HSBC Analyst: AI Integration Fuels Growth for China's Legacy SaaS Firms

Yiran Liu, who leads the A-share IT software research team at HSBC Qianhai Securities, believes that Chinese AI model companies are unlikely to take over the domestic software market due to a lack of industry knowledge. In contrast to the U.S., where AI developments led to a 'SaaSpocalypse' earlier this year, China's nascent software-as-a-service sector is thriving through collaboration. Established Chinese SaaS firms are integrating AI into their offerings, driving significant growth. For example, Kingdee International Software Group from Shenzhen anticipates AI product revenue of 1 billion yuan this year, reflecting a 180% increase. While global investor worries have caused a 19% drop in the Hang Seng China A Software & Services Index since mid-January, Liu, located in Beijing, emphasizes that traditional companies are prospering through AI rather than being replaced.