Citi: Maintains "Buy" rating on KINGDEE INT'L (00268), target price HK$11.9, Q3 net new ARR up 46.9% year-on-year.

Citi issued a research report maintaining a "Buy" rating on KINGDEE INT'L (00268) with a target price of HK$11.9. The company's "AI-first, subscription-first, and globalization" strategy continues to advance. In Q3, subscription annual recurring revenue (ARR) grew approximately 19.3% year-on-year to RMB 4.604 billion, while net new ARR increased 46.9% year-on-year to RMB 191 million, primarily driven by strong demand for Kingdee's AI suite and Lingji. In the first three quarters of 2026, Kingdee's AI-native product contract value 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 with CRRC Corporation (01766), Chongqing Changan Automobile (000625.SZ), Everbright Group, HWORLD-S (01179), and others, reflecting that business cooperation is continuously penetrating into large, well-known clients.