Kingdee International Released 2021 Interim Results Cloud Service Revenue Achieved Rapid Growth of 55.1% y-y

Rhea-AI Summary

Kingdee International Software Group reported strong interim results for the period ended June 30, 2021. Revenue from cloud services rose by 55.1% year-on-year to RMB1,238 million, accounting for 66.1% of total revenue, which increased by 35.0% to RMB1,872 million. The company achieved a 71.5% rise in subscription ARR to approximately RMB1.27 billion. Despite this growth, a loss of RMB248 million was recorded. Kingdee continues to enhance its R&D in cloud services with significant milestones in customer onboarding and strategic partnerships.

Positive

• Cloud services revenue increased by 55.1% year-on-year to RMB1,238 million.
• Total revenue rose by 35.0% year-on-year to RMB1,872 million.
• Subscription ARR grew by 71.5% to approximately RMB1.27 billion.
• Kingdee Cloud Cosmic and Constellation revenue increased by 155.4% year-on-year.
• Signed 142 new customers across various industries.

Negative

• Loss attributable to the owners of the company was approximately RMB248 million.

HONG KONG, Aug. 19, 2021 /PRNewswire/ -- Kingdee International Software Group Co., Ltd. ("Kingdee International", "Kingdee" or the "Company", together with its subsidiaries collectively referred to as the "Group"; Stock Code: 0268.HK) today announced its interim results for the period ended 30 June 2021 (the "Reporting Period"). Focusing on the "Platform + Finance & HR & Tax + Ecosystem" strategy, the Group continued to develop and promote subscription based cloud services. During the reporting period, the revenue from Cloud services increased by 55.1% yoy to RMB1,238 million, accounting for 66.1% of total revenue. Kingdee's subscription ARR (annual recurring revenue) was approximately RMB1.27 billion, an increase of 71.5% yoy. Meanwhile, subscription related contract liabilities achieved growth of 82.2% yoy.

During the reporting period, the Group recorded total revenue of RMB1,872 million, representing an increase of 35.0% as compared with the same period in 2020, and the revenue from the ERP and other business achieved growth of 7.7% yoy. In addition, the Group continued to increase the R&D investment on Kingdee Cloud Cosmic, Constellation, and other cloud services. Loss attributable to the owners of the Company for the period was approximately RMB248 million.

Evolving from ERP to EBC (Enterprise Business Capability), Kingdee has assisted more and more enterprises to boost "enterprise capability". Through persistent exploration in cloud services area and gaining customer trusts, Kingdee was well recognised by global research institutions including the following "only" awards: 1) the only Chinese enterprise SaaS vendor ranked top-five market share in Gartner's 2020 Application Platform Software; 2) the only Chinese enterprise SaaS vendor selected into Gartner's Global Market Guide for Cloud ERP; 3) the only Chinese vendor won IDC's 2020 Global SaaS Customer Satisfaction Award, ranked No.1 in ERP SaaS customer satisfaction; 4) the only Chinese vendor selected into IDC's 2021 Asia Pacific Manufacturing ERP SaaS MarketScape, as a Contender; 5) the only company ranked No.1 market share in IDC's China's Enterprise SaaS ERM market for four consecutive years; 6) the only company ranked No.1 market in IDC's growth enterprise application software market for seventeen consecutive years.

Remarkable growth in Large Enterprise market, and milestone achievement with model customers.

As the industry leading enterprise-class PaaS platform, Kingdee released Cosmic 4.0 version during the reporting period, to maintain the technological advantages and high entry barriers. Cosmic has proved its high stability and high reliability with multiple customers, also certified by Huawei, for passing industry high-standard enterprise scene million concurrent connections stress test. Meanwhile, Cosmic's ecosystem ISV partners amounted to nearly 800, adding several new modules such as pharmaceutical distribution, MES (Manufacturing Execution System), WMS (Warehouse Management System), and CRM (Customer Relationship Management System).

In May 2021, Cosmic's SaaS was rebranded as a new independent brand Kingdee Cloud Constellation. As EBC cloud service for large enterprises, Constellation provides more than 200 modules and features around finance, taxation, HR, supply chain, procurement and manufacturing.

During the reporting period, Kingdee achieved milestone breakthrough with several Cosmic and Constellation model customers, including 1) On-boarded Huawei Global HR Phase One system. Huawei and Kingdee will continue to move forward on the system, jointly building the enterprise digital capability for the future. 2) China Tobacco Yunnan's Cosmic-based integrated ERP system was on-boarded at the beginning of 2021. With stable performance, the customer and Kingdee achieved breakthrough in local substitution and innovation. 3) Constellation modules for Hisense Group Phase Two has been on-boarded, improving scale operating efficiency.

During the reporting period, Kingdee Cloud Cosmic and Constellation recorded RMB160 million in revenue, an increase of 155.4% yoy. Cosmic and Constellation signed 142 new customers in total, including industry leading customers such as China Huaneng Group, Shagang Group, HPGC Renmintongtai, Guangxi Beibu Gulf Investment Group, Hengfeng Paper, and German Continental AG.

Favored by star high-growth Enterprises in Medium Market, and in-depth exploration in industry verticals.

Based on successful digital transformation cases and enterprise management wisdom, Kingdee Cloud Galaxy is poised to help the stable operation of high-growth enterprises. Galaxy offers finance cloud, manufacturing cloud, supply chain cloud, omni-channel marketing cloud, new retail cloud, and especially the industry leading unique "PLM + ERP + MES" integrated solution. As the EBC cloud service for high-growth enterprises, Kingdee Cloud Galaxy focused on industry vertical capabilities, and grew with the booming industry leaders and unicorns, including Phytium, Sensoro, IntelliFusion and EV Power in High-tech industry, PharmaBlock Sciences, Angelalign, Smartee and Mednovo in Life science industry, HMNTech, Huanghe S&T Group Information Industry, Cheersson Industrial and Sunny Precision in Advanced manufacturing industry, as well as leadership in other industry verticals like manufacturing, food and daily chemical, food and beverage. Galaxy has developed standard industry best practices as well as customized solutions. Galaxy solution for HMNTech was included in "Typical Case of Innovative Solutions for Information Technology Applications in 2020" by the Ministry of Industry and Information Technology (MIIT).

During the reporting period, Kingdee Cloud Galaxy continued to deepen the industry layout, and successively signed well-known enterprises such as KINGSEMI, Sillumin, Tong Hua Dong Bao Group, Sanyou Medical, ZET, Chiopt Optotech, Huaxin Photoelectricity and Kanhoo. Kingdee Cloud Galaxy registered revenue of approximately RMB680 Million, an increase of over 35.1% yoy, maintained its dollar retention at 87.1%, and accumulated over 22,800 customers. Thanks to the maturity of the industry plan and the signing of direct delivery with its partners, Kingdee Cloud Galaxy's profitability has improved significantly.

Rapid growth in Small & Micro enterprise market, and constructing the finance & tax service ecosystem

During the reporting period, Small & Micro business (SMB) finance cloud service achieved rapid growth with a yoy revenue increase of 72.3%. Kingdee Cloud Stellar and Jingdou Cloud's combined revenue grew by 54.8% yoy. Kingdee KIS Cloud achieved a rapid growth of 329.9% yoy in revenue by promoting old customers of KIS end products to upgrade cloud subscription, and maintained its dollar retention of approximately 91.6%. During the reporting period, Kingdee Cloud Stellar and Ding Talk jointly launched a data standard co-build plan based on the integration of business and finance, promoted the data interconnection among SaaS in the industry in order to realize one-stop digital management of business and finance and help the small and micro enterprises improve the efficiency of fiscal and tax management and business decision-making.

Advance in the ecosystem strategy, to achieve a Win-Win for Kingdee and Partners

During the reporting period, Kingdee strategically invested in Shanghai i-Search Software Co., Ltd. to jointly create intelligent, efficient and innovative RPA applications. Meanwhile, Kingdee invested for the majority shareholding in Beijing Infosin to provide full-life-cycle product solutions for the tobacco industry. Besides, Kingdee actively built strategic ecosystem: it deepened partnership with domestic and foreign consulting and implementation partners such as KPMG, iSoftStone, Chinasoft International, and explored service ecosystem cooperation. Kingdee introduced solution plans for the industry with IaaS players such as Huawei Cloud, Alibaba Cloud, and Tencent Cloud. Collectively working with the Xinchuang ecosystem, Kingdee has passed the adaptation certificates with 11 products of Xinchuang partners, such as Kunpeng, Dameng Database and Kylin Software.

Internal Reform motivated by Xu Shaochun's WeChat Public Account, to enable customer success

Introduction of "Xu Shaochun's WeChat Public Account" aims to promote the culture of "wholeheartedly serving the enterprise customers" across the Group, and has become a major force driving Kingdee's cloud transformation. In the first half of 2021, the Public Account received nearly 5,000 effective consultations, also received over 240 customer appraisals, representing over 110% yoy increase. Customer complaints also declined by 40% yoy. The Public Account has notably pushed forward internal reforms based on the feedbacks, and has built direct customer services and customer success model.

Mr. XU Shaochun, Chairman and CEO of the Group: "Kingdee will continue to execute the cloud subscription transformation strategy, and to fully carry out the strategy of "Platform + Finance & HR & Tax + Ecosystem", in order to consistently user experiences of our products and services. In the next three years, we will create a new Kingdee with subscription revenue. Committed to the philosophy of 'Putting customers at the center, Insisting professionalism in the long-run; Regarding hardworking as the foundation, Keeping a pure heart and pure mind for a long time', Kingdee will wholeheartedly work with every customers on digital transformation, to resolve challenges and achieve growth.

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, China. 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 through dedicated services. It strives to provide clients with the most trusted enterprise service platform.

With the exploration in cloud services area, Kingdee has continuously received recognition from renown global and local research institutions. Kingdee achieved the following six major recognitions: 1) the only Chinese enterprise SaaS vendor ranked top-five market share in Garnter's 2020 Application Platform Software; 2) the only Chinese enterprise SaaS vendor selected into Gartner's Global Market Guide; 3) the only Chinese vendor won IDC's 2020 Global SaaS Customer Satisfaction Award, ranked No.1 in ERP SaaS customer satisfaction; 4) the only Chinese vendor selected into IDC's 2021 Asia Pacific Manufacturing ERP SaaS MarketScape, as a Contender; 5) the only company ranked No.1 market share in IDC's China's Enterprise SaaS ERM market for four consecutive years; 6) the only company ranked No.1 market in IDC's growth enterprise application software market for seventeen consecutive years.

Many cloud service products of Kingdee have won the favour of benchmark enterprises, which included Kingdee Cloud Cosmic (new-generation PaaS Platform for enterprises), Kingdee Cloud Constellation (SaaS solution for large enterprises), Kingdee Cloud Galaxy (SaaS solution for medium-sized enterprises), Kingdee Cloud Stellar (SaaS solution for micro and small enterprises). Kingdee has provided software management and cloud services for more than 6.8 million enterprises, governments and organizations across the world.

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SOURCE Kingdee

FAQ

What were Kingdee's revenue figures for the first half of 2021?

Kingdee reported total revenue of RMB1,872 million for H1 2021.

How much did Kingdee's cloud services revenue increase?

Revenue from cloud services increased by 55.1% year-on-year.

What is the annual recurring revenue of Kingdee as of June 2021?

Kingdee's subscription ARR was approximately RMB1.27 billion.

What loss did Kingdee report for the first half of 2021?

Kingdee reported a loss of approximately RMB248 million.

How many new customers did Kingdee onboard in H1 2021?

Kingdee onboarded 142 new customers during the reporting period.

What market share recognition did Kingdee receive?

Kingdee ranked No.1 in IDC's China's Enterprise SaaS ERM market for four consecutive years.