Citi Keeps Buy Rating on Kingdee International with HK$11.90 Target Price

Citi issued a research report maintaining a "Buy" rating on Kingdee International (00268) with a target price of HK$11.9.

The company's "AI-first, subscription-first and globalization" strategy continues to advance. In the third quarter, subscription annual recurring revenue (ARR) grew approximately 19.3% year-on-year to RMB 4.604 billion, while net new ARR rose 46.9% year-on-year to RMB 191 million, mainly driven by strong demand for Kingdee's AI suite and Lingji.

In the first three quarters of 2026, total contract value of Kingdee's AI-native products reached RMB 1.002 billion, meeting the company's full-year AI-native revenue guidance of RMB 1 billion, reflecting rising willingness among enterprise clients to pay for embedded AI solutions.

Net dollar retention rates across the three AI+SaaS product lines showed divergence, with AI Xinghan, AI Xingkong and AI Xingchen at 101%, 97% and 95% respectively.

Citi noted that expansion among large enterprise clients outperformed that of small and medium-sized enterprises. During the period, Kingdee secured new contracts from CRRC (01766), Changan Automobile (000625.SZ), China Everbright Group, and H World Group-S (01179), among others, reflecting that business cooperation is continuing to penetrate into large and well-known clients.