Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HK5.84 [2][3]. Core Insights - The company reported a revenue growth of 11.9% year-on-year for 1H24, down from 16.8% in 1H23, attributed to extended transaction cycles and macroeconomic headwinds affecting small and micro enterprises [2]. - The net loss for 1H24 was RMB 218 million, a 23% decrease year-on-year, indicating a commitment to improving operational efficiency [2]. - The company's core SaaS product, Galaxy, showed a healthy annual recurring revenue (ARR) growth of 24% in 1H24, although this was a decline from 29% in 1H23 [2]. - Cloud revenue grew by 17.2% year-on-year, reaching RMB 2.4 billion, accounting for 83.2% of total revenue, up from 79.5% in 1H23 [2]. - The company expects revenue growth to accelerate to 16% in 2H24, despite a 4% downward revision in the 2024 revenue forecast [2]. Financial Performance Summary - For FY24E, the company is projected to generate revenue of RMB 6.475 billion, reflecting a 14% year-on-year growth [3][4]. - The net profit is expected to improve significantly, with a forecasted loss of only RMB 11.5 million for FY24E, compared to a loss of RMB 209.9 million in FY23A [3][4]. - Gross profit margin is projected to be 64.9% for FY24E, slightly improving from 64.5% in FY23A [4][5]. - Operating cash flow (OCF) guidance for 2024 remains at RMB 900 million, indicating confidence in operational efficiency improvements [2]. Revenue Breakdown - The company's revenue from large enterprises grew by 38.9% year-on-year in 1H24, indicating stable demand despite longer transaction cycles [2]. - The Galaxy product line generated RMB 1.1 billion in revenue for 1H24, marking a 14.3% increase year-on-year [2]. - The contribution of cloud revenue continues to rise, with a significant increase in the share of total revenue [2]. Market Position and Outlook - The management remains optimistic about the recovery of demand, particularly for small enterprises, and anticipates a gradual improvement in contract values and transaction cycles [2]. - The company signed 275 new customers for its C&C business in 1H24, emphasizing the solid expansion trajectory of its lifetime contract value (LTCV) [2].
金蝶国际：宏观逆风拖累增长 ； 亏损减少步入正轨