Kingdee International Announces 2022 Interim Result

Cloud Service Achieved High Quality Growth, with 35.5% YoY Revenue Expansion

HONG KONG, Aug. 22, 2022 /PRNewswire/ — Kingdee International Software Group Company Limited (“Kingdee International”, “Kingdee” or the “Company” and its subsidiaries, collectively referred to as the “Group”; Stock Code: 0268.HK) today announced its interim results as of 30 June 2022 (the “Reporting Period”). During the Reporting Period, the Group continued to focus on subscription-based cloud services, powering a high quality growth of cloud service business. During the Reporting Period, cloud service business achieved a revenue growth of 35.5% year-on-year (yoy), accounting for approximately 76.4% of the Group’s total revenue. Annual recurring revenue (ARR) of Kingdee subscription-based cloud services reached approximately RMB1.86 billion, representing a yoy increase of 46.5%, and the contract liabilities related to subscription-based cloud services expanded by 56.0% yoy.

During the Reporting Period, the Group recorded total revenue of approximately RMB2,197 million, representing an increase of approximately 17.3% comparing to 1H2021 (1H2021: RMB1,872 million). Revenue from ERP business decreased by 18.1% yoy. Loss attributable to owners of the Company amounted to RMB356 million for the current period, which was mainly due to increasing investment in research and development of cloud services products, in particular Kingdee Cloud Constellation and HR SaaS, and the adverse impact on the project implementation efficiency caused by the continuation of the COVID-19 pandemic.

Almost 30 years since its inception, Kingdee has provided digital management solutions to more than 7.4 million enterprises. Kingdee has also been well recognized by renowned domestic and international research institutions in 1H2022: 1) the only Chinese enterprise SaaS vendor ranked top-ten market share in Gartner’s 2021 High Productivity aSaaS Platform; 2) ranked No.1 by IDC in China’s aPaaS public cloud market (“China ERP Application Platform-based Cloud Services Market Insights”); 3) selected into Gartner’s China Enterprise Low-Code Application Platform Competitive Landscape, as China’s representative vendor in the enterprise low-code platform.

Large Enterprise – accelerating cooperation with Top 500 Companies, proceeded in building local substitution benchmarks

During the Reporting Period, Kingdee Cloud Cosmic and Constellation recorded RMB284 million in revenue, an increase of 77.6% yoy. Dollar retention ratio remained stable compared to the same period last year. In 1H2022, 476 customers were signed, including 194 new customers, such as Shandong Heavy Industry, China General Technology Group, Minmetals International, Gemdale Corporation, Liugong Group, Guangdong Energy, Chongqing Pharma, etc. In addition, the Company continued to introduce strategic implementation partners and achieved major breakthrough in direct implementation by partners. This initiative was to support Kingdee’s large enterprise business growth plan. Cosmic and Constellation helped 122 enterprise customers to complete local substitution, and supported Huawei, Vanke, China Merchants Group, Wuchan Zhongda, Hesteel Group, Shagang Group and other global top 500 companies to carry out digital management reconstruction.

During the period, Kingdee Cloud Cosmic has received a series of industry recognitions: 1) selected into the “Cloud Native Products Directory” of the ICT Institute, 2) enlisted in the “Key Laboratory of Industrial Big Data Analysis and Integrated Application” of the Ministry of Industry and Information Technology. Moreover, Kingdee Cloud Cosmic was deeply involved in Xinchuang ecosystem, including completing the full stack adaptation with four Xinchuang mainstream technology system and obtaining the “Digital Ecology Compatibility Certification” from the ICT Institute.

Kingdee Cloud Constellation is designed for large enterprise EBC, covering standard applications and features such as finance cloud, supply chain cloud, procurement cloud, marketing cloud, manufacturing cloud, etc. Among them, Constellation HR Cloud, combined with Huawei’s leading global human resources management practice, focuses on the main business key points of human resources management in large Chinese enterprises. It is a global human resources management cloud service application product that satisfies the organizational transformation of the main business of large enterprises and the flexible adjustment of innovative businesses. In addition, financial middle office, EPM (Enterprise Performance Management) and smart finance have prominent differentiation advantages, helping large enterprises to build world-class financial systems and accelerate localization substitution.

Medium Enterprise – expanding the lead, subscription ARR achieved rapid growth of 53% yoy

During the Reporting Period, Kingdee Cloud Galaxy signed more than 300 national and provincial novel elites of SMEs; Newly signed DONG FANG ZHEN XUAN, Zhoushan Boeing, Shanghai Mabwell, Shenzhen Microgate, Digibird, Senba Dptoelectronic, HeyGears, Snapmaker, FACC, Zhongshan Lanju, Joyoung Soymilk & Food, Hong Kong Catalo and other enterprises. Galaxy’s revenue reached RMB786 million in 1H2022 , an increase of 16.1% yoy. Cloud subscription ARR increased by 53% yoy. Dollar retention ratio was 89%. Galaxy’s customer base reached 28,300 customers.

During the Reporting Period, Kingdee Cloud Galaxy improved the business layout of “one rocket, multiple satellites” by launching Kingdee Cloud Galaxy Ultra. Galaxy announced four major growth plans with EXIN, Amazon AWS, Ctrip Travel and Deloitte to accelerate the advancement of Galaxy’s platform and ecosystem strategy. Galaxy also upgraded the Manufacturing Operations Management (MOM) solution and launched special solutions for novel elites of SMEs, further enhancing the competitiveness of “PLM+ERP+MES”. Galaxy launched supply chain control tower, a metrics design platform based on a customizable number of metrics, strengthening its data intelligence services.

Small and Micro Enterprise – strengthening business-finance-tax integrated solutions, continuously improved market share

During the Reporting Period, SME finance cloud business maintained rapid growth of 74.1% yoy. Kingdee Cloud Stellar recorded a revenue increase of 337.7% yoy, and dollar retention ratio was at 72%. Stellar’s customer base reached nearly 20,000. Kingdee Cloud Stellar is positioned to meet the requirements of small commerce business and industrial trade business in growth stage. Stellar kept improving “management + operation” integrated solutions, helping enterprises to realize intelligent financial and tax management, digital and intelligent customer management, online integration, and supply and marketing collaborative integration. It redefined the industry benchmark for business-finance-tax integration. Through persistent product innovation and marketing promotion, the layout of Kingdee SME ecosystem continued to expand, which benefited Kingdee in market share gain.

Ecosystem – Cosmic ISV partners growing rapidly, moved forward in the layout of ecosystem strategy

Kingdee Cloud Cosmic ISV partner ecosystem continued to expand. Over 150 ISV partners developed their products based on Cosmic platform, covering 13 major sectors including intelligent manufacturing, transportation and logistics, wholesale and retail, finance, and life sciences. On strategic partners, Kingdee carried out cooperation with domestic and global consulting and service companies, and reached strategic partnership with Deloitte, Ernst& Young, ShineWing, HAND Enterprise, JGDT, etc. Meanwhile, Kingdee also deepened the collaboration with KPMG, iSoftStone and Chinasoft International. These partnerships formed Kingdee’s implementation service ecosystem, and supported the Company’s large enterprise market strategy. In addition, Kingdee co-built industry solutions with Huawei Cloud, Ali Cloud, Tencent Cloud, Amazon AWS and Meituan to offer comprehensive products on these platforms. Kingdee constantly improved the Xinchuang layout, completing product certifications with over twenty Xinchuang partners.

“Xu Shaochun WeChat Public Account” – listening to customers and improving Kingdee customer success ecosystem

Pioneering in the enterprise service industry, Xu Shaochun WeChat Public Account established the culture of “wholeheartedly serving the enterprise customers” through the entire user journey. In the first half of 2022, the Public Account received over 12,000 inquiries and consultations. Through optimizing the workflow, the Account enabled Kingdee’s R&D team directly accessing to customer feedbacks, in order to promote product improvement. Going forward, Kingdee’s customer success would take the Account as leverage for improving customer lifecycle experience.

Xu Shaochun, Chairman of the Board and CEO of Kingdee Group, noted that in the first half of 2022, the repetition of COVID-19 breakout in China and uncertainties in global economic recovery post many challenges. The challenging environment pushed for the acceleration of digital transformation to pursue high quality growth across different industries and verticals. Kingdee will play a major role in the enterprise digital transformation by offering the new generation composable EBC digital platform and delivering agile innovation capabilities to resolve challenges, and realizing “data-driven enterprise, resilient growth.” Looking forward, the Group will adhere to the Kingdee philosophy of “Customer foremost, long-term adherence to professionalism; Strivers oriented, long-term adherence to pure and visionary minds,” fighting alongside customers. On the basis of consistent self-innovation and advancing technology, Kingdee will promote open and win-win with ecosystem partners. Kingdee will continue to execute the “Platform + Finance & HR & Tax + Ecosystem” strategy and remain unswervingly committed to cloud subscription model, to achieve the mission of “Creating another Kingdee with the cloud subscription business model.”

About Kingdee International Software Group Company Limited

Kingdee International Software Group Company Limited (“Kingdee International” or “Kingdee”) was established in 1993. It is listed on the Main Board of the Hong Kong Stock Exchange (stock code: 0268.HK) and headquartered in Shenzhen, the PRC. Adhering to the core values of “Acting in all Conscience, with Integrity and Righteousness”, the Company is committed to helping businesses achieve their growth targets and let the sun shine on every company through dedicated services. It strives to provide them with the most trusted enterprise service platform.

According to IDC, Kingdee ranked as No.1 in the SaaS ERM (Enterprise Resource Management Cloud Service) for Large, Medium and SME enterprises in China, maintaining the No.1 in the market share in terms of SaaS EA (Enterprise Application Software Cloud Services) and Finance Cloud. Meanwhile, Kingdee has become the only Chinese enterprise SaaS vendor ranked top-ten market share in Gartner’s 2021 High Productivity aSaaS Platform, as well as the only Chinese vendor to be selected in IDC’s Asia-pacific manufacturing ERP SaaS MarketScape, as a Contender. In addition, Kingdee Cloud was selected in “The State of Low-Code Platforms of Forrester”, having the most case studies among all enterprise PaaS+SaaS platforms. Kingdee has attached great importance to user privacy and data security, and obtained the “grand slam” of security and privacy certifications, including ISO27001, ISO27701, Grade III Protection of Information Security, Cloud Security Alliance CSA-STAR.

Kingdee’s diverse Cloud services and products are the preferred choices of leading enterprises. They include “Kingdee Cloud Cosmic” (an assemblable enterprise-grade PaaS platform), “Kingdee Cloud Constellation” (EBC of large enterprises), “Kingdee Cloud Galaxy” (EBC of high growth enterprises), “Kingdee Cloud Stellar” (SaaS management cloud for small enterprises). Kingdee have provided digital management solutions to more than 7.40 million enterprises and other organizations around the world.

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