Core Viewpoint - Kingdee International (0268.HK) reported a continued loss in the first half of 2025, with a loss of 97.738 million yuan, accumulating over 1.4 billion yuan in losses over the past five and a half years [1][2]. Financial Performance - In the first half of 2025, Kingdee International achieved revenue of 3.192 billion yuan, a year-on-year increase of 11.2%, while the loss attributable to equity holders narrowed by 55.1% compared to the previous year [2][3]. - Cumulative losses over five and a half years reached 1.477 billion yuan [2]. Cost Structure - Research and development expenses were controlled at 777 million yuan, down 3.8% year-on-year, while sales expenses rose to 1.264 billion yuan, an increase of 3.18%, marking a historical high for the period [3]. - Administrative expenses increased by 39% to 346 million yuan due to personnel restructuring and severance payments [3]. Strategic Focus - The company has accelerated its AI transformation, launching several AI-native products in the first half of 2025, including the Cloud AI Agent platform 2.0 and various intelligent assistants [3]. - AI contract amounts exceeded 150 million yuan, with expectations that AI revenue could account for 30% of total revenue by 2030 [3]. Business Segments - The cloud service business remains the largest revenue source, contributing over 80% of total revenue, with a revenue of 2.673 billion yuan in the first half of 2025, growing approximately 11.9% year-on-year [5]. - However, the growth rate of cloud service revenue has been declining, with previous growth rates of 35.5%, 21.5%, and 17.2% from 2022 to 2024 [5]. Market Performance - In the large enterprise market, Kingdee's cloud services performed well, generating approximately 845 million yuan, a year-on-year increase of 34.3% [6]. - The mid-sized market showed weaker performance, with customer growth stagnating and a decline in new contracts signed [6]. - The small enterprise segment also faced challenges, with renewal rates below industry standards despite customer growth [6]. International Expansion - Kingdee is actively expanding its overseas business, particularly in Southeast Asia and the Middle East, but revenue from international operations remains low at 41.61 million yuan, accounting for only 1.32% of total revenue [7]. - The company has faced challenges in penetrating the high-end enterprise market dominated by international giants like SAP and Oracle [7]. Shareholder Sentiment - Recent shareholder reductions indicate a lack of confidence in the company's ability to turn around its financial performance, with stock prices significantly down from historical highs [8].

Financial Performance - The company reported a revenue of RMB 3.192 billion for the six months ending June 30, 2025, representing a year-on-year increase of 11.24% [1] - Gross profit reached RMB 2.095 billion, up 15.43% year-on-year [1] - The loss attributable to equity holders narrowed to RMB 97.738 million, a decrease of 55.14% compared to the previous year [1] - Basic loss per share was 2.78 cents [1] Cloud Subscription Business - The cloud subscription revenue grew from approximately RMB 1.38 billion in the same period of 2024 to approximately RMB 1.684 billion, marking a year-on-year increase of about 22.1% and accounting for approximately 52.8% of total revenue [1] - Annual Recurring Revenue (ARR) from cloud subscriptions was approximately RMB 3.73 billion, an increase of 18.5% year-on-year [1] - The contract liabilities for cloud subscription business amounted to approximately RMB 3.378 billion, reflecting a year-on-year growth of about 24.7% [1] AI Integration and Innovations - The company has integrated AI technology deeply into all its SaaS products, services, and operational processes, with AI contract amounts exceeding RMB 150 million during the reporting period [2] - New AI platforms and tools were launched, including the Cangqiong AI Agent 2.0 and various AI-native agents, which have signed contracts with key clients such as Hisense Group and China Minmetals [2] - The collaboration with Hebei Steel Group aims to establish an "AI + Management Innovation Center" to enhance intelligent management capabilities [2] Support for Small and Micro Enterprises - The company has achieved full-process intelligent support for financial and tax scenarios for small and micro enterprises, with active users of AI assistants reaching 170,000 [3] - The AI + Tax application has helped thousands of small and micro enterprises improve bookkeeping efficiency by approximately 80%, invoicing efficiency by about 40%, and tax filing efficiency by around 60% [3] Global Expansion Strategy - The company is actively pursuing a global strategy, expanding into Southeast Asia and the Middle East [3] - During the reporting period, the company signed contracts with 259 Chinese enterprises going abroad and local overseas companies, covering various industries such as modern services and high-tech electronics [3] - The company provided digital infrastructure for local enterprises in Singapore, facilitating comprehensive collaboration and intelligent monitoring in the bulk trade industry [3]