Morgan Stanley-Chinas 3D Journey Greater China IT Services and Software...-108190957

MMay12,202409:00PMGMTIdeaChina's3DJourneyGreaterChinaITServicesandMorganStanleyAsiaLimited++8522239-1911SoftwareAsiaPacific+8522239-1572YangLiu+8523963-1860China1H24CIOSurvey:+8523963-4660PersistentNegativeImpactEquityAnalyst+8522239-7840FromDeflationYang.Liu@morganstanley.comDespitetheYTDmacrostabilizationinrealterms,CIOsareLydiaLincutting2024ITbudgetsacrosstheboardbyasizablemargin,resultinginanL-shapedgrowthoutlook.HamperedbytheEquityAnalystsustaineddeflationandlatecyclenature,enterprises'long-termLydia.Lin@morganstanley.comITinvestmentconfidencecontinuedtosink.TomTangMResearchAssociateOurAlphaWiseChinaCIOSurveysuggestsa5.4pptcutfor2024ITbudgetwithaTom.Tang@morganstanley.com3.7pptdownwardrevisionfor2024growthanda1.7pptlowerbasein2023budgetfinalreview.Thecurrent2024expectedbudgetgrowthof10%isslightlybetterPamelaHuangthan8%in2023.TheweakenterpriseITinvestmentsentimentspreadtosoftware,hardwareandITservices,bothneartermandlongterm.SoftwarecontinuestohaveResearchAssociatethehighestgrowthpotential,butnoreboundforgrowthrate,whileITservicessawPamela.Huang@morganstanley.comthebiggestcutinspending.ThesecontrastsharplywiththeYTDmacroeconomicstabilizationinrealterms.WecontinuetobelievethenominalmacrometricsmatterMavisNgmoreforenterprisedecisionmaking,whichisstillunderpressure.AndITinvestmentisatthelatestageofthecycle.D...