Core Viewpoint - Kingdee has successfully completed its cloud transformation, with cloud services projected to account for 82% of its business by 2024, achieving a compound annual growth rate of 31% over the past decade. The company is now transitioning into the AI era of enterprise management software, officially rebranding "Kingdee Cloud" to "Kingdee AI" [1]. Group 1: Transformation Strategy - Kingdee's CEO Xu Shaochun outlined a strategy involving seven transformations: 1. Operations shifting from daily tasks to strategic execution, focusing on urgent strategic priorities 2. Products evolving from traditional functionalities to intelligent systems with self-perception and decision-making capabilities 3. Business models transitioning from product sales to subscription or outcome-based pricing 4. Ecosystems moving from transaction-oriented to continuous intelligent symbiosis 5. Organizational structures transforming into neural network types to enhance decision-making efficiency 6. Talent competition shifting from quantity to high-density, focusing on young talents skilled in AI and innovation 7. Leadership evolving from tangible to intangible, emphasizing emotional value and motivation over control [2]. Group 2: AI Product Development - Kingdee has launched several AI products, including the enterprise-level AI native entry "Kingdee Xiao K," which serves as a platform for interconnected intelligent agents. Currently, nearly 20 intelligent agents are available, such as gross profit analysis and ESG agents, which are ready for immediate use [3]. - The company is exploring pricing models for AI applications, currently favoring organization size and usage-based pricing, similar to its cloud services, while also considering prepaid options. The overall cost for businesses is expected to decrease as AI applications become more integrated [3]. Group 3: Financial Performance and Future Outlook - Kingdee reported total revenue of 3.192 billion yuan, an 11% year-on-year increase, with cloud subscription revenue contributing 1.684 billion yuan, up 22%. The net loss narrowed by 55% to approximately 98 million yuan [4]. - The company aims to achieve profitability in 2025, with a target for AI revenue to reach or exceed 30% by 2030, indicating a significant focus on AI and SaaS integration in the coming decade [4].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported Q1 FY26 earnings with revenue of $9.83 billion, a year-over-year increase of 7.6%, and subscription revenue of $9.30 billion, up 8.3% year-over-year [3][4] - The acquisition of Informatica for $8 billion is aimed at strengthening the company's data capabilities, with AgentForce completing 8,000 transactions in Q1, nearly half of which were paid collaborations [4][5] - The company's Remaining Performance Obligations (RPO) reached a record high of $60.9 billion, reflecting a year-over-year growth of 13% [5] - The company has raised its full-year revenue guidance for FY26 to $41-41.3 billion, driven by growth in data cloud and AgentForce [6][7] Financial Performance - For FY26, the company expects non-GAAP net profits of $10.96 billion, with year-over-year growth rates of 10.4%, 14.8%, and 15.6% for FY26, FY27, and FY28 respectively [7][9] - The company’s gross margin is projected to improve from 77.2% in FY25 to 79.5% in FY28 [9] - The company’s operating margin is expected to remain stable, with GAAP operating margin at 21.6% and non-GAAP operating margin at 34% for FY26 [6][9]

Core Viewpoint - Despite macroeconomic uncertainties causing market volatility, investors should focus on high-quality stocks that can deliver substantial long-term returns, as identified by top analysts based on solid fundamentals and growth potential [1] Group 1: Nvidia - Nvidia reported results for Q1 FY2026 that significantly exceeded market expectations, maintaining confidence in AI infrastructure demand despite chip export restrictions [2] - Analyst Harlan Sur from JPMorgan reiterated a "Buy" rating with a target price of $170, noting that while H20 chip export restrictions impacted some sales, overall revenue remained robust [2] - The anticipated 16% quarter-over-quarter growth in data center revenue for the July quarter is driven by increased customer investment in AI and accelerated computing projects [2] - Nvidia's strong demand for the Blackwell platform is expected to lead to supply shortages in upcoming quarters, supported by partnerships with large data centers in regions like the UAE, Saudi Arabia, and Taiwan [2] Group 2: Zscaler - Zscaler's Q3 performance surpassed expectations, driven by increased demand for its zero-trust exchange platform and AI security solutions [4] - Analyst Brian Essex raised the target price from $275 to $292 while maintaining a "Buy" rating, highlighting Zscaler's strong quarterly performance amid macro pressures faced by peers [4] - The company has raised its annual revenue, profit, and billing guidance, with annual recurring revenue (ARR) nearing $1 billion, driven by emerging products like "full-domain zero trust" and "intelligent operations" [4] - Zscaler's customer growth momentum remains strong, with a 23% year-over-year increase in customers with ARR exceeding $1 million [4] Group 3: Salesforce - Salesforce reported Q1 FY2026 revenue and earnings that exceeded expectations and raised its full-year guidance, while announcing an $8 billion acquisition of data management firm Informatica [5] - Analyst Derrick Wood from TD Cowen reiterated a "Buy" rating with a target price of $375, noting strong signals of demand from the expansion of the sales team [5] - The company is experiencing rapid growth in AI applications, with data cloud and AI-related ARR increasing over 120% year-over-year, and 30% of new orders coming from existing customers [5] - Salesforce is reinvesting cost savings from AI into growth areas, with a notable increase in the sales pipeline growing at a double-digit rate [6]

Investment Rating - The report maintains a "Buy" rating for Salesforce, with a target price adjusted to $388.00 from a previous $410.00, based on a 21x FY26E EV/EBITDA multiple [1][14]. Core Insights - Salesforce reported a total revenue of $10 billion for 4QFY25, reflecting a 9% year-over-year growth in constant currency, aligning with Bloomberg consensus expectations. Non-GAAP net income increased by 20% year-over-year to $2.7 billion, exceeding consensus by 6% due to improved operational efficiency [1][2]. - For FY26E, management forecasts total revenue between $40.5 billion and $40.9 billion, indicating a 7-8% year-over-year growth in constant currency, slightly below the consensus estimate of $41.5 billion. This has raised investor concerns as strong momentum in Data Cloud and Agentforce is expected to be offset by weakness in Marketing and Commerce Cloud [1][2][3]. Financial Performance - In 4QFY25, cRPO grew by 9% year-over-year (11% in constant currency), consistent with management's guidance. Revenue growth across segments included Sales/Service/Platform and others at 8%, Marketing and Commerce at 7%, and Integration and Cloud Analytics at 12% [2]. - Data Cloud and AI solutions showed robust performance, with annual recurring revenue (ARR) for Data Cloud and AI reaching $900 million, a 120% year-over-year increase. Agentforce has gained over 3,000 paying customers since its launch in October 2024 [3][4]. Operational Efficiency - Salesforce utilized Agentforce to enhance efficiency, achieving an 84% resolution rate across over 380,000 interactions. Non-GAAP operating margin rose by 1.6 percentage points year-over-year to 33.1% in 4QFY25, with expectations for a further increase to 34.0% in FY26E due to operational improvements [4][5]. Revenue and Profitability Forecast - Revenue projections for FY26E are set at $40.9 billion, with a growth rate of 8.0% year-over-year. Adjusted net income is expected to reach $10.99 billion, reflecting a 10.7% growth rate [5][12]. - The report indicates a decline in the projected revenue and operating income for FY27E and FY28E by 0.2% and 0.5%, respectively, compared to previous estimates [12][13]. Valuation Metrics - The target price of $388.00 reflects a valuation discount relative to the industry average EV/EBITDA of 23x, as Salesforce's growth enters a more mature phase [14][16].

Core Viewpoint - The company is progressing in the right direction by developing its data cloud and artificial intelligence-related businesses [1][3][8] Financial Performance - Salesforce reported a 9% revenue growth and a 13% increase in adjusted operating profit for Q4 FY2025 [1] - The adjusted earnings per share (EPS) grew by 21% [1] - The company has maintained a stable revenue growth rate of around 9% over the past three quarters [1] Revenue Breakdown - The revenue growth rates for different segments in Q4 FY2025 are as follows: - Sales Cloud: 9% - Service Cloud: 9% - Platform and Other: 12% - Marketing and Commerce: 8% - Data: 6% [2] Future Guidance - For FY2026, Salesforce expects total revenue to be between $40.5 billion and $40.9 billion, reflecting a year-over-year growth of 7%-8% [4][5] - Operating cash flow is projected to grow by 10%-11% [4][5] Profitability and Margin Improvement - The management aims to increase the adjusted operating margin to 34% by FY2026, having improved it by 10% over the past two years [3][4] - The company anticipates a 100 basis point increase in profit margins for FY2026 [3] Strategic Focus - Salesforce achieved $900 million in annual recurring revenue from its data cloud and AI, marking a 120% year-over-year growth, although this currently represents only 2.5% of total revenue [3] - The company is prioritizing growth in data cloud and AI, with significant transactions in these areas [3][8] Market Conditions and Challenges - The company faces potential growth challenges due to a weak U.S. economy affecting its clients' sales expansion [8] - The current growth in current remaining performance obligations (cRPO) is primarily driven by strong early renewals, but a high base may pose challenges for FY2026 growth [8] Valuation - Analysts have upgraded Salesforce's rating to "Buy," with a fair value estimate of $320 per share [8]