Investment Logic - The company is a leader in domestic enterprise service SaaS, having launched the first Windows-based financial management software in 1995 and transitioning to cloud services in 2007. By 2024, cloud service revenue is expected to account for 81.6% of total revenue [1] - From a total perspective, the company's cloud transformation has resulted in stronger revenue growth resilience, maintaining positive growth from 2016 to 2024, higher employee efficiency with a CAGR of 10% from 2020 to 2024, lower expense ratios with improvements of 2.45pp and 5.10pp in sales and R&D expense ratios respectively from 2020 to 2024, and healthier cash flow returning to historical highs in 2024 [1] - From a structural perspective, in 2024, the revenue from the "Cang Qiong" and "Xing Han" products is expected to be approximately 1.3 billion yuan, accounting for 20.8% of total revenue, with a net dollar retention rate (NDR) of 108% maintained for five consecutive quarters. The demand side is driven by ERP system replacements mandated by policies for central and state-owned enterprises by the end of 2025/2027 [1] Revenue Breakdown - In 2024, revenue from the "Xing Kong" product is projected to be approximately 2.15 billion yuan, accounting for 34.3% of total revenue, with an NDR of over 94% [2] - The "Xing Chen" product, aimed at small and micro enterprises, is expected to generate approximately 1.23 billion yuan in revenue in 2024, accounting for 19.6% of total revenue, with an NDR improvement to 93% [2] - The company has covered 435,000 small and micro enterprises with its integrated financial, tax, and business solutions, addressing common issues faced by these enterprises in their digital transformation [2] AI and Future Outlook - Since 2017, the company has been investing in AI, launching the "Jin Die Cloud·Cang Qiong GPT" large model platform in 2023, and has developed agent capabilities across seven major scenarios including finance, human resources, and marketing [2] - The company forecasts revenues of 7.01 billion, 8.05 billion, and 9.38 billion yuan for 2025, 2026, and 2027 respectively, with net profits of 80 million, 490 million, and 1.07 billion yuan for the same years [2] - A target price of 16.98 HKD per share is set based on an 8x PS valuation for 2025, with an initial "buy" rating assigned [2]

Market Space and Transformation Demand - The demand for digital transformation in enterprises has significantly increased post-pandemic, with the core ERP market space exceeding 50 billion yuan and the broader ERP market space exceeding 100 billion yuan [1][10] - Large enterprises continue to release information technology needs in areas such as group finance, marketing, and supply chain, while medium-sized enterprises are upgrading from basic information technology to intelligent management [1][10] - There are nearly 400,000 industrial enterprises above a designated size in China, providing a substantial customer base for ERP software, with significant differences in customer unit prices across different enterprise sizes [1][10] Breakthroughs and Competitive Landscape of Domestic Vendors - The dual-channel drive of digital transformation and the "Xinchuang" policy has created significant opportunities for domestic vendors, particularly in state-owned enterprises [2][10] - Leading vendors such as Kingdee, Yonyou, and Inspur have established dominant market positions through cloud transformation and product line enhancements, with Kingdee's cloud business revenue accounting for 76% of total revenue, and Yonyou's cloud business revenue nearing 70% [2][10] - Market share is dominated by Yonyou and Kingdee, which together account for approximately 26%, while foreign vendors like SAP hold an 18% share [2][10] Technological Evolution and Application Scenario Innovation - AI technology is reshaping the application model of enterprise management software, with international vendors like Microsoft and Salesforce implementing low-code platforms combined with AI capabilities [3][10] - Domestic vendors are also leveraging AI, with Kingdee's cloud services implementing chatbots and visual recognition, while Yonyou's intelligent platform automates processes in finance, human resources, and procurement [3][10] - The combination of cloud computing and AI is lowering the barriers to software usage, with Kingdee's public cloud renewal rate reaching 90% [3][10] Xinchuang and Domestic Process - The Xinchuang policy is driving the localization of software from office applications to core business systems, with significant progress in the financial and telecommunications sectors [4][10] - State-owned enterprises have set clear digital transformation goals during the 14th Five-Year Plan, with notable increases in Xinchuang investment proportions [4][10] - Domestic vendors like Kingdee and Yonyou are gradually replacing foreign systems like SAP and Oracle in core systems of large enterprises [4][10] Future Trends - The enterprise management software market is expected to exhibit a threefold trend of "cloudification, localization, and intelligence," with cloud business revenue continuing to rise [5][10] - Driven by Xinchuang, domestic vendors are likely to increase their market share in large enterprises from the current 50% [5][10] - AI technology is anticipated to evolve from being an auxiliary tool to becoming a core productivity driver, ultimately achieving full-scenario coverage as "personal AI assistants" [5][10]

KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED 香港聯合交易所有限公司對本公佈的內容概不負責，對其準確性或完整性亦不發表任何聲 明，並表明不會就本公佈全部或任何部分內容所產生或因倚賴該等內容而引致的任何損失承 擔任何責任。 金蝶國際軟件集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：268） 二零二五年五月二十二日舉行之股東週年大會投票表決結果 茲提述金蝶國際軟件集團有限公司（「本公司」）日期為二零二五年四月二十三日之通函（「通 函」）。本公告所用辭彙與通函所界定者具有相同涵義。 董事會謹此宣佈，於二零二五年五月二十二日舉行之股東週年大會的投票表決結果如下： | | 普通決議案 | 有效投票票數 | (%) | | --- | --- | --- | --- | | | | 贊成 | 反對 | | | 省覽及採納本公司於截至二零二四年十二月三 十一日止年度的經審核綜合賬目及董事報告書 | 2,173,251,757 | 3,924,909 | | 1. | | (99.819725%) | (0.180275%) | | | 及核數師報告書 ...

Core Viewpoint - Kingdee has established the "Enterprise Management AI Ecological Alliance" to address the challenges of AI application for small and medium-sized enterprises (SMEs), emphasizing that AI is essential for enterprise management and a key focus for the company's future development [1][4]. Group 1: AI and Large Clients - The strategy of targeting large clients is crucial for Kingdee, as one large client is significantly more valuable than multiple small clients, given the instability and low payment capacity of SMEs [2]. - Kingdee has historically aimed to serve larger enterprises and government services rather than being labeled as a provider for SMEs [3]. - The company is poised to benefit from market and technological advantages, particularly due to policies mandating state-owned enterprises to complete domestic replacements by 2027, which could release a significant portion of the high-end ERP market [4][6]. Group 2: AI Product Development - Kingdee has launched several AI enterprise service products aimed at large clients, including the "China's first financial large model" and upgrades to its AI platform [9][10]. - Despite these efforts, Kingdee's revenue from large enterprises remains low compared to SMEs, with large enterprise cloud service revenue reported at approximately RMB 1.304 billion in 2024, while revenue from SMEs was significantly higher at RMB 21.53 billion [10][11]. Group 3: Challenges in Large Client Acquisition - Kingdee's reliance on SMEs persists, with their revenue contribution from SMEs being 259% higher than that from large enterprises, indicating a need for improvement in attracting larger clients [11]. - The primary challenge in acquiring large clients lies in Kingdee's limited customization capabilities and system functionality, which are critical for meeting the complex needs of large enterprises [12][15]. - To succeed, Kingdee must enhance its product's foundational capabilities, focusing on customization and personalized service for large enterprises, rather than solely on AI concepts [15][16]. Group 4: Future Directions - Kingdee aims to aggressively target the large enterprise market, viewing it as essential for becoming a leading PaaS provider by 2026 and a world-class SaaS provider by 2030 [14]. - The company has invested heavily in R&D, with expenses reaching RMB 1.514 billion in 2024, yet it has faced continuous losses, primarily due to the inability to penetrate the large client market effectively [17].

Core Viewpoint - The "golden decade" of AI+SaaS has arrived, presenting opportunities for small and medium-sized enterprises (SMEs) to achieve digital transformation through AI technology, which is essential for industrial upgrading [1][3]. Group 1: Digital Transformation and Policy Support - The digital transformation of SMEs is a crucial step towards new industrialization and is key to achieving the "specialized, refined, distinctive, and innovative" development of SMEs [3][4]. - The "Action Plan for Digital Empowerment of SMEs (2025-2027)" outlines a systematic approach to promote digital transformation, including seven key tasks such as implementing pilot projects and enhancing public service capabilities [3][4]. - SMEs are encouraged to leverage policy support and technological tools to build competitive advantages in niche markets [3][5]. Group 2: AI and SaaS as New Growth Drivers - The integration of AI and SaaS is redefining the digital transformation landscape, with a focus on AI-native technologies to reconstruct enterprise management [5][6]. - The launch of the AI-native mobile application "Cangqiong APP" by the company supports natural language interaction and intelligent data analysis across various business functions [5][6]. - The expected cloud adoption rate among SMEs is projected to exceed 40% by 2027, with the company offering subscription-based cloud services to lower the barriers to transformation [5][6]. Group 3: Strategic Recommendations for SMEs - A gradual approach to digital transformation is recommended, starting with basic functions like financial management and gradually extending to core business areas [6]. - The company has initiated a subsidy program to alleviate cost pressures on SMEs, emphasizing that true digitalization enhances human capabilities rather than replacing them [6]. - The company plans to invest significantly in R&D over the next three years to develop an intelligent management system covering finance, human resources, and supply chain [6].

Summary of Kintone International Conference Call Company Overview - Kintone International has successfully transformed into a cloud service provider, with cloud service revenue accounting for 81.6% of total revenue by 2024, establishing itself as a leading ERP giant in the domestic SaaS market [2][12][16] - The company offers core products including Xinghan, Cangqiong, Xingkong, and Xingchen, catering to large, medium, and small enterprises with comprehensive management solutions [2][13] Key Insights and Arguments - **Cloud Transformation Impact**: The shift to cloud services has enhanced revenue resilience, improved employee efficiency, and strengthened cash flow health, with operating profit margin for cloud services reaching 6% in 2024 [2][12][19] - **AI Technology Influence**: AI technology is expected to significantly impact Kintone's business model, with anticipated revenue growth of 10-15% in 2025, projecting total revenue of approximately 7 billion RMB [2][14][27] - **Profitability Forecast**: Kintone expects to turn a profit in 2025, estimating a profit of around 80 million RMB, with a current PS valuation of about 6 times, potentially reaching 8 times in the long term, corresponding to a market value target of 56 billion RMB [2][15][26] - **Market Share Gains**: The company benefits from the "Xinchuang" policy, which drives rapid growth for its Xinghan and Cangqiong platforms by capturing market share from SAP and Oracle, with revenue growth from under 100 million RMB in 2019 to 1.3 billion RMB in 2024, reflecting an annual growth rate of approximately 40% [2][23] Additional Important Content - **AI Agent Commercialization**: Kintone is poised for large-scale commercialization of AI agents in 2025, leveraging its extensive customer base and data accumulation to enhance its SaaS offerings [5][7][27] - **Product Development**: Recently, Kintone launched five AI agents, including Travel Agent and Financial Report Analysis Agent, which integrate into the ERP financial system, creating a closed-loop management system [9][10] - **Client Segmentation**: Kintone's products are tailored to different client segments, with varying deployment times and customization needs, reflecting the diverse requirements of small, medium, and large enterprises [20][21][22] - **Financial Resilience**: Kintone has demonstrated strong revenue growth resilience, maintaining positive growth even during economic fluctuations and external shocks, with no negative growth recorded in the past 8-9 years [17][18] Conclusion Kintone International's strategic focus on cloud transformation and AI integration positions it well for future growth, with a robust product offering and a clear path to profitability. The company's ability to adapt to market demands and leverage policy changes further enhances its competitive edge in the ERP SaaS landscape.

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of HKD 16.98 per share based on an 8x PS valuation for 2025 [3]. Core Insights - The company is positioned as a leading SaaS provider in the domestic enterprise service sector, with a significant shift towards cloud services, which are expected to account for 81.6% of revenue by 2024 [8][10]. - The transition to cloud services has enhanced revenue growth resilience, with consistent positive growth from 2016 to 2024, and improved operational efficiency reflected in a 10% CAGR in revenue per employee from 2020 to 2024 [8][29][31]. - The company has developed three core product solutions targeting different customer segments: Xinghan & Cangqiong for large enterprises, Xingkong for medium enterprises, and Xingchen for small businesses, with high renewal rates indicating strong customer retention [8][10][25]. Summary by Sections Investment Logic - The company is expected to achieve revenues of RMB 70.1 billion, RMB 80.5 billion, and RMB 93.8 billion for the years 2025, 2026, and 2027 respectively, with net profits turning positive by 2025 [3]. Financial Forecasts, Valuation, and Rating - The projected revenue growth rates are 16.71% for 2023, 10.15% for 2024, and 11.99% for 2025, with net profit growth rates expected to be 46.07% in 2024 and 156.06% in 2025 [7][3]. Company Overview - The company has transitioned from traditional ERP software to a cloud-native EBC model, enhancing its service offerings and operational capabilities [14][19]. - The cloud transformation has led to a significant increase in contract liabilities and a decrease in accounts receivable, indicating improved cash flow management [41][42]. Growth Drivers - The demand for digital transformation among small and medium enterprises is driving the adoption of the company's SaaS solutions, with a potential market space of approximately RMB 70 billion for the Xingkong product line [10][25]. - The company has established a strong foothold in the domestic market, with over 2,110 clients for its cloud-native EBC solutions, reflecting its competitive advantage in the industry [8][10]. AI and SaaS Integration - The company has been integrating AI capabilities into its SaaS offerings, enhancing operational efficiency and creating new revenue-sharing opportunities through its Agent model [8][10][42].

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of HKD 16.98 per share based on an 8x PS valuation for 2025 [3]. Core Insights - The company is positioned as a leading SaaS provider in the domestic enterprise service sector, with a significant shift towards cloud services, which are expected to account for 81.6% of revenue by 2024 [8][10]. - The transition to cloud services has enhanced revenue growth resilience, operational efficiency, and cash flow health, with the operating profit margin (OPM) for cloud services turning positive in 2023 and projected to reach 6% in 2024 [42]. - The company has developed three core product solutions targeting large, medium, and small enterprises, which are expected to drive substantial revenue growth in the coming years [8][10]. Summary by Sections Investment Logic - The company is forecasted to achieve revenues of RMB 70.1 billion, RMB 80.5 billion, and RMB 93.8 billion for the years 2025, 2026, and 2027 respectively, with net profits turning positive by 2025 [3]. Financial Forecasts, Valuation, and Rating - The projected revenue growth rates for the company from 2023 to 2027 are 16.71%, 10.15%, 11.99%, 14.96%, and 16.42% respectively, with net profit growth rates showing significant improvement, particularly in 2025 with a forecasted growth of 156.06% [7]. - The company’s diluted earnings per share are expected to improve from -0.06 in 2023 to 0.30 in 2027 [7]. Company Overview - The company has transitioned from traditional ERP software to a cloud-native EBC model, enhancing its service offerings and operational capabilities [14][19]. - The company’s cloud transformation has been marked by a significant increase in annual recurring revenue (ARR), which is projected to grow by 20% to RMB 34.3 billion in 2024 [31]. Growth Drivers - The company’s core products, including the "Cangyun" and "Xinghan" solutions, have achieved high net dollar retention rates of 108% and 94% respectively, indicating strong customer loyalty and demand [8][10]. - The demand for digital transformation among small and medium enterprises is expected to create a market space of approximately RMB 70 billion for the company’s services [10]. AI and SaaS Integration - The company has integrated AI capabilities into its SaaS offerings, enhancing service delivery and operational efficiency, with the launch of the "Jindie Cloud Cangyun GPT" platform [8][10].

Group 1 - The core viewpoint of the article highlights the rapid development and commercialization of AI agents by Kingdee International, including the launch of five AI agents and the establishment of the "Enterprise Management AI Ecosystem Alliance" [1][2] - The five AI agents include JinYao Financial Report (financial report analysis agent), ChatBI (enterprise inquiry agent), recruitment agent, travel agent, and enterprise knowledge agent, with a focus on making financial report analysis accessible to a wider audience [1][2] - The JinYao Financial Report agent aims to simplify financial report analysis for professional investors and business operators, claiming to enable users to generate high-quality financial analysis reports in just 10 minutes [1] Group 2 - The deployment of the five AI agents signifies their application across five vertical industries, with each agent operating through collaboration with multiple underlying AI agents [2] - Kingdee International's cloud platform allows users to access AI assistants for various tasks, enhancing efficiency and creativity by automating repetitive tasks and providing personalized information based on user preferences [2] - The CEO of Cloud Home predicts that the adoption rate of multiple AI agents in work scenarios will exceed 50% within the next three years, emphasizing the transformation of companies into intelligent organizations [3] Group 3 - Industry experts suggest that the development of AI and intelligent agents will drive changes in business models, shifting from functionality-based pricing to outcome-based pricing [4] - Kingdee International is transitioning from a Software as a Service (SaaS) model to a Results as a Service (RaaS) model, where services are charged based on the results achieved, as demonstrated by the travel agent charging per business trip itinerary [4]

Group 1 - The core viewpoint of the articles is that the industry is undergoing significant changes, with AI agents expected to experience explosive growth, while SaaS will continue to exist in the foreseeable future [1][2] - The CEO of Kingdee, Xu Shaochun, emphasized the importance of companies developing appropriate AI strategies to adapt to these changes without being left behind or acting impulsively [1] - The CEO of Cloud Home, Song Kai, predicted that the adoption rate of various AI agents in workplace scenarios will exceed 50% within the next three years [1] Group 2 - Kingdee announced the launch of five AI agents and the 2.0 version of the Cangqiong Agent platform, including financial report analysis, enterprise inquiry, recruitment, travel, and knowledge management AI agents [2] - Kingdee aims to transform into a leading "enterprise management AI company" within the next 3 to 5 years [2] - The company is shifting from a subscription-based model (SaaS) to a results-based model (RaaS), where products will be charged based on outcomes rather than functionalities [2]