Investment Rating - The report maintains a "Buy" rating for Kingdee International with a target price of HKD 18.21 per share [1] Core Views - Kingdee's subscription-based cloud service revenue demonstrates strong resilience, with a 16.7% YoY growth in 2023, indicating a performance inflection point [1][6] - The company's gross margin increased by 2.6 PCT in 2023, while sales, management, and R&D expense ratios decreased by 0.8 PCT, 1.8 PCT, and 1.2 PCT respectively, signaling a successful subscription model transition [1][6] - Contract liabilities related to cloud subscriptions grew by 29.6% YoY in 2023, indicating strong future revenue growth potential [1][6] - Operating cash flow increased by 75% YoY in 2023, reaching RMB 653 million, suggesting a bottoming out and potential for further release [1][6] Financial Performance - 2023 revenue reached RMB 5.679 billion, a 16.7% YoY increase, with a net loss attributable to shareholders narrowing to RMB 210 million, a 46% reduction from the previous year [1][2] - Cloud business revenue grew 21.3% YoY to RMB 4.505 billion, accounting for 79.3% of total revenue, with ARR increasing by 33.1% to RMB 2.86 billion [3] - Gross margin improved to 64.2% in 2023, up from 61.6% in 2022, driven by the increasing proportion of subscription revenue [3] - R&D investment reached RMB 1.51 billion, a 3.5% YoY increase, with a capitalization rate of 31.7% [3] Business Segments - The enterprise resource management (ERP) and other businesses generated RMB 1.174 billion in revenue, a 1.9% YoY increase [3] - The cloud business for large enterprises (including the Cangqiong PaaS platform and Xinghan SaaS) achieved RMB 981 million in revenue, a 40.9% YoY growth, with a renewal rate of 105.3% [3][10] - The Xingkong cloud business generated RMB 1.952 billion in revenue, a 16.2% YoY increase, with a 97.2% renewal rate and 39,000 customers [3][11] Future Projections - The report forecasts 2024, 2025, and 2026 revenues of RMB 6.595 billion, RMB 7.671 billion, and RMB 9.030 billion respectively, with YoY growth rates of 16.1%, 16.3%, and 17.7% [13] - The company is expected to achieve positive net profits starting from 2025, with RMB 303 million and RMB 466 million in 2025 and 2026 respectively [13] Valuation - The report applies a 9x PS valuation multiple for 2024, based on comparable company valuations, resulting in a target price of HKD 18.21 per share [13]
订阅模式下收入韧性十足，业绩拐点已然来临