver development, providing hardware support for industrial control scenarios, with Harmony-based solutions achieving intelligent management and remote monitoring of industrial equipment.

Scheduling Command Systems: Including power scheduling, oil and gas scheduling, etc. Zhiyang Innovation, as the first partner in the Harmony ecosystem for intelligent operation and maintenance in the power sector, is a distinctive Huawei concept stock. The company’s developed intelligent operation and maintenance applications for electricity integrate the Harmony system, achieving real-time monitoring of equipment, fault warning, and intelligent diagnosis, improving data processing efficiency.

Management Information Systems: Including ERP, CRM, OA, etc. Yonyou Network (600588)’s ERP software is deeply integrated with Galaxy Kylin, with wide applications in the energy sector.

In the energy sector, Dameng Data (688692)‘s database products provide domestic substitution solutions for the energy industry, with the upgraded distributed database DM MPP improving the efficiency of massive data analysis by 60% through intelligent scheduling algorithms, providing domestic substitution solutions for large-scale data governance in energy, telecommunications, and other fields.

6. Investment Strategies and Risk Analysis

6.1 Investment Opportunity Analysis

Based on a comprehensive analysis of the Xinchuang and operating system sectors, we believe that the following areas present good investment opportunities:

1. Operating System Sector: With the continuous release of domestic substitution demand in key industries such as government, finance, telecommunications, and energy, operating systems, as the core foundational software of the Xinchuang industry, have broad market space. Focus on China Software (600536), Tuowei Information (002261), Runhe Software (300339), etc.

2. Database Sector: With the increasing requirements for data security and autonomy, the acceleration of domestic substitution in databases is underway. Dameng Data (688692), as the “first domestic database stock,” ranks first in market share among domestic manufacturers in the financial sector, with broad future growth potential.

3. Middleware Sector: With the continuous development of the Xinchuang industry, the middleware market is entering a critical strategic opportunity period. Dongfang Tong (300379), as a pioneer and leader in domestic middleware, is expected to reach a performance turning point under the dual promotion of policy tailwinds and industry waves.

4. Harmony Ecosystem: With the expansion of Harmony systems in multiple fields, enterprises related to the Harmony ecosystem are facing development opportunities. Core partners in the Harmony ecosystem, such as Tuowei Information (002261), Runhe Software (300339), and Softcom Power (301236), are expected to gain more market opportunities in various industries.

6.2 Risk Alerts

Investing in the Xinchuang and operating system sectors also faces some risks, and investors should carefully assess:

1. Policy Risk: The Xinchuang industry largely relies on national policy support. If the intensity of policy support weakens or the policy direction changes, it may adversely affect industry development.

2. Technical Risk: The technology in the Xinchuang and operating system fields updates and iterates rapidly. If enterprises cannot maintain technological leadership or fail to adapt to technological changes in a timely manner, they may face risks of declining market competitiveness.

3. Market Risk: The Xinchuang and operating system markets are becoming increasingly competitive, which may lead to price declines and reduced gross margins, affecting corporate profitability.

4. Supply Chain Risk: The Xinchuang industry chain is long and involves multiple links. If there are issues in the supply chain, it may affect the normal production and operation of enterprises.

5. Performance Underperformance Risk: Some Xinchuang enterprises are currently in the investment phase and have not yet achieved profitability or have low profit levels. If future performance growth does not meet expectations, it may lead to stock price declines.

6.3 Investment Recommendations

Based on the above analysis, we provide the following investment recommendations:

1. Allocation Strategy: We recommend that investors achieve balanced allocation in the Xinchuang and operating system sectors, while focusing on leading enterprises and high-quality enterprises in segmented fields. Funds can be divided into three parts: 40% allocated to the operating system sector, 30% to the database sector, and 30% to enterprises related to the Harmony ecosystem.

2. Stock Selection Strategy: When selecting stocks, attention should be paid to the following aspects: first, technical strength and R&D capabilities; second, market share and competitive advantages; third, financial status and profitability; fourth, position in the industry chain and ecological construction. It is recommended to choose leading enterprises with technological advantages, stable market shares, and good financial conditions.

3. Timing Strategy: Considering the current market volatility, we recommend that investors adopt a phased investment strategy to avoid large one-time investments. Funds can be divided into 3-4 batches, gradually building positions at different price levels to reduce timing risks.

4. Risk Management: During the investment process, closely monitor industry dynamics and changes in corporate performance, set reasonable stop-loss levels, and control drawdown risks. At the same time, pay attention to diversification in investments to avoid excessive concentration in a single enterprise or segmented field.

7. Conclusion and Outlook

7.1 Summary of Industry Development

The Xinchuang and operating system sectors are currently experiencing a historic development opportunity driven by accelerated domestic substitution and growing industry demand. By 2025, the scale of China’s Xinchuang market is expected to exceed 2 trillion yuan, with continuous release of domestic substitution demand in key industries such as government, finance, telecommunications, and energy.

From the enterprise perspective, companies such as China Software (600536), Dameng Data (688692), and Dongfang Tong (300379) have formed strong technical strength and market competitiveness in their respective segments. In the operating system field, Kylin Software, a subsidiary of China Software, has ranked first in the Chinese Linux market for 14 consecutive years; in the database field, Dameng Data ranks first in market share among domestic manufacturers in the financial sector; in the middleware field, Dongfang Tong has ranked first in the domestic middleware market share for 16 consecutive years.

7.2 Future Development Trends

Looking ahead, the Xinchuang and operating system sectors will exhibit the following development trends:

1. Accelerated Technological Breakthroughs: With continuous increases in R&D investment and talent accumulation, domestic products such as operating systems, databases, and middleware will achieve more breakthroughs in performance, compatibility, and security, gradually narrowing the gap with international leading levels.

2. Expansion of Application Scenarios: Xinchuang applications will penetrate more industries beyond government and finance, driving diversified demand. Edge computing, intelligent driving, and intelligent manufacturing will become new growth points, with edge computing expected to account for 35% by 2025.

3. Improved Ecological Construction: Enterprises in the upstream and downstream of the Xinchuang industry chain will strengthen cooperation, forming a closer collaborative innovation system. The compatibility between foundational software such as operating systems, databases, and middleware will continue to improve, providing users with more comprehensive solutions.

4. Intensified International Competition: As the strength of domestic software enterprises increases, international competition will become more intense. Domestic enterprises need to comprehensively enhance their technology, ecology, and services to gain a larger share in the global market.

7.3 Investment Value Outlook

The Xinchuang and operating system sectors, as a national strategic emerging industry, have long-term investment value. In the short term, the industry is highly prosperous, and corporate performance is growing robustly; in the long term, there is broad space for domestic substitution, and industry demand will continue to grow.

Specifically, the following types of enterprises have high investment value: first, leading enterprises with technological advantages in segmented fields, such as China Software, Dameng Data, and Dongfang Tong; second, core partners benefiting from the expansion of the Harmony ecosystem, such as Tuowei Information, Runhe Software, and Softcom Power; third, rapidly growing middleware enterprises in the domestic substitution process, such as Dongfang Tong, Puyuan Information, and Baolande.

Overall, the Xinchuang and operating system sectors will continue to maintain a high growth trend, providing good investment opportunities for investors. However, attention should also be paid to industry volatility and risks, adopting reasonable investment strategies to achieve stable returns.