2023092800178

1.
Macro Economy Overview
2
Nominal GDP Growth
Nominal GDP (the PRC), 2017 – 2027E

Nominal GDP 2017-2022 2022-2027E
(RMB Trillion)
CAGR 7.8% 6.9%
180 169.3
158.4
160 148.4
138.8
140 130.0
121.0
120 114.4
98.7 101.6
100 91.9
83.2
80
60
40
20
0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• According to the PRC’s National Bureau of Statistics of PRC, Chinese economy grew at a CAGR of 7.8% from 2017 to 2022 in
terms of its nominal GDP growth. The Chinese authorities are not likely to change its macroeconomic policies so as to maintain
macroeconomic stability going forward. Under this trend, the Chinese economy is likely to maintain sound and healthy
development. The economy in the PRC has been affected since late January and is expected to recover as enterprises in the
PRC have gradually reopened since mid-February 2020. In the meantime, the Chinese authorities are working to mitigate the
negative impact of COVID-19 on the economy, with anti-crisis measures, liquidity provision, fiscal measures, and financial
support. According to the International Monetary Fund (IMF), The PRC is expected to be the only economy to achieve positive
growth in 2020 among other global major economies. Under this circumstance, the Chinese economy is forecasted to keep
growing at a CAGR of 6.9% from 2022 to 2027.
Source: National Bureau of Statistics, IMF
3
Per Capita Nominal GDP
Per Capita Nominal GDP (the PRC), 2017 – 2027E

GDP Nominal Per Capita
(Thousand RMB)
2017-2022 2022-2027E
150
CAGR 7.4% 7.1%
120.5
112.6
105.3
98.4
100 92.1
81.0 85.7
70.6 72.4
66.0
60.0
50
0
2017 2018 2019 2020 2021 2021 2023E 2024E 2025E 2026E 2027E
• In line with the growing economy, GDP nominal per capita in the PRC has grown at a fast pace over the past and is expected to
maintain its solid growth. According to the National Bureau of Statistics, the GDP nominal per capita in the PRC for 2022 has
reached RMB85.7 thousand.
• In the foreseeable future, with the sound growth of the Chinese macro economy, the GDP nominal per capita in the PRC is also
likely to maintain a steady rate of growth. According to IMF, the GDP nominal per capita in the PRC is predicted to reach
RMB120.5 thousand in 2027, growing at a CAGR of 7.1% from 2022.
Source: National Bureau of Statistics, IMF
4
Population and Urbanization
Population and Urbanization (the PRC), 2017 – 2027E
Population (Million) Urbanization (%)

Urbanization Rate Rural Population Urban Population
1,800 100
1,500 1,411.8 1,412.6 1,411.8 1,412.0 1,410.8 1,409.2 90

1,390.1 1,395.4 1,400.1 1,407.0 1,404.3
80
1,200 509.8 498.3 491.1 475.8 456.8 436.3 414.8 392.2
576.6 564.0 551.7
63.9 70
900 59.6 60.6 70.5 72.1
58.5 67.6 69.0
64.7 65.2 66.3 60
600
936.2 954.0 972.9 992.2 1,012.1 50
813.5 831.4 848.4 902.0 914.3 920.7
300 40
0 30
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• China has the world’s largest population. In 2022, China’s total population reached 1,411.8 million. With the PRC Government investing a
tremendous effort into controlling the enormous population, the population growth rate has been stable over the past five years. However,
with the release of the two-child policy, the total population of China is estimated to grow at a moderate level, reaching 1,404.3 million in
2027.
• Due to the rapid economic development of China and the influx of migrants from rural areas to developed areas, the Chinese urban
population has been steadily increasing. China’s rapid economic growth has fueled the unprecedented urbanization of its population since
the 1990s. From 2017 to 2022, China’s urban population increased from 813.5 million to 920.7 million, with a CAGR of 2.5%. During the
same period, the urbanization rate in China increased by 6.7%, from 58.5% to 65.2%.
• With the continuous growth of urbanization, the urban population is expected to maintain a CAGR of 1.9% from 2022 to 2027. Frost &
Sullivan forecasts that by 2027, China’s urban population is expected to reach 1,012.1 million. Under the 'National Plan for Promoting
Healthy Urbanization (《全国促进城镇化健康发展规划》)' raised in 2013, new-style urbanization is expected to promote the urban-rural
coordination and reasonable distribution. Accordingly, Frost & Sullivan forecasts China’s urbanization rate is likely to increase gradually
from 2022 to 2027, reaching 72.1% by 2027.
Source: National Bureau of Statistics, Frost & Sullivan
5
Per Capita Disposable Income
Per Capita Disposable Income (the PRC), 2017 – 2027E
60 2017-2022 2022-2027E
CAGR 7.3% 7.6% 53.2
49.6
Per Capita Disposable Income
46.3
43.2
40.4
(RMB Thousand)
40 35.1 36.9
30.7 32.2
28.2
26.0
20
0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• Together with the continuous growth in the economy and urbanization, the average income level of Chinese households has also
increased continuously in recent years. In 2022, the per capita annual disposable income has increased to RMB36.9 thousand in
2022 from RMB26.0 thousand in 2017.
• The growth of Chinese per capita annual disposable income has demonstrated a positive effect on Chinese residents’ purchasing
power. Based on the prediction of the steady increase of nominal GDP and urbanization rate in China for the next five years, which
are expected to increase to RMB169.3 trillion and 72.1% in 2027 respectively, Frost & Sullivan estimates that by 2027, the per
capita annual disposable income in China is expected to increase to RMB53.2 thousand with a CAGR of 7.6% from 2022.
Source: National Bureau of Statistics; Frost & Sullivan
6
Nominal GDP in Southwest Economic Zone
Nominal GDP (Southwest Economic Zone) Nominal GDP (Guangxi)

2017 – 2027E 2017 – 2027E
RMB Trillion RMB Billion
2017-2022 2022-2027E 4,500 2017-2022 2022-2027E
25 CAGR 8.3% 7.9% 23.5 3,839
21.9 4,000 CAGR 8.1% 7.9%
3,589
20.4 3,360
19.0 3,500 3,139
20 17.7 2,937
16.1 3,000 2,630
15.3 2,474
15 13.8 2,500
12.0
13.1 2,124 2,216
1,963
10.8 2,000 1,779
10
1,500
1,000
5
500
0 0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E 2027E
• According to the National Bureau Statistics, Southwest Economic Zone is one of the eight economic zones in the PRC. Southwest Economic
Zone includes five provinces, which comprises of Guangxi, Sichuan, Chongqing, Yunnan and Guizhou. The nominal GDP in Southwest
Economic Zone has increased from RMB10.8 trillion in 2017 to RMB16.1 trillion in 2022, representing a CAGR of 8.3%. Sichuan is the largest
economy with approximately RMB5,675.0 billion nominal GDP in 2022, accounting for approximately 35.2% of nominal GDP in the Southwest
Economic Zone. The macro economy in Southwest Economic Zone is one of the fast growing regions in the PRC, which grew at a faster
CAGR than the overall nominal GDP in the PRC from 2017 to 2022. Going forward, the nominal GDP in Southwest Economic Zone is
expected to sustain a relatively fast pace from 2022 to 2027, reaching RMB23.5 trillion with a CAGR of 7.9%.
• The nominal GDP in Guangxi was approximately RMB2,630.0 billion in 2022 which was approximately 2.2% of the nominal GDP in the PRC.
Over the past several years, the nominal GDP in Guangxi has grown at a CAGR of 8.1% from 2017 to 2022. Going forward, the nominal GDP
in Guangxi is expected to grow at a CAGR of 7.9%, reaching RMB3,839.0 billion in 2027.
7
Per Capita Nominal GDP in Southwest Economic Zone
Per Capita Nominal GDP (Southwest Economic Zone) Per Capita Nominal GDP (Guangxi)
2017 – 2027E 2017 – 2027E
RMB Thousand RMB Thousand
2017-2022 2022-2027E 2017-2022 2022-2027E
100 94.0 80 74.2
CAGR 8.1% 8.0% CAGR 7.4% 7.3%
87.4 69.7
81.5 70 65.5
80 75.7 61.4
70.5 57.7
60
64.0 52.2
60.9 49.2
60 54.8 50 43.0 44.3
52.3 40.0
48.2 36.6
43.4 40
40 30
20
20
10
0 0
2017 2018 2019 2020 2021 2022 2023E2024E2025E2026E2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• Along with the growth of the macro economy, the per capita nominal GDP in Southwest Economic Zone also witnessed a fast growing
pace over the past several years. The per capita nominal GDP in Southwest Economic Zone was approximately 64.0 thousand in
2022, which was 74.7% of that of the PRC. With the sound growth of the economy in the region, the per capita nominal GDP in
Southwest Economic Zone is expected to maintain its solid growth in the following years, reaching RMB94.0 thousand in 2027 with a
CAGR of 8.0% from 2022 to 2027.
• In line with the growing macro economy, the per capita nominal GDP in Guangxi has increased from RMB36.6 thousand in 2017 to
RMB52.2 thousand in 2022, representing a CAGR of 7.4%. In the foreseeable future, the growing macro economy in Guangxi is likely
to keep the steady growth of the per capita nominal GDP. In 2027, the per capita nominal GDP in Guangxi is expected to reach
RMB74.2 thousand.
8
Population and Urbanization in Southwest Economic Zone
Population and Urbanization (Southwest Economic Zone) Population and Urbanization (Guangxi)
2017 – 2027E 2017 – 2027E
Million Urban Rural Urbanization Rate % Million Urban Rural Urbanization Rate %
300 100% 60 100%

248.3 249.5 250.8 251.8 251.6 251.9 251.4 251.1 250.7 250.3 249.7 49.1 49.5 49.8 50.2 50.4 50.5 50.4 50.3 50.2 50.1 49.9
250 50
80% 80%
200 40
66.3% 60% 60%
62.6% 64.4% 61.9% 63.7%
59.3% 60.9% 58.4% 60.2%
150 56.0% 57.0% 57.6% 30 54.2% 55.0% 55.6% 56.9%
53.0%
50.3% 51.6% 48.9% 49.9% 50.8%
40% 40%
100 20
157.0 161.1 165.5 31.0 31.8
141.1 143.5 145.2 149.0 152.9 27.2 27.7 28.1 28.7 29.4 30.2
124.8 128.8 132.9 20% 24.0 24.7 25.3 20%
50 10
0 0% 0 0%
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• In 2022, the total population of Southwest Economic Zone was approximately 251.9 million, accounting for approximately 17.8% of
total population in the PRC. The total population in Southwest Economic Zone will generally follow the trend of China’s population and
it is expected to reach 249.7 million in 2027.
• Due to the rapid economic development and urbanization process, the influx of migrants from rural regions to urban region in
Southwest Economic Zone has shown an increasing trend. From 2017 to 2022, the urban population increased from 124.8 million to
145.2 million, with a CAGR of 3.1%. During the same period, the urbanization rate of Southwest Economic Zone increased from
50.3% in 2017 to 57.6% in 2022. With the accelerating urbanization process, the urbanization rate in Southwest Economic Zone is
expected to reach 66.3% in 2027.
• Guangxi’s population has also grown at a stable rate over the past years. In 2022, the total population of Guangxi was approximately
50.5 million and 55.6% are urban populations. Along with the growing macro economy and accelerating process, the urbanization rate
in Guangxi is also expected to continue rising from 2022 to 2027, reaching 63.7% in 2027.
9
Per Capita Disposable Income in Southwest Economic Zone
Per Capita Disposable Income (Southwest Economic Zone) Per Capita Disposable Income(Guangxi)
2017 – 2027E 2017 – 2027E
RMB Thousand RMB Thousand
2017-2022 2022-2027E 2017-2022 2022-2027E
50 45
CAGR 8.0% 8.1% 43.2 CAGR 7.1% 7.5% 40.2
40.1 40 37.5
40 37.3 35.0
34.6 35 32.7
32.3 30.6
27.8 29.3
30 26.7 28.0
30
23.8 25.4 25 23.3 24.6
21.5
21.7 19.9
19.9 20
20
15
10 10
5
0 0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• Economic development in Southwest Economic Zone has lagged behind the booming coastal regions. The per capita disposable
income of Southwest Economic Zone and Guangxi is relatively lower than that in the nationwide.
• Highly relevant to regional GDP, per capita disposable income of Southwest Economic Zone and Guangxi shows a similar pattern to
the growth of GDP. During the period from 2017 to 2022, the per capita disposable income of Southwest Economic Zone and Guangxi
has grown from RMB19.9 thousand and RMB19.9 thousand to RMB29.3 thousand and RMB28.0 thousand respectively, representing
CAGRs of 8.0% and 7.1%. For the forecast period, the per capita disposable income is forecasted to grow at 8.1% and 7.5% from
2022 to 2027 respectively and reach RMB43.2 thousand in Southwest Economic Zone and RMB40.2 thousand in Guangxi by 2027.
10
Total Public Expenditure on Education
Total Public Expenditure on Education (the PRC) Total Public Expenditure on Education
2017 – 2027E (Southwest Economic Zone), 2017– 2027E
RMB Trillion RMB Billion
2017-2022 2022-2027E
2017-2022 2022-2027E
8 1,200 CAGR 7.8% 6.3% 1,108.7
CAGR 7.6% 5.8% 1,057.3
7 6.5 1,004.3
6.2 1,000 942.8
5.6 5.9 881.8
6 5.3 816.8
4.9 769.2
4.7 800 661.3
709.1
5 4.3 607.4
3.7 4.0 561.5
4 3.4 600
3 400
2
200
1
0 0
2017 2018 2019 2020 2021 2022 2023E2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
Total Public Expenditure on Education (Guangxi) • Total public expenditure on education refers to the aggregating total public
2017 – 2027E expenditure allocated to schools and educational institutions by the PRC
government. Total public expenditure on education is used for educational
RMB Billion expenses, construction expenses, scientific research expenses and others.
2017-2022 2022-2027E Total public expenditure on education in the PRC, Southwest Economic Zone
and Guangxi has maintained a steady growth rate from 2017 to 2022 at a CAGR
CAGR 8.2% 6.1% 198.3
189.2 of 7.6%, 7.8% and 8.2%, respectively. Total public expenditure on education has
200 179.7 been the largest component of total revenue of formal education over the past
180 169.4
159.0 years, accounting for approximately 79%, 83% and 87% of total revenues of
160 139.9 147.7 formal education in the PRC, Southwest Economic Zone and Guangxi
140 128.4
118.4 respectively. In the foreseeable future, total public expenditure on education in
120 99.4 105.2 the PRC, Southwest Economic Zone and Guangxi is expected to grow steadily
100 at a CAGR of 5.8%, 6.3% and 6.1% respectively between 2022 and 2027, and
80 to remain the largest component of total revenue of formal education.
60 • The total public expenditure on education is the major fund source for education
40 IT solutions market, which contributed approximately 84% of the total market
20 size of education IT solutions market in 2022. Hence, the continuously growing
0 total public expenditure on education is expected to further drive the
2017 2018 2019 2020 2021 2022 2023E2024E2025E2026E2027E development of the education IT solutions market.
Source: MOE; Frost & Sullivan
11
Total Public Expenditure on Education IT Solutions
Total Public Expenditure on Education IT Solutions (the PRC) Total Public Expenditure on Education IT Solutions
2017 – 2027E (Southwest Economic Zone), 2017 – 2027E
RMB Billion RMB Billion
2017-2022 2022-2027E
700 120 2017-2022 2022-2022E
CAGR 8.6% 6.6% 576.9
600 547.6 CAGR 9.0% 7.0% 98.4
517.8 100 93.2
485.8 88.0
500 454.0 82.1
419.8 76.4
393.3 80 70.3
65.5
400 338.0 358.5 56.0 59.5
305.8 60 50.4
277.3 45.6
300
200 40
100 20
0 0
2017 2018 2019 2020 2021 2022 2023E2024E2025E2026E2027E 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E 2027E
Total Public Expenditure on Education IT Solutions (Guangxi)

2017 – 2027E
• According to the Ten-year Development Plan for Education IT
RMB Billion 2017-2022 2022-2027E Solutions (2011-2020) (《教育信息化十年发展规划2011-2020》)
20 CAGR 9.1% 6.5% issued by the MOE, governments at different levels should pay for
17.5
18 16.6 education IT solutions at a rate of not less than 8% to ensure the
15.7
16 14.7 steady and stable public expenditure on education. Following the
13.8
14 12.0
12.8 plan, total public expenditure on education IT solutions in the PRC
12 10.2 10.7 has increased from RMB277.3 billion in 2017 to RMB419.8 billion
10 8.3 9.0 in 2022, representing a CAGR of 8.6%. Same for Southwest
8 Economic Zone and Guangxi, the increasing total public
6 expenditure on education IT solutions has injected great
4 development power into the education IT solutions market.
2
0
2017 2018 2019 2020 2021 2022E2023E2024E2025E2026E2027E
12
Total Number of Student Enrolments

Total Number of Student Enrolments (the PRC), 2017 – 2027E
(Southwest Economic Zone), 2017 – 2027E
Million 2017-2022 2022-2027E Million 2017-2022 2022-2027E
400 80
CAGR 1.6% 2.3% CAGR 1.6% 2.2%
350 314 321 328 70 63.9
302 308 60.1 61.3 62.6
282 289 291 293 56.6 57.0 57.3 59.0
300 270 276 60 52.9 54.0 55.4
250 50
200 40
150 30
100 20
50 10
0 0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E

(Guangxi), 2017 – 2027E
• The number of students enrolled in formal education has
Million
20 2017-2022 2022-2027E increased from 2017 to 2022, which has increased from 270
million persons in 2017 to 293 million persons in 2021 according
CAGR 2.3% 3.0% to the data released by MOE, representing a CAGR of 1.6%. With
14.9 15.3
14.1 14.5 the adoption of the three-child policy, the total number of students
15 13.1 13.2 13.7
12.2 12.7 12.8 enrolled in formal education is expected to reach 328 million
11.8
persons in 2027.
10 • Along with the increasing number of student enrolments in the
PRC, the student enrolments in Southwest Economic Zone and
Guangxi also witnessed steady growing pace over the past years,
5 each realized a CAGR of 1.6% and 2.3% from 2017 to 2022.
0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
13
2. Overview of Education IT Solutions Market
14
Introduction of Education IT Solutions Market
• information technology (IT) solution is a set of IT products and/or services that are sold as a single package to customers. IT solutions are usually applied in
a wide range of industries such as education, finance, healthcare, logistics, energy, etc.
• Education IT solutions, also known as educational informatization (“教育信息化”), refers to the application of modern information technologies to provide
hardware equipment, software tools, integrated solutions, teaching contents and other IT services to schools and institutions inside the education system.
Education IT solutions can effectively improve the operating efficiency and service quality of schools and educational institutions, which in turn promotes the
construction of informational service system in the education industry in the PRC. Representative education IT solutions include intelligent interactive panel,
cloud platform, smart campus, administrative management system, etc.
• In terms of service types, education IT solutions generally can be divided into four categories, including sales of hardware equipment, provision of software
services, provision of integrated IT solutions services and provision of content services.
Business Types of Education IT Solutions
Business Types Business Overview Applications
 Intelligent Interactive Panel

Sales of Hardware  Sales of hardware equipment generally refers to the provision of
 Intelligent Interactive Monitor
Equipment equipment support for the construction of education IT solutions.  Electronic Equipment, etc.
 Provision of software services generally refers to software support  Cloud Platform

Provision of Software
for various educational activities at schools, including school  Class Arranging System
Services  Marking System, etc.
administration, teaching management, etc.
 Provision of Integrated IT solutions services generally refers to the

 Smart Campus
Provision of Integrated integration of hardware, software and communication technologies to
 Practical Teaching Room
IT Solutions provide comprehensive solutions services to schools and educational  Campus IT Infrastructure, etc.
institutions.
 Provision of content services generally refers to the provision of  Teaching Materials

Provision of Content
informatization of teaching contents and teaching tools to students  Multimedia teaching contents
Services  Learning Videos, etc.
and teachers at schools.
Source: Frost & Sullivan
15
Overview of the Development History of Education IT Solutions
Market in the PRC
Main Development Stage of Education IT Solutions Market (the PRC)
Stages Key Insights Representative Policies
 Schools are gradually deploying computers to conduct basic management stuff,

 Educational Promotion Action Plan for
Before 2000s and some are attempting to utilize multi-media tools in teaching.
the 21st Century 《面向21世纪教育振
 Education IT solutions mainly include network construction and application of 兴行动计划》
basic hardware equipment.
 Basic network infrastructure has greatly improved.  Standard of Educational Management

 Education IT solutions such test scores inquiry and online course selection have Informatization 《教育管理信息化标准》
emerged in schools.  The 10th FYP of Education IT Solutions
2000~2010
 Multi-media teaching had been relatively popular in schools. (Outline) 《教育信息化"十五"发展规划(纲
要)》
 Ten-Year Development Plan for
 Over 90% of primary and secondary schools have access to the Internet. Education IT Solutions (2011-2020) 《教
 Diversified education IT solutions such as school management, test system, 育信息化十年发展规划(2011-2020年)》
course selection have been widely applied in schools. School are paying  Outline of the National Medium and Long-
attention to upgrade intelligent hardware equipment. term Educational Reform and
2011~2017
Development Plan (2011-2020) 《国家中
 Education IT solutions are gradually transferring into the application of software
长期教育改革和发展规划纲要（ 2011-
services and integrated solutions. 2020年）》
 Following the Action Plan of Education IT Solutions 2.0, the education IT

solutions market in the PRC has entered a new development era.  Action Plan of Education IT Solutions
2018 to  New education IT solutions utilized new technologies such as cloud platform, 2.0《教育信息化2.0行动计划》
Present VR/AR are gradually adopted by some schools. Schools and educational  China Education Modernization 2035
institutions continuously upgrade the existing education IT solutions by utilizing 《中国教育现代化2035》
emerging technologies such as 5G, AI, IoT, etc.
16
Industry Value Chain of Education IT Solutions Market
Industry Value Chain of Education IT Solutions Market (the PRC)
Upstream Midstream Downstream
Technical Support Procurement Party End Users

Hardware Equipment
Internet Manufacturers Schools
Local Education
Infrastructure Data Services Software Content Bureau Educational
Construction Service Service (To Government Institutions
Providers Providers “2G”)
Cloud Internet of Teachers
Services Things (IoT)
Students
Schools
Parts and Model and Integrated Solutions
(To School “2B”)
Fittings Algorithm Providers Parents
• The upstream of the education IT solutions market mainly consist of various technical supports such as Internet infrastructure construction, cloud services, as well as essential technologies applied in the education IT
solutions. Generally, the upstream of the industry value chain provides the fundamental technical support for midstream education IT solutions providers.
• The midstream education IT solutions providers generally include hardware equipment manufacturers, software services providers, integrated IT solutions services providers and other content services providers. Hardware
equipment manufacturers, software providers and content service providers may sell products or services to downstream clients or integrated solution providers through distributors or resellers. In the meantime, integrated
solution providers may integrate the procured products with their self-developed products and services and sell as a bundle to downstream clients. At the moment, education IT solutions providers are mostly composed of
software service providers and integrated solution providers. In the meantime, an increasing number of software service providers are evolving to be integrated solution providers by providing more value-added and
comprehensive services to customers.
• It is not uncommon for IT services provider to procure hardware and software because (i) they have relevant experience and understanding in the features of different hardware and software and therefore may advise the
other IT service providers on the selection of hardware and software (ii) they may provider ancillary installation services of hardware and/or software; and (iii) they may provide competitive pricing driven by their business
relationship with the relevant supplier.
• As public expenditure on education is the major funding source of education IT solutions, local education bureau is the largest procurement party of education IT solutions projects. In addition, private schools, who usually
have more self-owned funds than public schools, can also bid for education IT solutions projects.
• The education IT solutions market usually displays strong seasonal patterns. For one thing, market participants usually recognized higher revenue in the fourth quarter since public schools usually start the project tender
process in the 1st half or later in a year and requires the vendors to complete the projects before the year end in attempts not to delay their own yearly finance plans pre-approved by the overseeing governments. On the
other hand, service providers usually recognized higher revenue at the end of summer and winter holidays since most of projects are carried out during this period to avoid unnecessary interruption to students. As a result,
companies in education IT solution market would experience such seasonal impacts, generating higher revenue in the fourth quarter. Meanwhile, some of the large-scale companies would showcase relatively smaller
seasonal fluctuations as they have more businesses and more number of projects and the seasonality would be offset to some extent by other businesses.
• It is not uncommon in the education IT solutions market that winning bidders for integrated solution projects would subcontract or outsource transfer the projects, in whole or in part, to other third-party market participants.
• The IT industry in Shenzhen and Chengdu is more developed than Nanning. The number of employed persons in information transmission, software and information technology in Shenzhen and Chengdu were
approximately 296 thousand and 263 thousand respectively, which were much larger than that in Nanning. Source: Frost & Sullivan
17
Market Size of Education IT Solutions Market in the PRC
Total Revenue of Education IT Solutions Market (the PRC), 2017-2027E

RMB Billion
800
2017-2022 2022-2027E 713.8
700 674.1
CAGR 9.3% 7.1% 634.3
592.3
600 551.1
507.2
500 472.4
427.8
401.9
400 361.4
325.1
300
200
100
0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• The education IT solutions market in the PRC is a policy-driven market. In 2012, the MOE issued the “Ten-year Development Plan for Education IT Solutions
(2011-2020) “(《教育信息化十年發展規劃（2011-2020年）》 ) and set the promotion of education IT solutions as a national strategy. Following the policy, the
MOE released the “Action Plan 2.0 of Education IT Solutions “(《教育信息化2.0行動計畫》) in 2018 to further strengthen the development the education IT
solutions market in the PRC. Under the strong policy support, the education IT solutions market in the PRC has entered a rapid growing stage, realizing a
CAGR of approximately 15% from 2010 to 2015. The total revenue of education IT solutions market increased from RMB325.1 billion in 2017 to RMB507.2
billion in 2022, representing a CAGR of 9.3%.
• Due to the outbreak of COVID-19, schools from kindergartens to higher educational institutions across the PRC had postponed the start date of the spring
semester in 2020. The temporary suspension of school work also adversely affected the education IT solutions market due to delayed projects and deferred
expenditure from government. In such case, the growth rate from 2019 to 2020 is expected to be lower than those from previous years, but will still to display a
growing trend.
• Education IT solutions market is a subset of the overall IT solution market and it accounted for approximately 11.7% of the overall IT solutions in 2022. Our
Group had a market share of less than 0.01% in terms of revenue in the overall IT solutions market in 2022.
• Given the huge number of educational institutions and students, there are still great development potential for the education IT solutions market. Going forward,
the total revenue of education IT solutions market in the PRC is expected to reach RMB713.8 billion in 2027, representing a CAGR of 7.1% from 2022 to 2027.
Source: Ministry of Education, Frost & Sullivan
18
Market Size of Education IT Solutions Market in the PRC
Revenue Breakdown of Education IT Solutions Market in Terms of Business Types (the PRC), 2017-2027E
Billion RMB
800
713.8
700
600
507.2
500
400 325.1
300
200
100
CAGR CAGR
0 (17-22) (22-27E)
2017 2022 2027E
Integrated IT Solutions 87.0 148.0 224.2 11.2% 8.7%
Hardware Equipment 141.4 189.6 244.7 6.0% 5.2%
Software Services 76.2 134.4 188.3 12.0% 7.0%
Content Services 20.5 35.2 56.6 11.4% 10.0%
Total 325.1 507.2 713.8 9.3% 7.1%
• Sales of hardware equipment is the largest component of education IT solutions market in the PRC, accounting for 37.4% in terms of revenue in
2022, followed by the provision of integrated IT solutions and software services, taking up 29.2% and 26.5% in 2022 respectively.
• Integrated IT solutions providers in the education IT solutions market mainly integrate hardware and software products and sell its integrated IT
solutions services as a bundle to clients in a certain area. As integrated IT solutions services can provide integrated products and services with
emerging technologies, educational institutions are increasingly preferring integrated IT solutions services providers when selecting vendors,
which in turn drove the growth of market size of integrated IT solutions services. The total revenue of integrated IT solutions services in
education IT solutions market has increased from RMB87.0 billion in 2017 to RMB148.0 billion in 2022, representing a CAGR of 11.2%. Going
forward, the market is expected to reach RMB224.2 billion in 2027, representing a CAGR of 8.7% between 2022 and 2027.
19
Market Size of Education IT Solutions Market in Southwest
Economic Zone and Guangxi
Total Revenue of Education IT Solutions Market Total Revenue of Education IT Solutions Market
(Southwest Economic Zone), 2017 – 2027E (Guangxi), 2017 – 2027E
RMB Billion RMB Billion
2017-2022 2022-2027E 25 2017-2022 2022-2027E
140
CAGR 9.5% 7.4% CAGR 9.4% 6.9% 20.5
118.1
120 111.5 19.4
104.8 20 18.3
97.5 17.1
100 90.3 15.9
82.8 14.7
76.8 15 13.7
80 69.5 12.3
65.2 11.6
58.4 10.2
60 52.5 9.4
10
40
5
20
0 0
2017 2018 2019 2020 2021 2022 2023E2024E2025E2026E2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• With national promotion of the education IT solutions, the education IT solutions market in Southwest Economic Zone has also witnessed a stead growing page
over the past years. The total revenue of education IT solutions has increased from RMB52.5 billion in 2017 to RMB82.8 billion in 2022 with a CAGR of 9.5%,
which was mainly driven by local governments’ supporting policies. For instance, Chongqing and Yunnan issued The 13th FYP for Education IT Solutions,
Sichuan and Guizhou also reform plan and guidance documents to stimulate the deployment of education IT solutions. The education IT solutions market in
Guangxi is also driven by the strong policy support. The Education Department and the People’s Government of Guangxi each issued “Development Plan for
Education IT Solutions in Guangxi (2017-2020) “(《廣西教育信息化發展規劃（2017-2020年）》) and “Three-year Action Plan for the Promotion of Guangxi
Education (2018-2020)” (《廣西教育提升三年行動計畫（2018-2020年）》) in 2017 and 2018, respectively. Furthermore, the Education Department of Guangxi
issued “Action Plan of “Internet + Education” in Guangxi (2018-2022)” (《廣西“互聯網+教育”行動計畫（2018-2022年）》) in 2019, which entailed ten major
action plans associated with education IT solutions. The total revenue of education IT solutions market in Guangxi increased from RMB9.4 billion in 2017 to
RMB14.7 billion in 2022, representing a CAGR of 9.4%.
• With the government support and increasing public expenditure on IT education, the total revenue of education IT solutions market in Southwest Economic
Zone and Guangxi is expected to sustain growing at CAGR of 7.4% and 6.9% respectively from 2022 to 2027, and reach RMB118.1 billion and RMB20.5 billion
respectively in Southwest Economic Zone and Guangxi.
20
Market Size of Education IT Solutions Market in Guangxi
Revenue Breakdown of Education IT Solutions Market in Terms of Business Types (Guangxi), 2017-2027E
Billion RMB
25
20.5
20
14.7
15
9.4
10
CAGR CAGR
0 (17-22) (22-27E)
2017 2022 2027E
Integrated IT Solutions 2.5 4.3 6.4 11.5% 8.3%
Hardware Equipment 4.1 5.2 6.6 4.9% 4.9%
Software Services 2.1 3.7 5.1 12.0% 6.6%
Content Services 0.7 1.5 2.4 16.5% 9.9%
Total 9.4 14.7 20.5 9.4% 6.9%
• Sales of hardware equipment is also the largest market segment in education IT solutions market in Guangxi. In 2022, the revenue
from sales of hardware equipment accounted for 35.4% of the total market size of education IT solutions in Guangxi.
• Similar to the market size of integrated IT solutions services market in the PRC, the revenue of integrated IT solutions in education
IT solutions market in Guangxi also increased from RMB2.5 billion in 2017 to RMB4.3 billion in 2022, representing a CAGR of
11.5%. With the strong demand from education industry and strong policy support in education IT solutions market, the market size
of integrated IT solutions in education IT solutions market of Guangxi is expected to reach RMB6.4 billion by 2027, representing a
CAGR of 8.3% between 2022 and 2027.
21
Market Drivers of Education IT Solutions Market (1/2)
Major Market Drivers
1 Strong Policy Support
2 Increasing Public Expenditure on Education
3 Strong Demand from Education Industry
4 Rapid Development and Iteration of Information Technologies
Analysis of Major Market Drivers
1.Strong Policy Support
 The promotion of education IT solutions has been set as one of the key tasks in the development of education industry. Over the past decade, supportive polices
on education IT solutions market have been intensively introduced by the PRC governments. Since the issuance of Ten-Year Development Plan for Education IT
Solutions (2011-2020) ( 《教育信息化十年發展規劃（2011-2020年）》), in 2012, the education IT solutions market in the PRC has entered the first rapid
development stage. Following the development plan, the MOE then issued several guidance and policies to further promote the market development, including
‘The 13th FYP for Education IT Solutions’ (《教育信息化“十三五”規劃》) and ‘The Notice on Further Strengthening the Informatization of Educational
Management’ (《關於進一步加強教育管理信息化的通知》), etc. In recent years, the MOE issued ‘The Action Plan 2.0 of Education IT Solutions’ (《教育信息化2.0
行動計畫》) to designate new development goals for education IT solutions market in the following years.
 In the meantime, local governments also issued supportive polices on the development of education IT solutions market. In Southwest Economic Zone, local
provinces correspondingly released relevant policies on the education IT solutions market. Representative policies include ‘Working essentials of Sichuan’s
Education IT Solutions and Cybersecurity in 2020’ (《2020年四川省教育信息化和網路安全工作要點》), ‘The 13th FYP for Education IT Solutions in Chongqing’
(《重慶市教育信息化“十三五規劃”》), ‘The 13th FYP for Education IT Solutions in Yunnan’(《雲南省教育信息化“十三五規劃”》), ‘The Comprehensive
Educational Reform Plan in Guizhou’(《貴州省教育綜合改革方案》), etc. In particular in Guangxi, ‘The Education Department of Guangxi has issued the Three-
year Action Plan for the Promotion of Guangxi Education (2018-2020)’ (《廣西教育提升三年行動計畫（2018-2020年）》) and ‘Development Plan for Education IT
Solutions in Guangxi (2017-2020)’ (《廣西教育信息化發展規劃（2017-2020年）》) to vigorously promote education IT solutions in the education industry. These
favorable polices are expected to further drive the demand for education IT solutions and fuel up the development of education IT solutions market.
 In addition, ‘The 14th Five Year Plan for the Development of Digital Economy’(《“十四五”数字经济发展规划》) demonstrated the importance of developing the
digital economy and also set the goal of increasing the GDP of digital economy to take up to 10% of total GDP in China in 2025. Particularly for education, the
Chinese government made plans to promote the development of “smart education” and to have a well-established public education service system for a better
educational environment and a wider coverage of education. Thus, education IT solution market is expected to continuously grow with these favorable policies.
22
Market Drivers of Education IT Solutions Market (2/2)
1 Strong Policy Support
2 Increasing Public Expenditure on Education
3 Strong Demand from Education Industry
4 Rapid Development and Iteration of Information Technologies

2. Increasing Public Expenditure on Education
 As the public expenditure is the major fund source for the education IT solutions market, the increasing public expenditure on education is a key driver for the
market. The total public expenditure on education in the PRC has steadily grown over the past years, increased from RMB3.4 trillion in 2017 to RMB4.9 trillion in
2022, representing a CAGR of 7.6%. Meanwhile, the total public expenditure on education in Guangxi also stably grew from RMB99.4 billion in 2017 to RMB147.7
billion in 2022. According to the Ten-year Development Plan for Education IT Solutions (2011-2020) (《教育信息化十年发展规划2011-2020》) issued by the MOE,
governments at different levels should spend for education IT solutions not less than 8% to ensure the steady and stable public expenditure on education. Under
strong policy support, the public expenditure on education is expected to further increase, and therefore drive the development of the education IT solutions market.
3. Strong Demand from Education Industry

 Due to the large population number and education demand in the PRC, there are a huge number of schools and student enrollments in the PRC. According to the
data from the MOE, there were approximately 0.52 million schools and 293 million students enrolled in 2022. The large number of schools and student enrollments
have created strong demand for education IT solutions products and services. As governments are advocating the construction of education IT solutions in the
education system, education departments and schools are expected to generate demand for education IT solutions. In such case, the strong demand from
education industry will strongly promote the growth of education IT solutions market.
4. Rapid Technology Development and Iteration
 The rapid technology development and iteration have deeply influenced the education industry. Advanced technologies such as big data analysis, cloud service, AI,
IoT and VR/AR have provided diversified education IT solutions, which can update the teaching and management models to improve the teaching environment and
management efficiency of schools and educational institutions. For instance, face recognition application utilizing face recognition, big data, IoT and other
information technologies can provide security services and relevant campus management service to schools. The rapid technology development and iteration of
information technologies will continue to promote the innovation in education industry by providing diverse IT solutions, which in turn drives the growth of education
IT solutions market.
23
Policies and Regulations of Education IT Solutions Market in the
PRC
• Since 2010, the PRC government has consecutively issued several policies and regulations to support the development of the education IT
solutions market in the PRC. In July 2010, The State Council first stated the important role of information technology in the education industry.
Then in March 2012, the education IT solutions market in the PRC entered Era 1.0. Policy support has been the main driver for the market
development. In 2018, the market entered into Era 2.0 with the issuance of Action Plan for Education IT Solutions 2.0 by the MOE. The market
is expected to further driven under the influence of government’s supporting policies.
Key Policies and Regulations Issuing Agencies Effective Date
China Education Modernization 2035 《中國教育現代化2035》 State Council 2019/02

It is China’s first long-term strategic plan for the construction of educational modernization. One of the main tasks is to construct smart campus by coordinating
the construction of integrated intelligent reaching, management and service platforms.
Implementation Plan for Accelerating Educational Modernization (2018-2022)

State Council 2019/02
《加快推進教育現代化實施方案（2018-2022年）》
The plan has set detailed implementation plan for the construction of educational modernization. One of the main tasks is to vigorously promote the development
of education IT solutions by establishing new educating and teaching models based on information technologies.
Action Plan for Education IT Solutions 2.0《教育信息化2.0行動計畫》 MOE 2018/04
It is a national guidance policy for the development of education IT solutions market. The action plan has set specific development goals for education IT
solutions by 2022.
The 13th FYP Plan for Education IT Solutions (2011-2020) 《教育信息化“十三五”規劃》 MOE 2016/04
The plan aims to build education IT solutions system complying with the construction of national education modernization by 2020. The plan also requires the
government to take the important role in the investment of education IT solutions, as well as diversifying the investment schemes by introducing social
communities , enterprises, etc.
Ten-Year Development Plan for Education IT Solutions (2011-2020)
MOE 2012/03
《教育信息化十年發展規劃（2011-2020年）》
The plan also sets clear goals and action plans for the development of education IT solutions by 2020. The plan calls for the integration of information technology
and education, including building intelligent teaching environment, providing quality digital education resource and software tools, etc.
Outline of National Medium to Long-term Educational Reform and Development Plan

State Council 2010/07
(2010-2020) 《國家中長期教育改革和發展規劃綱要（2010—2020年）》
The outline calls for accelerating the construction of education IT infrastructure and firstly incorporates education IT solutions into the national development
strategy of IT solutions construction.
24
Relevant Policies and Regulations in Southwest Economic Zone
Three-year Action Plan for the Promotion of Guangxi Education (2018-2020)

People’s Government of Guangxi 2018 Jan.
《廣西教育提升三年行動計畫（2018-2020年）》
Guangxi proposed to investment RMB73 billion to promote eight key projects in the education industry, which includes the promotion project on education IT
solutions with an aggregate investment worth RMB2.55 billion.
Development Plan for Education IT Solutions in Guangxi (2017-2020)

Education Department of Guangxi 2017 Oct.
《廣西教育信息化發展規劃（2017-2020年）》
Guangxi will strengthen the IT infrastructure construction to fulfill the demand in educational management and teaching. Main tasks include strengthening the
Internet coverage in Guangxi, strengthening the information application in vocational education, promoting the construction of smart campus in universities and
colleges, accelerating the construction of the public service systems of educational management, etc.
Working essentials of Sichuan’s Education IT Solutions and Cybersecurity in 2020

Education Department of Sichuan 2020 Apr.
《2020年四川省教育信息化和網路安全工作要點》
Continuously promote the construction of education IT solutions in education industry and proposes to issue new Three-year Action Plan of Education IT
Solutions in Sichuan (2020-2022) (《四川省教育信息化三年行動計畫（2020-2022年）》). Main tasks set in the policy include improving the construction of
education IT infrastructure, promoting popularization of the digital teaching resource services, optimizing the educational management, etc.
The 13th FYP for Education IT Solutions in Chongqing 《重慶市教育信息化“十三五規

Education Department of Chongqing 2017 Aug.
劃”》
Following the 13th FYP in the nationwide, Chongqing issued its 13th FYP covering nine major tasks to promote the application of education IT solutions in the
education industry.
The 13th FYP for Education IT Solutions in Yunnan 《雲南省教育信息化“十三五規劃”》 Education Department of Yunnan 2017 Mar.
Following the 13th FYP in the nationwide, Yunnan issued its 13th FYP covering seven major tasks to promote the application of education IT solutions in the
education industry.
The Comprehensive Educational Reform Plan in Guizhou《貴州省教育綜合改革方案》 People’s Government of Guizhou 2016 Aug.
The plan proposes to improve the construction of management platform based on educational IT solutions to promote scientific and efficient decision-making. An
advanced data center for exchange and sharing with the national education management information system will be built.
25
Opportunities, Threats and Challenges
Opportunity, Threats and Challenges of Educational Informatization Market in the PRC
Opportunities
The outbreak of COVID-19 Spawns Demand for More Education IT Solutions
• In early 2020, the outbreak of COVID-19 caused the massive suspension of school operation. In February 2020, the MOE issued the Notice on Supporting
Education and Teaching with IT during the period of Epidemic Prevention and Control (《關於疫情防控期間以資訊化支援教育教學工作的通知》) to utilize IT
solutions to support online teaching and management works during the period of epidemic prevention and control. Multiple regular works of schools have
switched from offline to online, including online remote teaching, online campus management, human resource management, etc. The influence of COVID-
19 on schools is expected to create strong demand for education IT solutions.
Technology Improvement Generates More Development Opportunities
• Advanced technologies such as cloud computing, big data analytics and AI are strongly supported by government policies such as Action Plan for
Promoting the Development of Big Data (《促進大數據發展行動綱要》) and The 13th Five-Year National Information Plan (《十三五國家資訊化規劃》), etc.
The technology improvement will further improve the ability of acquiring and analyzing data, which in turn generates more businesses and raises the
product quality and service efficiency in the education IT solutions market.
Self R&D Capability
• IT solutions providers with own research and development capability can provide services that can better satisfy the distinctive needs of their customers and
help them to achieve greater efficiency in terms of budget and resource allocation, and thus shall have a competitive edge over the other market players.
Threats and Challenges
Data Security
• Along with the promotion of education IT solutions in schools and educational institutions, data security has always been a big challenge for the education
IT solutions providers. Once the information is leaked or illegally used by others, there will be huge risks to educational institutions. Moreover, education IT
solutions such as big data application system and face recognition software normally store large amount of personal information of students. The leakage of
data could potentially threaten the privacy information of students, which will bring technical challenges for the education IT solutions providers.
Increasing Labor Costs
• As a knowledge-intensive industry, education IT solutions market has a strong demand for IT talents. With the rapid technology development and iteration,
education IT solutions providers are increasingly demanding for high-end talents who possess capability relating to new emerging technologies. On the
other hand, labor cost in education IT solutions market accounts for a large amount of overall expenditure, and it has continuously increased in recent years.
The increasing labor costs generally raise the operating pressure and may have imposed a challenge for education IT solutions providers.
Management of cash flow and working capital
• Education IT solutions providers need to have sufficient capital for its operation. They require a large initial capital investment in research and development
as well as in the improvements and upgrades of existing products and services. IT solutions providers are also usually required to pay a substantial amount
of cash upfront throughout the execution of projects for procurement of hardware, equipment and software, whereas customers generally make payments
upon project completion. Cash flow management and source of funding thus serves as a common constraint for companies with limited financial capability.
As the capital requirement and upfront cost will increase along with the number and scale of projects undertaken by education IT solutions providers, a
sufficient financial reserve is essential.
26
Recent Development Trend of Education IT Solutions Market
 Smart Campus Development

Smart campus is the further upgrade of digital campus. Smart campus effectively connects the physical space and
information resources by fully integrating teaching, researching, management and campus life under one integrated
application service system, with an aim to the overall effectiveness of teaching and learning. Previously, the
development of smart campus mainly focused on the construction of hardware infrastructure. The construction of data
management, software platforms, and application systems is mostly scattered and unsystematic. It is usually difficult to
achieve an integrated model in lack of systematic and long-term planning and designing for the smart campus
development. Recently, with the clear goals of smart campus development, and the assistance from education IT
solutions service providers who are able to design and construct smart campus to assist governments and educational
institutions start to achieve the systematic construction of smart campus. Going forward, the construction of smart
campus is expected to continuously utilize advanced technologies, such as AI, big data, digital twins and other
technologies to open up and connect different operating sectors of campus in a single platform, realizing the integration
and utilization of data from multiple sources.
In recent years, the MOE consecutively issue Action Plan for Education IT Solutions 2.0(《教育信息化2.0行動計畫》),
Smart Campus Overall Framework(《智慧校園總體框架》), China Education Modernization 2035 (《中國教育現代化
2035》)to advocate to utilize new emerging technologies to promote the reform and upgrade in the education industry.
27
Cost Analysis
Average Annual Wage of Employed Persons in Information Transmission, Computer Service and Software, 2016-2021
The PRC RMB Guangxi

RMB
2016-2021 200,000 2016-2021
200,000 CAGR 9.1% 189,135 CAGR 5.9%

172,647
161,352
150,000
147,678
150,000 133,150 111,988
122,478 107,824
101,642
93,936 91,934
100,000 84,064
100,000
50,000
50,000
0 0
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
• Procurement of hardware equipment and software accounts for the largest proportion of total costs in education IT solutions
market. As hardware equipment and software vary in product types and service models, there is no standardized price statistics for
the procurement costs. Labor cost is one of the main component of education IT solutions providers’ costs. Along with the growing
macro economy, the average annual wage of employed persons in information transmission, computer service and software has
increased from RMB122,478 in 2016 to RMB189,135 in 2021 at a CAGR of 9.1%.
• Education IT solutions providers also procure equipment from other suppliers. As the equipment are usually diversified and non-
standardized, there is no industry average price for the procurement price of such equipment.
• The average annual wage of employed persons in information transmission, computer service and software in Guangxi is
generally lower than the national level from 2016 to 2021. Note: Actual data of 2022 is not available yet
28
3. Competitive Landscape of Education IT Solutions
Market
29
Competitive Landscape Analysis of Education IT Solutions Market
in the PRC
Ranking Education IT Solutions Market by Revenue (the PRC), 2022
Company Revenue Market Share

Ranking Identity and Background
Name (RMB Billion) (%)
 CVTE was founded in 2005 and headquartered in Guangzhou. It is a company
CVTE listed on Shenzhen Stock Exchange. Its major business is in the design,
1 6.8 1.3%
视源股份 development and sales of LCD main boards, intelligent interactive panel and
related intelligent hardware.
 Hitevision was founded in 2010 and headquartered in Shanghai. It is a
Hitevision company listed on Shenzhen Stock Exchange. It mainly focuses on the design,
2 6.3 1.2%
鸿合科技 development, manufacturing and sales of intelligent interactive audio visual
solution and system integration services in education and business area.
 iFLYTECk was founded in 1999 and headquartered in Hefei. It is a company
listed on Shenzhen Stock Exchange. Depending on its leading intelligent
iFLYTEK
3
科⼤讯⻜
speech and artificial intelligence technologies, iFLYTEK provides products and 6.2 1.2%
services to companies in multiple industries such as education, politics and
laws, automobile, medical services, etc.
 Doushen was founded in 1999 and headquartered in Beijing. It is a company
Doushen
4
豆神教育
listed on Shenzhen Stock Exchange. It mainly provides education services and 4.3 0.8%
information security services.
 NewCapec was founded in 1999 and headquartered in Zhengzhou. It is a
NewCapec
5
新开普
company listed on Shenzhen Stock Exchange. It mainly provides education IT 0.4 0.1%
solutions to higher education schools.
Subtotal of top 5 market players 24.0 4.7%
Others 483.2 95.3%
Total 507.2 100.0%
 The education IT solutions market in the PRC is highly fragmented with over 10,000 companies in the PRC as of 2022. In 2022, the top five
players in the education IT solutions market in the PRC only accounted for approximately 4.7% market share in terms of revenue.
 The Company only accounted for approximately 0.04% market share in the education IT solutions market in the PRC in terms of revenue in 2022.
Source: Annual report, Frost & Sullivan
30
Competitive Landscape Analysis of Guangxi’s Education IT
Solutions Market
Ranking of Education IT Solutions Market by Revenue (Guangxi), 2022

Name (RMB Million) (%)
1 The Company  N/A 197.7 1.3%

 Hitevision was founded in 2010 and headquartered in Shanghai. It is a
company listed on Shenzhen Stock Exchange. It mainly focuses on the design,
Hitevision development, manufacturing and sales of intelligent interactive audio visual
2 128.6 0.9%
鸿合科技 solution and system integration services in education and business area.
Hitevision has a total of over 2,800 employees and its registered capital is
around RMB235.0 million.
 CVTE was founded in 2005 and headquartered in Guangzhou. It is a company
listed on Shenzhen Stock Exchange. Its major business is in the design,
CVTE
3
视源股份
development and sales of LCD main boards, intelligent interactive panel and 111.8 0.8%
related intelligent hardware. CVTE has a total of over 5,400 employees and its
registered capital is around RMB666.5 million.
 Thunisoft was founded in 2001 and headquartered in Beijing. It is a company
listed on Shenzhen Stock Exchange. Its subsidiary, Lianyi Technology, mainly
Thunisoft
4 focuses on providing education IT solutions to higher education schools. 71.6 0.5%
华宇软件
Thunisoft has a total of over 6,700 employees and its registered capital is
 Wisedu was founded in 2008 and headquartered in Jiangsu. It is a private
Wisedu company and mainly provides education IT solutions to higher education
5 57.9 0.4%
金智教育 schools. Wisedu has a total of over 1,000 employees and its registered capital
is around RMB60.0 million.
Others 14,132.4 96.1%
Total 14,700.0 100.0%
 The education IT solutions market in Guangxi is also highly fragmented with approximately 1,000 players as at 2022. In 2022, the top five
players in Guangxi’s education IT solutions market only accounted for approximately 3.9% market share in terms of revenue.
 The Company was Guangxi’s largest education IT solutions market. In 2022, the Company achieved RMB197.7 million revenue and took
approximately 1.3% market share in Guangxi’ education IT solutions market.
31
Competitive Landscape of the Integrated IT Solutions Services in
Education IT Solutions Market
Ranking Integrated IT Solutions Providers in Education IT Solutions Market in Terms of Revenue (the PRC), 2022

Name (RMB Billion) (%)
 Doushen was founded in 1999 and headquartered in Beijing. It is a company

1 Doushen listed on Shenzhen Stock Exchange. It mainly provides education services and 1.0 0.7%
information security services.
 NewCapec was founded in 1999 and headquartered in Zhengzhou. It is a
2 NewCapec company listed on Shenzhen Stock Exchange. It mainly provides education IT 0.9 0.6%
solutions to higher education schools.
3 Thunisoft listed on Shenzhen Stock Exchange. Its subsidiary, Lianyi Technology, mainly 0.6 0.4%
focuses on providing education IT solutions to higher education schools
 Sunmet was founded in 2009 and headquartered in Guangzhou. It is a private
4 Sunmnet company that mainly provides software services and integrated solutions in 0.5 0.3%
education IT solutions market.
 Sansheng was founded in 2003 and headquartered in Shenzhen It is a
5 Sansheng company listed on Shenzhen Stock Exchange. Its subsidiary, Hengfeng, 0.5 0.3%
mainly provides integrated solutions in the education IT solutions market.
Others 144.5 97.6%
Total 148.0 100.0%
 Within the education IT solutions market, the market of integrated IT solutions in the PRC is highly fragmented with thousands of integrated IT
solutions providers in the PRC as at 2022. The top five integrated solution providers accounted for only 2.4% market share in terms of revenue
of integrated solution market in 2022. The Company only took up approximately 0.1% market share in the PRC.
32
Competitive Landscape of the Integrated Solutions in Education IT
Solutions Market
Ranking of Integrated IT Solutions Providers in Education IT Solutions Market by Revenue (Guangxi), 2022

Name (RMB Million) (%)
1 The Company  NA 187.4 4.4%

listed on Shenzhen Stock Exchange. Its subsidiary, Lianyi Techonology, mainly
2 Thunisoft focuses on providing education IT solutions to higher education schools. 68.0 1.6%
Thunisoft has a total of over 6,700 employees and its registered capital is
 Sunmet was founded in 2009 and headquartered in Guangzhou. It is a private
company that mainly provides software services and integrated solutions in
3 Sunmnet 62.4 1.5%
education IT solutions market. Sunmet has a total of over 800 employees and
its registered capital is around RMB75.5 million.
 Jutuo was founded in 2009 and headquartered in Nanning. It is a private
company that provides IT solutions for governmental and educational
4 Jutuo 42.1 1.0%
institutions. Jutuo has a total of around 100 employees and its registered
capital is around RMB20.0 million.
 Zhizhong was founded in 2010 and headquartered in Nanjing. It is a private
company that provides IT solutions for clients from government, education,
5 Zhizhong 39.2 0.9%
military, power, finance, communication, etc. Zhizhong has a total of around 50
employees and its registered capital is around RMB10.0 million.
Others 3,900.8 90.7%
Total 4,300.0 100.0%
 As integrated IT solutions providers are mostly local companies, the market of integrated IT solutions services in education IT solutions market is
more concentrated than that of the PRC. There were less than 500 players in Guangxi. The Company was the largest integrated IT solutions
provider in Guangxi, with 4.4% in terms of revenue in 2022.
Source: The Group (with respect to the Group’s data), Annual report, Frost & Sullivan
33
Entry Barriers Analysis
Entry Barriers
• As the projects of education IT solutions are usually complex and involve multiple kinds IT segments
such as hardware, software, as well as various technologies, educational institutions are increasingly
Industry Experience willing to select experienced service providers with successful track records. Such companies have
and Track Records accumulated rich experience and deep know-how in education IT solutions. In addition, schools
usually select education IT solutions providers through bidding model, generally evaluating the
product performance, successful past cases, technologies, goodwill and other benchmarks to filter
quality suppliers. It is difficult for new entrants in lack of industry experience to compete with
experienced service providers.
• As a knowledge-intensive industry, education IT solutions market usually requires players to equip
with strong technical strength. With the rapid technology development and upgrade, market
Technical Strength participants are not only proficient in system design, data modeling and other software engineering
technologies, but also able to quickly adapt to new emerging technologies and applications such as
big data, AI, clouding computing, etc. In addition, for integrated IT solutions providers, the capability of
providing customized education IT solutions are key success factors in the market. Hence, strong
technical strength requirement has created a high entry barrier for new entrants.
• Through years of operation, existing education IT solutions providers generally have already
Sales Channel established a well-known brand name in the operating regions and solid relationship with educational
institutions. New entrants cannot establish a good brand image and good relationships with local
institutions in a short time.
• The integrated IT solutions providers have established solid business relationship with suppliers of
Solid Relationship hardware equipment and software services. These suppliers tend to cooperate with integrated IT
with Suppliers solutions providers with rich industry experience and considerable number of projects. New entrants
cannot directly source the products or services from large suppliers in short time.
34
Competitive Advantages of the Company
Leading market position with rich industry experience and experienced and professional management team
 Established in 2003, the Company has accumulated over 18 years of solid experience in the education IT solutions market in
Guangxi. At the moment, the Company has become the largest education IT solutions service provider and the largest
intelligence solutions service provider in Guangxi. Depending on its extensive knowledge and experience in education IT
solutions market, the Company is well positioned to capture the growth of Guangxi’s education IT solutions market as one of the
early movers in the market. The Company is one of the few local education IT solutions providers that is able to offer self-
developed products in Guangxi.
Complete business model back up with strong capability in providing integrated solutions
 The Company has established a complete business model back up with strong capability in providing integrated solutions,
which enables the Company to provide one-stop customized education IT solutions to clients. By leveraging its complete
business model, the Company could forge a renowned reputation in the market by providing value-added services to
clients.
Strong R&D capability
 The Company has been focusing on improving the R&D capabilities to enhance the competitiveness in the market. The
Company has already built an effective and efficient R&D system in developing products widely used in the education IT
solutions. The Company established two R&D centers located in Chengdu and Guangxi, which are responsible for big
data and technical products development and product applications development respectively.
Well-established relationships with clients

 Through years of operation in Guangxi, the Company has accumulated extensive understanding and has cultivated an established
client base in the local market. The strong business relationships with various education institutions constitutes a well brand name,
which shall allow the Company to exploit new business opportunities from both existing and potential clients.
Source: Frost & Sullivan Analysis
35
4. Overview of Smart City Industry
36
Introduction of Smart City Industry and Government IT Solutions
Market
• Smart city refers to the use of various information and communication technologies to integrate urban systems and services to improve the resource
utilization efficiency and optimize the urban management and services. Building smart city could enable urban activities such as urban governance, public
services, economic activities and urban infrastructure to respond intelligently by sensing, transmitting, integrating and analyzing the key information
collected from urban operating systems, which in turn to build a smart environment for urban development and to improve the living quality of residents.
• Smart city products and solutions can be applied to various industries such as transportation, government affairs, education, health care, logistics, security,
environmental protection, building construction, etc.
• Government IT solutions refer to the application of modern information technologies to raise the government efficiency and service quality in operation,
supervision, services and decision-making process. Government IT solutions basically integrate various functional departments and various exiting
resources through detection, analysis, and intelligent response to improve the efficiency of government operation and management, creating a convenient
and efficient government platform for enterprises and the public.
Industry Value Chain of Smart City Industry (the PRC)
Upstream Midstream Downstream

Raw Material Procurement End Users
Hardware Products
Hardware Software Project Installation/ Governments
Construction
Other Raw Materials
Software Products Enterprises
Technical Support
Operation Services
AI, 5G, Big Data, Internet of Integrated Solutions Individuals
Things (IoT), Block Chain, etc.
• The upstream of the smart city industry consists of raw material suppliers and technical supports, which provide the underlying
raw materials and technologies for smart city products and solutions.
• The midstream of the industry value chain are mainly composed of hardware and software products manufacturers and integrated
solutions. In general, the smart city projects contains the project installation or construction and the operation services.
• The end users of smart city solutions are mostly governments, enterprises and individuals.
37
Market Size of Smart City Industry in the PRC
Market Size of Smart City Industry (the PRC), 2017-2027E
2017-2022 2022-2027E 6.8 Market Size Breakdown (the PRC), 2022

7 6.5
CAGR 28.2% 8.6% 6.2
Total Revenue (Trillion RMB)
6 5.7 20.6%
5.2
5 38.0%
4.5
4 3.8 16.2%
3.0
3 2.9%
2.3 5.0% 7.8% 9.5%
2 1.8
1.3 Logistics Education
Government Affairs Security
1
Health Care Transportation
0 Others
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• Along with government policy support, the smart city industry in the PRC has grown rapidly over the past years. The market size of
the smart city industry in the PRC has increased from RMB1.3 trillion in 2017 to RMB4.5 trillion in 2022, representing a CAGR of
28.2%. Logistics, education and government affairs industry are the three largest application areas of smart city products and
solutions.
• Going forward, with the development of emerging technologies such as 5G and AI, the market size of smart city industry is
expected to continue growing at a stable growth rate from 2022 to 2027. The market size is expected to reach RMB6.8 trillion in
2027, growing at a CAGR of 8.6% during that period.
38
Market Size of Government IT Solutions Market in the PRC and
Guangxi
Market Size of Government IT Solutions Market (the PRC & Guangxi), 2017-2027E
Billion RMB Billion RMB
700 2017-2022 2022-2027E 2017-2022 2022-2027E
16
CAGR 11.8% 5.6% 14.1
600 CAGR 9.0% 6.1% 574.9
14 13.4
548.3 12.7
520.2 12.0
490.8 11.3
500 460.1 12 10.7
428.4 9.9
399.7 10 9.2
400 368.5
336.8 7.9
306.0 8 6.9
278.8 6.1
300
6
200
4
100 2
0 0
2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E
• As governments are increasingly focusing on the applications of IT solutions in government affairs, government IT solutions market in the PRC has witnessed a
stable growth pace over the past years. The market size of government IT solutions market has grown from RMB278.8 billion in 2017 to RMB428.4 billion in
2022, representing a CAGR of 9.0%.
• Going forward, the PRC government is expected to continue promoting digitalization of government governance, the government IT solutions market is
expected to steadily grow in the foreseeable future. The market size is expected to increase at a CAGR of 6.1% and reach RMB574.9 billion in 2027,
representing a CAGR of 6.1% between 2022 and 2027.
• The government IT solutions market in Guangxi increased from RMB6.1 billion in 2017 to RMB10.7 billion in 2022, representing a CAGR of 12.8%. The growth
was mainly driven by supporting government policy issued in 2018. Guangxi’s People Government issued Three-year Action Plan to Promote the Construction
of Digital Government (《推進數字政府建設三年行動計畫》). Under government support, the market size rapidly grew during 2017 to 2022. Going forward, the
market size is expected to reach RMB14.1 billion, representing a CAGR of 5.6% between 2022 and 2027.
• Government IT solutions market is a subset of the overall IT solution market and it accounted for approximately 9.9% of the overall IT solutions in 2022. The
Company had a market share of less than 0.01% in terms of revenue in the overall IT solutions market in 2022.
• The Company accounted for a small part of the government IT solutions market in the PRC and Guangxi, with a market share of 0.02% and 0.64% in terms of
revenue in 2022.
39
Market Drivers of Government IT Solutions Market
1 Favorable Government Policy
2 Accelerating Urbanization Process
3 Rapid Development of Information Technologies

1. Favorable Government Policy
 The national government of the PRC government has issued a series of favorable policies and regulations to support the development of
government IT solutions market. Representative policies include Guiding Opinions on Accelerating the Construction of a National Integrated Online
Government Service Platform (《加快推进全国一体化在线政务服务平台建设的指导意见》) in 2018 and Action Plan for Promoting the Development
of Big Data(《促进大数据发展行动纲要》) in 2018, which both set plans for the development of government IT solutions market. The favorable
government policies have been the major market driver for the development of government IT solutions market in the PRC. Guangxi’s People
Government issued “Three-year Action Plan to Promote the Construction of Digital Government” (《推進數字政府建設三年行動計劃》), which
instructed that the government to accelerate the development of E-government data center, etc.
2. Accelerating Urbanization Process
 From 2017 to 2022, the urbanization rate in the PRC increased by 6.7%, from 58.5% to 65.2% and it is expected to reach 72.1% in 2027. The
accelerating urbanization process has brought prominent problems with the increasing number of population in urban area. The growing influx
population, especially in tier-1 and tier-2 cities, has generated higher requirement for operating efficiency of governments. Under this circumstance,
the demand government IT solutions services has raised and drove the growth of government IT solutions market in the PRC.
3. Rapid Development of Information Technologies
 The rapid technological development have been one of the key drivers for the development of government IT solutions market in the PRC. The
emerging and evolving information technologies has provided multiple solutions for the construction of smart government, and there is an increasing
number of subsectors adopting information technologies to improve the operating efficiency of the industries. Source: Frost & Sullivan
40
Policies and Regulations of Smart City Industry in the PRC
Smart city—Guide for information technology operation《智慧城市信息技术运营指南》 State Administration for Market Regulation 2019/05
The guidance provides technical support for the informational construction of the smart city. And it gives the standard for data collection and data analysis. The
guidance also provides theoretical support for the construction of the whole smart city system.
Outline for the Construction of Big Data Platform for Smart City (2019 Edition)《智慧城
Ministry of Natural Resources 2019/01
市时空大数据平台建设技术大纲（2019版）》
The outline states that the goal is to build a big data platform based on the geographic framework of the city. And the platform should also use technologies such
as cloud services to provide applications for smart city.
Action Plan for Promoting the Development of Smart Transportation(2017-2020)《推进

Ministry of Transportation 2017/01
智慧交通发展行动计划（2017-2020年）》
The plan requires the gradually realization of an informational construction in infrastructure, production management, transportation services and decision-making
process by 2020.
Opinions on Promoting the Development of Smart Tourism《关于促进智慧旅游发展的

National Tourism Administration 2015/01
指导意见》
The opinion clarified the development goal of the smart tourism. By 2020, smart tourism service and smart management should be improved. In the meantime,
technologies such as big data mining, smart market analysis and AI should be deployed to the smart tourism system.
Opinions on Promoting the Development of Smart Cities《关于促进智慧城市健康发展 NDRC, MIIT, MOST, MPS, MOF, MLR,
2014/08
的指导意见》 MOHURD, MOT
The policy issued by 8 different government departments set goals for the smart city construction. By 2020, a number of distinctive smart cities will be built. Smart
city applications such as public services, data collection and sharing on digital platforms, law enforcement (such as taxation based on informational technology)
and e-government(such as public complaints platform)should be widely used.
Preliminary Regulations for the Administration of National Pilot Smart City 《国家智慧 Ministry of Housing and Urban-Rural
2012/11
城市试点暂行管理办法》 Development
The regulation states the application process for pilot smart city and management methods for pilot smart city.

41
Opportunities, Threats and Challenges
Opportunity, Threats and Challenges of Smart City Industry in the PRC
Opportunity
New Infrastructure
• The concept of New Infrastructure was firstly mentioned in 2018, but was officially defined by the NDRC in April 2020. New
infrastructure construction mainly contains the construction of information infrastructure, converged infrastructure and innovative
infrastructure, which may generate more demand for smart city products and solutions. As the core carrier of infrastructure, the
massive promotion and upgrade of infrastructure construction in urban area is expected to become a key driver for the
development of smart city industry.
Increasing Demand with Increasing Urbanization Rate

• Along with the increasing urbanization rate and the growing urban population, cities is expected to have sustaining demand for
smart city products and solutions to improve the city operating efficiency, solving practical problems in multiple areas such as
transportation, living environment, public services and government affairs, etc. Especially with the strong policy support from the
government, smart city projects are expected to embrace a fine development environment in the foreseeable future.
Threats and Challenges
Fragmented Data Information

• In general, the data and information in different departments and segments is usually fragmented, and it is usually rather difficult
to integrate such data and information to achieve universal application, which can greatly affect the efficiency of smart city
products and solutions.
Growing Attention on Safety and Maintenance

• Smart city project is a systematic project relating core functions in the urban infrastructure. The information safety and data
security is increasingly important for service providers. The leakage of information and data could threat the normal function of
urban infrastructure and may impose danger to residents, especially in the transportation and security industry. Thus, service
providers are expected to paying more attention to the safety and maintenance of data and information.
42
Appendix
 The PRC government has continuously issued several policies and regulations to promote the development of the education IT solution market in the PRC. For instance, the
“China Education Modernisation 2035” (中國教育現代化2035) aims to support the national modernisation through constructing smart campuses and modernising the education
sector in the PRC. Smart campus aims to integrate advanced technologies such as big data, IoT, cloud computing and AI with teaching and improve the overall effectiveness of
teaching and learning. Traditional IT solution providers without own research and development capability generally offer education institutions application systems for merely
some particular demands and without any overall planning, which may disable resources sharing among schools and some specific demands of different campus users may not
be catered for.
 According to F&S Report, IT solution providers need to have sufficient capital for its operation. They require a large initial capital investment in research and development as well
as in the improvements and upgrades of existing products and services. IT solutions providers are also usually required to pay a substantial amount of cash upfront throughout
the execution of projects for procurement of hardware, equipment and software, whereas customers would only make payments upon project completion. Therefore, cash flow
management and source of funding serves as a common constraint for IT solution providers with limited financial capability.
 Shenzhen is one of the largest cities in the IT industry in the PRC. The development of the IT industry in Shenzhen is also supported by the government policies, such as the
“Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area” (粵港澳大灣區發展規劃綱要) issued in February 2019, which stipulated, among others, the
goal to promote Shenzhen as a capital of technological innovation and IT services. Under such plan, the Greater Bay Area, consisting of Hong Kong, Macau, Guangzhou,
Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing, will be further developed as a strategic economic zone in the PRC, and Shenzhen will
play a significant role in the overall IT services development in the PRC.
 With the rapid development of related technologies, including IoT and AI, along with the upgrade of IT infrastructure, the demand for cloud services to be applied in the IT
infrastructure in education institutions and government authorities in the PRC will continue to grow in the foreseeable future.
 The concept of smart campus was initiated based on the construction of digital campus in the process of education informatization and it refers to a smart learning environment
that could apply full-perception, intelligence, data, network and coordination into teaching, research, management and life services, and look into and predict teaching and
teaching management.
 In particular, according to the F&S Report, due to limited budgets annually assigned to each education institution and government authority, they generally implement upgrades
of their IT infrastructure and systems in phases. In this connection, education institutions and government authorities may tend to engage the same IT solutions services
providers in years by separate engagements to complete an upgrade of their IT infrastructure and systems, in order to ensure the quality and compatibility of the IT infrastructure
and systems.
 According to the F&S Report, it is not uncommon in the IT solutions market that customers would request to enter into tripartite agreement with more than one of their suppliers.
 In respect of our arrangements with the education institutions and the banks, according to the F&S Report, it is not uncommon in the IT solutions market that customers would
request to enter into tripartite agreement with their suppliers and the paying parties.
 According to the F&S Report, it is not uncommon for IT services providers to have their customers that were also their suppliers.
 The government IT solutions markets in the PRC and Guangxi are relatively fragmented. There were around 5,000 and 300 players in the government IT solutions markets of the
PRC and Guangxi respectively.
 It is an industry norm that there is no guidelines in the industry in relation to the classification of self-developed products.
 It is not uncommon for education institutions and government authorities to change the tendering and implementation schedule of projects in pre-tendering stage, especially
under the outbreak and recurrence of COVID-19 which had resulted in uncertainty of market conditions.
43
Appendix
 Familiarity and connections developed with education institutions / customers provide strong competitive advantages for market players in the IT solutions market to understand,
identify and accommodate the specific needs of customers and thus they could be better positioned to leverage their experience to promptly react to market demands and
expand alongside the market expansion and increase their market shares by undertaking more projects.
 The ability to provide customised services and value-added solutions that can be tailored to the specific needs of customers provides strong competitive advantages to the
market players in the IT solutions market as they can expand their revenue source by serving a wider group of customers with different requirements. The provision of high-
quality and customised services to customers could enhance customers’ satisfaction as well as the market player’s reputation, which would be conducive to the market player’s
expansion of market share.
 Possessing a successful track record of researching and developing self-developed products is uncommon in the education IT solutions services industry in Guangxi. Leveraging
this unique advantage, the Group is poised to sharpen such competitive edge by further developing new products to complement the Group’s integrated IT solutions services,
utilising the existing and to be established or upgraded research and development centers, so that a wider variety of self-developed products can be offered to customers.
 National Intellectual Property Advantage Enterprise“ is one of the highest honours in the field of intellectual property management in the PRC.
 Seasonal fluctuations are in line with the market practice in the education and government IT solutions markets. In particular, some of the market players in the PRC which are
listed or in the course of listing applications recognized over 60% of its revenue in the fourth quarter of 2021.
 Customer concentration of education IT solution companies were relatively high. Based on the annual reports of listed companies in education IT solution industry, revenue
contribution by five largest customers range from 10% to over 50%.
 The Group’s revenue contribution by the five largest customers during the Track Record Period is generally in line with industry level and such reliance is mutual and
complementary. Customers generally also prefer to engage their business with experienced IT solution providers because they have built up trust relationship with each other
and those IT solution providers who are able to provide customized services and self-developed products for their customers based on their different business requests.
 According to F&S Report, based on the public information on China Government Procurement Website, a national government procurement website designated by the Ministry of
Finance of China, in 2021, totally there were 32 education IT solution projects in software areas in Guangxi with a total contract value of RMB107.2 million and the Group has
won 8 projects with a contract value of 17.5 million, occupying 16.3% market share.
 It is not uncommon for education IT solutions companies to have relatively higher customer concentration, with one of the major reasons being the market players tend to
undertake sizeable projects to enhance their reputation in the industry.
44
Appendix
 According to the “Major Tasks for Basic Education in 2022” (《教育部2022年工作要點》) issued by the Ministry of Education of the PRC in 2022, the PRC government is
implementing the strategic direction of digital education and developing “Internet + Education” program in order to improve the informatisation of the education IT solutions
market.
 The National Development and Reform Commission is currently mobilising local governments to implement mid-to-long term loan financing programs for 16 major areas,
including technical upgrades in the education IT solutions market. Low-rate loans with a total amount of RMB1.5 trillion will be available for high schools, vocational schools and
other educational facilities to purchase new IT devices and improve the IT development programs of schools. Such loan project would be likely to attract more support from banks
to schools and educational organisations. Commercial banks are also encouraged to expand their mid-to-long term loan programs and provide the sufficient amount of financing
for those construction projects and equipment upgrading.
 Since 2021, the Guangxi government has promulgated several favourable policies to promote the development of the education IT solutions market. First of all, according to “The
14th Five Year Plan for the Development of Education in Guangxi” (《廣西教育事業發展十四五規劃》) issued by the People’s Government of Guangxi in 2021, the Guangxi
government plans to build 30 experimental zones and 100 experimental schools for the integration of information technology and innovation in education. This encourages the
strengthening of the new educational infrastructure and considers the construction of education information technology as an important part of the new infrastructure. The plan
promotes increasing investments in educational infrastructure and fully utilising information technology to improve the professionalism and scientific characteristics of education;
 According to “The Development Plan for Guangxi on the ‘Digital Silk Road’ for ASEAN (2021-2025)” (《廣西面向東盟的‘數字絲綢之路’發展規劃（2021-2025）》) issued by the
People’s Government of Guangxi in 2021, the Guangxi government cooperates with the Association of Southeast Asian Nations (ASEAN) to work on various projects relating to
education IT solutions during their strategic cooperation. Throughout such strategic cooperation process, some companies received around RMB1.5 billion for proposed
investment in several areas, including the education IT solutions market, which would significantly drive the market to consistently grow.
 In 2022, the Department of Education in Guangxi has also announced the “Notice of the Education Department of the Autonomous Region on the organisation of the second
batch of Guangxi basic education information integration and innovation experimental areas and the establishment of experimental schools”（《自治區教育廳關於組織開展第二
批廣西基礎教育信息化融合創新試驗區和實驗校創建工作的通知》）, which clearly states the Guangxi government’s intention to improve the integration of information technology
and education to develop the education IT solutions market.
 “Maiyue Big Data Smart Campus Platform (邁越大數據智慧校園平台)” was selected into the list of pilot demonstration projects for the development of the big data industry（大數
據產業發展試點示範項目名單） in August 2022 by the MIIT. The demonstration projects are measured with various criteria and are selected from enterprises in national wide.
This national award provides a list of demonstration projects for other enterprises to learn in big data industry. Only 5 enterprises from Guangxi are selected in this award and the
Group is the only enterprise that focuses on education IT solutions market.
 Nanning Maiyue was awarded the “National Intellectual Property Advantage Enterprise (國家知識產權優勢企業)” by the China National Intellectual Property Administration in
September 2022. This award is one of the highest honours in the filed of intellectual property management in the PRC and is designated to honour those enterprises that have
great capability of operation and have great influence on specific regions and industries. In the year of 2022, 100 enterprises from Guangxi received this award and only 10 of
them are involved in the IT solutions services.
 Nanning Maiyue was awarded the “Nanning City Service Industry Leading Enterprise (南寧市服務業龍頭企業)” in July 2022. This award is recognized by the Guangxi government
and it is designated to promote the leading enterprises in the scale of revenues and sizes. The Group is one out of seven enterprises that are involved in IT solutions services.
 The Group’s competitiveness was also being named as the first among the “Top 50 Most Competitive IT Services Providers for Government Procurement in Guangxi (廣西政府採
購信息技術服務最具競爭力50強)” jointly published by Government Procurement Big Data Research Institute (政府採購大數據研究院) and Government Procurement Big Data
Network (政府採購大數據網) in 2022, which is determined based on various of criteria, such as the number of projects, the total value amount of projects, the number of key
customers and the overall situation of administrative penalties. This ranking list is conducted with containing sufficient number of companies and considering different aspects of
the companies; therefore, the conclusion generally reflects that the Group is relatively competitive in the education IT solutions market.
45
Appendix
 According to the “Action plan for the integration and development of virtual reality and industry applications (2022-2026)” (虛擬現實與行業應用融合發展行動計劃(2022-2026年))
jointly issued by MIIT, MOE, Ministry of Culture and Tourism of the PRC (中華人民共和國文化和旅游部), National Radio and Television Administration (國家廣播電視總局),
General Administration of Sport of China (國家體育總局) in November 2022, the overall market size of virtual reality related market will exceed RMB350 billion in the PRC, and
advanced technologies such as 5G, artificial intelligence, big data, cloud computing, blockchain, and digital twins will all become the key technologies for future informatisation
development;
 According to the “2022 China Digital Twin Industry Insight Report” released by 36Kr Research Institute (36氪研究院), the breadth and depth of digital twin application scenarios
will be further expanded, driving the rapid growth of the industry. It is estimated that by 2025, the global digital twin market will increase to USD26.46 billion and the CAGR from
2020 to 2025 is as high as 38.35%;
 There is no dominating player in the education IT solutions market in the PRC for cloud computing-related products, which shall offer us considerable growth potential to develop
the products to maintain our competitiveness.
 The frequency of replacing/upgrading companies’ existing IT systems/infrastructures usually depends on the companies’ policies and the different requirements of their
customers. Thus, there is no fixed frequency of replacing/updating companies IT systems/infrastructures in the industry.
 According to the trend of the national expenditure on education, which is a main financial resource for the education IT solution market, COVID-19 hasn’t resulted in any
decrease in the overall budget for the education IT solution market in China.
46
5. Introduction of Frost & Sullivan and Methodology
47
Abbreviations and Terms
Abbreviations and Terms
• CAGR: compound annual growth rate • NDRC: National Development and Reform Commission
• the PRC: if not specified refers to mainland China, excluding • The 13th FYP: Thirteenth Five-Year Plan period, namely 2016-
Hong Kong, Taiwan and Macau 2020
• GDP: gross domestic product • Formal Education: A format of education. The curriculum is
designed and delivered based on the predetermined teaching
• RMB: Renminbi, the lawful currency of the PRC program of administrative authorities on education. After
graduation, students will be granted with official
• IT: Information Technology certificates/diplomas.
Limitations in Source of Information

• Interviews with market players are conducted to collect information for this report, based on a best-efforts basis.
• Frost & Sullivan will not be responsible for any information gaps where interviewees have refused to divulge confidential data or
figures.
• In instances where information is not available, figures based on similar indicators combined with Frost & Sullivan in-house
analysis will be deployed to arrive at an estimate.
• Frost & Sullivan will state the information sources at the bottom right-hand corner of each slide for easy reference.
Note to Numeric Calculations
• Value and percentage figures in this report are all rounded. Figures may not add up to the respective totals owing to rounding.
• The base year is 2022. The historic period is from 2017 to 2022. The forecast period is from 2023 to 2027.
48
Methodologies
Frost & Sullivan is an independent global consulting firm, which was founded in 1961 in New York, with over 45 global offices and more than 3,000 industry
consultants, market research analysts, technology analysts and economists. It offers technology research, independent market research, economic research,
corporate best practices advising, training, customer research, competitive intelligence and corporate strategy. Its industry coverage in the PRC includes
automotive and transportation, chemicals, materials and food, commercial aviation, consumer products, energy and power systems, environment and building
technologies, healthcare, industrial automation and electronics, industrial and machinery, and technology, media and telecom.
The Frost & Sullivan’s report includes information on the education IT solutions market in the PRC, the smart city industry in the PRC, the government IT
solutions market in the PRC and other economic data.
The market research process for this study has been undertaken through detailed primary research which involves discussing the status of the industry with
leading industry participants and industry experts. Secondary research involved reviewing company reports, independent research reports and data based on
Frost & Sullivan’s own research database.
Projected total market size was obtained from historical data analysis plotted against macroeconomic data as well as specific related industry drivers.
Frost & Sullivan’s independent research was undertaken through both primary and secondary research obtained from various public and private sources, as well
as our management with respect to our market position. Secondary research involved information integration of data and publication from publicly available
resources, including official data and announcements from PRC government departments, and market research on industry and enterprise player information
issued by our chief competitors. Primary research involved interviewing leading industry participants, government officials, relevant institutions, and our executives
to obtain objective and factual date and prospective predictions. Forecast data is based on historical growth rates as well as government announcements of
planned investment in the municipal water supply and wastewater treatment market.
Frost & Sullivan’s report was compiled based on the below assumptions:
• The economy in the PRC, Southwest Economic Zone and Guangxi are likely to maintain steady growth in the next decade;
• The social, economic, and political environment in the PRC, Southwest Economic Zone and Guangxi are likely to remain stable in the forecast
period;
• Market drivers such as strong policy support, increasing public expenditure on education and public administration, increasing demand from
education industry and rapid technology development and iteration of information technologies are likely to drive the growth of the education
IT solutions market and government IT solutions market.
• The COVID-19 pandemics will be under effective control in the PRC along with government’s strict quarantine and prevention measures and
do not affect the long-term economy development of the PRC.
Frost & Sullivan considers the source of information as reliable because (i) it is general market practice to adopt official data and announcements from various
PRC government agencies; and (ii) the information obtained from interviews is for reference only and the findings in its report are not directly based on the results
of those interviews. Frost & Sullivan has proven track records in providing market research studies to government and private clients in the regions where the
Frost & Sullivan Report covers.
49
Thank You!
Partner with you on the Road to Growth
Your Strategic Growth Partner
50

2023092800178

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2023092800178

Uploaded by

Copyright:

Available Formats

1.

Macro Economy Overview

Nominal GDP (the PRC), 2017 – 2027E

Source: National Bureau of Statistics, IMF

Per Capita Nominal GDP (the PRC), 2017 – 2027E

Source: National Bureau of Statistics, IMF

Population and Urbanization (the PRC), 2017 – 2027E

Population (Million) Urbanization (%)

1,500 1,411.8 1,412.6 1,411.8 1,412.0 1,410.8 1,409.2 90

Per Capita Disposable Income (the PRC), 2017 – 2027E

Source: National Bureau of Statistics; Frost & Sullivan

Nominal GDP (Southwest Economic Zone) Nominal GDP (Guangxi)

Source: National Bureau of Statistics; Frost & Sullivan

Source: National Bureau of Statistics; Frost & Sullivan

300 100% 60 100%

Source: National Bureau of Statistics; Frost & Sullivan

Total Public Expenditure on Education IT Solutions (Guangxi)

Total Number of Student Enrolments

Total Number of Student Enrolments

Business Types of Education IT Solutions

Business Types Business Overview Applications

 Intelligent Interactive Panel

 Provision of software services generally refers to software support  Cloud Platform

 Provision of Integrated IT solutions services generally refers to the

 Provision of content services generally refers to the provision of  Teaching Materials

Source: Frost & Sullivan

Stages Key Insights Representative Policies

 Schools are gradually deploying computers to conduct basic management stuff,

 Basic network infrastructure has greatly improved.  Standard of Educational Management

 Following the Action Plan of Education IT Solutions 2.0, the education IT

Source: Frost & Sullivan

Industry Value Chain of Education IT Solutions Market (the PRC)

Upstream Midstream Downstream

Technical Support Procurement Party End Users

Total Revenue of Education IT Solutions Market (the PRC), 2017-2027E

Source: Ministry of Education, Frost & Sullivan

Source: Ministry of Education, Frost & Sullivan

Major Market Drivers

1 Strong Policy Support

2 Increasing Public Expenditure on Education

3 Strong Demand from Education Industry

4 Rapid Development and Iteration of Information Technologies

Analysis of Major Market Drivers

1.Strong Policy Support

Source: Frost & Sullivan

Major Market Drivers

1 Strong Policy Support

2 Increasing Public Expenditure on Education

3 Strong Demand from Education Industry

4 Rapid Development and Iteration of Information Technologies

Analysis of Major Market Drivers

3. Strong Demand from Education Industry

China Education Modernization 2035 《中國教育現代化2035》 State Council 2019/02

Implementation Plan for Accelerating Educational Modernization (2018-2022)

Action Plan for Education IT Solutions 2.0《教育信息化2.0行動計畫》 MOE 2018/04

Outline of National Medium to Long-term Educational Reform and Development Plan

Key Policies and Regulations Issuing Agencies Effective Date

Three-year Action Plan for the Promotion of Guangxi Education (2018-2020)

Development Plan for Education IT Solutions in Guangxi (2017-2020)

Working essentials of Sichuan’s Education IT Solutions and Cybersecurity in 2020

The 13th FYP for Education IT Solutions in Chongqing 《重慶市教育信息化“十三五規

Source: Frost & Sullivan

Opportunity, Threats and Challenges of Educational Informatization Market in the PRC