[ET Net News Agency, 15 August 2019] Huatai Research cut its target price for Kingdee
International Software (00268) to HK$10.3 from HK$10.8 and maintained its "buy" rating.
The research house said Kingdee's 1H results were in line with an earlier profit
warning. Huatai maintained its 2019/20 cloud revenue growth forecasts unchanged at 55/55%,
but cut total revenue and earnings by 2/1% and 18/21% to reflect weak ERP (enterprise
resource planning) growth and margin pressure.
IDC expects China's enterprise resource management (ERM) market to record a CAGR of 29%
during 2018-2023. Huatai believes Kingdee, as the leading player with a 15% share in
China's ERM SaaS (Software as a Service) market and advanced cloud products, will benefit
from localization momentum and growing digital transformation demand. (KL)