Software - China (H/A): China Conference Takeaways: accelerating AI monetization; focus on growth visibility

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Software - China (H/A): China Conference Takeaways: accelerating AI monetization; focus on growth visibility

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Software - China (H/A)

China Conference Takeaways: accelerating AI

monetization; focus on growth visibility

Industry Overview

ERP/photo & design tools better; solid AI monetization 18 May 2026

We hosted investor meetings with the management of 10+ software companies (e.g., Equity

Kingdee, Meitu, Chinasoft, Ming Yuan Cloud, Xunce and etc.) at the 2026 BofA China China

Conference in Shenzhen during the week of May 11. We also hosted an expert meeting Software

on agentic AI and AI models. Daley Li, CFA >>

Research Analyst

Key takeaways include: (1) software AI monetization is generally accelerating, with ARPU Merrill Lynch (Hong Kong)

uplift potential driven by token-based revenue models; (2) AI is driving a shift in +852 3508 5365

daley.li2@bofa.com

software service models, transitioning from SaaS to RaaS; (3) demand trends are

Harry Zhuang >>

diverging: ERP / photo editing & design tools demonstrate better growth visibility, Research Analyst

supported by rising AI revenue contributions and a higher share of recurring revenue; Merrill Lynch (Hong Kong) +852 3508 7998

while IT outsourcing, cybersecurity, and property software demand remain soft; (4) by harry.zhuang@bofa.com

client type and vertical: SOEs—particularly those in critical infrastructure sectors (e.g., Owen Wang >>

energy)—as well as large private enterprises, are showing solid demand, while demand ResearchMerrill LynchAnalyst(Hong Kong)

from gov’t-related clients has yet to recover; and (5) overall cash flow and profitability +852 3508 6533

are expected to further improve in FY26E, supported by disciplined headcount expansion owen.wang2@bofa.com