Core Viewpoint - Kingdee International announced the acquisition of a 62.8% stake in Yunzhijia for 68 million yuan, increasing its ownership from 7.5% to 70.3%, allowing for consolidation in financial statements [1] Group 1: Acquisition Details - The acquisition is based on a comparable company EV/S median of 2.9x, with Yunzhijia's estimated EV at 310 million yuan, leading to an equity valuation of 110 million yuan after deducting liabilities [1] - Yunzhijia was incubated from Kingdee's ecosystem and has evolved into a mobile social and collaboration platform since its inception in 2011 [1] - The company previously sold 85% of Yunzhijia's equity in 2016 due to expanding losses and the pressures of cloud transformation, transitioning Yunzhijia to an associate company [1] Group 2: Financial Performance and Strategy - Yunzhijia has shifted its focus towards subscription and AI, achieving a tax profit of 4.66 million yuan in the first four months of 2025 [2] - The platform is built on a cloud-native architecture and has seen improved financial conditions as subscription revenue increases [2] - Kingdee plans to position Yunzhijia as a unified entry point for AI and collaboration, enhancing mobile office capabilities and optimizing user experience in cloud ERP [2] Group 3: Revenue Projections - Revenue projections for Kingdee from 2025 to 2027 are estimated at 7.01 billion yuan, 7.90 billion yuan, and 8.95 billion yuan, with corresponding price-to-sales ratios of 7.5x, 6.6x, and 5.9x [3]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The report highlights that Kingdee International is acquiring a 62.8% stake in Yunzhijia for 68 million yuan, which will increase its ownership from 7.5% to 70.3% and allow for consolidation in financial statements [7] - Yunzhijia has transitioned to profitability, with a net profit of 4.66 million yuan in the first four months of 2025, aligning with Kingdee's subscription and AI-focused strategy [7] - The acquisition is expected to enhance Kingdee's mobile office capabilities and create a unified entry point for AI and collaboration tools, improving user experience in cloud ERP [7] - The financial impact of the acquisition is anticipated to be limited in the short term, with projected revenues for 2025-2027 at 7.01 billion, 7.90 billion, and 8.95 billion yuan respectively [7] Financial Performance Summary - Revenue for 2023 is projected at 5.68 billion yuan, with a growth rate of 16.71%, and expected to reach 7.01 billion yuan in 2025, reflecting a growth rate of 12.03% [6][8] - The company is expected to achieve a net profit of 151 million yuan in 2025, with a significant increase in net profit growth rate of 270.97% in 2026 [6][8] - Earnings per share (EPS) is projected to turn positive in 2025 at 0.04 yuan, increasing to 0.31 yuan by 2027 [6][8] - The price-to-earnings (P/E) ratio is expected to decrease from 346.26 in 2025 to 48.25 by 2027, indicating improving valuation metrics [6][8]