20230821-招银国际-金蝶国际-00268.HK-Loss_reduction_on_track_5页_1009kb

Revenue in the first half of 2023 grew 16.8% year-over-year to RMB2.6 billion, slightly below the Bloomberg consensus.

Net loss narrowed by 8% year-over-year to RMB284 million, indicating on-track loss reduction.

Cloud revenue increased 22% YoY to RMB2.0 billion, now comprising 79.5% of total revenue.

Core SaaS product Galaxy achieved 28.6% YoY growth in subscription ARR, with improved dollar retention at 96%.

Large enterprise revenue surged 38.4% YoY driven by domestic substitution, securing new high-value customers.

The report maintains a BUY rating with a new target price of HK$17.0, based on 8.4x EV/Sales for 2023.

Management updated guidance for 2023E ARR to RMB3.0 billion amid macro headwinds, emphasizing solid long-term trends in digitalization and domestic substitution.

Financials show improving gross profit margin and GPM, but concerns over demand recovery timing.

Overall, Kingdee is positioned to benefit from key trends, with a focus on upselling mid-sized clients.