On the evening of August 27th, Digital China (000034.SZ) released its 2025 interim report.

During the reporting period, Digital China achieved a revenue of 71.59 billion yuan, representing a year-on-year increase of 14.4%. Among this, the AI-related business generated an income of 13.332 billion yuan, with a year-on-year increase of 56%.

Firmly adhering to the core strategy of “AI-Powered Data-Cloud Integration", Digital China adopted AI for Process as the key methodology to launch an integrated AI solution for enterprise scenarios, and created a closed-loop capability system integrating computing power, models, platforms and applications. It continuously promoted product structure optimization and platform capability building, driving a steady growth in overall performance.

Breakthrough in AI “Computing-Network Integration” to Rapidly Meet Market Demand
Revenue from Proprietary Brand Products Up 16.6%

In the first half of 2025, the revenue from the own-brand product business reached 3.1 billion yuan, increasing by 16.6% year-on-year. Among them, the AI-related business achieved a revenue of 660 million yuan, which became a new driving force for business growth.

In response to the surging computing power demand in the AGI era, the brand of Shenzhou KunTai under Digital China responded promptly and launched intelligent computing products and solutions suitable for customers of different industries and scales, such as the Shenzhou KunTai Smart Vision All-In-One Appliance and KunTai Cube. These products and solutions enhanced the development efficiency and implementation speed of AI applications for enterprises. Currently, the Shenzhou KunTai Smart Vision All-In-One Appliance has been deployed at multiple industry customer sites, and the implementation progress is smooth with positive customer feedback. Based on the Ascend computing power, Shenzhou KunTai has also won several contracts exceeding 100 million yuan.

With the gradual commissioning of the Hefei production base, Shenzhou KunTai has established its first commercial PC production line based on the Kunpeng architecture in Hefei. This effectively filled the gap in the PC manufacturing sector using the Kunpeng technology roadmap in Anhui Province and promoted the localization of commercial PC manufacturing. With continuous deepening in the field of information technology innovation, Shenzhou KunTai has ranked 49th among the top 100 private enterprises in terms of revenue and 14th among the top 100 service industries in Anhui Province. It has become an important force in the local development of information technology innovation.

Furthermore, leveraging the joint venture company Muxi Intelligent, Digital China completed the acquisition of all the physical business operations of Accton Technology in the mainland of China, enhancing its own capabilities in the data center-level network product line, and further strengthening the “computing-network integrated” intelligent computing infrastructure system.

Accelerating AI Product Innovation to Drive Industry Adoption
Cloud Services and Software Revenue Up 14.1%

During the reporting period, the revenue from cloud services and software business reached 1.64 billion yuan, increasing by 14.1% year-on-year. Among them, the AI-related business achieved a revenue of 802 million yuan, growing by 33%. The gross profit margin increased by 2.3 percentage points to 21.4%. The proportion of AI-driven high-value business has risen, and the intelligent, multi-scenario, and sustainable digital solution system is driving the high-quality development of the business.

In the first half of 2025, the AI-related business of Digital China continued to innovate based on enterprise scenarios. The self-developed platform Smart Vision has been fully upgraded from an AI-native enabling platform to an enterprise-level Agent Middle Platform. With high scalability and controllability, it meets the large-scale deployment needs of enterprise AI, providing customers with full-process support from model deployment, knowledge integration to multi-Agent collaborative management. It has become one of the first batch of enterprise-level LLM solutions in China to pass the “Comprehensive Capability Assessment for LLMs” certification by the China Information and Communication Research Institute. In the “2025 First Quarter Overview of China’s AI Agent Application Market” released by IDC, Digital China was successfully included in the “Consumer-level Intelligent Agents Application” and “Enterprise-level Intelligent Agents Application” sections based on its full-stack capabilities in the AI Agent field and pioneering practical experience in layout. Currently, Smart Vision has launched multiple products adapted to different scenarios, achieving a significant increase in effective business opportunities.

Meanwhile, Digital China continued to expand its customer base in various industries and deepened its cooperation with customers. Take the automotive industry as an example, Digital China signed a strategic cooperation memorandum with Qiming Information, a subsidiary of FAW Group, to accelerate the commercialization of intelligent connected vehicles; relying on Smart Vision, it built an intelligent center for a certain new energy vehicle brand, accurately identifying high-value scenarios where AI and business processes were deeply integrated, and helping the customer release new momentum for AI transformation.

Microelectronics Segment Expands AI Deployment, Policy Tailwinds Drive Distribution Growth
IT Distribution and Value-Added Services Revenue Up 14.3%

During the reporting period, the IT distribution and value-added services business achieved operating revenue of 68.39 billion yuan, a year-on-year growth of 14.3%. Among them, the AI-related business achieved operating revenue of 11.681 billion yuan, a year-on-year growth of 59%. The microelectronics business maintained a positive trend and continued to expand its cooperation map. It established deep cooperation relationships with top brands such as Hisilicon, Changxin, BOE, and China Star Optoelectronics. It continuously improved its business layout around four categories: main control, storage, display and driver, and discrete components, achieving operating revenue of 12.1 billion yuan, a year-on-year growth of 30.4%. Thanks to the national subsidy policy, the IT distribution and value-added services business has shown a good growth trend, and Digital China has continued to maintain its leading position in the industry.

Continuously Increasing R&D Investment to Strengthen Technological Leadership
Full-Stack AI Capabilities Widely Recognized

Under the circumstances of external pressure and intensified industry competition, Digital China has persisted in increasing investment in core and key areas, continuously enhancing the performance of core products such as AI applications and AI servers, constantly strengthening adaptability and delivery efficiency, and reinforcing the full-stack AI capabilities. During the reporting period, Digital China’s R&D expenditure was 210 million yuan, an increase of 10.6% compared to the previous year.

The technical talents have grown rapidly and have shown their prowess in the AI professional field. In the highest-level global competition of large language models organized by Amazon Web Services, the Smart Vision team employed three strategies: precise knowledge distillation, enhancement of thinking chains, and dynamic prompt word optimization. These measures compensated for the shortcomings of the 3.5B model in terms of Chinese language, reasoning, and breadth of knowledge. As a result, they won the championship with an absolute advantage, breaking the industry mindset that "the larger the parameters, the better they would be." After publishing a paper on the arXiv platform last year, the Smart Vision research team recently re-released a paper on the arXiv platform, proposing a structured planning framework called "Routine," aiming to address multiple core challenges faced by large model intelligent agents (LLM-Agent) in enterprise professional scenarios, significantly improving the stability and accuracy of execution.

Not only in the domestic market, but also in its international business, Digital China has achieved a breakthrough development. Using Thailand as a pivot, Digital China covered Southeast Asia, leveraging its GoPomelo platform to deeply empower local enterprises in their digital transformation; and it continuously deepened overseas cooperation with partners such as Alibaba Cloud and ByteDance, achieving a steady growth in overseas orders and significantly accelerating its global layout. With these achievements, Digital China became one of the first enterprises to be included in the "2025 Digital Economy Outbound Case Studies", and its international brand influence has reached a new level.

The State Council recently issued the "Opinions on Deeply Implementing the 'Artificial Intelligence +' Initiative", releasing clear policy benefits for the integration of AI and industries. Against this backdrop, Digital China will always take policy guidance as the anchor, deeply focus on the implementation of AI value scenarios, continuously deepen technological breakthroughs and practical innovations in computing infrastructure and application scenarios, and consolidate growth resilience and development momentum. It will truly become a solid driver for promoting AI to empower thousands of industries.