Kingdee International Software Group Co (0268) AI Stock Analysis

• Market Cap: HK$45.88B
• Dividend Yield: N/A
• Average Volume (3M): 30.72M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.08
• 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$18.90
• Price Target Upside: 45.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: HK$13.50 ▲(4.25% Upside)

The score is supported primarily by improving financial fundamentals—solid revenue growth, strong gross margin, low leverage, and free-cash-flow turning positive. It is held back by continued net losses/negative ROE, weak technical trend and momentum (below major moving averages with negative MACD), and an unfavorable/negative P/E with no dividend yield data.

Positive Factors

Revenue Growth

Sustained 10.1% revenue growth indicates steady demand for Kingdee’s enterprise software across segments. Durable top-line expansion supports scale for R&D and partner investment, improving long-term product breadth and market penetration over the next several quarters.

Gross Margin Strength

A 65.1% gross margin reflects structural software economics and pricing power in core ERP products. High gross profitability provides room to invest in cloud transitions, sales and product development while sustaining operating leverage over a multi-quarter horizon.

Conservative Balance Sheet

Very low leverage and a high equity ratio signal financial resilience and flexibility to fund cloud migration or inorganic moves without stressing liquidity. A conservative capital structure reduces refinancing risk and supports strategic investments over 2–6 months and beyond.

Negative Factors

Persistent Unprofitability

Despite revenue growth, negative net margins and ROE show the company still struggles to convert sales into profits. Continued losses constrain retained earnings and limit the pace at which Kingdee can self-fund expansion or return capital to shareholders long term.

Free Cash Flow Volatility

While FCF turned positive, prior swings indicate cash generation is not yet consistently reliable. Volatile free cash flow complicates planning for recurring cloud investments, working capital needs, and may require external financing in adverse quarters.

Cloud Transition Margin Risk

Migration from license to subscription improves recurrence but can compress near-term cash and alter margin mix as upfront license revenue declines. This structural transition can depress short-term profitability and requires sustained execution to realize long-term margin benefits.

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

Revenue growth remains solid (10.1% in 2024) and gross margin is strong (65.1%), supported by a low-leverage, high-equity balance sheet (debt-to-equity 0.03; equity ratio 58.4%). However, profitability is still weak with negative EBIT and net income margins (net margin -2.3%) and negative ROE, keeping the score in the mid-range. Cash flow improved with positive free cash flow in 2024, but volatility remains a risk.

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: 12.95
• 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 12.95 is below the 20-day moving average (MA) of 14.55, below the 50-day MA of 14.07, and below the 200-day MA of 14.81, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 37.19 is Neutral, neither overbought nor oversold. The STOCH value of 22.62 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
1675	71 Outperform	HK$8.07B	18.52	6.90%	3.47%	-17.90%	56.67%
1588	64 Neutral	HK$2.60B	30.86	8.51%	―	12.46%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0268	55 Neutral	HK$45.88B	-1,876.81	-0.26%	―	9.71%	84.42%
3896	54 Neutral	HK$32.40B	-26.31	-15.92%	―	23.96%	55.68%
9600	47 Neutral	HK$196.31M	-1.78	-14.03%	―	15.44%	10.57%
0909	43 Neutral	HK$5.83B	-87.43	-1.31%	3.10%	-17.48%	83.80%

Kingdee International Software Group Co Corporate Events

Kingdee Flags 2025 Return to Profit as Cloud and AI Strategy Boosts Growth

Kingdee International Software Group has issued a positive profit alert for 2025, projecting a return to profitability and solid top-line growth on the back of its cloud and AI strategy. The company expects 2025 revenue of RMB6.95 billion to RMB7.05 billion, up about 11% to 13% year on year, driven by rapid growth in cloud subscription income and accelerated commercialization of enterprise management AI, which has helped lift its market share. Profit attributable to shareholders is forecast at RMB60 million to RMB100 million, reversing a RMB142 million loss in 2024, while adjusted non-IFRS profit is seen at RMB190 million to RMB240 million versus a small loss a year earlier, reflecting scalability in the subscription business and efficiency gains from AI. Operating cash flow is also set to strengthen, with net cash inflow from operating activities expected to rise about 17% to 19% to roughly RMB1.09 billion–RMB1.11 billion, underscoring improving financial health as Kingdee continues to transition its business model and consolidate its positioning in China’s enterprise cloud software market.

The most recent analyst rating on (HK:0268) stock is a Hold with a HK$15.50 price target. To see the full list of analyst forecasts on Kingdee International Software Group Co stock, see the HK:0268 Stock Forecast page.