Investment Rating - The report maintains a "Buy" rating for Kingdee International (00268) [1] Core Insights - The company reported a revenue of 3.19 billion RMB for H1 2025, representing a year-on-year increase of 11.2%. The net loss attributable to shareholders was 97.74 million RMB, an improvement from a loss of 218 million RMB in the same period last year. Revenue met expectations, while profit performance was slightly below the most optimistic market forecasts due to increased management expenses, which are speculated to be one-time impacts [4] - Cloud subscription revenue reached 1.68 billion RMB in H1 2025, up 22.1% year-on-year, accounting for 53% of total revenue. The Annual Recurring Revenue (ARR) grew to 3.73 billion RMB, an 18.5% increase year-on-year. Contract liabilities rose to 3.38 billion RMB, up 24.7% year-on-year, indicating strong growth in subscription revenue [6] - The company anticipates accelerated growth in AI contracts, with amounts exceeding 150 million RMB. The AI revenue is expected to gradually reflect in the second half of the year as the sales window for AI products was relatively short in the first half [6] Financial Data and Profit Forecast - The projected financials for Kingdee International are as follows: - Revenue (in million RMB): 5,679 in 2023, 6,256 in 2024, 7,078 in 2025E, 8,121 in 2026E, and 9,517 in 2027E, with year-on-year growth rates of 16.7%, 10.2%, 13.1%, 14.7%, and 17.2% respectively [5] - Net profit (in million RMB): -210 in 2023, -142 in 2024, 47 in 2025E, 288 in 2026E, and 527 in 2027E, with significant growth expected in the later years [7] - The report adjusts the revenue growth assumptions for the company's key business lines from 40% to 30% for the years 2025-2027, leading to a revised revenue forecast of 7.08 billion RMB for 2025, down from a previous estimate of 7.29 billion RMB [6]