Kingdee International (00268) surged more than 8% in early trading. As of press time, the stock was up 3.43%, trading at HK$8.895, with a turnover of HK$158 million.
Kingdee International recently announced that in the first three quarters, the contract value of AI-native products reached 1.002 billion yuan; subscription ARR at the end of September was approximately 4.604 billion yuan, up about 19.3% year-on-year; net new ARR in the third quarter grew about 46.9% year-on-year. The net dollar retention rates (NDR) for Kingdee AI Xinghan, Kingdee AI Xingkong, and Kingdee AI Xingchen were 101%, 97%, and 95%, respectively.
GF Securities noted that the rapid growth of net new ARR in the third quarter alone further proves the surge in demand brought by AI integration, and we believe this growth trend is likely to continue. In addition, based on industry patterns, a relatively high renewal rate is one of the important indicators of healthy cloud service development, mainly reflecting the comprehensive competitiveness of the company's cloud products. A higher renewal rate also lays the foundation for the company's expense ratio, especially the sales expense ratio, to continue declining in the future. It is particularly noteworthy that the company maintains a relatively high NDR, which we believe is not only related to the improvement in the quality of its core business operations but also benefits from strengthened customer repurchases driven by AI applications.
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