Guosen Securities released a research report highlighting KINGDEE INT'L (00268) as a global leader in SaaS services, with smooth progress in AI product development. The firm forecasts the company's revenue for 2025/2026/2027 at RMB 6.957 billion, RMB 7.928 billion, and RMB 9.059 billion, representing year-on-year growth of 11.2%, 14%, and 14.3%, respectively. Net profit attributable to shareholders is projected at RMB 72 million, RMB 369 million, and RMB 634 million, with corresponding P/S ratios of 6.1x, 5.35x, and 4.69x. Based on a 2026 P/S range of 7-8x, the valuation stands at HKD 61.068-69.792 billion, warranting an "Outperform" rating. Key insights from Guosen Securities include:
1. **Comprehensive Enterprise Management Solutions and AI Integration** KINGDEE INT'L is a top-tier enterprise management cloud SaaS provider, offering full lifecycle digital solutions. Its flagship products include the enterprise AI platform KINGDEE Cloud Tianqiong, and SaaS management clouds Xinghan, Xingkong, and Xingchen. Since its cloud transformation in 2011, cloud services accounted for 83.74% of revenue in H1 2025. With a mature subscription model, revenue CAGR reached 16.84% from 2020-2024, alongside improving gross and net margins.
2. **Cloud-Native EBC: Redefining Management Software for AI** The company, in collaboration with Gartner, introduced the post-ERP era of enterprise digital management, transitioning to cloud-native EBC (Enterprise Business Capability). EBC modularizes traditional functions into AI-driven services, serving as a critical interface for AI implementation. As a pioneer in this transformation, KINGDEE INT'L continues to enhance customer retention.
3. **Domestic Replacement and Software Upgrades Driven by Innovation** ERP replacement demand, led by state-owned enterprises, is accelerating domestic substitution. KINGDEE's Xinghan and Tianqiong platforms are fully compatible with major domestic ecosystems, including China Electronics, CETC, Huawei, and CAS, making them a preferred choice for central enterprises and Fortune 500 companies.
4. **AI Agent Expansion and Enterprise Adoption** Global AI advancements, particularly in large models for knowledge, math, and programming, have spurred Agent protocols, enabling enterprise applications. Competition now focuses on scenario-specific and ecosystem integration, where SaaS firms like KINGDEE INT'L leverage technical expertise for market positioning. The company has integrated AI capabilities across its platform, securing clients like Hisense Group and Tongwei Co.
5. **Cross-Border ERP Growth Amid Chinese Enterprises' Global Expansion** The expanding global digital economy supports Chinese enterprises' overseas growth, boosting demand for cross-border ERP solutions. KINGDEE offers end-to-end solutions covering R&D, sales, supply chain, and finance. In H1 2025, Xingkong signed 259 contracts with Chinese overseas and local enterprises, a 114.05% year-on-year increase.