Goldman Sachs: Maintains a "buy" rating on KINGDEE INT'L (00268) with a target price raised to 12.7 Hong Kong dollars.

Goldman Sachs released a research report stating that they have a constructive view on KINGDEE INTL (00268), as the leading enterprise software local supplier in mainland China is in the early stages of cloud transformation, with the main driving factors being continued revenue growth. This will improve revenue prospects and reduce the marginal cost of acquiring customers. The bank maintains a "buy" rating with a target price raised from HK$12.53 to HK$12.7. The bank expects that KINGDEE's annual recurring business revenue in 2025 will account for 53% of total revenue, promoting a favorable revenue structure and growth of large enterprise cloud customers. KINGDEE INT'L still maintains a leading position among small and medium-sized enterprise customers, and the value appreciation of the artificial intelligence platform Cosmic GPT, which provides additional value to enterprises, supports customer retention and the acquisition of new customer projects. Goldman Sachs expects KINGDEE's revenue to achieve a compound annual growth rate (CAGR) of 25% between 2024 and 2027, with a CAGR of 45% for large enterprise cloud and 18% for medium-sized enterprises. It is expected that net profit will turn positive in 2025, with a healthy free cash flow, benefiting from operational leverage improvement after the scale of cloud services.