研究报告全文：MN14Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateKingdee268HKBiddingdataimpliedacceleratedsoftwaresubstitutionTargetPriceHK2356WeexpectKingdeetodeliverFY22ErevenueofRMB48bn15YoYwithPreviousTPHK2383netlosswidenedtoRMB395mnvsRMB302mninFY21LookingintoUpDownside413FY23EARRgrowthrecoverycoreSaaSproductGalaxyprofitabilityCurrentPriceHK1668improvementandXinchuanginitiativewillremainasthekeygrowthdriversOurrecentchannelchecksuggestedanacceleratingsoftwarelocalsubstitutionChinaSoftwareITServicestrendKingdeestotalbiddingwonwasup82141YoYinFY22FY23MarleyNGANYTDbasedondollaramountDespitenear-termcorrectionpressureafter8085239163719sharepricerallysinceOct2022weremainpositiveonthelong-termsoftwaremarleyngancmbicomhksubstitutiontrendMaintainBUYBowenLIFY22previewRevenue15YoYthoughnetlosswidenedWeexpect85237618957KingdeetodeliverFY22revenueofRMB48bn15YoYwithnetlosslibowencmbicomhkwidenedtoRMB395mnvsRMB302mninFY21ARRisexpectedtogrow33YoYtoRMB21bnbelowcompanyspriortargetof45-50StockDataYoYWeestimatecloudrevenuetogrow32YoYtoRMB36bnofwhichMktCapHKmn579540Avg3mthstoHKmn160coreSaaSproductGalaxywillexperiencemoderategrowthof15YoY52wHighLowHK2050918asCOVIDresurgenceinFY4Q22hasaffectednewcustomeracquisitionTotalIssuedSharesmn34749andARROurFY22revenueforecastis5belowconsensusSourceFactSetFY23EfocusonARRrecoveryGalaxyprofitabilityimprovementandShareholdingStructureXinchuangopportunitiesWethinkKingdeewillfocusonqualitygrowthinMrXu-Chairman203FY23EandthatnetlosswillnarrowtobelowRMB300mnlevelWeexpectOrientalTaoLimited111SourceHKExtoseeARRgrowthtopickup40YoYvs33YoYinFY22EMeanwhilefurtherimprovementinGalaxyOPMto30vs20inSharePerformanceFY22EwillhelpoffsetthemargindilutionimpactfromXinchuangprojectsAbsoluteRelative1-mth0410Biddingdatashowedacceleratinglocalsubstitutionamonglarge3-mth31800enterprisesOurrecentchannelchecksuggestedthatERPisbeingputin6-mth35-42acoredirectionintheXinchuanginitiativesinceFY2H22andthat40000SourceFactSetgovt-backedenterpriseshavetosubmitXinchuangworkplanin2023This12-mthPricePerformanceisin-linewithourobservationinSOEslargeenterprisebiddingdataInFY22basedondollaramountKingdeestotalbiddingwonwasup82YoYFY23YTDgrowthismoresignificantat141YoYThesereaffirmedourviewthatChinaisacceleratingsoftwarelocalizationanditgivesKingdeetheopportunitiestopenetrateintoSOEslargeenterprisesMaintainBUYwithChinasTwoSessionsbeingthenear-termcatalystWeslightlyreviseddownFY22-24Erevenueby1-2toreflectslowerARRSourceFactSetgrowthMaintainBUYwithnewtargetpriceofHK2356priorHK2383basedonunchanged11xFY23EEVsalesin-linewith3-yearmeanKingdeevsYonyouvaluationDespitenear-termcorrectionpressureafter80rallyinsharepricesinceOct2022weremainpositiveonthelong-termsoftwaresubstitutiontrendKeycatalysttechnologyself-sufficiencytobeoneofthekeyfocusesinupcomingChinasTwoSessionsinMarEarningsSummaryYE31DecFY20AFY21AFY22EFY23EFY24ERevenueRMBmn33564174478858497031YoYgrowth09244147222202RelatedreportsNetprofitRMBmn3355302339462635274EPSReportedRMBcents101292311377590791Kingdee268HKCloudontrackwithimprovedearningsquality22ConsensusEPSRMBcents10129231280790000Aug2022linkPExnananana176182ChinaSoftwareITServicesEVSalesx136111967965SoftwarelocalizationtobenefitYield0000000000ChinaERP27May2022linkROE4939533704Netgearing332259277322390SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk14Feb2023FocusChartsFigure1RevenueandgrowthFigure2KingdeebiddingwonRMBmnRMBmn80003070200180700025601602060005014015YoY141500040120104000100530803000020602000-540101000-10200-15002011201320152017201920212023E1Q212Q213Q214Q211Q222Q223Q224Q2220222023YTDYTDRevenueYoYBiddingamountRMBmnYoYSourceCompanydataCMBIGMestimatesSourceQCCcomCMBIGMFigure3RevenuemixFigure4Contractedliabilities100RMBmn9025001008070200080605015006040301000402010500200201320152017201920212023E001H192H191H202H201H212H211H22ManagementsoftwarebusinessandothersCloudServicesbusinessCloudcontractedliabilitiesYoYSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesFigure5SubscriptionARRFigure6DecreasingRDcapitalizationrateSubscriptionARRRMBmnRMBmn4000FY21-23EARRCAGR361000903500900808007030007006060025005050040200040030150030020020100010010005001H192H191H202H201H212H211H220RDexpensedRDcapitalized2019202020212022E2023E2024ECapitalizationrateSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE214Feb2023FY22EpreviewFigure7RevenuebreakdownRMBmn2019202020212022E2023E2024ERevenuebreakdownCloudServicesbusiness131419122758363247515988CosmicConstellation601903856169241247Galaxy86811411418163119572309Others386581955138518702431ERPbusiness201214441416115610981043License980448472354336320Implementationand1066996944802762724maintenanceRevenueYoYCloudServicesbusiness554644323126ERPbusiness3-28-2-18-5-5Blended18124152220RevenuemixCloudServicesbusiness395766768185ERPbusiness614334241915ARRRMBmn63010001570208829233800YoY-5957334030SourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE314Feb2023EarningsrevisionFigure8Earningsrevision2022E2023E2024ERMBmnNewOldDiffNewOldDiffNewOldDiffSales47884906-258495931-170317091-1Grossprofit29903011-136223761-443984530-3OPProfit-839-978-14-650-6165-313-3043PBT-447-586-24-308-277113237-13Netprofit-395-513-23-263-237112732-13EPS-011-015-23-008-00711001001-13MarginsGM625614109bps619634-149bps625639-134bpsOPM-175-199240bps-111-104-72bps-45-43-17bpsPBTmargin-93-119260bps-53-47-60bps0505-7bpsNetmargin-82-105222bps-45-40-51bps0404-6bpsSourceCompanydataCMBIGMFigure9CMBIestimatesvsconsensus202220232024RMBmnCMBIStreetDiffCMBIStreetDiffCMBIStreetDiffSales47885028-558496281-770317819-10Grossprofit29903096-336223995-943985057-13Operatingprofit-839-68323-650-44446-313-133136Profitbeforetax-447-512-13-308-2906322340Corenetprofit-395-422-7-263-215232767-59EPS-011-013-11-008-008-100100097MarginsGM62561687bps619636-169bps625647-212bpsOPM-175-136-394bps-111-71-404bps-45-17-276bpsProfitbeforetax-93-10286bps-53-46-66bps050316bpsmarginNetmargin-82-8415bps-45-34-108bps0409-47bpsSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE414Feb2023ValuationKingdee268HKBUYTPHK2356WemaintainBUYonKingdeewithnewtargetpriceofHK2356priorHK2383basedonunchanged110xFY23EEVsalesin-linewithitsthree-yearmeanFigure10KingdeepeersvaluationcomparisonMarketPriceTPEVsalesxFCFmarginSalesEPSCapCAGRCAGRCompanyTickerRatingUSmnLCLCFY22EFY23EFY22EFY23EFY21-24EFY21-24EKingdee268HKBUY73831668235696791719naYonyou600588CHHOLD125092487222781664617naKingsoft688111CHNR1958728992na32024140402829OfficeSAPSAPUSNR14416511735na474316178naIntuitINTUUSNR11616841352na968629281827XeroXROAUNR80027688na11890-722663WorkdayWDAYUSNR4802018685na8974262019naServiceNowNOWUSNR9304745836na126103293022114SalesforceCRMUSNR16703016703na64551920179Mean1159317191948Median967819201929SourceBloombergCMBIGMestimatesFigure11Kingdee12MforwardEVsaleschartFigure12Kingdee12MforwardEVsalesbandxHKmn3020000025180000160000201400001200001510000080000106000040000520000--Apr-20Oct-20Apr-21Oct-21Apr-22Oct-22Jun-20Jun-21Jun-22Feb-20Feb-21Feb-22Dec-20Dec-21Dec-22Aug-20Aug-21Aug-22Oct-21Apr-20Oct-20Apr-21Apr-22Oct-22Jun-22Jun-20Jun-21Feb-20Feb-21Feb-22Dec-20Aug-21Dec-21Aug-22Dec-22Aug-20EV44x95x1-yrfwdEVSALESMean146x197x248xMean1SDMean-1SDSourceBloombergCMBIGMestimatesSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE514Feb2023FinancialSummaryINCOMESTATEMENT2019A2020A2021A2022E2023E2024EYE31DecRMBmnRevenue332633564174478858497031Costofgoodssold92211471541179822272633Grossprofit240322092634299036224398Operatingexpenses234728233392383042724711Sellingexpense137414251741200921242324Adminexpense386414466519570618RDexpense5879841185130215781769Operatingprofit56614758839650313NetInterestincomeexpense53676666573Others335195299326276272Pre-taxprofit39638338244730832Incometax30414418313Minorityinterest763634141Netprofit37333530239526327BALANCESHEET2019A2020A2021A2022E2023E2024EYE31DecRMBmnCurrentassets424161834471478751075699Cashequivalents189927542047238426003071Restrictedcash308334392416508611Prepayment6881236370370370370Othercurrentassets89515031339123912761295Contractassets452357323377352351Non-currentassets417945396616674369547252PPE5477461045108411401215Intangibles9237861037112612801503Othernon-currentassets270930074534453445344534Currentliabilities199825993084374545675438Short-termborrowings2001200999388Accountpayables61679575986110141139Othercurrentliabilities186200160160160160Contractliabilities99714842165262533014052Non-currentliabilities276165200411397387Long-termborrowings000211196187Othernon-currentliabilities276165200200200200Totalliabilities227427643284415649645826Sharecapital808383838383Capitalsurplus296350535149514951495149Retainedearnings2257192216191225961989Otherreserves687732744744744744Totalshareholdersequity598777907596720269386966Minorityinterest159169207172158160Totalequityandliabilities84201072211087115301206112951PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE614Feb2023CASHFLOW2019A2020A2021A2022E2023E2024EYE31DecRMBmnOperatingProfitbeforetaxation39638338244730832Depreciationamortization485493439447491545Taxpaid30414418313Changeinworkingcapital131364560584725755Others49144525092Netcashfromoperations9634736615328581241InvestingCapitalexpenditure515353772575702844Others381138433708188Netcashfrominvesting55314911205505621755FinancingDividendpaid33370000Netborrowings102801203102114Proceedsfromshareissues020910000Others167924000Netcashfromfinancing3319661443102114NetchangeincashCashatthebeginningoftheyear145318992754204723842600Exchangedifference39319000Cashattheendoftheyear189927542047238426003071GROWTH2019A2020A2021A2022E2023E2024EYE31DecRevenue18409244147222202Grossprofit4781192136211214Operatingprofit118nananananaNetprofit96nananananaPROFITABILITY2019A2020A2021A2022E2023E2024EYE31DecGrossprofitmargin723658631625619625Operatingmargin1718318217511145ReturnonequityROE654939533704GEARINGLIQUIDITYACTIVITIES2019A2020A2021A2022E2023E2024EYE31DecNetdebttoequityx030303030304Currentratiox212414131110Receivableturnoverdays394nananananaInventoryturnoverdays15nananananaVALUATION2019A2020A2021A2022E2023E2024EYE31DecPE633nananana17618PB386193697272Divyield020000000000EV465742456397462265461995459621454769EVSales140136111967965SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE714Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE8