Revenue and Financial Performance - Revenue for the six months ended June 30, 2023, increased by approximately 16.8% to RMB 2,565,850,000 compared to RMB 2,196,656,000 in the same period of 2022[2] - The net loss attributable to equity holders for the first half of 2023 was approximately RMB 283,535,000, a reduction of about 20.5% from a loss of RMB 356,441,000 in the same period of 2022[3] - Revenue from contracts with customers for the six months ended June 30, 2023, was RMB 2,565,850 thousand, an increase of 16.7% compared to RMB 2,196,656 thousand in 2022[19] - Gross profit for the same period was RMB 1,588,770 thousand, up from RMB 1,330,808 thousand, reflecting a gross margin improvement[19] - The group reported a net loss before tax of RMB (325,560,000), compared to a net loss of RMB (402,267,000) in the same period of the previous year, indicating an improvement in financial performance[30] - The group reported a total comprehensive loss of RMB 315,587 thousand for the period, down from RMB 392,804 thousand in the previous year, marking a 19.7% reduction[20] - The net loss attributable to equity holders was approximately RMB 283,535,000, with a net loss margin of 11.1%, improving from 16.2% in the same period last year[87] Cloud Services Performance - Annual Recurring Revenue (ARR) from cloud subscription services reached approximately RMB 2.54 billion, representing a year-on-year growth of 36.3%[3] - Cloud service revenue grew by approximately 21.5% year-on-year, from RMB 1,677,482,000 in 2022 to RMB 2,038,598,000 in 2023, accounting for about 79.5% of total group revenue[7] - Kingdee's cloud services have achieved a total revenue of approximately RMB 393 million during the reporting period, reflecting a year-on-year growth of about 38.3%[8] - Kingdee Cloud·Xingkong achieved revenue of approximately RMB 922 million, representing a year-on-year growth of about 17.3%[9] - The annual recurring revenue (ARR) for Xingkong Cloud subscriptions increased by approximately 28.6%, with a net dollar retention (NDR) rate of 96% and a customer base of 34,000[9] - The subscription ARR for the cloud services of KIS and KIS Star increased by approximately 95.9%, with a Net Dollar Retention (NDR) rate of 108%[8] - The group’s revenue from cloud services reached RMB 2,038,598 thousand in the first half of 2023, up from RMB 1,677,482 thousand in the same period of 2022, representing a growth of approximately 21.6%[61] Customer Acquisition and Market Expansion - The number of new signed customers reached 297 during the reporting period, including notable companies such as China National Building Material Group and Tongwei Co., Ltd.[8] - The company signed over 600 new specialized and innovative enterprises during the reporting period, further enhancing its market share in the specialized and innovative sector[9] - The number of marketing service partners for Kingdee's small and micro ecosystem exceeded 2,000, with over 60 applications available on the Cangqiong application market, achieving an 80% year-on-year increase in transaction value[10] Cash Flow and Liquidity - The company reported a net cash outflow from operating activities of approximately RMB 168,887,000, an improvement from RMB 179,869,000 in the same period of 2022[3] - For the six months ended June 30, 2023, the net cash generated from operating activities was RMB (168,887) thousand, compared to RMB (179,869) thousand for the same period in 2022, indicating a slight improvement[23] - The net cash used in investing activities for the six months ended June 30, 2023, was RMB (914,362) thousand, an increase from RMB (694,852) thousand in the prior year, primarily due to higher investments in property, plant, and equipment[23] - The net cash from financing activities was RMB 209,919 thousand for the six months ended June 30, 2023, compared to RMB (97,962) thousand in the same period of 2022, reflecting increased borrowings[23] Assets and Liabilities - The total assets of the company as of June 30, 2023, amounted to approximately RMB 11.75 billion, a slight increase from RMB 11.73 billion at the end of 2022[17] - Total liabilities increased to RMB 4,633,543 thousand as of June 30, 2023, from RMB 4,323,854 thousand at the end of 2022, representing a 7.2% rise[18] - Total equity decreased to RMB 7,120,865 thousand from RMB 7,407,583 thousand, indicating a decline of 3.9%[18] - The carrying amount of property, plant, and equipment as of June 30, 2023, was RMB 1,541,717,000, up from RMB 1,108,651,000 in 2022, indicating significant investment in fixed assets[34] - The intangible assets at the end of June 30, 2023, were valued at RMB 1,270,794,000, an increase from RMB 1,126,876,000 in the previous year, showing ongoing investment in technology and development[35] Research and Development - Research and development costs for the six months were RMB 744,036 thousand, compared to RMB 698,066 thousand in 2022, reflecting a 6.6% increase in investment in innovation[19] - Research and development costs for the first half of 2023 amounted to RMB 829,188 thousand, compared to RMB 794,806 thousand in the same period of 2022, reflecting a rise of approximately 4.3%[63] - The group capitalized development costs of RMB 270,811 thousand in the first half of 2023, compared to RMB 249,063 thousand in the same period of 2022, indicating an increase of about 8.7%[63] Corporate Governance and Social Responsibility - Kingdee has been recognized as the top Chinese software company in the S&P Global Sustainability Yearbook 2023, highlighting its strong ESG performance[6] - The group actively participates in corporate social responsibility initiatives, including partnerships with 53 universities for digital talent training and internship programs[102] - The board is committed to enhancing corporate governance and has implemented various management systems and training for directors and senior management[128] Stock Options and Shareholder Information - The total number of stock options granted since the adoption of the 2005 plan is 529,501,600 shares, with 322,469,193 shares exercised and 205,222,407 shares expired as of June 30, 2023[105] - The total number of shares issued as of June 30, 2023, is 3,476,328,271[119] - The total number of shares held by directors and senior executives amounts to 703,419,807, representing about 20.23% of the issued share capital[118] - The company has a stock reward plan with performance targets based on financial metrics and individual performance indicators[112]

Company Overview - Kingdee ranks first in China's SaaS ERM market and maintains the largest market share in SaaS EA and Finance Cloud services[2]. - Kingdee has provided management software and cloud services to over 7.4 million enterprises, governments, and organizations globally[3]. - Kingdee is recognized as a leader in both industry empowerment value and technology service capability in the CAICT's 2022 report[2]. - Kingdee's headquarters is located in Shenzhen, China, and it is listed on the Hong Kong Stock Exchange[1]. - Kingdee has maintained the largest share in the enterprise application software sector for fast-growing enterprises for 18 consecutive years[121]. - The company has held the largest share in the enterprise-grade SaaS ERM and financial Cloud services industry for five consecutive years[121]. Financial Performance - Revenue for 2022 reached RMB 4,865,769, an increase of 16.5% from RMB 4,174,147 in 2021[16]. - The company reported a loss attributable to owners of RMB (389,158) in 2022, compared to a loss of RMB (302,330) in 2021[16]. - Kingdee Cloud service revenue grew by 34.6% to RMB 3,714 million, accounting for 76.3% of total revenue[18]. - The annual recurring revenue (ARR) for Kingdee Cloud subscription was approximately RMB 2.14 billion, representing a year-on-year growth of 36.3%[18]. - Total revenue for the year ended December 31, 2022, was approximately RMB 4.866 billion, representing a 16.6% increase compared to RMB 4.174 billion in 2021[28]. - Loss attributable to owners of the Company for 2022 was approximately RMB 389.2 million, compared to a loss of approximately RMB 302.3 million in 2021[29]. - Basic loss per share attributable to owners of the Company was approximately RMB 11.31 cents, up from RMB 9.23 cents in 2021[30]. - Gross profit for the Group was approximately RMB 2,997,633,000, a year-on-year increase of 13.8%, with a gross profit margin of approximately 61.6%[63]. Cloud Services and Products - Kingdee's major cloud service products include Kingdee Cloud Cosmic, Kingdee Cloud Constellation, Kingdee Cloud Galaxy, and Kingdee Cloud Stellar[3]. - Kingdee Cloud Cosmic and Constellation's domestic substitution solutions have matured, supporting comprehensive substitutions for major Top 500 enterprises, enhancing digital technology capabilities[43]. - Kingdee Cloud Galaxy achieved revenue of approximately RMB1,679 million, an increase of 18.4% year-over-year, with an annual recurring revenue (ARR) growth of 31.2% year-over-year and a dollar retention ratio of 97.2%[46]. - Kingdee Cloud Stellar's revenue increased by approximately 358.6% year-over-year, with SME financial cloud services revenue growing by approximately 63.1% year-over-year and a dollar retention ratio of 77.3%[50]. Strategic Focus and Goals - The company aims to help businesses achieve growth targets through dedicated services and trusted enterprise service platforms[1]. - Kingdee plans to continue focusing on the core strategy of "Platform + Finance & HR & Tax + Ecosystem" in 2023, aiming to strengthen its position in the SOE and Top-500 enterprise market[23]. - The company aims to expand its leadership in the manufacturing sector and create a second wave of growth with Galaxy Ultra in the medium enterprise market[23]. - Kingdee aims to create a cloud subscription model and is in the concluding year of its three-year strategy, celebrating its 30th anniversary in 2023[110]. Customer and Market Engagement - Kingdee has signed contracts with 154 large enterprises to assist in domestic substitution, enhancing its reputation in the high-end market[22]. - Kingdee's cloud subscription renewal rates remained strong, with rates exceeding 110% for certain services[22]. - The customer base of Kingdee Cloud Galaxy reached 31,000, with nearly 1,000 new enterprise customers signed during the reporting period[46]. Research and Development - Kingdee has applied over 260 patents and won five national-level awards, becoming a member of the first batch of packageable application promotion centers organized by CAICT[43]. - Total research and development costs were approximately RMB1,458,246,000, reflecting a 15.7% year-over-year increase, with R&D expenses recognized in the consolidated income statement increasing by approximately 9.4% to RMB1,295,476,000[65]. Governance and Management - The Board of Directors consists of executive, non-executive, and independent non-executive directors, with independent directors exceeding one-third of the Board during the reporting period[192]. - The term of appointment for each director is two years, with mandatory rotation every three years at the AGM[193]. - The company has established mechanisms for directors to seek independent professional advice to ensure effective governance[192]. Shareholder Information - The Company reported distributable reserves amounting to RMB5,027,537,000 as of 31 December 2022, a slight increase from RMB5,013,833,000 in 2021[124]. - The Board does not recommend the declaration and payment of a final dividend for the year ended 31 December 2022, consistent with the previous year where no dividend was declared[124]. - A total of 8,390,000 ordinary shares were issued during the year due to the exercise of share options, generating HK$28,217,960 in total[125]. Risk Management - The Group manages credit risk by transacting with high-credit-quality financial institutions in mainland China and Hong Kong[97]. - The Group has established a disciplined fund management principle to efficiently manage market risks and maintain a strong cash position[98]. - The Group's expected credit loss assessment indicated that the majority of loans were in stage 1, with no significant change in credit quality for both 2022 and 2021[85].

Revenue Growth - Revenue for the year ended December 31, 2022, increased by approximately 16.6% to RMB 4,865,769,000, compared to RMB 4,174,147,000 in 2021[2] - Cloud service revenue grew by approximately 34.6% year-on-year, contributing about 76.3% to total revenue[3] - Annual Recurring Revenue (ARR) from cloud subscription services reached approximately RMB 2.14 billion, reflecting a year-on-year growth of 36.3%[3] - Kingdee's cloud service revenue increased from RMB 2,758,422,000 in 2021 to RMB 3,714,093,000 in 2022, marking a significant growth[7] - Total revenue from external customers for the year ended December 31, 2022, was RMB 4,865,769,000, an increase from RMB 4,174,147,000 in 2021, representing a growth of approximately 16.5%[34] - The cloud services segment generated revenue of RMB 3,714,093,000, up from RMB 2,758,422,000 in the previous year, indicating a growth of about 34.7%[35] Financial Performance - The loss attributable to equity holders for the year was approximately RMB 389,158,000, compared to a loss of RMB 302,330,000 in 2021[2] - Basic loss per share attributable to equity holders was approximately RMB 11.31, compared to RMB 9.23 in the previous year[2] - The company reported a net loss of RMB 452,404,000 for the year ended December 31, 2022, compared to a net loss of RMB 338,355,000 in the previous year[23] - The operating loss for the group was RMB (587,344,000) for 2022, compared to a loss of RMB (466,900,000) in 2021, reflecting a deterioration in profitability[34] - The group reported a net loss attributable to equity holders of approximately RMB 389,158,000, with a net loss margin of 8.0%, compared to 7.2% in 2021[99] Cash Flow and Liquidity - The net cash inflow from operating activities was approximately RMB 374,437,000, down from RMB 660,563,000 in the previous year[3] - The total cash and cash equivalents at the end of 2022 amounted to RMB 1,942,735,000, down from RMB 2,046,815,000 at the end of 2021, reflecting a decrease of approximately 5.1%[27] - The net cash outflow from investing activities was RMB 787,031,000 in 2022, compared to RMB 1,204,742,000 in 2021, indicating a reduction of about 34.6%[27] - The net cash generated from financing activities was RMB 300,525,000 in 2022, a significant improvement from a net cash outflow of RMB 143,841,000 in 2021[27] Strategic Focus and Development - The company continues to focus on transforming to a cloud subscription service model, enhancing its product offerings and delivery methods[4] - Kingdee has been recognized as a leading SaaS provider in various markets, including being ranked first in the Chinese market for SaaS ERM and financial cloud solutions[6] - The company aims to build a comprehensive ecosystem through its "one arrow, multiple stars" product strategy, leveraging its PaaS platform[5] - Kingdee continues to focus on core advantageous industries, signing contracts with clients in metallurgy, construction, and property management sectors, enhancing digital solutions and services[13] - The company plans to continue expanding its cloud services, which include enterprise cloud services and microfinance cloud services, to enhance its market presence[28] Research and Development - Research and development costs for 2022 amounted to RMB 1,458,246 thousand, an increase from RMB 1,260,069 thousand in 2021, reflecting a growth of approximately 15.7%[70] - The amortization of capitalized development costs for 2022 was RMB 317,738 thousand, down from RMB 348,388 thousand in 2021, reflecting a decrease of about 8.8%[70] Customer and Market Engagement - The total number of signed customers for Kingdee Cloud·Cangqiong and Kingdee Cloud·Xinghan reached 902, including 478 new customers, contributing to the support of 154 enterprises in achieving domestic substitution[8] - Kingdee Cloud·Cangqiong and Kingdee Cloud·Xinghan recorded a total revenue of approximately RMB 696 million, representing a year-on-year growth of about 80.9%, with a renewal rate exceeding 110%[8] - Kingdee Cloud·Xingkong achieved revenue of approximately RMB 1.679 billion, a year-on-year increase of about 18.4%, with an annual recurring revenue (ARR) growth of approximately 31.2% and a customer renewal rate of 97.2%[10] Assets and Liabilities - The total assets of the company as of December 31, 2022, amounted to RMB 11,731,437,000, an increase from RMB 11,087,132,000 in the previous year[18] - The company’s total liabilities increased to RMB 4,323,854,000 from RMB 3,283,993,000 year-on-year[19] - The total equity as of December 31, 2022, was RMB 5,168,490 thousand, compared to RMB 5,232,834 thousand as of December 31, 2021, reflecting a decrease of about 1.2%[61] Corporate Governance and Compliance - The company has adhered to all corporate governance code provisions except for the rule that the chairman and CEO should not be the same person, which is currently held by Mr. Xu Shaochun[127] - PwC has been appointed as the external auditor for the year 2022, with no changes in auditors over the past three years[129] - The financial statements for the year ended December 31, 2022, have been verified by the external auditor, but no assurance statement will be issued[130] Employee and Community Engagement - The company reported a total of 12,036 employees during the reporting period, emphasizing a focus on customer-centricity and professional development[120] - The company has actively supported educational initiatives, helping nearly 3,000 teachers enhance their practical teaching skills during the reporting period[121]

Share Options and Awards - A total of 529,501,600 share options were granted under the 2005 Scheme, with 320,723,193 options exercised and 203,594,907 options lapsed, leaving 5,183,500 options outstanding as of June 30, 2022[3]. - Under the 2015 Scheme, 40,000,000 share options were granted, with 22,291,000 options exercised and 8,945,000 options lapsed, resulting in 8,764,000 options outstanding as of June 30, 2022[3]. - During the reporting period, 3,706,000 share options were exercised and 2,762,500 options lapsed, with no new options granted or cancelled[3]. - The Share Award Scheme, adopted on December 4, 2015, is valid for 10 years and aims to incentivize certain employees and directors[7]. - The maximum number of shares awarded under the Share Award Scheme shall not exceed 3% of the issued share capital of the Company at any time[8]. - The remaining life of the 2015 Scheme was approximately 2 years and 8 months as of the report date[3]. - No share options were granted or cancelled during the reporting period[6]. - 3,564,000 share options were exercised during the reporting period under the 2015 Scheme[3]. - The Company may further grant 228,209,096 share options under the 2015 Scheme, representing approximately 6.57% of the total number of shares[3]. - A total of 7,207,500 awarded shares were granted under the Share Award Scheme during the reporting period, with 1,337,500 shares still outstanding as of June 30, 2022[10]. - The company has a cap on the number of awarded shares that can be granted to any participant, limited to 1% of the issued share capital within any 12-month period[9]. - The Share Award Scheme is effective for 10 years from its adoption date, December 4, 2015[9]. Financial Performance - Total revenue for the six months ended June 30, 2022, was RMB 2,196,656,000, representing a 17.3% increase compared to RMB 1,872,399,000 in the same period of 2021[51]. - Loss attributable to owners of the Company for the first half of 2022 was approximately RMB 356,441,000, compared to a loss of RMB 248,108,000 in the same period of 2021[51]. - Basic loss per share attributable to owners of the Company was approximately RMB 10.38 cents, compared to RMB 7.25 cents in the first half of 2021[51]. - The Group reported an operating loss of approximately RMB 453,567,000, compared to an operating loss of approximately RMB 354,584,000 in the same period last year[65]. - The current loss attributable to owners of the Company was approximately RMB 356,441,000, with a net loss margin of approximately 16.2%[65]. - The Group recorded a gross profit of RMB 1,330,808,000, representing a year-over-year increase of approximately 13.3%, while the gross profit margin decreased by 2.1 percentage points to approximately 60.6%[64]. - The company reported a total comprehensive loss of RMB 392,804 for the period, compared to RMB 285,451 in the same period of 2021[96]. - The company reported a loss for the period of RMB (388,857,000) for the six months ended June 30, 2022[99]. - The company reported a net cash outflow from operating activities of approximately RMB (179,869,000), compared to RMB (96,513,000) in the same period of 2021[51]. Revenue Breakdown - Revenue from the cloud service business grew by approximately 35.5% year-over-year from RMB 1,238,258,000 in the same period in 2021 to RMB 1,677,482,000, accounting for 76.4% of the Group's total revenue[53]. - Revenue from the ERP business and others decreased by 18.1% year-over-year to RMB 519,174,000, down from RMB 634,141,000 in the same period last year[61]. - Revenue from external customers for the six months ended June 30, 2022, was RMB 2,179,205,000, an increase of 17.3% compared to RMB 1,857,328,000 in the same period of 2021[122]. - Revenue from services transferred over time amounted to RMB 2,021,187,000, while revenue from products transferred at a point in time was RMB 175,469,000[118]. - The enterprise cloud services segment generated RMB 1,161,330,000, up from RMB 868,670,000, reflecting a growth of 33.7%[183]. Cash Flow and Liquidity - Cash and cash equivalents decreased significantly to RMB 1,078,333 from RMB 2,046,815, highlighting liquidity challenges[90]. - The company reported a net cash outflow from investing activities of RMB (694,852,000) for the six months ended June 30, 2022, compared to RMB (1,195,000,000) in the same period of 2021[102]. - The company reported a net decrease in cash and cash equivalents of RMB 972,683,000, compared to RMB 1,417,947,000 in the same period last year[104]. - The Group's cash and bank deposits totaled approximately RMB 3,713,459,000 as of June 30, 2022, compared to RMB 3,747,373,000 as of December 31, 2021[80]. - The current ratio of current assets to current liabilities was approximately 1.03 as of June 30, 2022, with net current assets amounting to approximately RMB 83,675,000[80]. Research and Development - The Group is committed to increasing investment in product research and development, particularly in Kingdee Cloud products[51]. - Research and development costs were approximately RMB 794,806,000, representing a 19.0% year-over-year increase, with R&D expenses as a percentage of revenue decreasing to 31.8%[64]. - Research and development costs for the six months ended June 30, 2022, amounted to RMB 794,806, an increase of 19% from RMB 667,911 in 2021[186]. Corporate Governance - The company complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the roles of chairman and chief executive officer[42]. - The audit committee reviewed the unaudited consolidated results for the reporting period and confirmed compliance with applicable accounting standards[48]. - Mr. Xu Shao Chun served as both Chairman and Chief Executive Officer during the reporting period, which the board believes is beneficial for the company's development[42]. - The company aims to enhance its corporate governance and internal controls, as well as improve communication with investors and stakeholders[43]. Employee and Talent Management - The total number of employees in the Group reached 11,708 during the reporting period[85]. - Employee benefit expenses rose to RMB 1,906,823, up 23% from RMB 1,545,690 in the previous year[186]. - Kingdee's ecosystem partners recruited over 500 digital talents during the reporting period[87]. Market and Economic Conditions - The adverse impact on project delivery efficiency was noted due to the continuation of the COVID-19 pandemic[51]. - The impact of COVID-19 has adversely affected project implementation efficiency, leading to uncertainties in financial performance[105]. - The Group continues to monitor the effects of COVID-19 on its financial position and operating results[105].

Market Position and Recognition - Kingdee International ranked first in the SaaS ERM market for large, medium, and small enterprises in China according to IDC data[2]. - Kingdee was recognized as the only Chinese enterprise in Gartner's top five application platform software in 2020[2]. - Kingdee has maintained the largest market share in the enterprise application software sector for fast-growing enterprises for 17 consecutive years[114]. - The company has held the top position in the enterprise-grade SaaS ERM (Cloud ERP) and financial Cloud services industry for 4 consecutive years[114]. - Kingdee's efforts in the market have been recognized by IDC data, highlighting its leadership position[114]. Financial Performance - Revenue for 2021 reached RMB 4,174,147, an increase of 24.4% from RMB 3,356,445 in 2020[23]. - Kingdee's financial highlights indicate a strong performance, with significant growth in revenue and user base[3]. - Cloud services business achieved a strong growth of 44.2%, totaling approximately RMB 2,758 million, which accounted for 66.1% of total revenue[26]. - Kingdee Cloud subscription ARR (annual recurring revenue) amounted to approximately RMB 1.57 billion, representing a year-on-year growth of 58.5%[26]. - The loss attributable to owners was RMB (302,330), a slight improvement from RMB (335,479) in 2020[23]. - Total revenue for the year ended December 31, 2021, was approximately RMB 4,174,147,000, representing a 24.4% increase compared to 2020[35]. - The Group recorded a gross profit of approximately RMB 2,633,572,000, a year-on-year increase of approximately 19.2%, with a gross profit margin of approximately 63.1%[66]. Cloud Services and Product Development - Kingdee's cloud services have provided digital management solutions to over 680 organizations globally[2]. - Kingdee's new cloud products include Kingdee Cloud · Cang Qiong, Kingdee Cloud · Xing Han, Kingdee Cloud · Xing Kong, and Kingdee Cloud · Xing Chen, targeting various enterprise sizes[2]. - Kingdee plans to focus on the strategic expansion of "Platform + Finance & HR & Tax + Ecosystem" and transition to a cloud subscription model[31]. - Kingdee Cloud Cosmic and Kingdee Cloud Constellation recorded approximately RMB 385 million in revenue, an increase of 102.9% year-over-year, with a dollar retention ratio exceeding 120%[45]. - The Kingdee Cloud Cosmic PaaS platform will enhance technological capabilities in low-code development, master data management, and robotic process automation[38]. Strategic Initiatives and Future Plans - The management discussion highlighted future strategies for market expansion and potential mergers and acquisitions[3]. - Kingdee aims to become the most trusted enterprise service platform, aligning with its core values of integrity and service[2]. - Kingdee is committed to building a growth flywheel to achieve better reputation, products, ecosystem, implementation, and services[31]. - The company is focused on expanding its market presence and enhancing its product offerings through continuous innovation[2]. - Kingdee aims to establish more industry lighthouses in the large enterprise market and enhance quality management in key industries[30]. Customer Engagement and Market Expansion - The total number of signed customers reached 551, including 316 new customers such as CCB Fintech and Shagang Group[45]. - The number of customer appraisal letters received increased by over 48% year-on-year, totaling 440[28]. - Kingdee accumulated nearly 11,000 enterprise customers in the SME market by the end of the reporting period[49]. - The SME market cloud service revenue grew rapidly by 82.8% year-on-year, with an average dollar retention ratio of approximately 85%[49]. - Kingdee's digital credit services partnered with over 50 financial institutions and received the Guangdong Finance Innovation Award[50]. Research and Development - Total research and development costs were approximately RMB 1,260,069,000, an increase of approximately 42.8% year-on-year, with R&D capitalization rate dropping to approximately 33.6%[66]. - Kingdee has submitted a total of 213 patent applications for its new generation PaaS platform, Kingdee Cloud Cosmic, enhancing its technological capabilities[44]. - The company is actively integrating into the domestic innovation ecosystem, achieving compatibility certification with 23 domestic partners[55]. Corporate Governance and Management - The Company has complied with all corporate governance code provisions except for code provision A.2.1 during the financial year ended December 31, 2021[167]. - The Board has maintained effective supervision over the Group's strategic plans, management, and risk assessment[168]. - The Company has established a disciplined fund management principle to efficiently manage market risks[97]. - The Company emphasizes high transparency in the Board member selection process, ensuring a balance of skills and experience[199]. - The Company has adopted a Board Diversity Policy since August 2013, with two of the seven Board members being women, enhancing gender diversity[199]. Employee Engagement and Training - The total number of employees in the Group reached 11,588 during the reporting period[101]. - Kingdee served 136 universities and helped nearly 1,800 teachers improve their practical teaching abilities during the reporting period[104]. - The company provided digital management training to over 300 senior executives, including CEOs and CIOs, to promote digital transformation in Chinese enterprises[104]. - Kingdee aims to cultivate over 400 talents for the industry through skills competitions involving thousands of students from more than 500 universities[104]. Sustainability and Social Responsibility - Gree's commitment to sustainability includes a goal to reduce carbon emissions by 30% by 2025 through innovative manufacturing processes[107]. - The company is focused on advancing basic education in resource-scarce areas and supporting welfare initiatives in regions like Sichuan, Hunan, and Jiangsu[104]. Shareholder Information and Stock Performance - The company is listed on the Main Board of The Stock Exchange of Hong Kong Limited with stock code 0268[114]. - The Board did not recommend the declaration of a final dividend for the year ended December 31, 2021, consistent with the previous year[117]. - The company completed a placing of 133,280,000 new shares at a price of HK$17.82 per share, raising gross proceeds of approximately HK$2,375.1 million[136].

Share Options and Awards - Total share options granted under the 2005 Scheme: 529,501,600, with 315,801,193 exercised and 197,797,407 lapsed, leaving 15,903,000 outstanding as of 30 June 2021[3] - Share options exercised under the 2005 Scheme during the six months ended 30 June 2021: 2,279,000[3] - Share options lapsed under the 2005 Scheme during the six months ended 30 June 2021: 5,665,000[3] - Total share options granted under the 2015 Scheme: 40,000,000, with 17,677,000 exercised and 8,795,000 lapsed, leaving 13,528,000 outstanding as of 30 June 2021[3] - Share options exercised under the 2015 Scheme during the six months ended 30 June 2021: 1,037,500[3] - Share options lapsed under the 2015 Scheme during the six months ended 30 June 2021: 2,535,000[3] - Remaining share options available for grant under the 2015 Scheme: 228,059,096, representing approximately 6.57% of the total shares issued as of 30 June 2021[3] - Total share options granted to other employees under the 2015 Scheme: 34,647,500, with 2,916,500 exercised and 8,200,000 lapsed, leaving 23,731,000 outstanding as of 30 June 2021[5] - The company granted 6,376,000 award shares under the Share Award Scheme during the six months ended 30 June 2021, with 2,562,500 awarded shares still outstanding as of that date[7] - The company's share award scheme allows for a maximum of 3% of the issued share capital to be awarded under the scheme, with a 1% limit per selected participant in any 12-month period[6] Placing Proceeds Allocation - The gross proceeds from the placing were approximately HK$2,375.1 million, with net proceeds of approximately HK$2,353.0 million after deducting related costs[11] - 50.0% of the placing proceeds (HK$1,176,850,000) were allocated to research and development, with HK$738,045,000 utilized and HK$438,805,000 remaining as of 30 June 2021[12] - 30.0% of the placing proceeds (HK$706,110,000) were allocated to future potential investments, with HK$530,483,000 utilized and HK$175,627,000 remaining as of 30 June 2021[12] - 20.0% of the placing proceeds (HK$470,740,000) were allocated to working capital and general corporate purposes, fully utilized as of 30 June 2021[12] - The net price per Placing Share was approximately HK$17.65, with the placing completed on 28 August 2020[11] Shareholdings and Interests - As of 30 June 2021, Xu Shao Chun held 1,525,000 shares as a beneficiary of a trust and 19,786,263 shares as a beneficial owner[13] - The aggregate interests of directors and the chief executive in shares, underlying shares, or debentures amounted to 2,751,275 shares, representing 0.08% of the total[14] - The weighted average closing price of the company's shares prior to the share option exercise date was HK$29.01[6] - The total number of shares held by directors and executives is 703,509,887, representing 20.27% of the issued shares[17] - Lin Bo holds 1,713,775 shares as a beneficial owner and 1,037,500 shares as a beneficiary of a trust[17] - Gary Clark Biddle holds 1,183,000 shares as a beneficial owner, representing 0.03% of the issued shares[18] - Dong Ming Zhu holds 400,000 shares through share options, representing 0.01% of the issued shares[18] - Liu Chia Yung holds 200,000 shares as a beneficial owner, representing 0.01% of the issued shares[18] - Easy Key Holdings Limited holds 682,198,624 shares, representing 19.66% of the issued shares[23] - Oriental Gold Limited holds 386,312,000 shares as a beneficial owner, representing 11.13% of the issued shares[23] - Billion Ocean Limited holds 295,886,624 shares as a beneficial owner, representing 8.53% of the issued shares[23] - JPMorgan Chase & Co. holds 17,650,592 shares as a controlled corporation and 6,742,371 shares as a short position[23] - The total long positions held by JPMorgan Chase & Co. amount to 305,918,767 shares, representing 8.82% of the issued shares[23] - JD Oriental Investment Limited holds 200,180,000 shares, representing 5.77% of the total issued shares[24] - FMR LLC holds 209,200,485 shares, representing 6.03% of the total issued shares[24] - Schroders Plc holds 173,693,020 shares, representing 5.01% of the total issued shares[24] - JPMorgan Chase & Co. holds 89,042,175 shares directly and 91,515,000 shares through its subsidiaries[27] - JPMorgan Chase & Co. has derivatives interests including 146,000 physically settled listed derivatives and 272,700 cash settled listed derivatives[28] - Max Smart Limited, controlled by Liu Qiangdong, holds 200,180,000 shares indirectly through JD.com, Inc. and JD.com Investment Limited[29] Financial Performance and Metrics - Total revenue for the six months ended 30 June 2021 was RMB1,872,399,000, representing a 35.0% increase compared to the same period in 2020[44] - Loss attributable to owners of the Company was approximately RMB248,108,000, compared to a loss of RMB224,025,000 in the same period in 2020[44] - Basic loss per share attributable to owners of the Company amounted to approximately RMB7.25 cents, compared to RMB6.87 cents in the same period in 2020[44] - Net cash outflow from operating activities was approximately RMB96,513,000, compared to RMB81,581,000 in the same period in 2020[44] - Gross profit increased by 31.9% YoY to RMB 1,174,133,000, with a gross profit margin decrease of 1.5 percentage points to 62.7% due to higher outsourcing costs[60] - Selling and marketing expenses rose by 22.3% YoY to RMB 887,846,000, but decreased as a percentage of revenue from 52.3% to 47.4%[60] - Administrative expenses and net impairment losses increased by 11.6% YoY to RMB 235,255,000, with a decrease in revenue percentage from 15.2% to 12.6%[60] - Research and development expenses surged by 71.4% YoY to RMB 667,911,000, with a R&D capitalization rate drop to 34.2% and capitalized amount decreasing by 6.0% YoY to RMB 228,722,000[60] - Other income and gains-net increased by 45.1% YoY to RMB 219,127,000, mainly due to the rise in fair value of the investment in FXiaoKe[61] - Operating loss widened to RMB 354,584,000, driven by increased R&D investment in cloud products like Kingdee Cloud Cosmic and Kingdee Cloud Constellation[61] - Cloud business operating loss increased by 53.7% YoY to RMB 433,223,000, while ERP business and others recorded an operating profit of RMB 42,724,000[61] - Finance income-net rose to RMB 21,975,000, up from RMB 4,633,000 in the same period of 2020, due to increased finance income[61] - Income tax credit amounted to RMB 38,679,000, up from RMB 9,181,000 in 2020, primarily due to the Group's loss and increased R&D costs[61] - Net loss attributable to owners of the Company was RMB248,108,000, with a net loss margin of 13.3%, and basic loss per share of RMB7.25 cents as of 30 June 2021[62] - Financial assets and derivative instruments at fair value through profit or loss decreased by RMB544,496,000 to RMB1,076,439,000 as of 30 June 2021 compared to 31 December 2020[62] - Investments designated at fair value through profit or loss, including wealth management products, listed equity investments, and unlisted equity investments, totaled RMB1,076,439,000 as of 30 June 2021[66] - The Group disposed of its 5% interest in Shenzhen Fast Learning Education Development Co., Ltd., resulting in a decrease of RMB15,585,000 in the book value of investments in associates[70] - The Group provided a loan of RMB200,000,000 to CITIC Consumer Finance Co., Ltd. at an annual interest rate of 5% for 182 days[72] - Contract liabilities increased to RMB1,690,768,000 as of 30 June 2021, up from RMB1,483,943,000 as of 31 December 2020, primarily due to growth in the Group's cloud service business[74] - Total cash and bank deposits amounted to RMB 3,668,508,000 as of 30 June 2021, a decrease from RMB 4,046,980,000 as of 31 December 2020[76] - Asset management products held by the Group decreased to RMB 173,254,000 as of 30 June 2021, down from RMB 993,656,000 as of 31 December 2020[76] - Net current assets were approximately RMB 2,226,998,000 as of 30 June 2021, compared to RMB 3,584,825,000 as of 31 December 2020[76] - The current ratio of current assets to current liabilities decreased to 1.90 as of 30 June 2021 from 2.38 as of 31 December 2020[76] - Group borrowings decreased by 100% year-over-year to RMB 0 as of 30 June 2021, down from RMB 120,000,000 as of 31 December 2020[76] - The Group's exposure to foreign exchange risk primarily stems from fluctuations in the US dollar/RMB and Hong Kong dollar/RMB exchange rates[78] - The Group does not have a foreign currency hedging policy but monitors foreign exchange exposure and may consider hedging if necessary[78] - Credit risk is managed by transacting with high-credit-quality financial institutions in China and Hong Kong[78] - The Group assesses the credit quality of distributors based on financial position, past experience, and other factors, setting individual risk limits accordingly[78] - The company's trade receivables are diversified with no significant concentration of credit risk, as they are composed of numerous small items spread across a large number of customers[79] - The company's investments in debt instruments, including loans to third parties and related parties, are considered low-risk, with credit ratings monitored for deterioration[79] - The company manages idle cash by purchasing and redeeming wealth management products, which primarily consist of low-risk products issued by financial institutions, to generate higher yields than bank deposits[81] - The company has established a disciplined fund management principle, including annual and monthly funding plans, to efficiently manage market risks and ensure financial security[81] - The company's total number of employees reached 10,589 during the reporting period, with a focus on innovation, quality, and a customer-centric culture[81] - The company implemented organizational strategies such as matrix, platform, systematization, and intelligence, while continuing to attract top-tier talent for cloud transformation[81] - Kingdee signed school-enterprise cooperation agreements with 11 universities, helping to cultivate over 200 graduates for the industry[83] - During the pandemic, Kingdee provided teaching support for over 60 universities, benefiting nearly 10,000 students[83] - Kingdee established a digital classroom, sharing digital management strategies with over 300 senior executives of Chinese enterprises[83] - The company's total assets as of 30 June 2021 were RMB 10,354,271,000, a decrease from RMB 10,722,079,000 at the end of 2020[85] - Non-current assets increased to RMB 5,645,031,000 as of 30 June 2021, up from RMB 4,538,665,000 at the end of 2020[85] - Current assets decreased to RMB 4,709,240,000 as of 30 June 2021, down from RMB 6,183,414,000 at the end of 2020[85] - Total liabilities decreased to RMB 2,681,168,000 as of 30 June 2021, down from RMB 2,763,602,000 at the end of 2020[87] - Net assets decreased to RMB 7,673,103,000 as of 30 June 2021, down from RMB 7,958,477,000 at the end of 2020[87] - Equity attributable to owners of the company decreased to RMB 7,546,472,000 as of 30 June 2021, down from RMB 7,789,631,000 at the end of 2020[87] - Revenue from contracts with customers increased to RMB 1,872,399 thousand in H1 2021, up 34.9% from RMB 1,387,445 thousand in H1 2020[89] - Gross profit rose to RMB 1,174,133 thousand in H1 2021, a 31.8% increase from RMB 890,494 thousand in H1 2020[89] - Operating loss widened to RMB 354,584 thousand in H1 2021, compared to RMB 253,562 thousand in H1 2020[89] - Loss for the period increased to RMB 286,457 thousand in H1 2021, up 18.5% from RMB 241,700 thousand in H1 2020[89] - Loss per share attributable to owners of the Company increased to RMB 7.25 cents in H1 2021, compared to RMB 6.87 cents in H1 2020[89] - Total comprehensive loss for the period was RMB 285,451 thousand in H1 2021, compared to RMB 238,845 thousand in H1 2020[91] - Research and development costs surged to RMB 624,743 thousand in H1 2021, a 74.3% increase from RMB 358,396 thousand in H1 2020[89] - Total equity decreased to RMB 7,673,103 thousand as of 30 June 2021, down from RMB 7,958,477 thousand at the start of the year[93] - Share premium decreased to RMB 5,027,044 thousand as of 30 June 2021, compared to RMB 5,052,514 thousand at the start of the year[93] - Non-controlling interests decreased to RMB 126,631 thousand as of 30 June 2021, down from RMB 168,846 thousand at the start of the year[93] - Net loss for the period was RMB 241.7 million, with a comprehensive loss of RMB 258.845 million[95] - Total equity decreased to RMB 5.9 billion as of 30 June 2020, down from RMB 6.145 billion at the beginning of the year[95] - Net cash outflow from operating activities was RMB 96.513 million for the six months ended 30 June 2021[97] - Net cash outflow from investing activities was RMB 1.195 billion for the six months ended 30 June 2021[97] - Net cash outflow from financing activities was RMB 126.434 million for the six months ended 30 June 2021[99] - Cash and cash equivalents decreased by RMB 1.417 billion to RMB 1.321 billion at the end of June 2021[99] - Purchases of intangible assets amounted to RMB 232.556 million for the six months ended 30 June 2021[97] - Payment for acquisition of a subsidiary was RMB 80.311 million for the six months ended 30 June 2021[97] - Dividends paid in 2020 amounted to RMB 36.756 million[95] - Interest paid was RMB 1.849 million for the six months ended 30 June 2021[97] - The company reclassified outsourcing service fees of RMB 134,154,000 from "selling and marketing expenses" to "cost of sales" for the six months ended 30 June 2020 to align with current reporting practices[103][104] - The reclassification resulted in an increase in cost of sales by RMB 134,154,000 and a corresponding decrease in gross profit and selling and marketing expenses by the same amount for the six months ended 30 June 2020[105] - The company operates in three main segments: Cloud services business, ERP business and others, and Investment properties operating business, with all businesses primarily conducted in the PRC[110] - The Cloud services business includes enterprise cloud services, Small & Micro business finance cloud services, and industry cloud services[110] - The ERP business and others segment includes sales of software and hardware products, provision of software implementation services, software solution consulting, maintenance, upgrade, and other supporting services[110] - The Investment properties operating business involves the operation of investment properties[110] - The company's primary listing is on the Stock Exchange of Hong Kong Limited since 15 February 2001[1] - The unaudited condensed consolidated interim financial statements are presented in thousands of Renminbi (RMB'000) and were approved for issue by the Board of Directors on 18 August 2021[1] - The company's interim financial information is prepared in accordance with IAS 34, 'Interim financial reporting', and should be read in conjunction with the annual financial statements for the year ended 31 December 2020[2] - The company's accounting policies for the interim period are consistent with those applied in the annual financial statements for the year ended 31 December 2020[107] - Total revenue from external customers for the Group was RMB 1,872,399,000, with RMB 1,238,258,

Market Position and Customer Base - Kingdee has maintained the largest market share in the enterprise application software sector for fast-growing enterprises for 16 consecutive years[3]. - The company has achieved the largest share in the enterprise-grade SaaS Cloud services industry for 4 years[3]. - Kingdee serves over 6.8 million enterprises, government agencies, and other organizations globally[3]. - The company is the only Chinese SaaS provider selected in Gartner's global market guide[3]. - Kingdee ranked No.1 in SaaS ERM market share for four consecutive years and received the customer satisfaction award in the 2020 IDC Global SaaS Customer Satisfaction Survey[29]. Financial Performance - Revenue for 2020 was RMB 3,356,445, a slight increase of 0.9% from RMB 3,325,590 in 2019[22]. - The company reported a loss attributable to owners of RMB (335,479) in 2020, compared to a profit of RMB 372,580 in 2019[22]. - Total assets increased to RMB 10,722,079 in 2020, up from RMB 8,420,153 in 2019[22]. - Total equity attributable to owners of the company rose to RMB 7,789,631 in 2020, compared to RMB 5,986,928 in 2019[22]. - The Group's total revenue for the year ended December 31, 2020, was approximately RMB3,356,445,000, representing a year-on-year increase of 0.9% compared to RMB3,325,590,000 in 2019[34]. Cloud Business Growth - The cloud business achieved a rapid growth of 45.6% in 2020, indicating a strong shift towards subscription-based services[24]. - Revenue from the cloud services business grew by approximately 45.6% year-on-year, increasing from RMB1,313,595,000 in 2019 to RMB1,912,385,000, accounting for 57.0% of total revenue[35]. - Kingdee Cloud Cosmic signed contracts with 367 customers in 2020, with a total contract value of approximately RMB 467 million[25]. - Kingdee Cloud Galaxy generated revenue of RMB 1,141 million, reflecting a year-over-year growth of over 31.4%[26]. - Kingdee's revenue from Jingdou Cloud grew by 62.4% year-on-year, with a cumulative customer base exceeding 160,000 and a renewal rate of about 76%[27]. Customer Satisfaction and Service - The company was awarded the 2020 IDC SaaS Customer Satisfaction Award, highlighting its strong customer service[3]. - Kingdee received 295 customer appreciation letters, reflecting strong customer recognition and support for its services[29]. - Kingdee provided 24-hour customer service during the pandemic to ensure normal operation of customers' businesses[73]. Strategic Initiatives and Future Plans - The company plans to create a new Kingdee with a subscription business model over the next three years, focusing on enhancing digital competitiveness for enterprises[30]. - Kingdee aims to strengthen its technological advantages and become the most reliable enterprise service platform[30]. - The Group's strategic initiatives include promoting a combined strategy of "Platform + Finance & HR Application + Ecosystem" to enhance product competitiveness[35]. - Kingdee aims to create a new subscription business model for small and medium-sized enterprises within the next three years[76]. Research and Development - Total research and development costs were RMB882,559,000, representing a year-on-year increase of 35.7%, with R&D costs recognized in the consolidated income statement increasing by 67.7% to RMB983,874,000[55]. - Significant resources were invested in R&D to enhance product value and encourage continuous innovation, aiming to build a highly competitive cloud platform[193]. Corporate Governance and Management - The Company has established four specialized committees: audit committee, remuneration committee, nomination committee, and corporate governance and strategy committee to oversee various aspects of its affairs[165]. - The Board is responsible for ensuring the accuracy and fairness of the financial statements of the Company[196]. - The Company has mechanisms in place for employees to report concerns about financial reporting and internal controls[169]. - The Company emphasizes high transparency in the Board member selection process to align with business requirements[175]. Charitable Contributions - Kingdee donated RMB 10 million to support pandemic relief efforts and assisted small and medium enterprises during challenging times[29]. - The Group made charitable and other donations amounting to approximately RMB 10,000,000 in 2020, compared to approximately RMB 1,000,000 in 2019, indicating a significant increase of 900%[88]. Employee and Workforce Development - The total number of employees in the Group reached 10,663 during the reporting period[71]. - Kingdee encouraged R&D and delivery of high potential talents to grow in rotation, promoting a younger and more professional workforce[71]. Risk Management and Internal Controls - The Company has established an internal audit function to maintain an effective risk management and internal control system, providing reasonable assurance against material misstatement[182]. - The Board reviews the risk management and internal control system annually to safeguard shareholders' investments and the Company's assets[182]. - The internal control system was deemed adequate and effective, with no material issues affecting financial, operational, or compliance controls identified during the year ended December 31, 2020[194].

Share Options and Awards - As of June 30, 2020, a total of 529,501,600 share options were granted under the 2005 Scheme, with 312,464,693 options exercised and 189,677,407 options lapsed[4]. - During the six months ended June 30, 2020, 6,930,500 share options were exercised and 10,844,100 options lapsed, leaving 27,359,500 options outstanding[4]. - Under the 2015 Scheme, 40,000,000 share options were granted, with 15,374,500 options exercised and 5,180,000 lapsed as of June 30, 2020[4]. - The remaining life of the 2015 Scheme is approximately 4 years and 8 months as of the report date[4]. - The company may further grant 219,264,096 share options under the 2015 Scheme, representing approximately 6.58% of the total shares issued as of June 30, 2020[4]. - The total options held as of June 30, 2020, amounted to 46,805,000 after accounting for options exercised and lapsed during the reporting period[5]. - The company granted a total of 10,608,000 award shares under the Share Award Scheme during the six months ended June 30, 2020[7]. - As of June 30, 2020, there were 3,800,000 awarded shares still outstanding for the Directors[7]. - The vesting period for the granted share options is four years, with 25% vesting at the end of each year[8]. - Lin Bo, a Director, has 1,400,000 awarded shares that are still outstanding as of June 30, 2020[8]. - The Share Award Scheme was adopted on December 4, 2015, and is valid for a period of 10 years[7]. Shareholding Structure - Xu Shao Chun, the Chairman and CEO, holds 715,198,624 shares, representing a significant interest in the company[12]. - As of June 30, 2020, Easy Key Holdings Limited holds 715,198,624 shares, representing 21.47% of the issued share capital[22]. - Oriental Gold Limited, a controlled corporation, holds 414,312,000 shares as a beneficial owner[19]. - Billion Ocean Limited has a total of 419,312,000 shares (12.59%) and 295,886,624 shares (8.88%) in long positions[23]. - The Capital Group Companies, Inc. owns 299,492,761 shares, accounting for 8.99% of the total issued shares[23]. - JD Oriental Investment Limited holds 231,330,000 shares, which is 6.94% of the issued share capital[25]. - BlackRock, Inc. has interests in 201,109,248 shares (6.04%) and short positions of 4,688,000 shares (0.14%)[25]. - The total number of issued shares as of June 30, 2020, is 3,330,996,071[26]. - The percentage of shares held by substantial shareholders is disclosed under the provisions of Part XV of the SFO[21]. - The report includes details of share options and interests of various shareholders as of June 30, 2020[28]. Financial Performance - The Group recorded total revenue of RMB1,387,445,000 in the first half of 2020, down 6.6% year-on-year from RMB1,485,156,000 in 1H2019[47]. - Revenue from the ERP business decreased by 37.0% year-on-year, while cloud services business grew by 45.1% year-on-year, accounting for 57.5% of total revenue[47]. - The Group experienced a loss of RMB224,025,000 attributable to owners of the Company in 1H2020, compared to a profit of RMB109,640,000 in 1H2019[47]. - Basic losses per share attributable to owners of the Company amounted to approximately RMB6.87 cents, compared to basic earnings per share of RMB3.40 cents in 1H2019[47]. - Net cash outflow from operating activities was approximately RMB81,581,000, compared to a net cash inflow of RMB189,203,000 in 1H2019[47]. - The Group recorded a gross profit of RMB1,024,648,000 in 1H2020, down by 13.2% year-over-year, with a gross profit margin of approximately 73.9%[71]. - Operating profit decreased to a loss of RMB253,562,000 in 1H2020, compared to a profit of RMB123,922,000 in 1H2019, primarily due to strategic changes and the impact of COVID-19[73]. - The net loss attributable to owners of the Company was RMB224,025,000 in 1H2020, with a net profit margin of -16.1%[77]. - Total revenue for the Group was RMB1,387,445,000, representing a year-over-year decrease of 6.6% from RMB1,485,156,000 in the same period last year[68]. - Revenue from the ERP business decreased by approximately 37.0% year-on-year to RMB589,069,000, down from RMB934,913,000[67]. - Cloud services revenue increased by 45.1% year-on-year to RMB798,376,000, compared to RMB550,243,000 in the previous year[70]. Research and Development - Research and development costs totaled RMB389,755,000, a year-over-year increase of 14.8%, with amortization of these costs rising by 20.9% to RMB212,038,000[71]. - The Group strategically raised wages and incentives for R&D staff to encourage product and technology innovation[102]. - Kingdee Cloud Cosmic has filed over 150 patents, with a core patent winning a national patent award[55]. - Kingdee Cloud Cosmic launched multiple major SaaS applications and over 140 business modules across 20+ cloud applications during the reporting period[54]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the roles of chairman and chief executive officer[41]. - The Board is committed to enhancing corporate governance and has arranged training for Directors and senior managers to ensure compliance with Listing Rules and relevant laws[42]. - The Company aims to enhance its corporate governance level and will review roles and responsibilities as necessary[41]. - The Company has adopted a code of conduct for Directors' securities transactions, with all Directors confirming compliance during the reporting period[43]. Cash Flow and Liquidity - Total cash and bank deposits decreased to RMB1,848,255,000 as of June 30, 2020, down from RMB2,586,565,000 as of December 31, 2019, a decline of about 28.5%[93]. - The company reported a net cash outflow of RMB (81,581) from operating activities, indicating a challenging operational environment[116]. - Cash and cash equivalents at the end of the period were RMB 1,456,499, down from RMB 856,380 in 2019, reflecting a net decrease of RMB 446,550[117]. - The Group is committed to maintaining a strong cash position and a healthy debt profile with strong repayment ability[99]. - The Group's current ratio decreased to approximately 1.91 as of June 30, 2020, down from 2.12 as of December 31, 2019[96]. Employee and Operational Metrics - The total number of employees in the Group reached 9,382 during the reporting period[102]. - Employee benefit expenses totaled RMB 1,074,142,000 for the six months ended June 30, 2020, compared to RMB 905,804,000 in 2019, representing an increase of approximately 18.6%[191]. - The Group provided 24-hour telephone and online customer services during the pandemic to ensure normal operation of customers' businesses[102]. Market and Competitive Position - Kingdee's cloud business maintained solid growth despite the impact of COVID-19, aiming for a 60% revenue contribution from cloud services in 2020[103]. - The Group aims to enhance competitiveness through a "Platform + Finance & HR Application + Ecosystem" strategy[48]. - Kingdee Cloud Cosmic was selected into Gartner's High-Productivity PaaS global vendor list and has applied over 150 patents related to cloud-native technology and enterprise management[54]. - The Group has retained the largest share in enterprise application software for fast-growing enterprises for 16 consecutive years[48].

Market Position and Growth - Kingdee has maintained the largest market share in China's enterprise application software sector for 15 consecutive years[4]. - The company holds the top position in the enterprise-grade SaaS Cloud services industry for the second year in a row[4]. - Kingdee's diverse Cloud services cater to over 6.8 million enterprises and organizations globally[5]. - The company offers various Cloud platforms, including "Kingdee Cloud Cosmic" and "Kingdee Cloud Galaxy," targeting different enterprise sizes[5]. - Kingdee's financial highlights indicate a strong performance, with significant growth in user adoption and service offerings[7]. - The company is recognized as the only Chinese enterprise SaaS Cloud service provider listed in Gartner's global market guide[6]. - Kingdee's total assets increased to RMB 8,420,153,000 in 2019, compared to RMB 7,578,553,000 in 2018[20]. - Kingdee has maintained the number one market share in China's growing enterprise application software market for 15 consecutive years[116]. - The company has achieved the largest share in the enterprise-grade SaaS Cloud services industry for the second year[113]. - Kingdee holds the largest share in the enterprise-grade SaaS ERM (Cloud ERP) and Financial Cloud services industry for the third year[113]. Financial Performance - In 2019, Kingdee's total revenue grew by 18.4% year-on-year, reaching RMB 3,325,590,000[23]. - The cloud business revenue increased by 54.7% year-on-year, contributing significantly to the overall growth[23]. - Kingdee Cloud Galaxy achieved revenue of RMB 868 million, with a dollar retention rate of 90%[24]. - The Group recorded total revenue of RMB3,325,590,000 in 2019, an increase of 18.4% year-on-year, with cloud services revenue growing by 54.7% year-on-year, accounting for 39.5% of total revenue[32]. - Profit attributable to owners of the Company decreased by approximately 9.6% to RMB372,580,000 in 2019[32]. - Basic earnings per share attributable to owners of the Company decreased by approximately 12.7% year-on-year to approximately RMB11.52 cents[32]. - Net cash generated from operating activities reached RMB 962,927,000 in 2019, up from RMB 905,515,000 in 2018[19]. - The Group's cloud business reported an operating loss of RMB195,065,000, an increase of 30.7% year-on-year[64]. - The income tax expense for 2019 was RMB30,333,000, representing a year-on-year decrease of 21.7% from RMB38,760,000 in 2018, mainly due to a decrease in pre-tax profit[66]. Cloud Services and Innovations - Kingdee's cloud business revenue grew by 54.7% year-on-year, reaching RMB1,313,595,000, accounting for 39.5% of total revenue[33]. - Kingdee's enterprise cloud services achieved 53.3% year-on-year growth, with revenue increasing from RMB605,095,000 to RMB927,375,000[33]. - Kingdee Cloud Cosmic generated approximately RMB60 million in revenue and signed 130 new customers, with total new contract value exceeding RMB200 million[34]. - Kingdee Cloud Galaxy's revenue increased by over 43.5% year-on-year to RMB868 million, with a customer dollar retention rate of 90%[36]. - Kingdee released the Kingdee Cloud Cosmic 2.0 version, adding over 100 enterprise applications across 20 cloud services[24]. - Kingdee aims to enhance competitiveness through the "Cosmic Platform + Finance & HR Application + Ecosystem" strategy[32]. - Kingdee is integrating project sales and execution into a unified system to serve high-quality large enterprise customers[32]. - The company is helping channel partners transform into service partners for collaborative growth[32]. - A Customer Success system is being built to enable all-around customer services[32]. Strategic Partnerships and Future Outlook - The company aims to expand its market presence through strategic partnerships and acquisitions[6]. - Kingdee formed joint ventures with industry leaders to expand into the industrial internet sector, enhancing its market presence[25]. - The long-term outlook for the enterprise cloud services industry remains positive despite the impact of the COVID-19 pandemic[28]. - Kingdee anticipates rising demand for cloud transformation post-COVID-19, similar to the consumer shift during the 2003 SARS crisis, with a focus on enhancing product competitiveness[95]. - The Group's cloud business is expected to significantly enhance profitability and consolidate its leadership in enterprise-grade SaaS services, despite potential pressure on profitability in the initial transformation year[95]. Corporate Governance and Management - Xu Shao Chun, the founder and CEO, has been awarded multiple honors for his contributions to the software industry, including the "World Indigenous Entrepreneur Award of the United Nations" and "Outstanding Leader of China's Information Industry"[96]. - Lin Bo, the CFO, has extensive experience in strategic planning and financial management, having joined the company in 1997 and held various managerial positions[97]. - Dong Ming Zhu, a non-executive director, is the chairman and president of Gree Electric Appliances, recognized for her innovative regional sales model in household appliances[99]. - Zhou Bo Wen, a non-executive director, has a Ph.D. in Electrical & Computer Engineering and extensive experience in AI and machine learning, previously serving as a chief scientist at IBM[100]. - Gary Clark Biddle, an independent non-executive director, is a leading expert in financial accounting and corporate management, with a strong academic background[102]. - Cao Yang Feng, an independent non-executive director, has a dual doctoral background in International Entrepreneurship and Human Resource Management, and has provided strategic consulting for large enterprises[103]. Social Responsibility and Community Engagement - Kingdee donated RMB 10 million to support frontline medical staff during the COVID-19 outbreak, demonstrating its commitment to social responsibility[95]. - The Group made charitable donations totaling approximately RMB 1,000,000 for the year ended December 31, 2019, compared to RMB 4,000,000 in 2018[133]. Employee and Talent Management - The total number of employees in the Group reached 8,903, focusing on talent activation, introduction, and development to support cloud transformation[93]. - The Group has established a rigorous capital management principle to ensure financial security and reduce capital costs, with a comprehensive budget management system approved by the Chief Financial Officer[90].

Share Options and Awards - As of June 30, 2019, a total of 529,501,600 share options were granted under the 2005 Scheme, with 298,713,643 options exercised and 163,291,807 options lapsed[5]. - During the six months ended June 30, 2019, 6,872,625 share options were exercised and 1,875,000 options lapsed, leaving 67,496,150 options outstanding[5]. - The Company adopted a new share option scheme on May 8, 2015, granting 40,000,000 options under the 2015 Scheme, with 8,663,000 options exercised and 1,100,000 lapsed as of June 30, 2019[5]. - As of June 30, 2019, the Company had granted 2,200,000 award shares under the Share Award Scheme, with 6,450,000 awarded shares still outstanding[10]. - The share option schemes are designed to incentivize and reward contributions from employees, directors, and other eligible participants[5]. - The 2015 Scheme has a mandate limit of 259,264,096 share options, allowing for an additional 219,264,096 options to be granted[5]. - The Company’s share options represent approximately 6.62% of the total number of shares as of June 30, 2019[5]. - The share award scheme is valid for a period of 10 years, commencing from its adoption date on December 4, 2015[10]. - As of June 30, 2019, the interests of directors and chief executives in the shares and debentures of the Company were required to be disclosed under the Securities and Futures Ordinance[19]. - The Company aims to enhance employee motivation and retention through its share option and award schemes[10]. Financial Performance - The Group recorded total revenue of RMB1,485,156,000 for the first half of 2019, up 16.1% from RMB1,279,103,000 in the same period of 2018[55]. - Revenue from the Cloud services business grew by 54.9% year-on-year in the first half of 2019, while revenue from the ERP business slightly increased by 1.2% year-on-year[55]. - Profit attributable to owners of the Company decreased by approximately 35.4% to approximately RMB109,640,000 compared to RMB169,777,000 in the same period of 2018[55]. - Basic earnings per share attributable to owners of the Company decreased by approximately 38.6% year-on-year to approximately RMB3.40 cents[55]. - The Company did not declare an interim dividend for the six months ended 30 June 2019, consistent with the previous year[52]. - The Group recorded gross profit of RMB1,180,429,000, up by 15.1% year-on-year, with a gross profit margin of approximately 79.5%[82]. - Operating profit fell by 26.0% year-on-year to RMB123,922,000, with ERP business segment profit increasing by 5.7% to RMB211,541,000, while cloud services segment loss increased by 84.1% to RMB124,521,000[83]. - Profit for the period was RMB 110,887, a decline of 30.0% compared to RMB 158,389 in 2018[128]. Shareholder Information - As of June 30, 2019, the total number of issued shares was 3,310,533,521, with substantial shareholders holding approximately 22.25% of the total issued share capital[25]. - Xu Shao Chun held 715,198,624 shares, representing approximately 21.6% of the total issued shares[22]. - JD Oriental Investment Limited held 288,526,000 shares, accounting for approximately 8.72% of the total issued shares[37]. - The Capital Group Companies, Inc. reported holding 371,736,037 shares as of March 28, 2019[39]. - The company had no directors or chief executives with interests in shares or debentures that required disclosure as of June 30, 2019[27]. - The aggregate number of shares held by directors was 736,653,658, which is approximately 22.25% of the total issued shares[22]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the roles of chairman and chief executive officer[44]. - The audit committee reviewed the Group's unaudited consolidated results for the six months ended 30 June 2019 and confirmed compliance with applicable accounting standards[50]. - The Group is committed to enhancing its corporate governance and internal controls regarding information disclosure[45]. Cloud Services and Innovations - Kingdee continues to invest in the development of the Kingdee Cloud service ecosystem, leveraging its understanding of Chinese enterprises' management[55]. - Kingdee's cloud transformation is progressing steadily, with ongoing investments in new technologies and business innovations to build the Kingdee ecosystem[61][63]. - Kingdee has been recognized as the leading brand in middleware products according to the Chinese IT users satisfaction survey, further consolidating its market share in proprietary and reliable products[65]. - Kingdee Cloud Cosmic aims to build a strong partner ecosystem by attracting more platform ecosystem partners through various initiatives[68]. - Kingdee Cloud Galaxy's revenue increased by over 50.5% year-on-year to RMB 384 million, with a customer dollar retention rate of over 90%[69]. - Kingdee Cloud Cosmic signed contracts with 43 customers during the reporting period, including 28 new customers from large enterprises[68]. Research and Development - Total research and development costs were RMB339,550,000, representing a year-on-year increase of 19.7%[82]. - Research and development expenses increased by 26.6% year-on-year, and selling and marketing expenses rose by 18.1% due to significant investments in cloud migration strategy[83]. - The capitalized amount during the reporting period for research and development was RMB262,530,000, up by 20.8% year-on-year[82]. Financial Position and Cash Flow - Total cash and bank deposits amounted to RMB1,138,876,000 as of June 30, 2019, a decrease of 37.0% from RMB1,812,674,000 as of December 31, 2018[109]. - The company held wealth management products worth RMB946,485,000 as of June 30, 2019, significantly up from RMB288,347,000 as of December 31, 2018, marking an increase of 228.5%[109]. - The company's borrowings decreased by 13.4% to RMB260,625,000 as of June 30, 2019, compared to RMB301,125,000 as of December 31, 2018[109]. - The current ratio improved to approximately 1.72 as of June 30, 2019, compared to 1.69 as of December 31, 2018, indicating stable liquidity[109]. - The company reported a net cash outflow in loans to third parties from the micro-credit business of RMB (81,501), compared to RMB (62,348) in the prior year, indicating an increase in cash outflow[135]. - Total cash used in investing activities amounted to RMB (745,432), which is an increase from RMB (532,418) in the same period of 2018, representing a rise of 40%[135]. Lease and Accounting Policies - The adoption of IFRS 16 resulted in an increase in right-of-use assets to RMB 47,982,000 as of June 30, 2019, compared to RMB 31,777,000 on January 1, 2019[147]. - Lease liabilities increased to RMB 46,421,000 as of June 30, 2019, from RMB 31,214,000 on January 1, 2019[147]. - The Group's accounting policies are consistent with those of the annual financial statements for the year ended December 31, 2018, except for the adoption of new standards[142]. - The Group has adopted IFRS 16, recognizing leases as right-of-use assets and corresponding liabilities starting from January 1, 2019[158].