Guotai Haitong: The overall overseas income proportion of the computer sector is not high, and the impact of US tariffs is relatively controllable.

Guotai Haitong released a research report stating that the uncertainty of the global industrial chain pattern has deepened due to the U.S. tariff policy, and capital market volatility has intensified. The high-tech industry represented by the new generation information technology industry has long been suppressed by U.S. restrictions. Since the China-US trade friction in 2018, China has continuously emphasized on technology security and independent controllability. Currently, the proportion of overseas income in the computer sector is not high overall, and the impact of U.S. tariffs is relatively controllable, maintaining a "hold" rating on the computer sector. From the perspective of China's export of ICT products to the global market, the proportion of exports to the United States is 16.05%, with ample opportunities in overseas markets. From a policy perspective, it is necessary to actively expand international cooperation in the digital economy, accelerate the development of digital trade, and promote the deeper development of the "Digital Silk Road" Guotai Haitong's views are as follows: Sector Level: The overseas revenue of the computer sector accounts for about 12%, with the overall proportion not being high. Guotai Haitong has conducted statistics on the Shenwan computer industry, totaling 362 listed companies. In recent years, the overall operating income of the computer sector has steadily increased, from 0.89 trillion yuan in 2019 to 1.21 trillion yuan in 2023; overseas income has increased from 113.1 billion yuan in 2019 to 145.9 billion yuan in 2023. From 2019 to 2023, the proportion of overseas income in the computer sector's operating income has shown a fluctuating upward trend, accounting for 11.20%, 11.96%, 10.80%, 11.49%, and 12.05%. (Wind's overseas income statistics are calculated based on the total revenue of China, Hong Kong, Macau, Taiwan and overseas operations as disclosed in announcements). Company Level: In the computer industry, there are 36 companies in 2023 with overseas revenue exceeding 500 million yuan, and 41 companies with overseas revenue accounting for over 30%. In terms of the amount of overseas income, the top 5 companies are Hangzhou Hikvision Digital Technology, Ninestar Corporation, Zhejiang Dahua Technology, Digital China Group, and Inspur Electronic Information Industry, with overseas income of 29 billion, 16.8 billion, 15.3 billion, 13 billion, and 9.5 billion yuan, accounting for 32%, 70%, 48%, 11%, and 14%, respectively. In terms of the proportion of overseas income, the top 5 companies are Shenzhen TVT Digital Technology, Zhuhai Raysharp Technology, Wondershare Technology Group, Fujian Foxit Software Development Joint Stock, and * ST Youshu, with overseas income of 1 billion, 600 million, 1.4 billion, 500 million, and 400 million yuan, accounting for 96%, 94%, 91%, 89%, and 88% of revenues, respectively. Regional Level: Destinations such as the "Belt and Road" initiative continue to bring vast market opportunities for Chinese digital companies. According to the China Academy of Information and Communications Technology's "Global Digital Economy Development Research Report (2024)", global ICT (Information and Communication Technology) product trade is accelerating, with the proportion of global trade volume fluctuating and increasing, showing characteristics of "multi-trade among big countries" and "neighborhood trade." Guotai Haitong extracted ICT product trade export data from the UN Comtrade database, categorized as ICT, media, computers, business, and financial services. Trade links of ICT products between major countries like China and the United States are relatively strong due to the large market size, advanced technology levels, and well-developed digital infrastructure in these countries, enabling them to produce and export large quantities of ICT products. At the same time, major countries are also the main consumer markets for digital products, with a huge demand for high-quality and innovative digital products. Risk Warning: Changes in the international policy environment; intensification of market competition; demand falling short of expectations.