Share Options and Awards - Total share options granted under the 2005 Scheme: 529,501,600, with 315,801,193 exercised and 197,797,407 lapsed, leaving 15,903,000 outstanding as of 30 June 2021[3] - Share options exercised under the 2005 Scheme during the six months ended 30 June 2021: 2,279,000[3] - Share options lapsed under the 2005 Scheme during the six months ended 30 June 2021: 5,665,000[3] - Total share options granted under the 2015 Scheme: 40,000,000, with 17,677,000 exercised and 8,795,000 lapsed, leaving 13,528,000 outstanding as of 30 June 2021[3] - Share options exercised under the 2015 Scheme during the six months ended 30 June 2021: 1,037,500[3] - Share options lapsed under the 2015 Scheme during the six months ended 30 June 2021: 2,535,000[3] - Remaining share options available for grant under the 2015 Scheme: 228,059,096, representing approximately 6.57% of the total shares issued as of 30 June 2021[3] - Total share options granted to other employees under the 2015 Scheme: 34,647,500, with 2,916,500 exercised and 8,200,000 lapsed, leaving 23,731,000 outstanding as of 30 June 2021[5] - The company granted 6,376,000 award shares under the Share Award Scheme during the six months ended 30 June 2021, with 2,562,500 awarded shares still outstanding as of that date[7] - The company's share award scheme allows for a maximum of 3% of the issued share capital to be awarded under the scheme, with a 1% limit per selected participant in any 12-month period[6] Placing Proceeds Allocation - The gross proceeds from the placing were approximately HK$2,375.1 million, with net proceeds of approximately HK$2,353.0 million after deducting related costs[11] - 50.0% of the placing proceeds (HK$1,176,850,000) were allocated to research and development, with HK$738,045,000 utilized and HK$438,805,000 remaining as of 30 June 2021[12] - 30.0% of the placing proceeds (HK$706,110,000) were allocated to future potential investments, with HK$530,483,000 utilized and HK$175,627,000 remaining as of 30 June 2021[12] - 20.0% of the placing proceeds (HK$470,740,000) were allocated to working capital and general corporate purposes, fully utilized as of 30 June 2021[12] - The net price per Placing Share was approximately HK$17.65, with the placing completed on 28 August 2020[11] Shareholdings and Interests - As of 30 June 2021, Xu Shao Chun held 1,525,000 shares as a beneficiary of a trust and 19,786,263 shares as a beneficial owner[13] - The aggregate interests of directors and the chief executive in shares, underlying shares, or debentures amounted to 2,751,275 shares, representing 0.08% of the total[14] - The weighted average closing price of the company's shares prior to the share option exercise date was HK$29.01[6] - The total number of shares held by directors and executives is 703,509,887, representing 20.27% of the issued shares[17] - Lin Bo holds 1,713,775 shares as a beneficial owner and 1,037,500 shares as a beneficiary of a trust[17] - Gary Clark Biddle holds 1,183,000 shares as a beneficial owner, representing 0.03% of the issued shares[18] - Dong Ming Zhu holds 400,000 shares through share options, representing 0.01% of the issued shares[18] - Liu Chia Yung holds 200,000 shares as a beneficial owner, representing 0.01% of the issued shares[18] - Easy Key Holdings Limited holds 682,198,624 shares, representing 19.66% of the issued shares[23] - Oriental Gold Limited holds 386,312,000 shares as a beneficial owner, representing 11.13% of the issued shares[23] - Billion Ocean Limited holds 295,886,624 shares as a beneficial owner, representing 8.53% of the issued shares[23] - JPMorgan Chase & Co. holds 17,650,592 shares as a controlled corporation and 6,742,371 shares as a short position[23] - The total long positions held by JPMorgan Chase & Co. amount to 305,918,767 shares, representing 8.82% of the issued shares[23] - JD Oriental Investment Limited holds 200,180,000 shares, representing 5.77% of the total issued shares[24] - FMR LLC holds 209,200,485 shares, representing 6.03% of the total issued shares[24] - Schroders Plc holds 173,693,020 shares, representing 5.01% of the total issued shares[24] - JPMorgan Chase & Co. holds 89,042,175 shares directly and 91,515,000 shares through its subsidiaries[27] - JPMorgan Chase & Co. has derivatives interests including 146,000 physically settled listed derivatives and 272,700 cash settled listed derivatives[28] - Max Smart Limited, controlled by Liu Qiangdong, holds 200,180,000 shares indirectly through JD.com, Inc. and JD.com Investment Limited[29] Financial Performance and Metrics - Total revenue for the six months ended 30 June 2021 was RMB1,872,399,000, representing a 35.0% increase compared to the same period in 2020[44] - Loss attributable to owners of the Company was approximately RMB248,108,000, compared to a loss of RMB224,025,000 in the same period in 2020[44] - Basic loss per share attributable to owners of the Company amounted to approximately RMB7.25 cents, compared to RMB6.87 cents in the same period in 2020[44] - Net cash outflow from operating activities was approximately RMB96,513,000, compared to RMB81,581,000 in the same period in 2020[44] - Gross profit increased by 31.9% YoY to RMB 1,174,133,000, with a gross profit margin decrease of 1.5 percentage points to 62.7% due to higher outsourcing costs[60] - Selling and marketing expenses rose by 22.3% YoY to RMB 887,846,000, but decreased as a percentage of revenue from 52.3% to 47.4%[60] - Administrative expenses and net impairment losses increased by 11.6% YoY to RMB 235,255,000, with a decrease in revenue percentage from 15.2% to 12.6%[60] - Research and development expenses surged by 71.4% YoY to RMB 667,911,000, with a R&D capitalization rate drop to 34.2% and capitalized amount decreasing by 6.0% YoY to RMB 228,722,000[60] - Other income and gains-net increased by 45.1% YoY to RMB 219,127,000, mainly due to the rise in fair value of the investment in FXiaoKe[61] - Operating loss widened to RMB 354,584,000, driven by increased R&D investment in cloud products like Kingdee Cloud Cosmic and Kingdee Cloud Constellation[61] - Cloud business operating loss increased by 53.7% YoY to RMB 433,223,000, while ERP business and others recorded an operating profit of RMB 42,724,000[61] - Finance income-net rose to RMB 21,975,000, up from RMB 4,633,000 in the same period of 2020, due to increased finance income[61] - Income tax credit amounted to RMB 38,679,000, up from RMB 9,181,000 in 2020, primarily due to the Group's loss and increased R&D costs[61] - Net loss attributable to owners of the Company was RMB248,108,000, with a net loss margin of 13.3%, and basic loss per share of RMB7.25 cents as of 30 June 2021[62] - Financial assets and derivative instruments at fair value through profit or loss decreased by RMB544,496,000 to RMB1,076,439,000 as of 30 June 2021 compared to 31 December 2020[62] - Investments designated at fair value through profit or loss, including wealth management products, listed equity investments, and unlisted equity investments, totaled RMB1,076,439,000 as of 30 June 2021[66] - The Group disposed of its 5% interest in Shenzhen Fast Learning Education Development Co., Ltd., resulting in a decrease of RMB15,585,000 in the book value of investments in associates[70] - The Group provided a loan of RMB200,000,000 to CITIC Consumer Finance Co., Ltd. at an annual interest rate of 5% for 182 days[72] - Contract liabilities increased to RMB1,690,768,000 as of 30 June 2021, up from RMB1,483,943,000 as of 31 December 2020, primarily due to growth in the Group's cloud service business[74] - Total cash and bank deposits amounted to RMB 3,668,508,000 as of 30 June 2021, a decrease from RMB 4,046,980,000 as of 31 December 2020[76] - Asset management products held by the Group decreased to RMB 173,254,000 as of 30 June 2021, down from RMB 993,656,000 as of 31 December 2020[76] - Net current assets were approximately RMB 2,226,998,000 as of 30 June 2021, compared to RMB 3,584,825,000 as of 31 December 2020[76] - The current ratio of current assets to current liabilities decreased to 1.90 as of 30 June 2021 from 2.38 as of 31 December 2020[76] - Group borrowings decreased by 100% year-over-year to RMB 0 as of 30 June 2021, down from RMB 120,000,000 as of 31 December 2020[76] - The Group's exposure to foreign exchange risk primarily stems from fluctuations in the US dollar/RMB and Hong Kong dollar/RMB exchange rates[78] - The Group does not have a foreign currency hedging policy but monitors foreign exchange exposure and may consider hedging if necessary[78] - Credit risk is managed by transacting with high-credit-quality financial institutions in China and Hong Kong[78] - The Group assesses the credit quality of distributors based on financial position, past experience, and other factors, setting individual risk limits accordingly[78] - The company's trade receivables are diversified with no significant concentration of credit risk, as they are composed of numerous small items spread across a large number of customers[79] - The company's investments in debt instruments, including loans to third parties and related parties, are considered low-risk, with credit ratings monitored for deterioration[79] - The company manages idle cash by purchasing and redeeming wealth management products, which primarily consist of low-risk products issued by financial institutions, to generate higher yields than bank deposits[81] - The company has established a disciplined fund management principle, including annual and monthly funding plans, to efficiently manage market risks and ensure financial security[81] - The company's total number of employees reached 10,589 during the reporting period, with a focus on innovation, quality, and a customer-centric culture[81] - The company implemented organizational strategies such as matrix, platform, systematization, and intelligence, while continuing to attract top-tier talent for cloud transformation[81] - Kingdee signed school-enterprise cooperation agreements with 11 universities, helping to cultivate over 200 graduates for the industry[83] - During the pandemic, Kingdee provided teaching support for over 60 universities, benefiting nearly 10,000 students[83] - Kingdee established a digital classroom, sharing digital management strategies with over 300 senior executives of Chinese enterprises[83] - The company's total assets as of 30 June 2021 were RMB 10,354,271,000, a decrease from RMB 10,722,079,000 at the end of 2020[85] - Non-current assets increased to RMB 5,645,031,000 as of 30 June 2021, up from RMB 4,538,665,000 at the end of 2020[85] - Current assets decreased to RMB 4,709,240,000 as of 30 June 2021, down from RMB 6,183,414,000 at the end of 2020[85] - Total liabilities decreased to RMB 2,681,168,000 as of 30 June 2021, down from RMB 2,763,602,000 at the end of 2020[87] - Net assets decreased to RMB 7,673,103,000 as of 30 June 2021, down from RMB 7,958,477,000 at the end of 2020[87] - Equity attributable to owners of the company decreased to RMB 7,546,472,000 as of 30 June 2021, down from RMB 7,789,631,000 at the end of 2020[87] - Revenue from contracts with customers increased to RMB 1,872,399 thousand in H1 2021, up 34.9% from RMB 1,387,445 thousand in H1 2020[89] - Gross profit rose to RMB 1,174,133 thousand in H1 2021, a 31.8% increase from RMB 890,494 thousand in H1 2020[89] - Operating loss widened to RMB 354,584 thousand in H1 2021, compared to RMB 253,562 thousand in H1 2020[89] - Loss for the period increased to RMB 286,457 thousand in H1 2021, up 18.5% from RMB 241,700 thousand in H1 2020[89] - Loss per share attributable to owners of the Company increased to RMB 7.25 cents in H1 2021, compared to RMB 6.87 cents in H1 2020[89] - Total comprehensive loss for the period was RMB 285,451 thousand in H1 2021, compared to RMB 238,845 thousand in H1 2020[91] - Research and development costs surged to RMB 624,743 thousand in H1 2021, a 74.3% increase from RMB 358,396 thousand in H1 2020[89] - Total equity decreased to RMB 7,673,103 thousand as of 30 June 2021, down from RMB 7,958,477 thousand at the start of the year[93] - Share premium decreased to RMB 5,027,044 thousand as of 30 June 2021, compared to RMB 5,052,514 thousand at the start of the year[93] - Non-controlling interests decreased to RMB 126,631 thousand as of 30 June 2021, down from RMB 168,846 thousand at the start of the year[93] - Net loss for the period was RMB 241.7 million, with a comprehensive loss of RMB 258.845 million[95] - Total equity decreased to RMB 5.9 billion as of 30 June 2020, down from RMB 6.145 billion at the beginning of the year[95] - Net cash outflow from operating activities was RMB 96.513 million for the six months ended 30 June 2021[97] - Net cash outflow from investing activities was RMB 1.195 billion for the six months ended 30 June 2021[97] - Net cash outflow from financing activities was RMB 126.434 million for the six months ended 30 June 2021[99] - Cash and cash equivalents decreased by RMB 1.417 billion to RMB 1.321 billion at the end of June 2021[99] - Purchases of intangible assets amounted to RMB 232.556 million for the six months ended 30 June 2021[97] - Payment for acquisition of a subsidiary was RMB 80.311 million for the six months ended 30 June 2021[97] - Dividends paid in 2020 amounted to RMB 36.756 million[95] - Interest paid was RMB 1.849 million for the six months ended 30 June 2021[97] - The company reclassified outsourcing service fees of RMB 134,154,000 from "selling and marketing expenses" to "cost of sales" for the six months ended 30 June 2020 to align with current reporting practices[103][104] - The reclassification resulted in an increase in cost of sales by RMB 134,154,000 and a corresponding decrease in gross profit and selling and marketing expenses by the same amount for the six months ended 30 June 2020[105] - The company operates in three main segments: Cloud services business, ERP business and others, and Investment properties operating business, with all businesses primarily conducted in the PRC[110] - The Cloud services business includes enterprise cloud services, Small & Micro business finance cloud services, and industry cloud services[110] - The ERP business and others segment includes sales of software and hardware products, provision of software implementation services, software solution consulting, maintenance, upgrade, and other supporting services[110] - The Investment properties operating business involves the operation of investment properties[110] - The company's primary listing is on the Stock Exchange of Hong Kong Limited since 15 February 2001[1] - The unaudited condensed consolidated interim financial statements are presented in thousands of Renminbi (RMB'000) and were approved for issue by the Board of Directors on 18 August 2021[1] - The company's interim financial information is prepared in accordance with IAS 34, 'Interim financial reporting', and should be read in conjunction with the annual financial statements for the year ended 31 December 2020[2] - The company's accounting policies for the interim period are consistent with those applied in the annual financial statements for the year ended 31 December 2020[107] - Total revenue from external customers for the Group was RMB 1,872,399,000, with RMB 1,238,258,

Share Options and Awards - As of June 30, 2020, a total of 529,501,600 share options were granted under the 2005 Scheme, with 312,464,693 options exercised and 189,677,407 options lapsed[4]. - During the six months ended June 30, 2020, 6,930,500 share options were exercised and 10,844,100 options lapsed, leaving 27,359,500 options outstanding[4]. - Under the 2015 Scheme, 40,000,000 share options were granted, with 15,374,500 options exercised and 5,180,000 lapsed as of June 30, 2020[4]. - The remaining life of the 2015 Scheme is approximately 4 years and 8 months as of the report date[4]. - The company may further grant 219,264,096 share options under the 2015 Scheme, representing approximately 6.58% of the total shares issued as of June 30, 2020[4]. - The total options held as of June 30, 2020, amounted to 46,805,000 after accounting for options exercised and lapsed during the reporting period[5]. - The company granted a total of 10,608,000 award shares under the Share Award Scheme during the six months ended June 30, 2020[7]. - As of June 30, 2020, there were 3,800,000 awarded shares still outstanding for the Directors[7]. - The vesting period for the granted share options is four years, with 25% vesting at the end of each year[8]. - Lin Bo, a Director, has 1,400,000 awarded shares that are still outstanding as of June 30, 2020[8]. - The Share Award Scheme was adopted on December 4, 2015, and is valid for a period of 10 years[7]. Shareholding Structure - Xu Shao Chun, the Chairman and CEO, holds 715,198,624 shares, representing a significant interest in the company[12]. - As of June 30, 2020, Easy Key Holdings Limited holds 715,198,624 shares, representing 21.47% of the issued share capital[22]. - Oriental Gold Limited, a controlled corporation, holds 414,312,000 shares as a beneficial owner[19]. - Billion Ocean Limited has a total of 419,312,000 shares (12.59%) and 295,886,624 shares (8.88%) in long positions[23]. - The Capital Group Companies, Inc. owns 299,492,761 shares, accounting for 8.99% of the total issued shares[23]. - JD Oriental Investment Limited holds 231,330,000 shares, which is 6.94% of the issued share capital[25]. - BlackRock, Inc. has interests in 201,109,248 shares (6.04%) and short positions of 4,688,000 shares (0.14%)[25]. - The total number of issued shares as of June 30, 2020, is 3,330,996,071[26]. - The percentage of shares held by substantial shareholders is disclosed under the provisions of Part XV of the SFO[21]. - The report includes details of share options and interests of various shareholders as of June 30, 2020[28]. Financial Performance - The Group recorded total revenue of RMB1,387,445,000 in the first half of 2020, down 6.6% year-on-year from RMB1,485,156,000 in 1H2019[47]. - Revenue from the ERP business decreased by 37.0% year-on-year, while cloud services business grew by 45.1% year-on-year, accounting for 57.5% of total revenue[47]. - The Group experienced a loss of RMB224,025,000 attributable to owners of the Company in 1H2020, compared to a profit of RMB109,640,000 in 1H2019[47]. - Basic losses per share attributable to owners of the Company amounted to approximately RMB6.87 cents, compared to basic earnings per share of RMB3.40 cents in 1H2019[47]. - Net cash outflow from operating activities was approximately RMB81,581,000, compared to a net cash inflow of RMB189,203,000 in 1H2019[47]. - The Group recorded a gross profit of RMB1,024,648,000 in 1H2020, down by 13.2% year-over-year, with a gross profit margin of approximately 73.9%[71]. - Operating profit decreased to a loss of RMB253,562,000 in 1H2020, compared to a profit of RMB123,922,000 in 1H2019, primarily due to strategic changes and the impact of COVID-19[73]. - The net loss attributable to owners of the Company was RMB224,025,000 in 1H2020, with a net profit margin of -16.1%[77]. - Total revenue for the Group was RMB1,387,445,000, representing a year-over-year decrease of 6.6% from RMB1,485,156,000 in the same period last year[68]. - Revenue from the ERP business decreased by approximately 37.0% year-on-year to RMB589,069,000, down from RMB934,913,000[67]. - Cloud services revenue increased by 45.1% year-on-year to RMB798,376,000, compared to RMB550,243,000 in the previous year[70]. Research and Development - Research and development costs totaled RMB389,755,000, a year-over-year increase of 14.8%, with amortization of these costs rising by 20.9% to RMB212,038,000[71]. - The Group strategically raised wages and incentives for R&D staff to encourage product and technology innovation[102]. - Kingdee Cloud Cosmic has filed over 150 patents, with a core patent winning a national patent award[55]. - Kingdee Cloud Cosmic launched multiple major SaaS applications and over 140 business modules across 20+ cloud applications during the reporting period[54]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the reporting period, except for the roles of chairman and chief executive officer[41]. - The Board is committed to enhancing corporate governance and has arranged training for Directors and senior managers to ensure compliance with Listing Rules and relevant laws[42]. - The Company aims to enhance its corporate governance level and will review roles and responsibilities as necessary[41]. - The Company has adopted a code of conduct for Directors' securities transactions, with all Directors confirming compliance during the reporting period[43]. Cash Flow and Liquidity - Total cash and bank deposits decreased to RMB1,848,255,000 as of June 30, 2020, down from RMB2,586,565,000 as of December 31, 2019, a decline of about 28.5%[93]. - The company reported a net cash outflow of RMB (81,581) from operating activities, indicating a challenging operational environment[116]. - Cash and cash equivalents at the end of the period were RMB 1,456,499, down from RMB 856,380 in 2019, reflecting a net decrease of RMB 446,550[117]. - The Group is committed to maintaining a strong cash position and a healthy debt profile with strong repayment ability[99]. - The Group's current ratio decreased to approximately 1.91 as of June 30, 2020, down from 2.12 as of December 31, 2019[96]. Employee and Operational Metrics - The total number of employees in the Group reached 9,382 during the reporting period[102]. - Employee benefit expenses totaled RMB 1,074,142,000 for the six months ended June 30, 2020, compared to RMB 905,804,000 in 2019, representing an increase of approximately 18.6%[191]. - The Group provided 24-hour telephone and online customer services during the pandemic to ensure normal operation of customers' businesses[102]. Market and Competitive Position - Kingdee's cloud business maintained solid growth despite the impact of COVID-19, aiming for a 60% revenue contribution from cloud services in 2020[103]. - The Group aims to enhance competitiveness through a "Platform + Finance & HR Application + Ecosystem" strategy[48]. - Kingdee Cloud Cosmic was selected into Gartner's High-Productivity PaaS global vendor list and has applied over 150 patents related to cloud-native technology and enterprise management[54]. - The Group has retained the largest share in enterprise application software for fast-growing enterprises for 16 consecutive years[48].