Chinasoft International (354.HK): Sustainable Improved Cooperation with Huawei August 9, 2017

Investment Summary

Chinasoft International has become Huawei cloud`s first “work-in-unity” partner which symbolizes another milestone of mutual cooperation. It will be a parallel software development company that is equivalent to Huawei and share the common task of packaging and selling Huawei cloud services. Furthermore, it will focus more on developing SMAC (social, mobile, analytics and cloud) and other services that have higher margin. We believe that the Company will continuously benefit from the strong growth of domestic informatization, IT localization, offshore IT outsourcing market, cloud computing and other emerging businesses. Its contribution from major clients will rise steadily. We give the company a valuation of 24x EPS in 2017 and the target price is HK5.88, with the “Buy” rating maintained. (Closing price as at 7 Aug 2017)

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