The Zhitong Finance App learned that Goldman Sachs released a research report stating that it will lower the target price of China Software International (00354) from HK$3.1 to HK$3, maintain the “sale” rating, and raise the net profit forecast for 2026 to 2028 by 19%, 11%, and 13%, respectively.

The bank has a positive view of China's international software business shifting from traditional IT outsourcing to Internet IT services, and continues to believe that the company's profit growth has bottomed out in 2025, and is expected to gradually pick up until 2028. The forecast net profit compound annual growth rate from 2025 to 2028 is 43%, mainly driven by the business's refocus on AI-related services and the use of generative AI to improve operational efficiency. The company continues to benefit from the growth of Huawei products, deploying related products and developing application software based on these platforms to provide enterprises with AI solutions based on local systems.

According to the report, the increase in net profit forecast is mainly due to the reduction in operating expenses ratios by 1 percentage point, 0.7 percentage point, and 0.7 percentage point, respectively, to reflect the improvement in operating efficiency as AI applications rise. The company's revenue compound annual growth rate from 2023 to 2025 was 0%, and gross margin fell from 23.4% in 2023 to 20.4% in 2025.

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