Share Options and Awards - A total of 529,501,600 share options were granted under the 2005 Scheme, with 323,426,693 options exercised and 206,074,907 options lapsed, resulting in no outstanding options as of June 30, 2024[4]. - The 2015 Scheme has a remaining term of approximately 8 months, with 6,118,500 options outstanding as of June 30, 2024, representing about 7.21% of the total issued shares[5]. - The company may grant an additional 228,409,096 share options under the 2015 Scheme as of June 30, 2024, after accounting for options granted and lapsed[5]. - The exercise price of share options is determined by the Board and cannot be less than the highest of the closing price on the grant date, the average closing price for the preceding five trading days, or the nominal value of the shares[12]. - During the reporting period, a total of 1,707,500 share options were exercised, and 852,500 options lapsed, leaving 6,118,500 options held at the end of the period[15]. - The weighted average closing price prior to the exercise of share options by employees was approximately HK$8.75[15]. - The Share Award Scheme, adopted on December 4, 2015, has a remaining life of approximately one year and four months, aimed at incentivizing key employees and directors[17]. - All award shares granted under the Share Award Scheme relate to existing shares only, with no consideration required for acceptance or vesting[18]. - The Board has discretion in selecting participants for the Share Award Scheme and determining the number of award shares to be awarded[17]. - The terms of the Share Award Scheme do not specify a vesting period or any payment required upon acceptance of an award[19]. - The number of award shares available for grant under the Share Award Scheme decreased from 88,942,233 at the beginning of the Reporting Period to 84,225,153 at the end[26]. - During the Reporting Period, the Company granted a total of 12,821,280 award shares[26]. - The maximum number of shares that may be awarded to a selected participant under the Share Award Scheme in any twelve-month period shall not exceed 1% of the issued share capital, which is 107,830,808 shares as of June 30, 2024[26][29]. - The weighted average fair value of the award shares during the Reporting Period was HKD 7.32 per share[29]. - The weighted average closing price of the Shares immediately before the vesting date was approximately HKD 8.36[29]. - The vesting period for the award shares is four years[29]. - No consideration is required to be paid for the acceptance or vesting of the award shares[29]. - The Company granted 12,231,280 award shares on April 19, 2024, and 440,000 award shares on June 3, 2024[29]. - There were no award shares cancelled during the Reporting Period[32]. - The Board shall not make any further award of shares that will result in exceeding 3% of the issued share capital[26][29]. - During the Reporting Period, the percentage of Shares that may be issued in respect of options and awards under all share schemes is 0% as no options were granted[33]. Financial Performance - For the first half of 2024, Kingdee recorded total revenue of approximately RMB2,870 million, representing an increase of approximately 11.9% compared to the same period in 2023[99]. - Cloud services revenue grew by 17.2% year over year, contributing approximately 83.2% of the Group's total revenue, amounting to approximately RMB2,390 million[98]. - The Annual Recurring Revenue (ARR) for Kingdee Cloud subscription services reached approximately RMB3.15 billion, an increase of 24.2% year over year[98]. - Loss attributable to owners of the Company narrowed to approximately RMB217.9 million, a decrease of 23.2% year over year[100]. - Net cash flow from operating activities was an outflow of approximately RMB166.3 million, slightly improved from RMB168.9 million in the same period last year[101]. - Kingdee maintained the No.1 market share in China for SaaS ERM, Financial Cloud Services, and enterprise EPM according to IDC's 2023 reports[106]. - Kingdee Cloud Cosmic and Kingdee Cloud Constellation recorded Cloud Services revenue of approximately RMB546 million, an increase of approximately 38.9% year over year[110]. - Total signed contract amount for Kingdee's cloud services increased by approximately 63% year over year[110]. - Kingdee reported total revenue of RMB2,870,025,000 for the six months ended June 30, 2024, representing a year-over-year growth of 11.9%[125]. - Revenue from cloud services increased by 17.2% year-over-year to RMB2,389,247,000, accounting for approximately 83.2% of total group revenue[125][126]. - The financial cloud services for small and micro enterprises generated revenue of approximately RMB588 million, increasing by 17.3% year-over-year, with subscription ARR growing by 31%[119][122]. - Kingdee Cloud Galaxy achieved revenue of approximately RMB1,054 million, reflecting a year-over-year increase of 14.3%, with a total customer base exceeding 42,000[115][117]. - The gross profit for the group was approximately RMB1,815,187,000, marking a year-over-year increase of 14.3%, with a gross profit margin of 63.2%[129]. - The revenue from the ERP business and others decreased by approximately 8.8% year-over-year to RMB480,778,000[121][123]. - Kingdee Cloud Stellar's revenue surged by approximately 70.8% year-over-year, with a Net Dollar Retention (NDR) rate of 92%[119][122]. - Selling and marketing expenses increased by 7.2% year-over-year to approximately RMB1,224,514,000, but as a percentage of group revenue, it decreased from 44.5% to 42.7%[130]. - Administrative expenses totaled approximately RMB249,036,000, representing a year-over-year increase of 4.2%, with the percentage of administrative expenses to group revenue decreasing from 9.3% in 1H 2023 to 8.7% in 1H 2024[135]. - Research and development expenses amounted to approximately RMB852,021,000, reflecting a 2.8% year-over-year increase, with the R&D capitalization rate rising to 33.6%[132]. - The Group recorded an operating loss of approximately RMB317,060,000, an improvement of 18.3% compared to the operating loss of approximately RMB388,191,000 in 1H 2023[139]. - The finance income – net amounted to approximately RMB47,722,000, slightly increasing from approximately RMB47,195,000 in the same period of 2023[140]. - The income tax credit for the reporting period was approximately RMB24,707,000, compared to RMB13,562,000 in 1H 2023[141]. - The current loss attributable to owners of the Company was approximately RMB217,851,000, with a net loss margin of approximately 7.6%, improving from 11.1% in 1H 2023[142]. Capital Management and Subscription - The Company completed a Subscription on 14 December 2023, raising gross proceeds of HK$1,561,732,700 and net proceeds of approximately HK$1,560,982,700[41]. - The Subscription Price was set at HK$10.10 per share, with the closing price on 8 December 2023 being HK$10.38[41]. - The intended use of proceeds includes HK$1,248,786,000 (80%) for potential capital market transactions and HK$312,197,000 (20%) for general operation and working capital[42]. - The expected timeline for utilizing unutilized funds includes potential capital market transactions expected to be utilized by December 2025[42]. - The company aims to support its international strategy and optimize its capital structure through the recent Subscription[41]. Shareholder Information - As of June 30, 2024, the total number of issued shares is 3,594,360,271[51]. - Xu Shao Chun holds a total of 703,303,689 shares, representing approximately 19.57% of the total issued shares[51]. - Easy Key Holdings Limited has an interest in 682,198,624 shares, accounting for 18.98% of the total issued shares[60]. - Oriental Tao Limited holds 386,312,000 shares, which is about 10.75% of the total issued shares[60]. - The percentage of shares held by Gary Clark Biddle is 0.03%, with 1,230,000 shares[51]. - Dong Ming Zhu owns 400,000 shares, representing 0.01% of the total issued shares[51]. - The report indicates that no other directors or chief executives had interests in shares or debentures that required disclosure as of June 30, 2024[53]. - The company has not granted any rights or options to acquire shares or debentures to directors during the reporting period[54]. - The total number of shares held by Lin Bo is 2,107,627, which is approximately 0.06% of the total issued shares[51]. - Billion Tao Limited holds 295,886,624 shares, representing 8.23% of the total issued shares of 3,594,360,271 as of June 30, 2024[62]. - BlackRock, Inc. has a total interest in 180,450,107 shares, accounting for 5.02% of the total issued shares[62]. - BlackRock, Inc. holds 6,114,000 short positions, which is 0.17% of the total issued shares[62]. - BlackRock Investment Management Ireland Holdings Unlimited Company has a direct interest of 25,133,855 shares[66]. - The company has not identified any other persons with interests or short positions in the shares as of June 30, 2024[67]. Corporate Governance and Compliance - The company complied with all corporate governance code provisions, except for the roles of chairman and CEO being held by the same individual[82]. - The audit committee reviewed the Group's unaudited consolidated results and confirmed compliance with applicable accounting standards[90]. - The company arranged training for directors and senior management to enhance compliance with listing rules and regulations[83]. - The company confirmed that all directors complied with the code of conduct regarding securities transactions during the reporting period[85]. Financial Position and Risk Management - The Group's total cash and bank deposits decreased to RMB 4,191,310,000 as of June 30, 2024, from RMB 5,692,651,000 as of December 31, 2023, a decline of about 26.4%[170][175]. - The current ratio of current assets over current liabilities was approximately 1.07 as of June 30, 2024, indicating a slight decrease in liquidity compared to previous periods[171]. - The Group's borrowings decreased significantly to RMB 359,600,000 as of June 30, 2024, from RMB 776,900,000 as of December 31, 2023, a reduction of approximately 53.8%[172]. - The gearing ratio as of June 30, 2024, was 62.08%, slightly down from 62.48% as of December 31, 2023, indicating a marginal improvement in financial leverage[169][174]. - The Group held asset management products valued at RMB 85,194,000 as of June 30, 2024, a significant increase from RMB 6,000,000 as of December 31, 2023[170][175]. - The Group's net current assets were approximately RMB 326,904,000 as of June 30, 2024, down from RMB 1,174,033,000 as of December 31, 2023, indicating a decrease of about 72.1%[171]. - The interest rates on loans to third parties remained stable, ranging from 4.28% to 24.00% as of June 30, 2024, consistent with the previous reporting period[162][165]. - The Group has assessed the credit quality of distributors based on their financial position and past experience, setting individual risk limits accordingly[188]. - There is no significant concentration of credit risk in trade receivables from end customers, as the balance is composed of numerous small items spread over a large number of customers[190]. - The Group's investments in debt instruments, including loans to third parties, are considered low risk, with credit ratings monitored for deterioration[190]. - The Group has implemented sophisticated fund management policies to enhance the effectiveness and efficiency of fund management, ensuring financial security and reducing capital costs[194]. - The Group manages idle cash by purchasing wealth management products, which provide higher yields than bank deposits[195]. - A disciplined fund management principle has been established to efficiently manage market risks, supported by annual and monthly funding plans[196]. - The Group has a monthly, quarterly, and annual budget management system approved by the chief financial officer to align capital budget plans with actual business needs[197].
金蝶国际(00268) - 2024 - 中期财报