20230317-招银国际-金蝶国际-00268.HK-SaaS_and_Xinchuang_both_in_good_shape_11页_1mb

报告摘要

Kingdee (268 HK) Summary

Core Content and Key Information

Kingdee reported FY22 results in line with expectations, with revenue growth of +17% YoY to RMB4.87bn. The cloud segment contributed 76% of total revenue, highlighting its significant role in the company's performance.

Cloud Revenue: RMB3.71bn, growing +34.6% YoY.
Subscription ARR: RMB2.14bn, up +36.3% YoY.
Subscription Contract Liabilities: RMB1.878bn, up +38.3% YoY.
Gross Margin (GPM): 61.6% (-1.5 pts YoY), primarily due to increased implementation costs for large enterprise projects.
Net Loss: RMB389mn, wider than FY21’s RMB302mn, but still in line with expectations and better than consensus.

Kingdee is maintaining its BUY rating, with a new target price of HK$23.28 (down from HK$23.56), based on an unchanged 11x EV/sales multiple, in line with its three-year average.

Main Points and Key Insights

SaaS Growth

Galaxy, the core SaaS product, grew +31.2% YoY in subscription ARR.
Dollar retention rate for Galaxy declined slightly to 97.2% (from 98.6% in FY21), but this is seen as a sign of high user stickiness.
Subscription ARR growth and improving recurring revenue contribution are expected to drive re-rating.

Large Enterprise Revenue

Cosmic & Constellation revenue grew +80.8% YoY to RMB696mn (14.3% of revenue).
The segment is driven by software localization demand, and Kingdee expects +50% YoY growth in FY23E.
Concerns over margin drag due to higher customization are acknowledged, but the company plans to outsource 50% of implementation work to third-party ISVs in the next three years.

Small and Medium Enterprise Segment

Galaxy continues to show strong growth potential with a stable OPM at 20%+.
ARR growth is robust, and the segment remains a key growth driver.

Revenue and Growth Overview

Metric	FY21A	FY22A	FY23E	FY24E	FY25E
Revenue (RMB mn)	4,174	4,866	5,769	6,720	7,962
YoY Growth (%)	24.4	16.6	18.6	16.5	18.6
Net Profit (RMB mn)	(302.3)	(389.2)	(257.0)	(174.0)	(3.0)
EPS (RMB cents)	(9.23)	(11.21)	(7.40)	(4.99)	(0.00)
EV/Sales (x)	9.9	8.6	7.2	6.2	5.0

Cloud Revenue Breakdown

Segment	FY22 Revenue (RMB mn)	YoY Growth (%)	Dollar Retention
Cosmic & Constellation	696	+80.8%	>110%
Galaxy	1,679	+18%	97%
Stellar & Jingdou	861	+65%	77% and 74% respectively

Operating Metrics

Subscription ARR Growth: +31% YoY for Galaxy.
Cloud Contract Liabilities: RMB1.878bn, up +38.3% YoY.
R&D Capitalization Rate: 33.0% (-0.6 pts YoY).
R&D Expenditure: RMB1.458bn (+16% YoY).
Operating Loss: RMB651mn, in line with estimates.

Earnings Revision

Metric	CMBI 2023E	Street 2023E	% Diff	CMBI 2024E	Street 2024E	% Diff
Sales	5,769	6,265	-8%	6,720	7,792	-14%
Gross Profit	3,485	3,622	-4%	4,054	4,398	-8%
OPM	-12.0%	-11.1%	-85 bps	-8.6%	-4.5%	-414 bps
Net Margin	-4.5%	-4.5%	5 bps	-2.6%	0.4%	-297 bps

Valuation and Peer Comparison

Company	Ticker	Rating	Market Cap (US$ mn)	Price (LC)	TP (LG)	EV/Sales (FY22E)	EV/Sales (FY23E)	FCF Margin (FY22E)	FCF Margin (FY23E)	Sales CAGR	EPS CAGR
Kingdee	268 HK	BUY	6,641	15.00	23.28	8.6	7.2	1%	7%	17%	n.a.
Yonyou	600588 CH	HOLD	13,463	27.06	22.27	9.2	7.4	4%	6%	17%	n.a.
Kingsoft Office	688111 CH	NR	20,696	309.66	N/A	34.7	26.1	41%	39%	28%	28%
SAP	SAP US	NR	142,015	115.60	N/A	4.6	4.2	16%	16%	9%	n.a.
Intuit	INTU US	NR	113,992	406.32	N/A	9.4	8.4	29%	29%	18%	27%
Xero	XRO AU	NR	8,845	88.44	N/A	13.3	10.3	-7%	1%	25%	86%
Workday	WDAY US	NR	47,749	184.36	N/A	8.7	7.2	26%	20%	19%	n.a.
ServiceNow	NOW US	NR	85,719	422.26	N/A	11.5	9.4	29%	30%	22%	114%
Salesforce	CRM US	NR	182,910	182.91	N/A	7.0	6.0	19%	19%	18%	17%

Mean EV/Sales: 11.9
Median EV/Sales: 8.9

Financial Highlights

Cloud Services Business: Dominates revenue with a 76% share in FY22.
ERP Business: Shrinking, with revenue at RMB1.152bn (-18.7% YoY).
Operating Expenses: Increased across all segments, with S&M up +16% YoY, G&A up +8% YoY, and R&D up +9% YoY.
Net Cash from Operations: Expected to grow to RMB759mn in FY23E, with a target of 50% CAGR in operating cash flow.
Net Loss: Expected to narrow in FY23E to RMB257mn and further to RMB174mn in FY24E.

Shareholding and Performance

Shareholding Structure:
- Mr. Xu (Chairman): 20.3%
- Oriental Tao Limited: 11.1%
Stock Performance:
- 1-month: -10.9%
- 3-months: -0.9%
- 6-months: +16.5%
- 12-months: +16.5%
Market Cap: HK$52,125.0 million
Avg 3-months t/o: HK$16.6 million
52-week High/Low: HK$20.00 / HK$9.18

Operating Model

Cloud Services:
- Revenue: RMB3.714bn (+35% YoY)
- Gross Margin: 61.6%
- Operating Margin: -17.0%
- Net Margin: -8.0%
Management Software and Others:
- Revenue: RMB1.152bn (-19% YoY)
- Gross Margin: 63.1%
- Operating Margin: -3.8%
- Net Margin: -7.2%
License and Implementation:
- License revenue: RMB286mn (-18.7% YoY)
- Implementation and maintenance revenue: RMB865mn (+4.3% YoY)

Conclusion

Kingdee's FY22 results show strong SaaS growth, with Galaxy's ARR increasing by 31.2% YoY and cloud revenue contributing 76% of total revenue. Despite a net loss of RMB389mn, the company's recurring revenue model and revenue diversification are positive signs. The company is expected to maintain its BUY rating, with a target price of HK$23.28, and is focusing on outsourcing implementation to third-party ISVs to improve margins. The EV/sales ratio remains at 11x, aligning with its three-year mean.