Kingdee International rallies 6.6% after Q1 subscription revenue jumps 19%

Kingdee International’s subscription revenue grew 19 percent year-over-year to RMB 4.22 billion, fueling a midday stock rally of 6.6 percent.

UBS noted the company's margin outlook is positive as artificial intelligence improves R&D and delivery efficiency, maintaining a Neutral rating on the stock.

The software company’s shares (00268.HK) closed the midday session at HK$8.53 after peaking at HK$8.89. Morgan Stanley echoed the neutral stance, rating the stock at Equalweight with a target price of HK$11.5, noting that first-quarter operations were on track.

The strong recurring revenue growth highlights progress in Kingdee's cloud transition, though analyst ratings suggest the market awaits sustained profitability improvements. The company maintained its full-year goal of RMB 1 billion in revenue from AI-enhanced enterprise resource planning solutions.

The positive data reinforces management's strategy, but the neutral analyst ratings indicate investors will be watching for this revenue growth to translate into significant margin expansion. The next major catalyst will be the company's official first-quarter earnings report to confirm the preliminary operating data.

This article is for informational purposes only and does not constitute investment advice.