Beijing Kingsoft Office Software this week posted a 143% leap in first-half profit and said China's requirement for information security is boosting earnings. SS) also sees governments and finance clients as new growth engines due to replacement demand, investor relations official Guo Xing said.
However, Brian Bandsma, New York-based portfolio director at Vontobel Asset Management, stated the chances in replacement requirement could be limited, given less aggressive local offerings and what might be longer-than-expected adoption rates.
"Companies like Microsoft have been in existence for decades and have a very complex bit of software that is being heavily used by multiple industries. There's a reason why Microsoft is in the position it is in," explained Bandsma.
"There is probably too much optimism baked into valuations in terms of what these regional organizations are going to get out of China's focus on national suppliers."
However, Brian Bandsma, New York-based portfolio director at Vontobel Asset Management, stated the chances in replacement requirement could be limited, given less aggressive local offerings and what might be longer-than-expected adoption rates.
"Companies like Microsoft have been in existence for decades and have a very complex bit of software that is being heavily used by multiple industries. There's a reason why Microsoft is in the position it is in," explained Bandsma.
"There is probably too much optimism baked into valuations in terms of what these regional organizations are going to get out of China's focus on national suppliers."