GF Securities maintains a "buy" rating on KINGDEE INT'L (00268) with a fair value of approximately HKD 17.94 per share.

GF SEC released a research report stating that it maintains previous forecasts, expecting KINGDEE INT'L (00268) to achieve main business revenue of 7.913 billion yuan, 8.901 billion yuan, and 9.939 billion yuan for the years 2026-2028, with year-on-year growth rates of 12.9%, 12.5%, and 11.7% respectively. Referring to comparable company valuations, the company assigns a 7x PS valuation multiple for Kingdee in 2026. With a reference exchange rate of 1 Hong Kong dollar = 0.87 RMB, the corresponding fair value per share is approximately 17.94 Hong Kong dollars/share, maintaining a "buy" rating. Key points from GF SEC include: - ARR continues to show significant growth, with NDR, the main product in Q1 2026, performing steadily, leading to a substantial year-on-year improvement on the profit side. - According to a voluntary disclosure by the company on the evening of April 13th, in Q1 2026, the company achieved annual recurring subscription revenue of about 4.22 billion yuan, a 19% year-on-year increase, with contracts won by well-known enterprises such as Henan Shuanghui Investment & Development, Face Wall Intelligence, GREENTOWN SER, Allcore Technology, Puyang Iron and Steel, and Huatong Group. In Q1 2026, the company's main product, NDR, performed steadily with renewal rates for StarHawk, StarSky, and StarChen at 103%, 96%, and 94% respectively. These high renewal rates reflect the comprehensive competitiveness of the company's cloud products, laying the foundation for future expense rates, especially sales expense rates, to continue to decrease. On the profit side, with continued growth in revenue and an increasing proportion of ARR, combined with the ongoing realization of cost reduction and efficiency enhancement initiatives from 2025, GF SEC expects a substantial year-on-year improvement in profitability for Q1 2026. - During Q1 2026, there was a rapid increase in AI orders, based on the company's complex ERP scene know-how, indicating promising prospects for the company's future. - In Q1 2026, the company's AI native product (Kingdee AI Suite) signed contracts worth 2.3 billion RMB, compared to the total AI contract order of 356 million RMB for the whole of 2025. GF SEC is optimistic about the trend of increased AI orders for the company in 2026. Risks include: fluctuations in downstream IT spending due to economic conditions; impacts from the trading environment in the Hong Kong stock market; and uncertainties in the realization of AI application performance.