Caitong Securities has released a research report forecasting that KINGDEE INT'L (00268) will achieve operating revenues of RMB 7.94 billion, RMB 9.04 billion, and RMB 10.27 billion for the years 2026 to 2028, respectively. The current share price corresponds to price-to-sales (PS) ratios of 3.1x, 2.7x, and 2.4x for those years. Considering the company's resilient renewal performance and ARR metrics, coupled with the smooth progression of its native AI products, the "Buy" rating is maintained. The key points from Caitong Securities are as follows:
On April 13, 2026, KINGDEE INT'L released its first-quarter operational data. As of March 31, 2026, the company's subscription Annual Recurring Revenue (ARR) was approximately RMB 4.22 billion. The Net Dollar Retention (NDR) rates for its Xinghan, Xingkong, and Xingchen products were 103%, 96%, and 94%, respectively. The contracted value for its AI suite reached RMB 230 million.
The trend for new subscription ARR bookings is positive. By the first quarter of 2026, the company's subscription ARR increased by 18.5% year-over-year to RMB 4.24 billion, with a net addition of RMB 130 million in the quarter. The growth in ARR can be further broken down into two components: 1) The renewal portion, where both Xingkong and Xingchen showed steady improvement, with NDR rates increasing by 2 percentage points year-over-year to 96% and 94%, respectively. 2) The new booking trend is upward, with clients signed during the period including Shuanghui Development and Mianwall Intelligence.
Demand for the AI suite is strong, with new contract values reaching RMB 230 million. The AI suite is the company's newly launched, AI-native ERP product, featuring a natural language interface and underlying SaaS capabilities packaged as Skills and Agents. It is currently primarily targeted at medium and large enterprise customer segments. Based on communications during the 2025 performance meeting, the company guided for AI suite revenue to reach RMB 1 billion in 2026. The contracted value for the AI suite this quarter has already reached RMB 230 million, indicating strong customer purchase intent, and the revenue target remains on track according to the established plan.
Growth in AI orders may help alleviate market concerns surrounding narratives like "AI cannibalizing software" or the "end of SaaS." The subsequent growth in contracts and the pace of revenue recognition will be key metrics to watch.
Risk factors include: a slower-than-expected recovery in the macroeconomy, intensifying competition in the ERP market, risks that AI development could impact software development value and business models, and slower-than-anticipated progress in product transformation.
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