CITIC International lowered the target price for KINGDEE INT'L to 15.1 yuan, making it a core beneficiary in the era of AI applications

Zhao Yin International published a research report stating that Kingdee International (00268.HK) announced a revenue of 7 billion RMB for 2025, representing a year-on-year growth of 12%, in line with market consensus expectations; it turned a profit with a net profit of 92.9 million RMB, lower than the market consensus expectation of 132 million RMB. It believes that this performance demonstrates Kingdee's robust revenue growth capability and continuously improving operational efficiency, while highlighting its firm determination to promote business transformation in the AI era.

Zhao Yin International assesses that the competition among large model vendors in the software industry may continue to suppress market sentiment in the short term and impact the overall industry valuation. However, with its deep industry accumulation, scenario insight capabilities, and high-quality enterprise data sets, it believes that Kingdee remains one of the core beneficiaries in the era of AI applications.

The firm has extended its valuation benchmark to 2026, lowering the target price from 19.2 to 15.1 RMB; the rating is "Buy." The target price-to-sales ratio has been adjusted down from 8.4 times (corresponding to the two-year average plus two standard deviations) to 5.4 times (corresponding to the two-year average) to reflect changes in market sentiment. Nevertheless, the firm still reaffirms Kingdee as the preferred target in the Chinese software coverage sector and believes that with the macro environment warming up, the commercialization of AI, and steady expansion of profit margins, the revenue growth rate is expected to rebound, which may drive a revaluation