【行业研究报告】金蝶国际-Steady rev growth with on-track loss reduction

20Mar2024
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Kingdee(268HK)
Steadyrevgrowthwithon-tracklossreduction
Kingdeereported2023financialresults:revenuewasRMB5.7bn,up17%YoY
(2022:17%YoY),andnetlossattributabletoordinaryshareholderswas
RMB210mn(2022:lossofRMB389mn),bothinlinewithourestimateand
Bloombergconsensus.Kingdee’slossreductioneffortwasontrack,withloss
marginnarrowingfrom-17.9%in2022to-12.1%in2023,drivenby2.6ppt
improvementingrossmargin,onanincreaseinsubscriptionrevenue,cloud
infrastructurecostoptimization,aswellasoperatingefficiencyimprovement.We
remainpositivethatKingdeeiswell-positionedtobenefitfromthedomestic
substitutiontrend,backedbystrongandcontinuouslyenhancedproduct
capabilityandpartnerecosystem.Werollforwardourvaluationto2024E,and
ournewtargetpriceofHK$15.5(priorHK$15.1)isbasedon6.4xFY24E
EV/sales,in-linewiththeone-yearmean.MaintainBUY.
2023resultsinlinewithcloudcontributing79%ofrevenue.Kingdee
deliveredin-line2023resultswithrevenuegrowthof17%YoYtoRMB5.7bn.
deliveredin-line2023resultswithrevenuegrowthof17%YoYtoRMB5.7bn.
Cloudrevenuegrew21%YoYtoRMB4.5bn(79%ofrevenue;+3pptYoY).
ERPbusinessandothersrevenuealsogrewby2%YoY(2022:19%YoY
decline),drivenbyone-offrevenuefromtheimplementationofsomeoffline
SOEprojects.Althoughfacingmacroheadwinds,the34%YoYgrowthin
ARR(2022:36%)and30%YoYgrowthinsubscriptioncontractliabilities
(2022:38%)stillsuggestKingdee’ssolidSaaSgrowthoutlookin2024,in
ourview.
Small-andmedium-sizedenterprises:Galaxymaintainedsolidmargin
expansion.Kingdee’scoreSaaSproductGalaxyachievedrevenueof
RMB2.0bn,up16.3%YoY(2022:18.4%).Galaxyrecordedover39,000
customersbyend-2023,indicatingover8,000YoYnetadds(2022:5,600),
andsaw29%YoYgrowthinsubscriptionARR.Dollarretentionrate
remainedstableat97.2%in2023,flatYoY.Managementhighlightedthat
theoperatingmarginofGalaxybusinessfurtherincreasedto22%in2023
(2021:20%),andwouldbe~30%ifexcludingtheimpactfrominvestmentin
theGalaxyFlagshipversion.
Largeenterprises:expectingrevenuegrowthtoreacceleratein2024.
Benefitingfromongoingsoftwarelocalizationdemand,aswellasenhanced
productcapability,KingdeeCosmic&Constellation(C&C)revenuegrew
40.9%YoYtoRMB981mn(17.3%ofrevenue).Inviewofastrongproject
pipelineandARRgrowth(+48.7%YoY),managementexpectsC&C
revenuegrowthtoreacceleratein2024E.
Updateonfinancialguidance.Managementguidedfor:1)a2023-2026E
revenueCAGRof15-20%;2)a2023-2026EsubscriptionARRCAGRof30%;
3)atleastRMB900mninoperatingcashflowin2024,indicatingatleast38%
YoYgrowth.Also,managementvowedtocontinuouslyimproveoperating
efficiencyin2024,andtargetstoachievebreakevennolaterthan2025.