Citi reiterated its "Buy" rating on KINGDEE INT'L, with last year's earnings falling short of market expectations

Citi published a report stating that Kingdee International (00268.HK) is expected to record total revenue of approximately RMB 6.95 billion to RMB 7.05 billion last year, representing a year-on-year growth of about 11.1% to 12.7%, in line with the bank's and market expectations as well as the company's previous forecasts. Net profit is expected to reach RMB 60 million to RMB 100 million, compared to a net loss of RMB 142 million in 2024, which is basically in line with Citi's expectations but lower than market forecasts.

Citi believes that Kingdee International's improvement in profitability is mainly benefited from economies of scale and AI-driven efficiency enhancements. The company has achieved its goal of turning profitable by 2025 and is considered a quality software enterprise that will continue to benefit from the AI-SaaS transformation wave in 2026. The "Buy" rating is reaffirmed, with a target price of RMB 18.3