China Merchants Securities: Overall revenue growth of 25H1 computers accelerates, Xinchuang continues to prosper, AI accelerates significantly

The Zhitong Finance App learned that China Merchants Securities released a research report saying that overall in the first half of '25, the computer industry's overall revenue growth accelerated in the first half of '25, revenue maintained steady growth in 25Q2, and profits all improved dramatically. From the perspective of growth quality, the industry continues to promote cost reduction and efficiency, and cash flow management. The 25Q2 fee control effect continues to show. Although operating cash flow declined year-on-year, accounts receivable management, etc. have all improved. In terms of direction, 25Q2 benefited from the acceleration of the Xinchuang industry, and the Xinchuang sector's performance increased; industry trends were determined, and the revenue and profits of the highly prosperous artificial intelligence sector all grew. Among them, computing power chip performance exploded and AI application software performance gradually implemented. It is recommended to focus on the core targets of the relevant industrial chain.

The main views of China Merchants Securities are as follows:

Growth perspective

The overall revenue growth of the industry accelerated in the first half of 2025, and the profit side achieved significant improvements. 25Q2 revenue maintained steady growth, and the profit side increased; in the first half of 2025, the computer industry achieved total revenue YoY +12.55%, an increase of 4.88pct year on year; the median revenue growth rate of individual stocks was 3.21%, up 1.77 pct year on year from the same period last year. The total net profit of the industry to mother was 3,522 billion yuan, which significantly reversed losses over the previous year; the median growth rate of net profit from individual stocks was 7.49%, which was corrected year on year. The total amount of non-net profit deducted by the industry was 1.397 billion yuan, and losses narrowed sharply; the median growth rate of non-net profit withheld by individual stocks was 6.25%, which was corrected year on year.

In terms of distribution, 56.59% of companies achieved year-on-year revenue growth (53.89% in the same period last year), of which companies with a revenue growth rate exceeding 50%/falling within the 0%-50% range accounted for 6.29%/50.30% respectively. Compared with the same period last year, the overall distribution of the industry's revenue growth rate range moved upward in the first half of 2025; 54.79% of companies achieved net profit growth (including loss reversal and loss reduction), of which companies with net profit reversing losses, reducing losses, falling 0% to 50%, and more than 50%, respectively accounted for 8.08%, 22.46%, and companies with growth rates of over 50% 15.27%, 8.98%

Looking at a single quarter, the total revenue of the 25Q2 industry was +8.10% YoY, continuing the recovery trend since Q1; the median growth rate of individual stocks was 3.20%, with a year-on-year increase of 2.69 pcts. Total net profit attributable to mother YoY +73.31%, a significant year-on-year increase; the median growth rate of individual stocks was 10.78%, which was corrected year-on-year. The total YoY after deducting non-net profit was +239.27%, a significant increase over the previous year; the median growth rate of non-net profit withheld by individual shares was +6.83%, which was corrected year on year. In terms of distribution, 55.39% of companies achieved year-on-year revenue growth (50.30% in the same period last year), and 54.65% of companies achieved net profit growth, loss reversal or loss reduction (43.20% in the same period last year).

From the perspective of growth quality, the trend of cost reduction and efficiency continues, and operating cash flow management has improved

The overall gross margin of the 25H1 industry was 20.98%, down 2.49pct year-on-year. The total cost rate for the period was 20.74%, down 2.91 pcts year on year. Among them, sales expense ratio/management expense ratio/R&D cost ratio were 6.82%/5.38%/8.50%, respectively, down 0.87/0.70/1.29 pct year on year. Looking at a single quarter, the overall gross margin level of the 25Q2 industry was 22.01%, down 1.61 pcts year over year. The cost ratio for the period was 19.87%, down 1.82pct year on year. Among them, sales, management, R&D, and finance expenses were 6.64%/0.09%/5.08%/8.06%, respectively, with a year-on-year change of -0.57/0.02/-0.47/ -0.80pct. In terms of cash flow, the overall net operating cash flow of the 25H1 industry was -39.560 billion yuan, YoY +25.53%. The overall net operating cash flow for 25Q2 was -6.896 billion yuan, an increase in the year-on-year outflow. The increase in accounts receivable was lower than the increase in accounts receivable, and the increase in accounts receivables+contract assets was lower than the growth rate of industry revenue, and the management of operating cash flow in the industry improved.

View segments

Profits in most sectors have improved. The acceleration of the Xinchuang industry in 25Q2 led to a high increase in sector performance and accelerated commercialization of the AI sector. On the revenue side, in the first half of '25, a total of 8 sectors achieved positive revenue growth, and 6 sectors experienced a decline in revenue. Compared to the first half of '24, the power and energy informatization, artificial intelligence, and financial IT sectors all accelerated, while the rest of the sectors decelerated or narrowed; 25Q2 revenue growth of Xinchuang, power and energy informatization, artificial intelligence, SaaS and enterprise services, financial IT software and hardware accelerated year-on-year, and the cybersecurity and education informatization industries bottomed out, and the revenue decline narrowed.

Focus on the AI sector, the performance of computing power chips has exploded, and the performance of AI application software has gradually been implemented

The median revenue growth rate of the 25H1 AI segment was 10.64%, of which: the chip sector Cambrian and Haiguang Information, respectively, exploded 4,347.82% and 45.21% year-on-year; the median revenue growth rate of the data services, big model and application sub-sector was 8.82%, +10.62pct year over year; the median revenue growth rate of the all-in-one & server sub-sector was 11.16%, +18.88pct year on year. The median revenue growth rate of the 25Q2 AI sector was 14.01%, +17.64pct year on year, including: the chip sub-sector Cambrian and Haiguang Information's revenue exploded by 4,425.01% and 41.15% year on year, respectively; the median revenue growth rate of the data services, big model and application sub-sector was 10.12%, +15.36pct year on year; the average revenue growth rate of the all-in-one & server sub-sector was 35.87%, +38.71 pct year on year.

Risk warning: Policy support such as Xinchuang, Internet Security, and Vehicle Road Cloud fell short of expectations; technological development in the cloud computing and AI industries fell short of expectations; industry competition intensified; and technological innovation fell short of expectations.