Comments on the computer industry: with the release of the 14th five year plan for the digital economy, the contribution of core industries to GDP will increase to 10%

Matters:

The State Council issued the 14th five year plan for the development of digital economy (hereinafter referred to as the plan), which is the first national special plan in the field of digital economy in China.

Ping An View:

The "14th five year plan" digital economy will enter a new development stage, and the contribution of core industries to GDP will increase significantly. Digital economy is a new economic form developed by relying on data elements after agricultural economy and industrial economy. During the 13th Five Year Plan period, driven by the national strategy, the digital economy has achieved unprecedented development, the information infrastructure has tended to be improved, new business forms and new models have emerged intensively, and positive results have been achieved in industrial digitization and digital industrialization. In 2020, the contribution of China's digital economy core industry to GDP will reach 7.8%. Among the core industries, digital manufacturing and service industries have developed rapidly, the application of digital technology has been further deepened, the Internet platform, e-commerce, Internet Finance and digital media industries have become more active, and the construction of information infrastructure has also entered a leading position in the world. The plan points out that during the 14th Five Year Plan period, the digital economy will turn to a new development stage of deepening application, standardized development and inclusive sharing. At this stage, we should preliminarily complete the construction of data element market and improve the level of industrial digitization and digital industrialization. By 2025, the added value of core industries of digital economy will account for 10% of GDP and enter a period of comprehensive expansion; By 2035, the digital economy will move towards a period of prosperity and maturity, and the development foundation and industrial system of the digital economy will rank among the top in the world.

The implementation of the plan will promote the digital transformation of China's key industries. The plan has deployed eight key tasks, including "optimizing and upgrading digital infrastructure" and "giving full play to the role of data elements". Focusing on key tasks, the plan defines 11 special projects such as "information network infrastructure optimization and upgrading project" and "data quality improvement project". In the "digital transformation and upgrading project of key industries", the plan emphasizes accelerating the digital transformation of agriculture, water conservancy, industry, commerce, logistics, finance, energy and other fields, and puts forward clear requirements for the digital transformation of key industries. Among them, "accelerating the digital transformation in the financial field" proposed "steadily promote the research and development of digital RMB and orderly carry out controllable pilot projects". On January 4, 2022, digital RMB (pilot version) was open for download in multiple app application markets. At present, the pilot areas of digital RMB include Shenzhen, Suzhou, xiong\'an, Chengdu, Shanghai, Hainan, Changsha, Xi\'an, Qingdao, Dalian and the Winter Olympics (Beijing and Zhangjiakou). The operating institutions include six state-owned banks (China, agriculture, industry, construction, transportation and postal savings) and nine banks such as China Merchants Bank Co.Ltd(600036) , e-commerce bank and Weizhong bank. The continuous promotion of the digital RMB pilot will bring new market demand for digital transformation in the financial field.

The plan emphasizes strengthening the innovation capacity of national key core technologies and consolidating the base of digital industrialization development. In the key task of "accelerating the promotion of digital industrialization", the plan clearly proposes to target strategic and forward-looking fields such as sensors, quantum information, network communication, integrated circuits, key software, big data, artificial intelligence, blockchain and new materials, so as to give full play to the advantages of China's socialist system, new national system and super large-scale market, Improve the basic R & D capacity of digital technology. In the "digital technology innovation breakthrough project", it is emphasized to optimize and innovate the organizational methods such as "being the leader", focus on breaking through the key core technologies in the fields of high-end chips, operating systems, industrial software, core algorithms and frameworks, and strengthen the integrated R & D of key technologies of general-purpose processors, cloud computing systems and software. The "digital technology innovation breakthrough project" covers basic software and hardware such as chips, operating systems and algorithms, innovative technologies such as cloud computing, big data, artificial intelligence and edge computing, as well as cutting-edge technologies such as quantum information, brain like intelligence and third-generation semiconductors. The implementation of the plan will accelerate the breakthrough of China's digital technology innovation and further promote the development of China's digital industrialization.

Strengthen the construction of digital economy security system and improve the ability to prevent risks. 1) Strengthen the construction of network security protection capacity. The plan requires that we should focus on strengthening the implementation of the requirements for synchronous planning, construction and use of network security technical measures, strengthen the network security protection capacity of key information infrastructure in important industries such as telecommunications, finance, energy, transportation and water conservancy, support the research, development and application of network security protection technologies and products, and promote the use of safe and reliable information products Services and solutions. 2) Improve data security capability. Establish and improve the data security governance system, establish a data classification and hierarchical protection system, standardize the management of the whole life cycle of data processing, do a good job in the security protection and socialized application of government data, improve the relevant systems and specifications for the security management of cross-border data flow, and promote the safety and reliability of important facilities and equipment. 3) Prevent economic risks, technical risks and social stability problems that may be caused by the superposition of various risks, focus on promoting the diversified supply of key products, and strive to improve the toughness of the industrial chain supply chain.

Investment suggestion: since the fourth quarter of 2021, relevant plans for digital economy have been continuously issued to support and guide the digital economy to achieve leapfrog development through key projects, special projects, finance, taxation and other supporting measures. We believe that during the "14th five year plan" period, investment in infrastructure areas such as 5g and fixed line broadband will be promoted in an orderly manner, and the layout of data centers will be optimized; The level of digital industrialization continues to improve, the localization of integrated circuits, operating systems, industrial software and other fields is expected to accelerate, and the supply chain integrity of key industries such as 5g, integrated circuits, new energy vehicles, artificial intelligence and industrial Internet will be improved; Industrial digitization also faces great opportunities, and the digital transformation in manufacturing, agriculture, commerce, logistics, finance and energy will be accelerated. At the same time, the demand for information security products and services will also maintain rapid growth. Strongly recommend Thunder Software Technology Co.Ltd(300496) , Glodon Company Limited(002410) , Venustech Group Inc(002439) , recommend Yonyou Network Technology Co.Ltd(600588) , Iflytek Co.Ltd(002230) , Beijing Kingsoft Office Software Inc(688111) , Sangfor Technologies Inc(300454) , Dbappsecurity Co.Ltd(688023) and Hundsun Technologies Inc(600570) , and pay attention to Yusys Technologies Co.Ltd(300674) .

Risk tips: 1) the implementation of policies may not be as strong as expected; 2) The digital transformation of traditional industries is not progressing smoothly; 3) The game between China and the United States in the field of science and technology has intensified.

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