高盛-中国软件行业 China Software Software spending remains muted; slower April growth at 11% YoY while Cloud and Big Data analysis outperform 20240605.docxVIP

4June2024|7:54PMHKT

ChinaSoftware:Softwarespendingremainsmuted;slowerAprilgrowthat11%YoYwhileCloudandBigDataanalysisoutperform

WeseeslowerChinasoftwareindustrygrowthinAprilat+10.9%YoY,leading

4M24revenues+11.6%YoY(vs.12.8%YoYin4M23),duetoslowersoftware

spendingamidmacroweakness,andITbudgettowardinfrastructureandcomputingspace.Forcoming2Q24,weexpectsequentialgrowthofChinasoftwarecoverageat24%YoYonlowbase,stilllowerthanhistoricallevelconsideringchallenging

environment,andwekeepmonitoring(1)SMBPMIdata,(2)contractliability

ratio,(3)ARdays,(4)companyhiring,and(5)productiterationtotrackthepathofsoftwarespendingrecoveryinChina.

Verticalswithstrongergrowth:4M24cloudcomputingandbigdatasegment

+14%YoY,whilesoftwareproducts/Cybersecuritywereslowerat9%/9%YoY,

potentiallyre?ectingtheITspendingdrivenbygenerativeAIisnowstillmoreat

infrastructure,andnotyettowardplatformorapplicationsoftware.ThehigherARdaysandlowercontractliabilityratiooflocalsuppliersin1Q24,alsore?ectslongerpaybackperiodofChinasoftwarecustomers.Despitenear-termweaknesson

budgeting,weremainpositiveonsoftwareexpansioninlongtermdrivenby

strongerfeaturestodrivepaymentandChinasoftwareindustryatearlystagewithupsidetogrowacrossARPU,newcustomers’expansion,andbusinessupgrade

towardsubscriptionfromone-off.

AllenChang

+852-2978-2930|

allen.k.chang@

GoldmanSachs(Asia)L.L.C.

VerenaJeng

+852-2978-1681|verena.jeng@GoldmanSachs(Asia)L.L.C.

SimonCheung,CFA

+852-2978-6102|

simon.cheung@

GoldmanSachs(Asia)L.L.C.

TimothyZhao

+852-2978-2673|timothy.zhao@GoldmanSachs(Asia)L.L.C.

ShuoYang,Ph.D.

+852-2978-0701|shuo.yang@GoldmanSachs(Asia)L.L.C.

TingSong

+852-2978-6466|ting.song@GoldmanSachs(Asia)L.L.C.

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