Bank of America Securities: KINGDEE INT'L (00268) had stable revenue growth last year, with net profit after adjustment meeting expectations.

Bank of America Securities released a research report stating that, based on profit forecasts, KINGDEE INT'L (00268) 2025 fiscal year operating cash flow is expected to reach 1.1 billion RMB, a year-on-year increase of 18%. The bank maintains a "buy" rating on Kingdee with a target price of HKD 20.2. Reasons include (1) resilient revenue growth supported by subscription revenue growth and improved AI monetization capabilities; (2) continuous improvement in profitability after achieving the breakeven target for the 2025 fiscal year. KINGDEE INT'L announced positive earnings after the market closed on the previous day (21st). Based on the median of the expected range, 2025 fiscal year revenue is expected to increase by 12% to 7 billion RMB. Adjusted net profit is expected to be 215 million RMB. Both figures are in line with market consensus and Bank of America's expectations. Adjusted net profit excludes stock incentive expenses, goodwill impairment, and changes in investment fair value. The bank believes that Kingdee's revenue growth in the 2025 fiscal year is stable, mainly driven by strong expansion in large enterprise business. Revenue growth acceleration is expected in the second half of 2025 (a 12.5% year-on-year increase, compared to an 11% increase in the first half), possibly reflecting gradual improvement in downstream demand. Part of the reason is the increase in new orders from small and medium-sized enterprises in the fourth quarter of 2025.