Kingdee International Software Group Co., Ltd. · HKEX:268

Kingdee International Software — H1 2024 Earnings Presentation

33 slides from Kingdee International Software's earnings presentation, Aug 16, 2024

  1. Slide 1: 2024 Interim Results Announcement

    Kingdee International Software Group 2024 Interim Results Announcement Stock Code: 268.HK 16 August 2024

  2. Slide 2: Overview

    Overview 01 Financial Review P 05 02 Kingdee Cloud Products P 13 03 China SaaS Market Outlook P 19 04 Appendix P 25 2

  3. Slide 3: 2024 Interim Results Overview

    2024 Interim Results Overview Group revenue Subscription ARR Net loss attributable to shareholders RMB 2.87bn RMB 3.15bn RMB 218mn 11.9% 24.2% 23.2% Share repurchase Cash reserves HKD 540mn RMB 4.28bn Including cancellation and employee incentive program As of Interim result quiet period 3

  4. Slide 4: Kingdee at a Glance

    Kingdee at a Glance Enterprise Business Capability（EBC） Serving over Half of China Top 500 Companies New choice for China Top 500 Companies Kingdee Cloud Cosmic - New generation enterprise-level AI platform Kingdee Cloud Constellation -Large enterprise SaaS management solution Kingdee Cloud Galaxy -

  5. Slide 5: Financial Review

    1 ° Kingdee Financial Review

  6. Slide 6: Resilient Revenue Growth across Years

    Resilient Revenue Growth across Years (RMB MN) 7 years revenue CAGR： 15.4% 2,870 收入 Revenue Headcount YoY growth 员工数YoY增长 1,055 2017 H1 2018 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 Revenue YoY 15% 21% 16% -7% 35% 17% 17% 12% Growth Headcount YoY 3% 11% 19% 15% 13% 11% 2% 1.6% Growth In 20

  7. Slide 7: Cloud Company Concentrating on Subscription Model

    Cloud Company Concentrating on Subscription Model 2024 H1 Cloud services revenue weight reached 83.2% 7 years Cloud Services Revenue CAGR： 35.6% ERP及其他收入 ERP and others revenue 云服务收入 Cloud services revenue 2017 H1 2018 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 H1 Cloud services as % of the Gro

  8. Slide 8: Subscription Model Continuously Driving High-quality Growth

    Subscription Model Continuously Driving High-quality Growth (RMB MN) 3,367 金蝶-合同负债 Kingdee - Contract Liabilities 金蝶-应收账款 Kingdee - Account Receivables 同业平均-合同负债 Peers average - Contract Liabilities 2,557 Peers average - Account Receivables 同业平均-应收账款 1,535 997 118 168 2019 H2 2020 H1 2020 H2 2021 H1

  9. Slide 9: Cloud Subscription Driving Operating Cashflow Uplift

    Cloud Subscription Driving Operating Cashflow Uplift (RMB MN) 963 906 824 661 653 473 374 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 9

  10. Slide 10: Cloud Services Improving Loss/Profit Margin

    Cloud Services Improving Loss/Profit Margin Cloud services operating profit margin 2024 H2 3.2% -2.3% -17.2% -14.5% -21.9% -29.2% -30.7% -35.3% -35.0% 2020 H1 2020 H2 2021 H1 2021 H2 2022 H1 2022 H2 2023 H1 2023 H2 2024 H1 10

  11. Slide 11: Cloud Subscription Services

    Cloud Subscription Services Subscription ARR (RMB) +24.2% 3.15bn 2.54bn 2023 1H 2024 1H ARR represents annual recurring revenue 11

  12. Slide 12: Operating Expense

    Operating Expense RMB1,222mn RMB250mn RMB 810mn +7.2% yoy growth +4.2% yoy growth +8.4% yoy growth 42.7% 8.7% 28.1% -1.9pp -0.6pp -0.9pp S&M G&A R&D as a % of total revenue as a % of total revenue as a % of total revenue R&D investments: RMB852mn, +2.8yoy R&D Capitalization rate: 33.6% 12

  13. Slide 13: Kingdee Cloud Business Update

    02 Kingdee Cloud Business Update 13

  14. Slide 14: Kingdee Cloud Cosmic and Constellation

    Kingdee Cloud Cosmic Kingdee Cloud Constellation Contract signed in 2024 1H RMB900mn New Customers 275 ARR Growth +29% Net Dollar Retention （NDR） 97% 14

  15. Slide 15: Cosmic & Constellation Customer Cohort Growth

    Cosmic & Constellation Customer Cohort Growth Customer lifetime contract value contribution Lifetime contract value expansion from initial contract 1.2x 2024 H1 2023 2022 1.8x 2021 2020 1.9x 2019 2018 2.9x 3.8x 5.3x 2018 2019 2020 2021 2022 2023 2024 H1 As illustrated above, 2020 customer cohort sta

  16. Slide 16: Cosmic & Constellation Average ARR Improving Consistently

    Cosmic & Constellation Average ARR Improving Consistently Customers with over RMB1 million ARR contributing 35% of total subscription 4.5 year CAGR 127% Customer subscription ARR segments 100% >300万 >RMB3 million 100-300万 RMB1-3 million 50-100万 RMB500k-1 million 140% <RMB500k <50万 79% 2020-01 2020-0

  17. Slide 17: Kingdee Cloud Galaxy

    Kingdee Cloud Galaxy Manufacturing Net customer base High-Tech Advance 42,000 ARR Growth +24% Life Sciences New Energy Net Dollar Retention （NDR） Consumer 95% Materials Operating Margin New 20% 17

  18. Slide 18: Kingdee Cloud Stellar and Jingdou

    Kingdee Cloud Stellar Kingdee Cloud Jingdou Net customer base 63,000 Net Dollar Retention （NDR） 92% Net customer base 335,000 Net Dollar Retention （NDR） 87% Operating Margin 40% 18

  19. Slide 19: China Enterprise SaaS Market Outlook

    03 China Enterprise SaaS Market Outlook 19

  20. Slide 20: China ERP SaaS Market Outlook

    China ERP SaaS Market Outlook Public Cloud Subscription Market in 2027 RMB 33.4billion ERP SaaS Market Estimated CAGR of 22% Representing 59% of total ERP Software Market RMB 13.5billion RMB 11.9billion RMB 8billion Finance & Tax Human Resources Others Management SaaS Management SaaS (product mgmt.,

  21. Slide 21: AI to Reshape Enterprise Software in the Next Years

    AI to Reshape Enterprise Software in the Next 30 Years By 2027, at least 50% of AI functions in ERP applications will be realized through generative AI. By 2027, 60% of customers will choose software with platform capabilities and business process orchestration when replacing ERP applications. The c

  22. Slide 22: Kingdee Cloud Cosmic

    Kingdee Cloud Cosmic Next generation enterprise AI platform Kingdee Cloud Kingdee Cloud Kingdee Cloud Other Kingdee Cloud SaaS Constellation Galaxy Stellar SaaS ISV SaaS Your AI Management Assistant Rebuild technology base AI-Native technology based on LLM Assistant Agent APP Flow Integration Analys

  23. Slide 23: Your AI Management Assistant

    Your AI Management Assistant Perception Memory Cognitive Action Capabilities Capabilities Capabilities Capabilities Sales Procurement Agent Production Human Agent Agent Development Resources Agent Agent Finance Agent Data Agent Agent Builder Kingdee Self-Developed Model Open Source and General LLMs

  24. Slide 24: 24

    24

  25. Slide 25: Appendix

    Appendix e °. Kingdee 25

  26. Slide 26: Income Statement

    Income Statement Revenue 2,870,025 2,565,850 11.9% Cost of Sales -1,054,838 -977,080 8.0% Gross Profit 1,815,187 1,588,770 14.3% Gross Margin 63.2% 61.9% +1.3pp Operating Expenses -2,304,186 -2,160,938 6.6% Other Incomes & Gains-Net 171,939 183,977 -6.5% Operating Profit -317,060 -388,191 NA Operati

  27. Slide 27: Revenue by Segments

    Revenue by Segments % of Total % of Total 2024 H1 2023 H1 YoY Change Revenue Revenue Cloud services business 2,389,247 83.2% 2,038,598 79.5% 17.2% -Enterprise Cloud Services 1,683,716 58.6% 1,404,558 54.8% 19.9% -Small & Micro Business Finance 587,926 20.5% 501,028 19.5% 17.3% Cloud Services -Indust

  28. Slide 28: R&D Expenses

    R&D Expenses 2024 H1 2023 H1 YoY Change Salaries and staff welfare 831,554 806,158 3.2% Fixed costs 12,208 14,064 -13.2% Professional service costs 2,360 3,244 -27.3% Travelling costs 4,385 4,160 5.4% Others 1,514 1,562 -3.1% Total R&D costs 852,021 829,188 2.8% Less: development costs capitalised 2

  29. Slide 29: Selling & Marketing Expenses

    Selling & Marketing Expenses 2024 H1 2023 H1 YoY Change Salaries and staff welfare 762,259 711,075 7.2% Sales promotion & marketing 362,063 330,934 9.4% Fixed costs 47,133 45,706 3.1% Travelling expenses 33,968 33,624 1.0% Project cooperation fee 7,116 8,638 -17.6% Others 11,975 12,340 -3.0% Total 1

  30. Slide 30: Administrative Expenses

    Administrative Expenses 2024 H1 2023 H1 YoY Change Salaries and staff welfare 203,732 190,583 6.9% Fixed costs 22,627 22,715 -0.4% Professional service costs 14,796 15,354 -3.6% Employee recruitment and training expenses 1,752 2,015 -13.1% Travelling costs 2,089 2,136 -2.2% Others 2,808 4,903 -42.7%

  31. Slide 31: Other Income and Gains -Net

    Other Income and Gains -Net 2024 1H 2023 1H YoY Change VAT refund 58,940 52,513 12.2% Government projects 76,343 76,798 -0.6% Rental income - net 27,137 34,584 -21.5% Others 9,519 20,082 -52.6% Total 171,939 183,977 -6.5% VAT % of Total Revenue 2.1% 2.0% +0.1pp 31

  32. Slide 32: Cloud Contract Liabilities

    Cloud Contract Liabilities 2024 1H 2023 1H YoY Change Total Cloud Contract Liabilities 3,094,930 2,554,098 21.2% - Subscription related 2,708,222 2,113,082 28.2% - Others 386,708 441,016 -12.3% 32

  33. Slide 33: Thank you

    e °. Kingdee BYNES ten Thanks — b Terima kasih BBY J Copyrights ©1993-2024 Kingdee International Software Group Company Limited

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