External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Kingdee International Software / Equity Bottom-Up

<ul><li>Kingdee reported 2023 financial results: revenue was RMB5.7bn, up 17% YoY (2022: 17% YoY), and net loss attributable to ordinary shareholders was RMB210mn (2022: loss of RMB389mn), both in line with our estimate and Bloomberg consensus.</li><li>Kingdee’s loss reduction effort was on track, with loss margin narrowing from -17.9% in 2022 to -12.1% in 2023, driven by 2.6ppt improvement in gross margin, on an increase in subscription revenue, cloud infrastructure cost optimization, as well as operating efficiency improvement.</li><li>We remain positive that Kingdee is well-positioned to benefit from the domestic substitution trend, backed by strong and continuously enhanced product capability and partner ecosystem. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee reported 2023 financial results: revenue was RMB5.7bn, up 17% YoY (2022: 17% YoY), and net loss attributable to ordinary shareholders was RMB210mn (2022: loss of RMB389mn), both in line with our estimate and Bloomberg consensus.Kingdee’s loss reduction effort was on track, with loss margin narrowing from -17.9% in 2022 to -12.1% in 2023, driven by 2.6ppt improvement in gross margin, on an increase in subscription revenue, cloud infrastructure cost optimization, as well as operating efficiency improvement.We remain positive that Kingdee is well-positioned to benefit from the domestic substitution trend, backed by strong and continuously enhanced product capability and partner ecosystem. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee (268 HK) - Steady Rev Growth with On-Track Loss Reduction

<ul><li>Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8% narrower than consensus estimate of RMB307mn loss, indicating an on-track loss reduction.</li><li>Core SaaS product Galaxy’s ARR growth momentum remained healthy with 28.6% YoY growth in subscription ARR.</li><li>Meanwhile, domestic substitution trend continues to drive solid large enterprise revenue growth (+38.4% YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8% narrower than consensus estimate of RMB307mn loss, indicating an on-track loss reduction.Core SaaS product Galaxy’s ARR growth momentum remained healthy with 28.6% YoY growth in subscription ARR.Meanwhile, domestic substitution trend continues to drive solid large enterprise revenue growth (+38.4% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee (268 HK) – Loss reduction on track

Thematic (Sector/Industry)

<ul><li>Media reported that Huawei may launch self-developed ERP (MetaERP) in Apr.</li><li>This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers are more largeenterprises/ SOEs focused.</li><li>Also, Huawei has to consider the potential implications to its Cloud business as Kingdee/ Yonyou/ Inspur may scale down their cloud resources usage with Huawei Cloud given direct competition in ERP.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Media reported that Huawei may launch self-developed ERP (MetaERP) in Apr.This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers are more largeenterprises/ SOEs focused.Also, Huawei has to consider the potential implications to its Cloud business as Kingdee/ Yonyou/ Inspur may scale down their cloud resources usage with Huawei Cloud given direct competition in ERP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Software & IT Services – Implications of Huawei MetaERP

<ul><li>Kingdee reported in-line FY22 results with revenue growth of +17% YoY to RMB4.87bn.</li><li>Core SaaS product Galaxy growth momentum remained strong with +31.2% YoY growth in subscription ARR.</li><li>The mild decline (-1.4 pts YoY) in dollar retention despite COVID-19 impacts suggested a high user stickiness. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee reported in-line FY22 results with revenue growth of +17% YoY to RMB4.87bn.Core SaaS product Galaxy growth momentum remained strong with +31.2% YoY growth in subscription ARR.The mild decline (-1.4 pts YoY) in dollar retention despite COVID-19 impacts suggested a high user stickiness. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee (268 HK) – SaaS and Xinchuang both in good shape

<ul><li>We expect Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).</li><li>Looking into FY23E, ARR growth recovery, core SaaS product Galaxy profitability improvement and Xinchuang initiative will remain as the key growth drivers.</li><li>Our recent channel check suggested an accelerating software local substitution trend. Kingdee’s total bidding won was up +82%/ +141% YoY in FY22/ FY23 YTD, based on dollar amount. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).Looking into FY23E, ARR growth recovery, core SaaS product Galaxy profitability improvement and Xinchuang initiative will remain as the key growth drivers.Our recent channel check suggested an accelerating software local substitution trend. Kingdee’s total bidding won was up +82%/ +141% YoY in FY22/ FY23 YTD, based on dollar amount. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kingdee (268 HK) – Bidding data implied accelerated software substitution

China

Kingdee International Software Group Company Limited, through its subsidiaries, develops and sells enterprise management software, e-commerce application software and middleware software.  The Company also provides internet-based services and setting up e-commerce platforms for enterprises. In addition, Kingdee provides solution consulting and technical support services.

Kingdee International Software (268 HK)

Kingdee (268 HK) - Steady Rev Growth with On-Track Loss Reduction

We roll forward our valuation to 2024E, and our new target price of HK$15.5 (prior HK$15.1) is based on 6.4x FY24E EV/sales, in-line with the one...

CMB International

Kingdee (268 HK) – Loss reduction on track

Kingdee reported its 1H23 results: revenue was up 16.8% YoY to RMB2.6bn, 1.2% shy of Bloomberg consensus, while the net loss of RMB284mn was 8%...

CMB International

China Software & IT Services – Implications of Huawei MetaERP

This is negative to the China ERP market as competition heats up but the impacts to Yonyou and Inspur will be larger than Kingdee as the formers...

CMB International

Kingdee (268 HK) – SaaS and Xinchuang both in good shape

Kingdee reported in-line FY22 results with revenue growth of +17% YoY to RMB4.87bn. Core SaaS product Galaxy growth momentum remained strong with...

CMB International

Kingdee (268 HK) – Bidding data implied accelerated software substitution

We expect Kingdee to deliver FY22E revenue of RMB4.8bn (+15% YoY) with net loss widened to RMB395mn (vs. –RMB302mn in FY21).

CMB International