Company Overview - Kingdee International, founded in 1993 in Shenzhen, is a leading global provider of enterprise management cloud SaaS services, leveraging technologies such as cloud computing, big data, and AI to create digital solutions covering the entire lifecycle of enterprises, serving over 7.4 million businesses and government organizations globally across more than 20 industries [1][23] - The company ranks first in the Chinese market for SaaS EA, SaaS ERM, financial cloud, EPM, and PLM, and is the only enterprise management vendor in the top 10 of the generative AI model market in China, maintaining a leading market share in the growth enterprise application software sector for 20 consecutive years [1][23] Company Development Stages - The company's development has gone through four stages: 1. Financial software period (1993-2001): Established with the launch of Kingdee financial software in 1995 and the first internet-based ERP system in 1999 [2][24] 2. ERP period (2001-2011): Introduced BPM-based strategic management solutions and launched the EAS software for large enterprises [2][24] 3. Cloud service transformation period (2011-2023): Released Kingdee K/3 Cloud in 2012, marking a shift from traditional ERP models [2][24] 4. AI era (2023-present): Launched Cangqiong GPT in 2023 and plans to fully transform into an enterprise management AI company by 2025 [2][24] Shareholding Structure - The founder, Xu Shaochun, holds a total of 19.81% of the shares, making him the largest shareholder. The management team has extensive industry experience, with most members having over five years of tenure in the company [4][26] Main Business - Kingdee's main business includes enterprise-level cloud services and digital management solutions, forming a diverse product matrix that includes a cloud-native PaaS platform and layered SaaS management clouds [5][27] - The company’s flagship products include the Kingdee Cloud Cangqiong AI platform and SaaS management clouds such as Xinghan, Xingkong, and Xingchen, catering to different enterprise needs [5][27] Financial Performance - The company has seen significant growth in cloud service revenue, which accounted for 83.74% of total revenue in the first half of 2025, with cloud service revenue reaching 2.673 billion yuan, a year-on-year increase of 11.9% [6][28] - Total revenue for the first half of 2025 was 3.192 billion yuan, a year-on-year increase of 11.24%, with a net profit of -98 million yuan, reflecting a 55.14% year-on-year improvement [7][29] Profitability and Cost Management - The company’s gross margin and net margin have shown recovery, with a gross margin of 65.63% and a net margin of -3.42% in the first half of 2025, indicating improvements in profitability [10][31] - The company has also seen a decrease in expense ratios, with sales, management, and R&D expense ratios at 39.59%, 10.84%, and 24.4% respectively [11][31] Cloud Transformation Impact - The shift to a SaaS subscription model has enhanced customer retention and revenue stability, with renewal rates for large, growing, and small enterprises reaching 108%, 95%, and 93% respectively [17][18] - The company’s annual recurring revenue (ARR) reached 3.73 billion yuan in the first half of 2025, a year-on-year increase of 18.5%, contributing to 54.83% of total revenue [17][18] Market Trends and Future Outlook - The transition from traditional ERP to cloud-native EBC (Enterprise Business Capability) is essential for AI deployment, with predictions indicating that AI will add approximately $13 trillion to the global economy by 2030 [15][36] - The adoption of cloud-native technologies is rapidly increasing, with a projected 89% global adoption rate by 2024, indicating a significant shift in enterprise software architecture [14][35]

Core Insights - The company reported a revenue of approximately RMB 3.192 billion for the six months ending June 30, 2025, representing a year-on-year growth of about 11.2% [1] - Cloud service revenue reached approximately RMB 2.673 billion, with a year-on-year increase of about 11.9%, while cloud subscription revenue grew by approximately 22.1% to RMB 1.684 billion [1] - The gross profit margin improved by 2.4 percentage points to approximately 65.6%, and the loss attributable to equity holders narrowed by about 55.1% to RMB 0.98 billion [1] Financial Performance - Annual Recurring Revenue (ARR) from cloud subscription services was approximately RMB 3.73 billion, reflecting a year-on-year growth of about 18.5% [1] - Contract liabilities related to cloud subscription services increased by approximately 24.7% year-on-year [1] Market Position and Recognition - The company is recognized as a leading global enterprise management cloud SaaS provider, ranking first in multiple segments of the Chinese market according to IDC [2] - It has maintained the top market share in the Chinese growth enterprise application software market for 21 consecutive years [2] - The company is the first and only Chinese vendor included in Gartner's "Discrete Manufacturing PLM Software Market Guide" [2] Business Growth and Client Acquisition - The company signed 304 new clients during the reporting period, including major enterprises such as Geely Holding and Moutai [3] - Revenue from the cloud products "Cang Qiong" and "Xing Han" reached approximately RMB 845 million, with a year-on-year growth of about 34.3% [3] - The net dollar retention rate (NDR) for these products was 108% [3] AI Integration and Innovation - The company has integrated AI technology into all its SaaS products and services, with total AI contract signing amounts exceeding RMB 150 million during the reporting period [5] - New AI products launched include the Cang Qiong AI Agent platform 2.0 and various AI-native assistants, enhancing operational efficiency for clients [5] - The active user count for AI assistants in small and micro enterprises reached 170,000, significantly improving accounting and invoicing efficiencies [5] Global Expansion Strategy - The company is actively pursuing a global strategy, expanding into Southeast Asia and the Middle East, signing contracts with 259 companies [7] - It has established localized applications and language packs in several countries, including Singapore and Vietnam [7] - Partnerships with international banks are being developed to enhance services in cross-border payments and financial technology innovation [7] Future Outlook - The company aims to leverage AI and SaaS to reshape the industry landscape and is committed to its core strategies of "AI First, Subscription First, Globalization" [8] - The CEO expressed confidence in the company's growth potential, targeting to become a leading global enterprise management AI company by 2030 [8]

Group 1 - The core viewpoint of the article highlights the strong market position of Kingdee International in the enterprise resource management (ERP) cloud services sector, being ranked first in China for 19 consecutive years [1] - As of July 31, Kingdee International's stock price increased by 5.26%, reaching HKD 17.62 per share, with a trading volume of HKD 299 million [1] - Kingdee International reported total revenue of HKD 6.256 billion and a net loss of HKD 142 million for the fiscal year ending 2024 [2] Group 2 - Kingdee International is recognized as a leading global enterprise management cloud SaaS company, providing ERP cloud services and AI management platforms [1] - The company serves over 7.4 million enterprises and government organizations worldwide [1] - Kingdee International is set to disclose its interim report for the fiscal year 2025 on August 11 [3]