YONYOU NETWORK TECHNOLOGY CO., LTD. 用友網絡科技股份有限公司 (the "Company") (A joint stock company incorporated in the People's Republic of China with limited liability) WARNING The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the conte ...

香港聯合交易所有限公司與證券及期貨事務監察委員會對本申請版本的內容概不負責，對其準確性或完整 性亦不發表任何意見，並明確表示概不就因本申請版本全部或任何部分內容而產生或因倚賴該等內容而引 致的任何損失承擔任何責任。 YONYOU NETWORK TECHNOLOGY CO., LTD. 用友網絡科技股份有限公司 （「本公司」） （於中華人民共和國註冊成立的股份有限公司） 的申請版本 警告 本申請版本乃根據香港聯合交易所有限公司（「聯交所」）及證券及期貨事務監察委員會（「證監 會」）的要求而刊發，僅用作提供資訊予香港公眾人士。 本申請版本為草擬本，其內所載資訊並不完整，亦可能會作出重大變動。 閣下閱覽本文件， 即代表 閣下知悉、接納並向本公司、本公司的聯席保薦人、整體協調人、聯席全球協調人、 顧問或包銷團成員表示同意： 倘於適當時候向香港公眾人士提出要約或邀請，準投資者務請僅依據與香港公司註冊處處長註 冊的本公司招股章程作出投資決定；招股章程的文本將於發售期內供公眾查閱。 (a) 本文件僅為向香港公眾人士提供有關本公司的資料，概無任何其他目的；投資者不應根 據本文件中的資料作出任何投資決定； (b) 在聯交所網 ...

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for the stock price in the next six months [4]. Core Insights - The company is focused on deepening its enterprise software offerings, with an emphasis on AI, big data, and cloud computing technologies. It has launched the "Yonyou BIP Enterprise AI" platform, which integrates AI, data, and processes [2][3]. - The transition from traditional software licensing to a cloud subscription model is accelerating, with cloud service revenue reaching 276.34 million yuan in the first half of 2025, accounting for 77.2% of total revenue, a year-on-year increase of 2.4 percentage points [3]. - The company's global expansion strategy is yielding positive results, with overseas revenue growing by 24.9% year-on-year and contract value increasing by 42.5% [3]. - High customer retention rates are evident, with a renewal rate of 95.4% for large enterprises and 94.0% for medium-sized enterprises, indicating strong service capabilities and customer satisfaction [3]. Financial Projections - Revenue is projected to reach 9.91 billion yuan in 2025, with a net profit of -478 million yuan, improving to a profit of 630 million yuan by 2027 [4]. - The annual recurring revenue (ARR) is expected to grow to 2.65 billion yuan by 2025, reflecting a year-on-year increase of 13.7% [3]. - The company anticipates a gradual recovery in performance, supported by increasing orders and high renewal rates [3].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has issued supplementary material requirements for 11 companies, including Yonyou Network, which is preparing for its IPO on the Hong Kong Stock Exchange [1][2]. Group 1: Regulatory Requirements - Yonyou Network is required to clarify the expected fundraising amount after fully exercising the over-allotment option and provide legal opinions from lawyers regarding the control of shares by major shareholders [1][3]. - The CSRC has requested Yonyou Network to explain the pledge situation of shares held by its controlling shareholders and whether it could lead to changes in company control, potentially violating regulations [1][2]. - The company must ensure compliance with foreign investment policies and provide details on its subsidiaries' business operations, including any necessary licenses [2][3]. Group 2: Business Operations - Yonyou Network is a leading global provider of enterprise software and intelligent services, focusing on AI, big data, and cloud computing technologies [3]. - The company aims to lead industry innovation by developing AI-driven solutions tailored for enterprise applications [3]. - Yonyou BIP serves as the core platform for the company's cloud services, addressing traditional enterprise software challenges and supporting digital transformation [3].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has issued supplementary material requirements for 11 companies, including Yonyou Network, which is preparing for its IPO on the Hong Kong Stock Exchange [1] Group 1: Regulatory Requirements - Yonyou Network is required to provide additional information regarding the expected fundraising amount after fully exercising the over-allotment option [1][3] - The CSRC has requested Yonyou Network to clarify the pledge situation of shares held by its controlling shareholder and actual controller, assessing whether it could lead to a change in control [1][2] - The company must ensure compliance with the foreign investment access policies and provide evidence of this compliance before and after the IPO [2] Group 2: Business Operations - Yonyou Network is a leading global provider of enterprise software and intelligent services, focusing on AI, big data, and cloud computing technologies [3] - The company aims to develop AI-driven solutions tailored for enterprises, positioning itself as a market leader in the Chinese enterprise software and services sector [3] - Yonyou BIP serves as the core platform for the company's cloud services, addressing traditional enterprise software challenges and supporting digital transformation [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Insights - The company is experiencing a performance turning point driven by AI applications and overseas expansion [1] - The company's revenue for Q2 reached 2.203 billion yuan, a year-on-year increase of 7.15%, with a gross profit margin of 54.13% [2] - The cloud service business generated revenue of 2.763 billion yuan, accounting for 77.2% of total revenue, with a year-on-year growth of 8.2% in Q2 [3] - The company signed contracts worth 3.2 billion yuan related to AI projects in H1 2025, indicating strong demand for AI solutions [9] - Overseas business revenue increased by 24.9%, with a significant growth in contract signing amount by 42.5% [10] - The company forecasts revenue growth of 7.96%, 11.18%, and 13.96% for 2025, 2026, and 2027 respectively [11] Summary by Sections Financial Performance - In H1 2025, the company reported total revenue of 3.581 billion yuan, a decrease of 5.89% year-on-year, with a net profit attributable to shareholders of -0.945 billion yuan [8] - The operating cash flow improved significantly, reaching -0.928 billion yuan compared to -1.521 billion yuan in the same period last year [8] Revenue Breakdown - The core product BIP3 generated 1.33 billion yuan in revenue in H1, a year-on-year increase of 7.7%, contributing to an overall revenue increase [2] - The subscription-related revenue grew by 16.9%, indicating a shift towards a subscription business model [3] Client Segmentation - Revenue from large enterprise clients in Q2 was 2.318 billion yuan, showing a recovery with a 16.2% year-on-year increase [4] - The company has signed contracts with 46 central enterprises and serves 382 of the top 500 companies in China, with a renewal rate of 95.4% for its core product [4] Future Outlook - The company aims to enhance its global strategy, focusing on the Asia-Pacific region while expanding into the Americas, Europe, and the Middle East [10] - The projected revenue for 2025 is 9.881 billion yuan, with a corresponding P/S ratio of 5.69 [11]

Core Viewpoint - Yonyou Network Technology Co., Ltd. reported a revenue decline of 5.9% year-on-year for the first half of 2025, with a total revenue of 3.581 billion yuan compared to 3.8 billion yuan in the same period last year [1][2]. Financial Performance - Revenue for the first half of 2025 was 3.581 billion yuan, down from 3.805 billion yuan in the previous year, marking a decrease of 5.9% [2]. - The net loss attributable to shareholders was 944.52 million yuan, compared to a net loss of 793.94 million yuan in the same period last year [2]. - The net cash flow from operating activities was -928.18 million yuan, an improvement from -1.521 billion yuan in the previous year [2]. - Total assets decreased by 9.2% to 21.93 billion yuan, while net assets attributable to shareholders fell by 8.5% to 7.55 billion yuan [2]. Business Segments - The company's cloud service revenue reached 2.763 billion yuan, accounting for 77.2% of total revenue, an increase of 2.4 percentage points year-on-year [4]. - The core product, Yonyou BIP, generated 1.33 billion yuan in revenue, up 7.7% year-on-year, and its proportion of total revenue increased by 4.7 percentage points [3][4]. - The company signed AI project contracts with notable enterprises, contributing to a revenue of 2.319 billion yuan from large enterprise clients, despite a 2.9% year-on-year decline [5]. Strategic Developments - The company is focusing on optimizing its workforce and enhancing AI applications, resulting in a reduction of 2,178 employees to a total of 19,105 [3]. - Yonyou Network is transitioning to a subscription-based business model, with subscription-related contract liabilities increasing by 23.6% to 2.41 billion yuan [4]. - The company has successfully launched AI projects with various clients, indicating a strong push towards digital transformation in finance, human resources, and supply chain management [5]. Management Changes - Frequent changes in management have been noted, with founder Wang Wenjing reassuming the role of president after a series of short tenures by other executives [7][9][11]. Shareholding Structure - As of June 30, 2025, major shareholders include Beijing Yonyou Technology Co., Ltd. with 26.96% and Shanghai Yonyou Technology Consulting Co., Ltd. with 11.47% [12][15]. - The company’s stock price was reported at 17.13 yuan, with a market capitalization of 58.533 billion yuan [17].

Core Insights - The article highlights the transformation of Zhongneng Storage and Transportation (Shandong) Group Co., Ltd. through the implementation of the YonSuite digital solution, which has enabled real-time settlement and improved operational efficiency in the bulk commodity trading sector [1][4][10] Group 1: Industry Challenges - The bulk commodity trading industry faces unique challenges such as non-standard business characteristics, complex payment terms, and the need for strong cost control and fund management capabilities [2][3] - Zhongneng Storage previously struggled with manual accounting, delayed financial data, and complex settlement processes, leading to significant operational inefficiencies [2][5] - The integration of multiple subsidiaries into a group structure created additional challenges in data management and operational efficiency [2][9] Group 2: Digital Transformation - The introduction of YonSuite has allowed Zhongneng Storage to achieve real-time integration of business and financial data, reducing the financial closing cycle from one month to three days [5][10] - The system has improved risk management by enabling precise tracking of financial transactions back to their corresponding contracts and documents [5][10] - The implementation of a comprehensive expense control system has transformed previously uncontrolled costs into manageable assets, enhancing budget management and financial transparency [6][8] Group 3: Human Resource Management - The YonSuite human resource module has streamlined payroll processing, reducing the number of personnel required for payroll from three to one and increasing efficiency by 70% [9] - The system has shifted human resource management from administrative tasks to strategic support, allowing for better workforce planning and cost analysis [9][10] Group 4: Standardization and Group Management - YonSuite's multi-organization management capabilities have standardized financial reporting and data management across subsidiaries, significantly reducing the time required for consolidated reporting [9][10] - This standardization has allowed subsidiaries to maintain operational flexibility while benefiting from centralized financial oversight and risk management [9][10] Group 5: Industry Impact and Future Outlook - Zhongneng Storage's digital transformation serves as a benchmark for the bulk commodity trading industry, demonstrating the necessity of digitalization for survival in a low-margin, high-risk environment [10][12] - The company plans to further integrate AI technologies into its operations, aiming to create a "digital twin" supply chain that enhances real-time data visibility across all stages of the trading process [11][12]

Investment Rating - The report maintains a Neutral rating for Yonyou with a 12-month target price of Rmb13.37, indicating a potential upside of 2.1% from the current price of Rmb13.09 [9][8]. Core Insights - Yonyou management anticipates a sequential recovery in client spending, particularly from mid to large-scale clients, following a challenging first quarter where revenues declined by 21% year-over-year [1][2]. - The company is focusing on AI-driven solutions to enhance internal efficiency and client decision-making, with new AI agents under development to improve productivity [1][3]. - The shift to a subscription model is expected to lower clients' total costs, which may support revenue recovery in the upcoming quarters [2][1]. Summary by Sections 1. Enterprise Clients' IT Spending Outlook - Despite ongoing macroeconomic challenges, there remains a demand for enterprise cloud platforms and new AI features among clients, who are seeking solutions with a better price-to-performance ratio [2]. - Yonyou's revenues in the first quarter of 2025 were down 21% year-over-year, but management expects improvement in the second quarter, supported by order recovery and a 25% year-over-year increase in contract liabilities to Rmb2.3 billion [2][1]. 2. Gen-AI and AI Agent Monetization - Yonyou has initiated AI monetization, charging clients Rmb100,000 or more per year for modular services, and is offering customized solutions based on in-house data for large-scale clients [3]. - The introduction of AI Copilot and AI Agent tools aims to assist management in decision-making and reduce time spent on repetitive tasks, thereby enhancing overall efficiency [3]. 3. Headcount Outlook and Efficiency Improvement - The total number of employees at Yonyou decreased from approximately 23,000 at the end of 2024 to around 21,000 by the end of the first quarter of 2025, with expectations for headcount to remain stable [4]. - Management is focused on improving revenue per employee and leveraging AI tools for specific tasks, which is anticipated to enhance profitability in the long term [4][7].

Core Viewpoint - Yonyou Network, the largest enterprise software and service provider in China by 2024 revenue, has submitted a listing application to the Hong Kong Stock Exchange, while facing significant competition and declining financial performance [2][3][10]. Company Background - Yonyou Network was established in 1988 and launched its first ERP product in 1998, listing on the Shanghai Stock Exchange in 2001. The company has expanded internationally since 2003, with 12 overseas branches and over 1,300 clients across more than 40 countries [3][4]. - The company offers a comprehensive range of enterprise software and intelligent services, including cloud services and software products, to support digital transformation for various business sizes [3][4]. Financial Performance - Yonyou Network's market capitalization is approximately 438 billion RMB, with a year-to-date increase of 19.57%. In contrast, its competitor Kingdee International has a market cap of about 477 billion RMB and a year-to-date increase of 72.57% [2]. - In 2024, Yonyou's revenue decreased by 6.62% to 8.817 billion RMB, while Kingdee's revenue increased by 10.15% to 6.256 billion RMB [11]. - Yonyou's gross margin fell from 55.03% in 2022 to 46.01% in 2024, while Kingdee's gross margin improved to 65.07% [10][11]. Competitive Landscape - Yonyou faces intense competition from international giants like SAP and Oracle in the high-end ERP market, as well as from major tech companies like Alibaba, Tencent, and ByteDance, which leverage their technological advantages and ecosystems [6][7]. - Kingdee International, while primarily targeting small and medium-sized enterprises, has made inroads into the large enterprise market, posing a direct challenge to Yonyou [8][10]. Future Plans - Yonyou plans to raise funds through its Hong Kong listing to attract top clients, enhance product maturity, invest in R&D, and cover operational costs [13][14]. - The company aims to leverage market opportunities, innovate with AI-driven products, and strengthen its ecosystem collaboration to improve its financial performance [13][14].