[ET Net News Agency, 22 October 2019] Jefferies Research lowered its target price for
Kingdee International Software (00268) to HK$11.3 from HK$12.1 and maintained its "buy"
rating.
The research house attended Kingdee Cloud User Conference in Beijing on 20 October. It
noted that a total of 3,000+ enterprise representatives and 60 investors presented at the
event on Sunday.
Jefferies' key takeaways are (1) Cosmic 2.0 version launched, based on bi-weekly update
in the past one year, with major improvements on its APaaS (Application Platform as a
Service) and new offerings like PLM (Product Lifecycle Management), Marketing. (2) Huawei
CIO endorsed Kingdee Cloud at the event, with more collaborations coming. (3) KIS Cloud
and EAS (Enterprise Applications Services) Cloud to accelerate on-premise migration.
Management saw better-than-expected conversion for KIS Cloud already but noted 2019-20
earnings under pressure due to the cannibalization. Jefferies trimmed its FY2019/20
revenue by 2.4% /5.4% and earnings by 12.5%/35.7% to reflect on-premise ERP (Enterprise
Resource Planning) cannibalized by Cloud and increasing investment on Cosmic. It raised
Cloud revenue CAGR in FY2019-21 from 54% to 58%. (KL)