China IT Weekly: Rise of AI Agent Ecosystem and Acceleration of Autonomous OS, Dual-Driven by Policy and Commercialization

Bottom Line

This week, the core themes of China's IT industry are the large-scale commercialization of AI Agent technology and the deep evolution of the autonomous operating system ecosystem. Investors should focus on investment opportunities arising from the rapid increase in AI Agent penetration in the software industry, as well as the catalytic effects on related industrial chains following the release of HarmonyOS 7. At the same time, caution is needed regarding the short-term impact on bank IT vendors due to stricter regulatory scrutiny triggered by the exposure of critical information system risks.

Key Developments

1. AI Agent Market Explodes, Fully Penetrating the Entire Software Process — According to China News Service, AI has deeply integrated into the entire software development process, including code generation, testing, and verification. Enterprise AI tool coverage continues to rise, with some companies achieving full adoption by all employees. Portfolio implication: Focus on software companies with full-stack AI Agent capabilities, especially those that have achieved full internal adoption and are exporting solutions externally; consider short-term overweighting of leading AI toolchain sub-sectors.

2. HarmonyOS 7 Developer Beta Officially Released, Ecosystem Undergoes Qualitative Change — Huawei released the HarmonyOS 7 Developer Beta on June 12, marking a new round of upgrades to its terminal ecosystem and development system, aiming to shift from the application adaptation phase to an Agent-driven ecological leap. Portfolio implication: Huawei ecosystem partners (system integrators, application developers) will directly benefit from the expansion of the developer community and user migration; it is recommended to focus on software service providers and smart hardware supporting companies in the HarmonyOS industrial chain.

3. Ministry of Industry and Information Technology Launches 'AI+Software' Special Action, Promoting Model-as-a-Service and Intelligent Programming — China's MIIT plans to accelerate the development and application of intelligent programming through this action and cultivate new business models such as 'Model-as-a-Service' and 'Agent-as-a-Service'. Portfolio implication: Policy benefits are clearly directed at the AI infrastructure layer (computing power, data annotation) and the platform layer (MaaS/AaaS providers); it is recommended to overweight AI software companies that have received national special support.

4. Three Major State-Owned Banks Fined for Critical Information System Risk Control Issues, Digital Compliance Pressure Rises — Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, and Tianjin Bank were fined a total of approximately 2.93 million RMB for violations in critical information system management, exposing shortcomings in bank IT systems regarding disaster recovery and risk identification. Portfolio implication: Bank IT outsourcing service providers will face stricter compliance reviews and project delay risks in the short term; in the medium to long term, fintech companies with high-level disaster recovery and compliance solutions will benefit from industry rectification needs.

5. AI Application Accelerates Penetration into Three Major Industrial Scenarios, Shifting from Pilots to Large-Scale Operations — According to Securities Times, AI is rapidly entering industrial scenarios such as aquaculture, petrochemical refining, and corporate finance, marking the transition of China's industry software from the pilot phase to large-scale application. Portfolio implication: Focus on software companies with the ability to implement AI in vertical industries (e.g., industrial ERP, MES, and AI vision solution providers); cross-industry replication capabilities will become a key valuation driver.

Sector Pulse

Risk Watch

• Critical Information System Compliance Risk — The fines on the three major banks exposed vulnerabilities in bank IT systems regarding disaster recovery and integrity, potentially triggering regulatory special inspections of critical information systems across the industry. If the inspection scope expands to the insurance and securities sectors, it will affect the revenue rhythm and compliance costs of related IT service providers. Probability: Medium. Impact: Medium.

• Intensified Commercial Competition in Large Models — Reports indicate that competition in the large model industry is shifting from technological rivalry to application-layer commercialization, with DeepSeek, Kimi, Doubao, and others lowering prices or strengthening features. Price wars may compress profit margins for AI application companies, putting short-term pressure on valuations. Probability: High. Impact: High.

• Policy Implementation in Data Annotation Industry Falls Short of Expectations — Although the National Data Administration has released a plan to cultivate the data annotation industry, the sector is still in its early stages. If pilot projects progress slowly or corporate profit models remain unclear, related targets may face the risk of speculative hype fading. Probability: Medium. Impact: Low to Medium.

Outlook

Key Events and Indicators to Watch Next Week:

• Final sales data from the 618 shopping festival and changes in AI consumer electronics penetration (News 6)
• Feedback on the HarmonyOS 7 Developer Beta and progress of initial application adaptation (News 2,10)
• Details of the MIIT 'AI+Software' special action and the pace of supporting fund allocation (News 5)

Position Adjustment Recommendations: The current sector is in a period of resonance between policy-driven and commercialization validation. It is recommended to maintain a relatively high allocation, focusing on three main themes: AI Agent platforms, autonomous operating system ecosystems, and compliance security. At the same time, reduce holdings in pure concept stocks that have experienced excessive short-term gains.