Summary of the Conference Call Company Overview - The conference call is regarding the Q3 performance of Changjie Tong, a company undergoing a cloud transformation with a focus on subscription-based revenue models [1][2]. Key Points Financial Performance - For the first three quarters of the year, the total revenue reached 670 million, representing a year-on-year growth of 24% [3]. - Subscription business revenue has increased to approximately 70% of total revenue, indicating a significant shift towards a subscription model [2][3]. - Gross profit for the first three quarters was 480 million, up 36% year-on-year, with a gross margin of 71% [4]. - The company reported a reduction in losses by 81% compared to the same period last year, with losses narrowing to less than 30 million [4][5]. - The company expects to achieve a profit of approximately 70-80 million more than last year, excluding non-recurring items [5][6]. Operational Efficiency - Operating expenses (OPEX) as a percentage of revenue have been decreasing, with a notable drop from 98% in Q3 2022 to 79% in 2023 [6]. - The company has reduced its workforce by 40 employees, leading to an increase in revenue per employee, which is now 76,000 per month [8]. - The company aims for an annual revenue per employee to exceed 1 million in 2024 [8]. Market Position and Competition - The main competitors include Kingdee and other traditional tax reporting companies, with a focus on small and micro enterprises [12][13]. - The company emphasizes a SaaS model, contrasting with competitors who may engage in aggressive pricing strategies [13][14]. - The management is confident in maintaining a competitive edge through customer success and subscription retention strategies [13][14]. Industry Trends and Government Policies - Recent government measures aimed at stimulating the economy are expected to positively impact small and medium enterprises, which could benefit the company [15][16]. - The company is involved in government projects that provide subsidies to small businesses, enhancing their market opportunities [16][18]. Future Outlook - The company anticipates a strong Q4, traditionally a peak season, and is optimistic about achieving its annual profit targets [5][6]. - The management has set a long-term goal of maintaining a compound annual growth rate (CAGR) of over 20% for total revenue and over 25% for subscription revenue over the next three years [9][22]. - The company is focusing on integrating AI into its products to enhance user experience and operational efficiency [27][28]. Challenges and Risks - The company acknowledges the competitive pricing strategies of rivals and is preparing to counteract these tactics without compromising its pricing integrity [14][15]. - There are concerns regarding the impact of macroeconomic factors and regulatory changes on future growth [39]. Additional Insights - The company has been actively addressing issues related to software piracy and is taking legal action against offenders [41][42]. - The management is exploring opportunities for a potential return to the A-share market, contingent on favorable market conditions [40]. This summary encapsulates the key points discussed during the conference call, highlighting the company's financial performance, operational strategies, market positioning, and future outlook.
畅捷通（1588.HK）2024年三季度业绩说明会