In-Depth Analysis of Donghua Software's RMB 300 Million AI and Big Data Strategic Transformation

Based on the obtained company data and market information, I will conduct a systematic analysis of the strategic transformation prospects of Donghua Software’s RMB 300 million layout in AI and big data businesses.

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On January 19, 2026, Donghua Software issued an announcement proposing to invest RMB 300 million of its own capital to establish a wholly-owned subsidiary,

, which will be positioned as the for emerging AI and big data businesses [1][2]. The strategic objectives of this investment include:

• Facilitate the company’s strategic transformation
• Enhance the response speed and service capability in the national intelligent technology market
• Further improve the strategic layout in the artificial intelligence field

The company clearly stated that the investment fund comes from its own capital, and

[1][2]. This statement not only reflects that the RMB 300 million investment is within a controllable range relative to the company’s scale, but also implies the company’s prudent attitude towards this transformation.

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Indicator Category	Value	Industry Evaluation
Market Capitalization	USD 32.18 Billion	Medium-to-large software enterprise
Price-to-Earnings Ratio (PE)	89.32x	Relatively high, reflecting market expectations for growth
Price-to-Book Ratio (PB)	2.64x	Moderate
ROE	2.97%	Relatively low, profitability needs improvement
Net Profit Margin	2.64%	Relatively low
Current Ratio	1.69	Sound financial condition
Debt Risk	Low Risk	Controllable financial risk

According to 2024 financial data, the company achieved operating revenue of

, a year-on-year increase of 15.61%; net profit attributable to shareholders of listed companies was , a year-on-year increase of 13.98% [3]. This growth trend indicates that the company’s main business maintains steady development, providing a solid financial foundation for this strategic transformation.

Financial analysis shows that the company’s financial attitude is characterized as “aggressive”, with a low ratio of depreciation to capital expenditure. This may indicate that the company adopts a relatively aggressive approach in accounting treatment, and investors need to pay attention to earnings quality [0].

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Xue Xiangdong, Chairman of Donghua Software, clearly proposed the

strategy, positioning the company as the , and committing to becoming a leader in industry-specific large models [4]. This strategic positioning has the following characteristics:

1. Scenario-based AI Route
   : Instead of pursuing general-purpose large models, focus on industry pain points to build exclusive industry-specific large models
2. “Walk with Giants” Philosophy
   : Historically, the company started its business in partnership with IBM and Microsoft; currently, it co-builds ecosystems with Huawei and Tencent, and co-creates the future of computing power with Moore Threads [4]

Sector	Existing Advantages	Transformation Direction
Digital Healthcare	Serves over 1,000 tertiary hospitals nationwide	Deepen healthcare AI applications, enhance iMedical AIGC capabilities, and build a new generation of medical digital equipment systems
Smart Finance	Builds core systems such as anti-money laundering and credit reporting for financial institutions	Focus on the three main lines of “intelligent upgrading, independent innovation transformation, and ecological collaboration” to build a full-chain solution
Smart City	Covers three major sectors: digital government, social governance, and smart industry	Integrate global advanced AI technology platforms to build an integrated service platform from front-end entry to back-end management
Smart Agriculture	Fastree AI Shennong Large Model	Implement vertical scenarios such as agricultural policies, agricultural production management, and agricultural materials and technologies

The company commits to

, focusing on AI technology innovation, product innovation, and business model innovation, and optimizing industry-specific large models around core tracks such as healthcare, finance, and smart cities [4]. In 2024, the company has obtained over 2,500 software copyrights, and continues to deepen its presence in cutting-edge technology fields such as artificial intelligence, big data, and cloud computing [3].

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From a financial perspective, the RMB 300 million investment accounts for approximately

of the company’s market capitalization of around USD 32 billion, having a limited impact on the company’s overall financial condition [1]. This investment scale reflects the company’s strategy of “small steps, quick runs, steady transformation”:

• Controllable Risk
  : Uses own capital, no increase in debt burden
• Clear Focus
  : Establishes a dedicated subsidiary to undertake AI and big data businesses
• Synergistic Effect
  : Complements existing businesses such as healthcare, finance, and smart cities

The positioning of Donghua Digital Intelligence Technology (Beijing) Co., Ltd. includes two core functions:

1. R&D Transformation Center
   : Translate cutting-edge AI technologies into implementable products and solutions
2. Global Technology Delivery Center
   : Enhance service capabilities and respond quickly to customer needs

This functional positioning is highly aligned with the company’s strategic thinking that “all past informatization customer services can be re-implemented through intelligentization” [4].

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Advantage Dimension	Specific Performance
Industry Accumulation	Has deepened its presence in sectors such as healthcare and finance for over 20 years, serving more than 1,000 tertiary hospitals and numerous financial institutions
Customer Resources	The scenario understanding capability formed through long-term collaboration with top-tier customers is difficult to replicate
Ecological Cooperation	Has established in-depth partnerships with leading enterprises such as Huawei, Tencent, and Moore Threads
Data Assets	Rich industry data provides a foundation for training industry-specific large models

Risk Type	Specific Content
Market Competition	The AI large model track is highly competitive, requiring competition with giants such as Baidu, Alibaba, and Tencent
Technology Iteration	AI technology iterates rapidly, requiring continuous maintenance of technological leadership
Profitability Pressure	Current ROE and net profit margin are relatively low, and the transformation period may face imbalance between input and output
Valuation Risk	The current PE ratio of 89.32x is at a relatively high level, bringing great pressure to deliver performance

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According to technical analysis results, the stock price of Donghua Software is currently in a

pattern [0]:

• Latest Closing Price
  : USD 10.04 (January 19, 2026)
• Trading Range
  : USD 9.61 (support level) - USD 10.20 (resistance level)
• Technical Indicators
  :
  • MACD: No crossover signal, but the trend is bullish
  • KDJ: K value 57.4, D value 69.3, showing a dead cross pattern, bearish
  • RSI: In the normal range
• Beta Value
  : 0.28, low correlation with the market

From the stock price performance, it has increased by 43.02% in the past year and 63.25% in the past three years [0], indicating that the market has a certain degree of recognition for the company’s tech transformation theme.

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1. Policy Support
   : The national “14th Five-Year Plan” and the construction of Digital China are steadily advancing, with the digital economy becoming a key driver of the national economy [3]
2. Industry Trend
   : Artificial intelligence is becoming a core force reshaping industries, with strong demand for industry-specific large models
3. Solid Foundation
   : The company has established competitive advantages in sectors such as healthcare, finance, and smart cities
4. Adequate Capital
   : Sufficient own capital, with the capability for continuous investment

1. Input-Output Cycle
   : AI businesses require time accumulation from investment to generating significant profits
2. Talent Competition
   : High-end talents in the AI field are scarce, leading to high labor costs
3. Technology Integration
   : How to deeply integrate AI technologies with existing businesses is a key challenge
4. Valuation Correction Risk
   : If performance falls short of expectations, high valuation may face correction pressure

Assessment Dimension	Rating	Explanation
Strategic Rationality	★★★★☆	Aligns with industry development trends and is highly synergistic with existing businesses
Financial Feasibility	★★★★☆	Moderate investment scale, supported by own capital
Competitive Advantages	★★★★☆	Deep industry accumulation and rich customer resources
Execution Difficulty	★★★☆☆	Rapid AI technology iteration requires continuous investment
Market Expectations	★★★★☆	Stock price has already reflected expectations, requiring continuous performance delivery

: Donghua Software’s RMB 300 million layout in AI and big data businesses is a strategic transformation initiative. The company chooses to enter the AI track based on its existing industry advantages, avoiding direct competition with general-purpose large model giants, and reflects a differentiated competition strategy. However, the effectiveness of the transformation still needs time to be verified, and investors should pay attention to the subsequent implementation of R&D results and performance contributions.

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1. Key Focus Areas
   :
   • R&D progress of AI subsidiary Donghua Digital Intelligence
   • Implementation cases of industry-specific large models
   • R&D investment and output efficiency
   • Contribution of AI-related businesses in financial statements

2. Risk Warnings
   :
   • AI business development falls short of expectations
   • Intensified market competition leads to declining gross profit margin
   • Performance delivery pressure under high valuation

3. Suitable Investor Types
   :
   • Investors optimistic about the long-term development trend of the AI industry
   • Professional investors with in-depth understanding of the software industry
   • Medium and long-term investors who can tolerate a certain degree of volatility

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[1] Sina Finance - “Donghua Software: Proposes to Invest RMB 300 Million to Establish Wholly-Owned Subsidiary Donghua Digital Intelligence” (https://cj.sina.com.cn/articles/view/5182171545/134e1a99902002boby)

[2] Jiemian News - “Donghua Software: Proposes to Invest RMB 300 Million to Establish Wholly-Owned Subsidiary Donghua Digital Intelligence” (https://www.jiemian.com/article/13904858.html)

[3] Donghua Software 2024 Annual Report Summary (https://pdf.dfcfw.com/pdf/H2_AN202504101654230329_1.PDF)

[4] Shanghai Securities News - “Xue Xiangdong, Chairman of Donghua Software: Unleashing Infinite Possibilities for Industrial Intelligence” (https://paper.cnstock.com/html/2025-12/06/content_2154960.htm)

[5] 36Kr - “Donghua Software: Proposes to Invest RMB 300 Million to Establish Wholly-Owned Subsidiary Donghua Digital Intelligence” (https://www.36kr.com/newsflashes/3646284400414598)