Chinasoft pays a premium for AI push into the power sector

The IT and software services giant is stumping up $141 million to gain a bigger foothold for its AI solutions in the power-generation and new-energy industry 

Key Takeaways:

• Chinasoft plans to acquire a controlling stake in energy services provider Gisway, paying 41% over the market price
• Chinasoft’s AI-related revenue more than doubled in the first half as it folds advanced computing and agentic functions into its enterprise services

By Lee Shih Ta

From high-performance models to autonomous agents, Chinasoft International Ltd. (0354.HK) has been gradually expanding its AI services over the past few years, targeting a range of business sectors.

Now the provider of IT and software services to large enterprises is making a deeper dive into the energy industry, via an engineering consultancy that helps to build and manage electrical power networks.

On Sept. 16 Chinasoft announced plans to spend 944 million yuan ($141 million) to gain a controlling stake in Hangzhou Gisway Information Technology Co. Ltd. (301390.SZ) as its looks to embed its evolving AI functions across a host of client industries, including power generation.

Under the proposed deal, the IT services giant would pay a 41% premium to acquire a 29.68% stake in Gisway at 53 yuan per share. Once the deal closes, Gisway would be consolidated into Chinasoft’s accounts but would retain the right to nominate its own chairman and most of its board members.

The move fits with Chinasoft’s AI strategy over the past two years, built around an intelligent operating system designed to allow AI agents to handle complex processing tasks for large enterprise clients. 

Going vertical 

Chinasoft is not the only software and IT company to take this AI route. China’s Kingsoft Office (688111.SH) has embedded AI into WPS Office software package and enterprise workflows, while Digital China (000034.SZ) is expanding into AI computing power, enterprise AI agents and industry solutions. Chinasoft, however, places a stronger emphasis on deploying AI for its existing clients, in industries such as banking, telecoms, manufacturing and utilities.

Chinasoft’s revenue from AI products and services more than doubled to 1.53 billion yuan in the first half of this year from the same period of 2025. The company is gradually infusing AI into the energy and power sector. In June, it won a bid for a large model project related to the Yalong River, and during a collaboration with Moonshot AI in July, energy was highlighted as a priority industry. The Gisway acquisition extends Chinasoft’s footprint within the power industry.

Gisway’s expertise spans planning, design, construction, operation and maintenance of power networks, including new-energy solutions such as solar energy systems and charging stations for electric vehicles. Beyond a new batch of energy clients, the new subsidiary offers Chinasoft engineering credentials, an on-site project presence and hands-on experience.

These capabilities stretch Chinasoft’s existing AI, software and digitization services into areas such as forecasting power generation, inspecting equipment and maintaining grids. In its announcement, Chinasoft noted that the two parties could share market channels, supply chains and client resources, driving the integration of software and hardware within the power sector.

Although AI-related income is rising, Chinasoft earnings are feeling the pressure of the transition. Revenue surpassed 20 billion yuan in 2022 but has hovered around 17 billion yuan for the last two years.

Its acquisition target has also been feeling the pinch. Gisway’s profits fell sharply last year and sliding revenues tipped the company 23.12 million yuan into the red in the first half. Part of the pressure stems from delays in breaking ground on new energy projects and a slowing pace of upgrades to existing networks for power distribution. On the bright side, its balance sheet remains relatively clean. By mid-year the company held around 314 million yuan in cash and cash equivalents, with zero bank loans.

A fair price to pay?

Chinasoft agreed to acquire its Gisway stake at around 41% over the pre-announcement closing price of 37.5 yuan, valuing the company at about 3.18 billion yuan. Gisway’s net assets were roughly 921 million yuan at the end of June, putting the overall transaction at about 2.5 times net book value. Whether the premium is justified or not will depend on Gisway’s earnings trajectory.

Once the deal closes, Gisway will become the first Chinasoft subsidiary with a mainland listing, giving the group an equity presence in Hong Kong and Shenzhen. However, Chinasoft has pledged not to pursue a backdoor listing through Gisway or inject related-party assets for 36 months, meaning the short-term impact will depend on integrating the businesses.

The purchase price is a significant investment. According to the filing, at least half the capital will come from the buyer’s shareholders, while the remainder may include bank M&A loans. The acquired shares are subject to a 60-month lock-up period for transfers and a 36-month lock-up for pledges, implying the success of the integration will take years to verify.

So far, Chinasoft has not enjoyed a clear premium from the rapid growth of its AI business. Its trailing price-to-earnings ratio is about 24 times, in the same range of 20 to 24 times seen between 2021 and 2024, and below the multiple of around 34.7 times at the end of 2025. In other words, after a pullback in its stock price, Chinasoft’s valuation has returned to its historical norm.

To break above the ceiling, Chinasoft would need to halt the earnings slide at Gisway and win new AI services orders from the energy sector. But the cost of acquiring and integrating its new power unit could constrain the upward momentum.

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