Kingdee International Software Group Co (0268) AI Stock Analysis

• Market Cap: HK$46.83B
• Dividend Yield: N/A
• Average Volume (3M): 30.72M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.02
• Revenue Growth: 9.71%
• EPS Growth: 84.42%
• Country: HK
• Employees: 12,149
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.03
• Shares Outstanding: 3,549,468,800
• 10 Day Avg. Volume: 27,830,291
• 30 Day Avg. Volume: 30,718,600
• PEG Ratio: 5.89
• Price to Book (P/B): 3.53
• Price to Sales (P/S): 4.54
• P/FCF Ratio: 112.21
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$19.14
• Price Target Upside: 44.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: HK$14.50 ▲(9.68% Upside)

The overall stock score is primarily influenced by financial performance and technical analysis. Strong revenue growth and a stable balance sheet are overshadowed by profitability challenges and bearish technical indicators. The negative P/E ratio and lack of dividend yield further impact the valuation negatively.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust demand for Kingdee's products and services, supporting long-term business expansion and market presence.

Balance Sheet Strength

A strong balance sheet with low leverage enhances financial stability, providing flexibility for strategic investments and weathering economic downturns.

Cash Flow Improvements

Positive free cash flow indicates improved cash generation, enabling reinvestment in growth initiatives and reducing reliance on external financing.

Negative Factors

Profitability Challenges

Persistent profitability issues can hinder long-term value creation and limit the company's ability to invest in growth opportunities.

Volatile Cash Flow Growth

Volatility in cash flow growth poses risks to financial planning and may affect the company's ability to consistently fund operations and investments.

Negative Net Profit Margin

A negative net profit margin indicates ongoing cost management issues, impacting profitability and potentially limiting future growth investments.

Kingdee International Software Group Co Business Overview & Revenue Model

Company Description

Kingdee International Software Group Company Limited, an investment holding company, engages in the enterprise resource planning business. The company operates through ERP Business and Others, Cloud Services Business, and Investment Properties Operating Business segments. The ERP Business and Others segment sells software and hardware products; and provides software solution consulting, maintenance, upgrade, and other supporting services, as well as software implementation services. The Cloud Services Business segment provides enterprise, finance, industry, and other cloud services. The Investment Properties Operating Business segment invests in properties. The company also designs, develops, manufactures, and sells software and hardware products; provides software-related and online financial services; and develops Internet and online pay technologies. It serves enterprises, government agencies, and other organizations worldwide. The company was founded in 1993 and is headquartered in Shenzhen, the People's Republic of China.

How the Company Makes Money

Kingdee generates revenue primarily through the sale of software licenses, subscription services for its cloud solutions, and maintenance and support services. The company has a robust revenue model that includes one-time license fees for on-premise software, as well as recurring revenue from its cloud-based offerings, which cater to a growing number of businesses transitioning to digital solutions. Key revenue streams also include consulting and implementation services that help clients effectively utilize Kingdee's products. Additionally, strategic partnerships with various technology firms enhance its market reach and contribute to its earnings through collaborative sales and joint ventures.

Kingdee International Software Group Co Financial Statement Overview

Summary

Kingdee International demonstrates strong revenue growth and a stable balance sheet with low leverage. However, profitability challenges persist, with negative net income and return on equity. Cash flow improvements are promising, but volatility remains a concern.

Income Statement

Kingdee International has shown consistent revenue growth over the years, with a notable 10.1% increase in 2024. However, the company faces profitability challenges, as indicated by negative EBIT and net income margins over the past few years. The gross profit margin remains strong at 65.1% in 2024, but the negative net profit margin of -2.3% highlights ongoing profitability issues.

Balance Sheet

The balance sheet of Kingdee International is relatively strong, with a high equity ratio of 58.4% indicating stability. The debt-to-equity ratio is low at 0.03, suggesting low leverage. However, the return on equity remains negative due to persistent net losses, which is a concern for long-term profitability.

Cash Flow

Kingdee International's cash flow statement shows promising improvements in free cash flow, which turned positive in 2024 after significant negative figures in previous years. The operating cash flow to net income ratio is strong at -6.6, reflecting efficient cash generation relative to net income. However, free cash flow growth has been volatile, posing potential risks.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.98B	6.26B	5.68B	4.87B	4.17B	3.36B
Gross Profit	3.30B	4.07B	3.64B	3.00B	2.63B	2.21B
EBITDA	90.69M	-137.28M	219.84M	-52.82M	61.52M	122.66M
Net Income	26.91M	-142.07M	-209.89M	-389.16M	-302.33M	-335.48M
Balance Sheet
Total Assets	13.46B	13.78B	14.14B	11.73B	11.09B	10.72B
Cash, Cash Equivalents and Short-Term Investments	3.14B	3.64B	4.05B	2.63B	3.16B	4.98B
Total Debt	47.50M	253.33M	841.51M	533.89M	79.79M	171.03M
Total Liabilities	5.43B	5.65B	5.44B	4.32B	3.28B	2.76B
Stockholders Equity	7.96B	8.05B	8.60B	7.27B	7.60B	7.79B
Cash Flow
Free Cash Flow	1.01B	252.95M	-243.28M	-513.28M	-111.33M	120.13M
Operating Cash Flow	1.09B	933.53M	653.32M	374.44M	660.56M	473.02M
Investing Cash Flow	-195.09M	-1.07B	-1.30B	-787.03M	-1.20B	-1.49B
Financing Cash Flow	-548.95M	-1.29B	1.67B	300.52M	-143.84M	1.97B

Kingdee International Software Group Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0268, the sentiment is Negative. The current price of 13.22 is below the 20-day moving average (MA) of 13.96, below the 50-day MA of 14.83, and below the 200-day MA of 14.77, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 38.20 is Neutral, neither overbought nor oversold. The STOCH value of 47.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0268.

Kingdee International Software Group Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1588	64 Neutral	HK$2.63B	29.90	8.51%	―	12.46%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1675	61 Neutral	HK$7.21B	16.53	6.90%	3.29%	-17.90%	56.67%
3896	51 Neutral	HK$27.73B	-22.08	-15.92%	―	23.96%	55.68%
0268	50 Neutral	HK$46.83B	-1,940.58	-0.26%	―	9.71%	84.42%
9600	47 Neutral	HK$196.31M	-1.82	-14.03%	―	15.44%	10.57%
0909	43 Neutral	HK$5.76B	-86.31	-1.31%	3.24%	-17.48%	83.80%

Kingdee International Software Group Co Corporate Events

Kingdee Reports Strong Growth in Cloud Subscription Revenue

Kingdee International Software Group has reported a notable increase in its cloud subscription annual recurring revenue, reaching approximately RMB 3.86 billion, marking an 18% year-on-year growth. The company has also achieved impressive Net Dollar Retention ratios across its cloud services and secured several high-profile new customers, indicating strong market positioning and growth potential.

Kingdee International Acquires Majority Stake in CloudHub

Kingdee International Software Group Co. announced a connected transaction involving the acquisition of a 62.764% equity interest in CloudHub, making it a subsidiary. This acquisition, valued at RMB68,250,000, is expected to enhance Kingdee’s market position by increasing its stake in CloudHub from 7.5373% to 70.3013%, thereby expanding its influence in the cloud services sector.