CMB International Securities analyst Saiyi He has maintained their bullish stance on KGDEF stock, giving a Buy rating today.
Saiyi He has given his Buy rating due to a combination of factors that highlight Kingdee International Software Group Co’s strong position and growth potential. The company has shown resilience in improving its financial performance, with a notable reduction in net loss margin and an increase in gross margin, driven by higher subscription revenue and improved operational efficiency. Despite macroeconomic challenges, Kingdee’s cloud revenue has grown significantly, and its core SaaS product, Galaxy, has maintained healthy profitability and market share among small and medium-sized enterprises.
Furthermore, Kingdee’s strategic focus on AI integration and software localization is expected to drive future growth. The company’s “AI First” strategy aims to enhance its AI-ERP integration, which is anticipated to expand average revenue per user (ARPU) and accelerate revenue growth as economic conditions improve. Kingdee’s management has also set ambitious financial targets, including achieving net profit breakeven and significant ARR growth by 2025. These factors, combined with Kingdee’s industry-leading position and development potential in the AI era, underpin Saiyi He’s positive outlook and Buy rating.
In another report released today, DBS also maintained a Buy rating on the stock with a HK$19.20 price target.