Kingdee International Announces 2024 Interim Results

(15 August 2024) Kingdee International Software Group Co., Ltd. ("Kingdee International", "Kingdee" or the "Company"; Stock Code: 268.HK) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2024 (the "Reporting Period"). During the Reporting Period, the Group's Cloud Services sustained high-quality growth, with Cloud Services revenue increasing by 17.2% year-on-year (yoy) to approximately RMB2,390 million, contributing 83.2% to the Group's revenue. The Annual Recurring Revenue (ARR) of Kingdee Cloud subscription services reached approximately RMB3.15 billion, an increase of 24.2% yoy. Contract liabilities to Cloud subscription services achieved growth of 28.2% yoy.

During the Reporting Period, the Group recorded total revenue of approximately RMB2,870 million, representing an increase of approximately 11.9% yoy. Gross profit margin continued to improve, increased from 61.9% in the same period last year to 63.2%. Loss attributable to owners of the Group was approximately RMB218 million, and the loss narrowed by 23.2% yoy. Basic loss per share attributable to owners of the Group amounted to approximately RMB6.12 cents.

As a global leader and China's top enterprise management cloud SaaS company, Kingdee has consistently won numerous honors according to IDC's 2023 reports, including awarded the No.1 market share in China for SaaS ERM (Enterprise Resource Management Cloud Services), Financial Cloud Services, and enterprise EPM (Enterprise Performance Management Cloud). The Group has won the No.1 market share in China for low-code/no-code software category for four consecutive periods and has remained the No.1 market share in the application software market for growing enterprises in China for 19 consecutive years, also being the only Chinese vendor in the Asia-Pacific SaaS ERP Small and Medium Market Competitiveness Report.

High-quality development with the large SOE and industry leader customers, continuing to explore AI application innovations

During the Reporting Period, Kingdee grasped the opportunity of the digital transformation and domestic substitution in China's large enterprises, achieving significant progress in the central enterprises, state-owned enterprises and Fortune 500 companies. Notable contract wins and bids include industry leaders such as China National Petroleum Corporation, Air China Group, Dongfeng Motor, Tongwei, Beijing Enterprises Water Group, Longfor Group, China Merchants Shekou, Haihua Group and Lingnan Group. During the Reporting Period, Kingdee Cloud Cosmic and Kingdee Cloud Constellation recorded Cloud Services revenue of approximately RMB546 million, an increase of approximately 38.9% yoy. Total signed contract amount increased by approximately 63% yoy. Cosmic and Constellation recorded subscription ARR of 29% yoy growth, and the Net Dollar Retention ratio (NDR) was 97%.

During the Reporting Period, Kingdee continued to promote the innovation of AI applications. Kingdee Cloud Cosmic was upgraded to a new generation of enterprise-level AI platform, and the super intelligent AI management assistant, Cosmic, was launched. Currently, Cosmic's financial and HR AI applications have been validated in large enterprises such as Hisense Group, Wens Group, China Jinmao, and C&D Properties, demonstrating its practical application potential in enterprise management. Meanwhile, Kingdee continued to deepen cooperation with Baidu, Microsoft, AWS, Tencent, and others in the AI large language model field, jointly exploring intelligent applications for new scenarios. Additionally, ISV partners based on the Kingdee Cloud Cosmic platform have developed over 150 applications, covering 19 industry verticals.

Sustained solid leadership in the medium-size enterprise market, seizing new opportunities from Chinese enterprise going global

During the Reporting Period, Kingdee further strengthened its product advantages in integrated research, production, supply, marketing and services, as well as integration of business and finance. Seizing Chinese enterprises' global expansion opportunities, Kingdee Cloud Galaxy realized revenue of approximately RMB1,054 million, an increase of approximately 14.3% yoy. Kingdee Cloud Galaxy recorded subscription ARR growth of approximately 24% yoy, and Net Dollar Retention (NDR) of 95% with a total customer base reaching over 42,000. Kingdee signed 611 new national and provincial specialized and innovative enterprises, including Yuean Advanced Materials, RIAMB (Beijing) Technology Development, Aqara, Yajie Furnace, GEOVIS, and Wayzim.

During the Reporting Period, Kingdee Cloud Galaxy strengthened its GlobalEase globalization capabilities, effectively supporting Chinese enterprises in their global expansion. Kingdee newly signed 121 enterprises including Minglida Precision, Tangtring Seating, Maxcess and Center Power during the Reporting Period, supporting customer operations in Indonesia, Singapore, Thailand, Vietnam, Philippines and countries and regions in America and Europe. In addition, Kingdee collaborated with AWS and Microsoft to support the compliance operations, data security, and local business strategies of Chinese enterprises going global. Meanwhile, Kingdee Cloud Galaxy introduced intelligent solutions including BOSS intelligent assistant, AI accounting, and intelligent data analysis of supply chain and channel management.

Rapid growth in the financial cloud services of small and micro enterprises, empowering smart business operation with AI technology

During the Reporting Period, Kingdee continued to reinforce the leadership in the Small and Micro Enterprise (SME) market. SME financial cloud services recorded a revenue of approximately RMB588 million, increasing by approximately 17.3% yoy. SME cloud subscription ARR grew by 31% yoy. Among which Kingdee Cloud Stellar's revenue increased by approximately 70.8% yoy and recorded an NDR of 92%.

During the Reporting Period, Kingdee Cloud Stellar strengthened supply chain process management and launched applications such as quality inspection and intelligent product sorting to uplift customer logistics efficiency. Kingdee Jingdou Cloud introduced AI-based inventory management, improving billing efficiency, customer management and product online supply collaboration efficiency, to empower intelligent business for micro-enterprises. Meanwhile, Kingdee helped eco-partners with further transformation of cloud services, which improved the quality of partners operation to have better links and services for customers.

Mr. XU Shaochun, Chairman of the Board and CEO of the Group, stated that Kingdee continued to focus on the core strategy of "Subscription First, AI First.", actively explored AI innovation and Chinese enterprises going global, and continued to improve the quality of products and services, achieving high-quality growth in the first half of 2024. The Group upholds the new mission of "Empowering Enterprises, Achieving Extraordinary" and integrates digital technology and management wisdom to empower every enterprise and individual around the world to achieve the extraordinary, and in turn, to achieve our extraordinary.

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