Information shares surge on digital transformation strategy

Shares of China's information services sector, covering data, cloud, cybersecurity and software, surged on Monday following the unveiling of a national strategy on digital transformation in a safe and controllable way.

The strategy, covering an integrated national big data system for government affairs and upgraded requirements for cybersecurity and industrial compliance, leaves domestic firms a wide market space. It means that Chinese products and services will gradually replace some overseas IT products, analysts said.

The STAR 50 Index, tracking high-tech companies on the Shanghai STAR Market, gained 1.67 percent on Monday, compared with a 0.77 percent drop in the Shanghai mainboard index.

STAR-listed Transwarp, a Shanghai-based vendor for enterprise-level big data infrastructure, surged to 82.56 yuan (US$11.63), hitting the 20 percent daily cap, on Monday. Transwarp has jumped 74 percent since its debut on the STAR Market on October 19.

Qi An Xin, a STAR-listed enterprise-oriented cybersecurity service provider, closed 12.83 percent higher at 62.80 yuan. Public cloud firms UCloud and Qingyun both climbed more than 6 percent while smart city infrastructure vendor eGova jumped over the 20 percent daily limit.

The State Council, China's cabinet, has released a plan for a national integrated data system for government affairs. It wants data catalog management, data collection, data governance and big data analysis, all with appropriate security, by 2023. The system will be fully constructed by 2025, according to media reports.

"It is a very good opportunity, changing the long-term fragmented and unsystematic situation of our national data security, and will push data security to a new stage," said Wu Yunkun, president of Qi An Xin. The company has established a team of 600 people working for related projects.

In the first nine months, Qi An Xin posted revenue of 3.19 billion yuan, growing19.34 percent from a year ago. Over 70 percent of its income is from big-volume deals over the size of 1 million yuan each.

China's online security spending will hit US$21.5 billion in 2025, double the level of US$10.3 billion in 2021. The five years' average growth rate will hit 20.5 percent, the highest among all regions globally, according to researcher IDC.

Almost 60 percent Chinese firms will increase investment on digitalization within one or two years, including 33 percent firms planning a 15 percent hike or more, as digitalization is required by all, researcher Accenture said in its China Digital Transformation Index research released last week.

"In the current environment, as companies manage challenges, including market volatility and supply chain disruptions, it's critical to invest in digital technologies to strengthen their core and drive continuous innovation," Samantha Zhu, chairperson of Accenture China.

The demand for self-controllability (in China) is definitely a trend, covering perspectives like data security, she added.