CITIC Construction Investment believes that China and the US have alternately imposed tariffs, and the amount of tariffs imposed by both sides has now reached 125%, highlighting the importance of supply chain security under the power game. Currently, the level of localization of domestic industrial software is relatively low. The localization rates for R&D and design, production control, and information management software are 12%, 31%, and 71%, respectively. The pace of localization and substitution of industrial software is expected to accelerate under policy impetus. In the first quarter of 2025, the size of Xinchuang's large orders remained flat from month to month. The number of large orders increased, and the average unit price declined slightly. Furthermore, the continued escalation of the tariff war will also force China to accelerate the construction of a settlement system using RMB as the settlement currency to cope with the hegemony of the US dollar under the SWIFT framework. Various aspects of cross-border payment-related systems such as the RMB cross-border payment system and the digital yuan and currency bridge may usher in development opportunities.

CITIC Construction Investment believes that China and the US have alternately imposed tariffs, and the amount of tariffs imposed by both sides has now reached 125%, highlighting the importance of supply chain security under the power game. Currently, the level of localization of domestic industrial software is relatively low. The localization rates for R&D and design, production control, and information management software are 12%, 31%, and 71%, respectively. The pace of localization and substitution of industrial software is expected to accelerate under policy impetus. In the first quarter of 2025, the size of Xinchuang's large orders remained flat from month to month. The number of large orders increased, and the average unit price declined slightly. Furthermore, the continued escalation of the tariff war will also force China to accelerate the construction of a settlement system using RMB as the settlement currency to cope with the hegemony of the US dollar under the SWIFT framework. Various aspects of cross-border payment-related systems such as the RMB cross-border payment system and the digital yuan and currency bridge may usher in development opportunities.