Kingdee International Software Group Co., Ltd. · HKEX:268
Kingdee International Software — H1 2020 Earnings Presentation
51 slides from Kingdee International Software's earnings presentation, Aug 19, 2020
Slide 1: Kingdee International Software Group 2020 Interim Results Announcement
Kingdee International Software Group 2020 Interim Results Announcement Stock Code: 268.HK 19 August 2020
Slide 2: Business Highlights
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 2
Slide 3: Business Highlights
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 3
Slide 4: 1H2020 Financial Highlights
1H2020 Financial Highlights Revenue Net Profit to Equity Holders Operating Cash Flow 1,485 1,387 189 110 1H2019 1H2020 1H2019 1H2020 1H2019 1H2020 -82 -224 (RMB mn) (RMB mn) (RMB mn) 4
Slide 5: Business Growth Driven by Cloud Services
Business Growth Driven by Cloud Services Revenue +45.1% YoY Revenue -37.0% YoY 57.5% 42.5% Cloud Services Management Software • China’s leading Enterprise Cloud Service • KIS and K/3 Wise close-down for strategic provider cloud transformation • Structural opportunities in Enterprise digital • EAS af
Slide 6: Growth of Cloud Services in 1H2020
Growth of Cloud Services in 1H2020 +45.1% 37.0% 57.5% Cloud Services in 1H2019 Cloud Services in1H2020 6
Slide 7: Cloud Contract Liabilities (deferred revenue)
Cloud Contract Liabilities (deferred revenue) (RMB’000) 1H 2020 1H 2019 Change Revenue: Cloud services 798,376 550,243 45.1% Contract liabilities: Cloud services 711,485 361,491 96.8% (= subscription + others) Subscription 551,996 289,611 90.6% Others 159,519 71,880 121.9% 7
Slide 8: Kingdee Cloud Cosmic
e °. Kingdee e °. Kingdee CioudCosmic
Slide 9: Cosmic Overview
Cosmic Overview 1H2020: New & Upsell Clients:106 Cosmic New Clients: 78 Total contract size: 通I源I石I油 RMB 150mn Average contract size: RMB 1.4mn 9
Slide 10: Cosmic Customer Distribution
Cosmic Customer Distribution Cloud technology Contract Distribution Contract Value by Customer 10% 4% 27% 4% 26% 30% 44% 4% 5% 56% 5% 11% 5% 43% 7% 10% 9% Public Cloud Hybrid Cloud Kingdee New customer Kingdee ERP upgrade Energy TMT Cosmic upsell Property & Construction Conglomerate Agriculture Manu
Slide 11: Cosmic Subscription Distribution by Module
Cosmic Subscription Distribution by Module Real Estate Channel Mgmt Supply Chain SRM 2% Others 4% 3% Others 3% 1% 1% Channel Mgmt Supply Chain 7% 6% Real Estate Employee 8% Service 8% PaaS 37% Employee Finance Service 41% 9% SRM 15% PaaS Finance 30% 25% 2018-2020 1H 2020 1H 11
Slide 12: Cosmic SaaS Development
Cosmic SaaS Development Level of Completion 100% More SaaS solutions in Retail, Manufacturing, HR, Coordination, Industrial Internet 50% 0% Finance Project Mgmt Procurement Supply Chain Enterprise Omni-Channel Cash Mgmt Taxation Mgmt performance
Slide 13: Cosmic PaaS: High productivity PaaS for Enterprises
Cosmic PaaS：High productivity PaaS for Enterprises (Enterprise Performance, Financial, Capital , Human , Collaborative , Project , Channel , Supplier Collaboration , SaaS Supply Chain , Manufacturing , Industry ) Cloud. High Kingdee Cloud Cosmic SaaS + PaaS Core Services APPLICATION DEVELOPMENT APPL
Slide 14: Cosmic PaaS Technology Highlights
Cosmic PaaS Technology Highlights 1Low-code Development 2 Localization Efforts 3 Enterprise cloud computing Selected into Gartner's Global High- Full Stack development + Open Source, to Container + Micro-service， Productivity PaaS vendor list support 100% local solution Elastic computing Applied ove
Slide 15: Cosmic's addressable market
Cosmic’s addressable market No. of Enterprises IT System Core Demands • Multiple operating centers Conglomerates Multiple IT vendors • Industry Internet transformation 937 >10 Bn Self-built Infrastructure • Industry Specific (Equipment manufacturing, Real estate ) Large Enterprises • Group level man
Slide 16: Kingdee Cloud Galaxy
e °. Kingdee e ... °*. Kingdee CloudGalaxy
Slide 17: Galaxy Overview
Galaxy Overview 15,000 金砖新开发银行 10,000 5,000 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 > 15,700 customers, >37% YoY Customer Growth, 90% of new customers 17
Slide 18: Galaxy Customer Analysis
Galaxy Customer Analysis 98% 9% 12% 55% 16% 5% 2% 79% Finance Cloud Supply Chain Manufacturing Omni-channel Catering Cloud Cloud Cloud Cloud 33% 18% of customers have 2+ of customers have 3+ Client new to ERP Client from competitors solutions solutions Kingdee existing client 18
Slide 19: Galaxy Customers by Sector
Galaxy Customers by Sector Retail 15% 30% Revenue Service 15% Growth Manufacturing 13% TMT 8% 37% Customer Construction & Materials 6% Growth Mechanical & Electrical 5% Gov, Healthcare & Public Service 4% 87% Dollar Retention Education & Media 2% Rate Modern Agriculture 2% 19
Slide 20: Galaxy's industry solutions
Galaxy’s 18 industry solutions Home Food Electronics Technology Bakery Service Decoration Consumer Industrial Household Pharmaceuti Catering Construction Electronics Mechanical Appliance cals Instruments Online Auto Parts Tourism Chemical Cosmetics & Meters Education 20
Slide 21: Kingdee Cloud Jingdou
e °. Kingdee e °*. Kingdee Cloud Jingdou
Slide 22: Jingdou Overview
Jingdou Overview Jingdou customer mix Retail & Wholesale 27% Manufacturing 12% Research & Tech service 8% Rental & Business Service 8% Construction 6% Others 39% 48% >137,000 72% Revenue Paying Dollar Retention Growth Customers Rate 22
Slide 23: Market Update
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 23
Slide 24: Market Leader in China's Enterprise SaaS Market
Market Leader in China's Enterprise SaaS Market 金蝶 金蝶 24% 13.3% Others Others PRC Enterprise ERM SaaS Market PRC Finance Cloud Market in 2019 in 2019 * Source:《Enterprise Application SaaS Tracker for PRC , 2019 IDC. Inc. 》 24
Slide 25: China Enterprise Application SaaS Market Trend
China Enterprise Application SaaS Market Trend EA SaaS market CAGR in PRC EA SaaS Market Forecast, 2019-2024($ M) 2019-2024: 33% 12000 34.7% 33.3% 34.7% 32.4% 30.8% Considering the impact of COVID-19, IDC has 10000 lowered the CAGR for the next five years, especially in 2020. But the growth rate wil
Slide 26: Cloud Strategy
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 26
Slide 27: From Value 'Hunter' to 'Farmer'
From Value ‘Hunter’ to ‘Farmer’ Traditional ERP Business: One-off sales, Product-focused Business Opportunity Evaluation Customer purchase Implement In-use Regularity Sales Partner Implementation Service Partner Partner Traditional Software Traditional Software Company Company Cloud Service Business
Slide 28: Platform + Finance & HR + Ecosystem
Platform + Finance & HR + Ecosystem Application Industrial Module Module Application Module Application Module Application Industrial Module Module Application Module SME Market Large Enterprise Market SaaS HR \ Finance PaaS Business \ Technology \ Data IaaS Public \ Hybrid \ Private 28
Slide 29: One Platform to Support Industry & Ecosystem Applications
One Platform to Support Industry & Ecosystem Applications Small Middle Large Enterprise Enterprise Enterprise Real Estate, Construction, Finance, Insurance, Ports, Business Travel, Image, SaaS SaaS SaaS SaaS Manufacturing, Public Logistics, Commerce...... Ecommerce, Finance, Service, Medical, Morden
Slide 30: Open Ecosystem Platform for ISV
Open Ecosystem Platform for ISV Applications APP&API Market Packages Code Audit CI/CD License 应用市场 应用包管理 代码审计 持续集成与持续交付 ISV许可 Core capabilities Workflow Chatbot Customization Building Block Embedded AI Light Analysis Mobile&Social 企业模型组件 企业流程模型 对话机器人 嵌入式AI 轻分析 移动&社交 行业&客户&用户定制 Tools CloudIDE Light I
Slide 31: Product Strategy
Product Strategy Users Size Kingdee Cloud Cosmic Public/Hybrid Kingdee Cloud Galaxy Enterprise Public/Private EAS Cloud Kingdee Cloud Galaxy Public/Private Standard Hybrid Jingdou Public KIS Cloud Public KIS Mini, Standard SMB Large Enterpries Size 31
Slide 32: 2020 Target
2020 Target ¥ 3.4-3.8bn Total Revenue(2020) ¥ 1.4bn Total Revenue(1H2020) 58% 60% 32
Slide 33: Cloud Services Revenue Guidance
Cloud Services Revenue Guidance RMB mn 1400 1200 1000 Guidance: 800 2020 Cloud 600 services revenue 400 up by 50%+ y-o-y 200 0 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 33
Slide 34: Business Highlights
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 34
Slide 35: Cloud Business Review
Cloud Business Review Cloud Services Enterprise Cloud Other Cloud Services Services +42.1% YoY +53.1% YoY Cargeer, Wojia Cloud, KIS Cloud, etc. 35
Slide 36: Kingdee Cloud Cosmic Highlights
Kingdee Cloud Cosmic Highlights +310% 140+ Revenue Growth YoY SaaS modules 106 78 Cosmic New & Upsell Cosmic New Customers Customers 36
Slide 37: Kingdee Cloud Galaxy Highlights
Kingdee Cloud Galaxy Highlights 30% 82% YoY Revenue Growth Customer Retention Rate >15,700 87% Customers Dollar Retention Rate 37
Slide 38: Kingdee Jingdou & Guanyi Cloud Highlights
Kingdee Jingdou & Guanyi Cloud Highlights Paying Customers Dollar Retention Rate >137,000 72% >6,100 84% 38
Slide 39: Management Software Business Review
Management Software Business Review Management Software KIS EAS Others Implementation Maintenance -75.5% YoY -26.2% YoY -70.0% YoY -21.1% YoY -5.7% YoY • KIS and K/3 Wise license revenue decreased significantly due to product close-down for Kingdee’s strategic cloud transformation. • EAS license rev
Slide 40: Financial Overview
Financial Overview Revenue 1,387,445 1,485,156 -6.6% Cost of Sales -362,797 -304,727 19.1% Gross Margin 73.9% 79.5% -5.6pts Total Operating Expenses -1,429,230 -1,198,483 19.3% Other Income & Gains 151,020 141,976 6.4% Operating Profit -253,562 123,922 NA Operating Margin -18.3% 8.3% NA Finance Cost
Slide 41: Operating Expenses Breakdown
Operating Expenses Breakdown S&M G&A R&D as a % of total revenue as a % of total revenue as a % of total revenue 62.0% 13.6% 25.8% +10.6PP +2.6PP +8.8PP RMB 860mn RMB 189mn RMB 358mn 41
Slide 42: Investment Highlights
Investment Highlights Market Leader in Enterprise Cloud Services in China • Leader in SaaS ERP and SaaS financial products in China • Significant leadership in services offerings and product maturity vs. competitors Market-leading Cloud Ecosystem with Industry-leading Partners • Industry-leading Iaa
Slide 43: Appendix
Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 43
Slide 44: Total Revenue by Segments
Total Revenue by Segments % of Total % of Total (RMB’000) 1H 2020 1H 2019 Change Revenue Revenue Management Software 589,069 42.5% 934,913 63.0% -37.0% business - Sales of software license 206,479 14.9% 493,208 33.2% -58.1% - Implementation 173,607 12.5% 220,088 14.8% -21.1% - Maintenance 203,752 14
Slide 45: Software License by Segments
Software License by Segments % of Total % of Total (RMB’000) 1H 2020 1H 2019 Change Revenue Revenue EAS Cloud 117,892 8.5% 159,746 10.8% -26.2% KIS 51,031 3.7% 208,370 14.0% -75.5% Others 37,556 2.7% 125,092 8.4% -70.0% Total software license 206,479 14.9% 493,208 33.2% -58.1% turnover 45
Slide 46: Other Gains
Other Gains (RMB’000) 1H 2020 1H 2019 Change VAT refund 52,540 80,468 -34.7% Government projects 15,289 22,767 -32.8% Rental income - net 38,634 36,902 4.7% Others 44,557 1,839 2322.9% Total 151,020 141,976 6.4% VAT % of Total Revenue 3.8% 5.4% 46
Slide 47: Selling & Marketing Expenses
Selling & Marketing Expenses (RMB’000) 1H 2020 1H 2019 Change Advertising and marketing 130,023 137,824 -5.7% Sales promotion 73,798 57,384 28.6% Salaries and staff welfare 441,623 372,367 18.6% Project cooperation and 16.2% outsourcing service fee 146,954 126,469 Travelling expenses 23,622 25,739 -
Slide 48: R&D Expenses
R&D Expenses (RMB’000) 1H 2020 1H 2019 Change Salaries and staff welfare 344,589 308,258 11.8% Option & restricted stock expense 25,219 10,127 149.0% Fixed costs 15,693 16,589 -5.4% Travelling costs 3,116 3,458 -9.9% Others 1,138 1,118 1.8% Total R&D costs 389,755 339,550 14.8% Less: development cos
Slide 49: Administrative Expenses
Administrative Expenses (RMB’000) 1H 2020 1H 2019 Change Salaries and staff welfare 116,294 106,199 9.5% Option & restricted stock expenses 39,599 25,624 54.5% Professional service fees 10,893 9,450 15.3% Travelling costs 2,192 2,415 -9.2% Meeting expenses 1,029 1,224 -15.9% Fixed costs 13,947 14,15
Slide 50: Balance Sheet Overview
Balance Sheet Overview (RMB’000) 30 Jun. 2020 31 Dec. 2019 Change Trade and other receivables 320,580 330,153 -2.9% Cash at bank and in hand 2,867,684 3,273,577 -12.4% Total assets 8,308,372 8,420,153 -1.3% Current assets 4,020,218 4,241,447 -5.2% Borrowings 234,000 199,625 17.2% Trade and other pay
Slide 51: Thanks
感謝 ありがとう ขอบคุณ Thanks 谢谢 ① 绝密信息 严禁泄露
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