Investment Rating - The report assigns a "Recommend" rating for the company, marking it as the first coverage [1] Core Views - The company is a leading domestic ERP provider, accelerating its cloud transformation and narrowing losses, with breakeven expected soon [1] - The company's cloud transformation has shown initial results, with revenue growth stabilizing and losses narrowing [9] - The company is leveraging AI and domestic substitution trends to drive ERP upgrades, accelerating the transition to the EBC era [17] - The company's cloud-native products and services are well-positioned to capture new opportunities in overseas markets [34] Company Overview - The company is a leading ERP provider in China, transitioning from financial software to ERP and now to SaaS cloud services [1] - Revenue grew from RMB 1.547 billion in 2014 to RMB 5.679 billion in 2023, with a 9-year CAGR of 15.5% [1] - The company's cloud business accounted for 79.33% of total revenue in 2023, up from 56.72% in 2020 [11] - The company's cloud subscription ARR grew from RMB 630 million in 2019 to RMB 2.86 billion in 2023, with a 5-year CAGR of 45.97% [12] Cloud Transformation - The company's cloud transformation began in 2014, with cloud revenue surpassing traditional ERP revenue in 2020 [11] - Cloud revenue reached RMB 4.505 billion in 2023, accounting for 79.33% of total revenue, with a 7-year CAGR of 35.6% [11] - The company's cloud subscription ARR reached RMB 3.15 billion in H1 2024, up 24.2% YoY [12] - The company's core cloud products, such as Kingdee Cloud·Star and Kingdee Cloud·Star River, have renewal rates above 90% [12] AI and EBC Era - The company is leveraging AI to upgrade traditional ERP systems, accelerating the transition to the EBC era [17] - The company's EBC platform, built on cloud-native and modular architectures, supports enterprise digital transformation [28] - The company's self-developed AI model, Cosmic, enhances ERP systems with better integration, automation, and security [32] Market Opportunities - The company is well-positioned to benefit from domestic substitution trends and the growing demand for industrial software [21] - The company's cloud products are gaining traction in overseas markets, with revenue from international operations growing 8.2% YoY in H1 2024 [43] - The company has established a presence in Southeast Asia, with new offices in Singapore, Vietnam, and Thailand [43] Financial Projections - The company's revenue is expected to grow from RMB 6.642 billion in 2024 to RMB 9.418 billion in 2026, with a CAGR of 18.07% [2] - Net profit is expected to turn positive in 2025, reaching RMB 276 million in 2026, with a YoY growth of 408.9% [2] - Cloud revenue is projected to grow from RMB 5.455 billion in 2024 to RMB 8.218 billion in 2026, with a CAGR of 22.16% [45] Product Portfolio - The company offers a diverse range of cloud products, including Kingdee Cloud·Star River for large enterprises, Kingdee Cloud·Star for mid-sized enterprises, and Kingdee Cloud·Star Light for small businesses [34] - Kingdee Cloud·Star River, the company's flagship product for large enterprises, achieved revenue of RMB 546 million in H1 2024, up 38.9% YoY [35] - Kingdee Cloud·Star, targeting mid-sized enterprises, generated revenue of RMB 1.054 billion in H1 2024, up 14.3% YoY [35] - Kingdee Cloud·Star Light, aimed at small businesses, saw revenue grow 70.8% YoY in H1 2024 [35]
金蝶国际：云转型持续推进，业绩有望迎来拐点