[Hong Kong, March 15, 2023] Kingdee International Software Group Limited ("Kingdee International," "Kingdee," or the "Company," together with its subsidiaries referred to as the "Group"; Stock Code: 0268. HK) today announced its annual performance for the twelve months ending December 31, 2022 ("Reporting Period"). Kingdee continues to deepen its cloud subscription model transformation strategy and build a diversified product matrix, leading to rapid growth in the cloud service business. During the reporting period, the Group's cloud business achieved a revenue increase of 34.6% YoY, reaching approximately RMB 3.714 billion, accounting for approximately 76.3% of total revenue. Our annual recurring revenue (ARR) from cloud subscription services amounted to approximately RMB 2.14 billion, representing a YoY growth of 36.3%. The contractual liabilities related to cloud subscription services experienced a YoY growth of 38.3%. The Group's net operating cash flow was approximately RMB 374 million.
During the reporting period, the Group recorded a revenue of approximately RMB 4.866 billion, representing a growth of about 16.6% compared to 2021, at about the same period. However, the revenue from enterprise resource management plans and other businesses decreased by 18.7% YoY. The Group continues to increase its investment in research and development in cloud products, particularly in Kingdee Constellation and HR SaaS. Additionally, the ongoing COVID-19 pandemic during 2022 hindered certain marketing and delivery activities, resulting in an estimated loss of approximately RMB 389 million for the current period attributable to equity holders of the company.
As a globally leading and China's top enterprise management cloud SaaS company, Kingdee has been providing products and services to over 7.4 million enterprises and government organizations worldwide during the span of nearly 30 years since its establishment. It has received recognition from renowned research institutions at home and abroad and has won multiple honors. In the "Enterprise Digital Transformation Development Hyperbola and Quadrant (2022 Edition)" by the China Academy of Information and Communications Technology (CAICT), Kingdee is the only SaaS service provider recognized as a leader in both the industry empowerment value and technology service capability domains. It is the only management cloud SaaS provider ranked as the leader in the IDC MarketScape China Digital Factory Solutions market. Kingdee is the only Chinese company that has been ranked among the top 10 in the Gartner High-Productivity aPaaS Platform worldwide for 2 consecutive years, earning the title of China's number one. Kingdee has also achieved the number 1 position in the IDC 2022 H1 SaaS ERM (Enterprise Resource Management Cloud), Financial Cloud, and EPM (Enterprise Performance Management Cloud) Chinese markets. Additionally, it has remained the top vendor in IDC China's Emerging Enterprise Application Software Market share for 18 consecutive years.
Continuously breaking into central state-owned enterprises and Fortune 500 companies, capturing the high-end market
After five years of continuous refinement, the domestic alternatives of the Kingdee Cosmic and Kingdee constellation have become increasingly evolved and possess comprehensive domestic substitution capabilities, making them the new choice for many Fortune 500 companies. Based on the enterprise-level cloud-native architecture and the concept of modular assembly, Kingdee Cosmic integrates the innovative Kingdee Dynamic Domain Model (KDDM) to help enterprises rapidly assemble and build digitally-enabled capabilities that are high-performing, resilient, adaptable, and self-controlled. Kingdee Cosmic has long been committed to independent innovation and has achieved full-stack compatibility with leading Chinese information and communication technology manufacturers such as China Electronics, China Electronics Technology Group Corporation, and Huawei. It has also achieved product compatibility and adaptation with mainstream information and communication technology providers such as China Telecom Tianyi Cloud, Huawei Cloud, Alibaba Cloud, Tencent Cloud, China Unicom Cloud, Feiteng, Kunpeng, NeoKylin, Uniontech, Dameng, and KingBaseES. At the same time, Kingdee Cosmic has applied intelligent technologies in various scenarios such as robotic process automation (RPA), business forecasting, and intelligent analytics. It has launched digital employees that combine multiple technologies like "RPA + AI + Big Data," and has accumulated more than 260 patent applications. It has received five awards at the national level and has become a member unit of the first batch of assembly-driven promotion centers at the China Academy of Information and Communications Technology (CAICT).
Kingdee Constellation, represented by financial middleware, enterprise performance management (EPM), and global treasury, covers all-round digital management of large enterprise group finance, group taxation, global human resources, group production and procurement, and other areas. Constellation Human Resources Cloud has released CoreHR, providing intelligent, global, and modular applications for large and super-large Chinese enterprises, creating a leading force in HR digitalization in China. Xinghan Finance Cloud has released a series of new functional features for its treasury product, achieving full coverage of the treasury functions required by the State-owned Assets Supervision and Administration Commission. Constellation EPM (enterprise performance management) has been successfully applied in many Fortune 500 companies such as Zhejiang Communications Investment Group and has become the first batch of certified platforms for the "EPM Business-Finance Integration" series of standards by the China Academy of Information and Communications Technology.
During the reporting period, Kingdee Cosmic and Kingdee Constellation recorded a total revenue of approximately RMB 696 million, a year-on-year increase of approximately 80.9%, with a renewal rate of over 110%. A total of 902 new customers were signed on, including 478 newly signed customers, including many benchmark customers such as Shandong Heavy Industry, SSCO, Tongwei Co., Ltd., China General Technology, Shenzhen Zhongjin Lingnan Nonfemet, China Minmetals Nonferrous Metals Co., Ltd., Hunan Nonferrous Metals Corporation Limited, Shanxi Automobile Group Co., Ltd., and Zhejiang Geely Holding Group Co., Ltd., thereby creating a leading practice in domestic substitution for central state-owned enterprises, building world-class management, and promoting digital transformation and upgrade. Kingdee has helped a total of 154 large enterprises complete their domestic substitution.
Expanding the integration of research, development, production, and sales and consolidating the competitiveness in the mid-market
Kingdee Galaxy continues to expand its advantages in cloud services in all fields such as finance, research and development, supply chain, manufacturing, and marketing. It has strengthened product innovation and customer practices in different industries such as high technology, manufacturing, and life sciences, and has consistently consolidated its competitive advantage in the mid-market. It was selected as the leader in the 2022 IDC China Digital Factory Service Provider Leaders Quadrant. Its intelligent data service launched a benchmark analysis platform with over 20 preset analysis models and over 70 analysis pointers to help enterprises achieve accurate prediction, risk control, and insights. In addition, the flagship version of Kingdee Galaxy was released during the reporting period, meeting the multi-dimensional growth needs of more leading enterprises.
During the reporting period, Kingdee Cloud · Xingkong achieved a revenue of approximately RMB 1.679 billion, a year-on-year increase of approximately 18.4%. The cloud subscription accounting rate of return (ARR) of Kingdee Cloud · Xingkong increased by approximately 31.2% year-on-year, with a customer renewal rate of 97.2% and a total of 31,000 customers. During the reporting period, Kingdee Cloud · Xingkong signed contracts with nearly a thousand national and provincial-level specialized and innovative new enterprises, as well as newly signed customers such as Dongfang Zhenxuan, Zhoushan Boeing, Zhengzhou Kaixue ColdChain Co., Ltd, Changfeng Kewei Optoelectronics, Yongjin Technology Group Co., Ltd, Rayhoo Motor Dies Co., Ltd., Yamaxi Electronics, Hangzhou Foresee Group Holding, and Aotecar New Energy Technology.
Building a new SaaS ecosystem for small and micro enterprises and seizing the integrated business, finance, and taxation market
During the reporting period, the small and micro financial cloud services continued to maintain rapid growth, with a year-on-year revenue growth of approximately 63.1%, wherein Kingdee Constellation’s revenue increased by approximately 358.6% year-on-year, with a renewal rate of 77.3%. During the reporting period, Kingdee Constellation focused on the integration of business, finance, and taxation, and through extensive connections with ecosystem partners, created an open, diverse, and win-win ecosystem of business, finance, and taxation SaaS for small and micro enterprises, enabling them to enhance their risk resistance, management mechanism construction, resource allocation, and many other aspects. It also worked with 8 banks, including China Merchants Bank, to connect banks and enterprises, and jointly launched exclusive solutions for 8 major industries such as food, clothing, and medicine with ecosystem partners.
Deepening strategic partnerships to accelerate the expansion of the Kingdee ecosystem
During this period, Kingdee continued to strengthen its ecosystem by forming strategic partnerships with more than ten partners, including Deloitte, Ernst & Young, GaoDun, ShineWing, Hand Enterprise Solutions, Jianguang Data & Science Technology, and others. It deepened collaborations with KPMG, Pactera Technology International, and Neusoft Corporation, joining forces to penetrate the large enterprise market. Kingdee also achieved in-depth integration and co-creation of multiple industry solutions with Huawei, Alibaba, Tencent, Intel, Amazon AWS, and other vendors. Strategic cooperation relationships were established with Huawei Kunpeng ecosystem, China Electronics PKS ecosystem, and China Electronics Technology Group Corporation WE ecosystem. Owing to the outstanding performance and ecosystem layout of the Kingdee Cosmic platform, Kingdee was honored with the "2022 China Information Technology Creation Ecosystem Excellence Award." So far as the reporting period is concerned, over 1,500 partners have joined the Kingdee ISV ecosystem, with 120 ISV partners building product solutions based on the Cosmic platform, connecting the business chain of "research, production, supply, sales, and services" for enterprises.
Using "Xu Shaochun Personal Account" as the focal point, driving continuous improvement in the user experience throughout the entire journey
The "Xu Shaochun Personal Account" has been a pioneer in enterprise services, establishing a culture of "wholehearted dedication to serving enterprises" that permeates the entire customer experience journey. In 2022, the "Xu Shaochun Personal Account" received over 460 customer commendation letters and the service complaints were reduced by 66%. Concurrently, Kingdee continues to innovate, improve, and transform its services for the success of its customers by developing customer success management methodologies, significantly improving the timeliness of service response and resolution, further enhancing customer satisfaction, and striving to create the Kingdee Cloud Community as an online service platform, helping more users be self-sufficient and also assist each other in solving problems. In the future, based on the "Xu Shaochun Personal Account," Kingdee will continue to optimize the end-to-end journey of the Kingdee customer success system.
Xu Shaochun, Chairman and CEO of Kingdee Group stated that Chinese-style modernization requires Chinese-style modernization in management, and behind a strong China, there must be a powerful management software company. Over the past 30 years, Kingdee has gradually evolved into China's top enterprise management cloud SaaS company and also a global leader, accelerating the transformation of Chinese enterprises into world-class entities. The year 2023 marks Kingdee's relaunch at the age of 30, and the company will firmly execute the strategy of "recreating a new Kingdee through the subscription model," continuing to focus on "platform + HR & payroll + ecosystem." By firmly adhering to the Kingdee philosophy of "customer-centricity and long-term dedication to professionalism, and employee-oriented and long-term commitment to integrity," it will strive to deliver better products, ecosystem, delivery, services, and reputation. Using digitalization as a means to drive high-quality development of Chinese enterprises, will be a vanguard in the construction of a digital economy powerhouse.
