Kingdee International Software : Announces 2017 Interim Results Revenue from ...

【Press Release】

(16 August 2017, Hong Kong) Kingdee International Software Group Company Limited ("Kingdee" or the "Group", stock code: 268.HK) today announced its unaudited interim results for the six months ended 30 June 2017 (the "Period"). During the Period, the Group capitalized on emerging opportunities brought about by China's digital transformation to accelerate its transition towards Cloud services, while driving steady growth of its management software business. The company achieved significant milestones in the development of its Cloud services business, with revenue from Kingdee Cloud for the Period surging 70% year-on-year and revenue from overall Cloud services (including Kingdee Cloud, Jingdou Cloud and Guanyi Cloud) climbing 45.1% from the same period last year (revenue from continuing operations grew 60.3% year-on-year). Contribution of the Cloud services to the Group's total revenue advanced to 26.8%.

During the Period, the Group recorded total revenue of approximately RMB1.055 billion, representing an increase of 15.5% year-on-year (excluding effects of disposed business, revenue from continuing operations would have increased 20.3% year-on-year). Of which, revenue from the Management Software business grew 7.5% to approximately RMB 772 million from a year ago (revenue from continuing operations increased 10.2% year-on-year). Revenue from Cloud services surged 45.1% year-on-year to approximately RMB 283 million (excluding effects of disposed businesses, revenue from continuing operations increased 60.3% year-on-year). The Group's operating profit for the Period amounted to approximately RMB126 million, up 22.3% year-on-year. Profit attributable to owners of the Company for the Period was approximately RMB106 million and net profit margin attributable to parent company for the Period was approximately 10.1%. Basic earnings per share were RMB 3.715 cents. During the Period, net cash inflow generated from operating activities reached approximately RMB 234 million, representing an increase of 14.7% year-on-year.

While continuing to expand the enterprise management software business, the Group further enhanced its Cloud services to develop a new generation of strategic enterprise management Cloud services platform. According to a study released by the independent research institute IDC, Kingdee remained China's No.1 application software provider for growth enterprises for 13 consecutive years.

During the Period, Kingdee made remarkable achievements in Cloud services development. It upgraded the fast-growing Kingdee Cloud ERP to "Kingdee Cloud". Driven by its robust sales performance, Kingdee Cloud generated revenue of RMB180 million, representing a 70% year-on year growth. The number of its users increased 80% year-on-year with retention rate above 90%. During the Period, the Kingdee Cloud team successfully implemented the O2O end-to-end closed-loop platform, simplifying the customer delivery process. Meanwhile, the Group signed cooperation agreements with various well-known enterprises, including HBIS Group, ZTE Nubia Corporation and Makeblock, for its Cloud services. As customers only need to pay annual fees for using Kingdee Cloud, it can help them manage their costs effectively while generating stable cash inflow to the Group in the long term.

During the Period, Kingdee achieved rapid growth in various enterprise Cloud services. The newly launched "Jingdou Cloud" App enables micro and small-sized enterprises to facilitate internal and external collaboration with ease, while revenue from this product line increased 55% year-on-year with retention rate above 70%. Meanwhile, the Guanyi Cloud system helped more than 100,000 shops to handle over 700 million orders worth approximately RMB120 billion in the first half of this year. The Group further integrated CloudHub's mobile office platform with Kingdee Cloud, Jingdou Cloud and Guanyi Cloud, further enhancing Kingdee's product differentiation and competitive advantage.

The Management Software business for medium and large-sized enterprises maintained steady growth in the Period, with revenue from this segment grew 7.5% year-on-year (continuing operations grew 10.2% year-on-year), while total contract value of the EAS business grew 30% from a year ago.

Shenzhen Kingdee Tianyan Middleware Corp., Ltd. ("Kingdee Tianyan") was successfully listed on the National Equities Exchange and Quotations in the Period. This not only reinforces the Group's financial resilience, but also enables it to have greater flexibility to expand secure and reliable domestically-developed software products.

With 24 years of experience in the enterprise management market and five years of pioneering Cloud services, Kingdee has evolved to be the leader in China's Cloud services market. Mr. Xu Shaochun, Chairman of Kingdee, commented, "Cloud services is set to overtake software business to drive our business growth in future. China has been the largest mobile Internet market for consumers in the world. Going

forward, the country will become the largest mobile Internet market for enterprises in the world. Cloud services will be the future direction for the industry and we will capitalize on this trend to vigorously expand Kingdee's Cloud operations, with the goal of maintaining market leadership. Contribution from Cloud services to the Group's total revenue is expected to exceed 60% by 2020, largely driven by Kingdee Cloud. We will make relentless efforts to develop our next generation of strategic enterprise management Cloud services platform, which will integrate various emerging technologies, such as Big Data, artificial intelligence and Internet of Things. With the design concept of "all for one and one for all", our products will turn traditional enterprise management software upside down and help Chinese enterprises to accelerate their digital transformation."

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Kingdee International Software Group Company Limited ("Kingdee International" or "Kingdee") was established in 1993 and is listed on the Main Board of Hong Kong Stock Exchange (stock code: 268.HK). Headquartered in Shenzhen, the PRC, it is committed to the core values of "Acting in all Conscience, with Integrity and Righteousness". Kingdee strives to be the most trustworthy Big Data service provider.

As a leading enterprise Cloud services provider in China, Kingdee retains leadership in ERP sector and has been named the "No.1 ERP solutions provider for growth enterprises" for thirteen consecutive years. Its Cloud services and products are the most preferred choices in the market: Kingdee Cloud (Cloud services for medium and large-sized enterprises), Kingdee Jingdou Cloud (one-stop Cloud services platform for micro and small-sized enterprises), CloudHub (a mobile office platform), Guanyi Cloud (Cloud services for E-commerce). With its strengths in management software and Cloud services, Kingdee provides services to more than 6.6 million enterprises, government agencies and other organizations around the world. The users of Kingdee products exceed 200 million.

Investor and Media Enquiries:

Steve Zhang

Kingdee International Software Group Co., Ltd. Tel：852-2155 3721

Email: szhang@kingdee.com

Charles Chan PRChina Limited Tel: 852-2522 1368

Email: ckchan@prchina.com.hk

Summer Gan

Kingdee International Software Group Co., Ltd. Tel：86-21-61625518

Email: summer_gan@kingdee.com

David Shiu PRChina Limited Tel: 852-2522 1838

Email: dshiu@prchina.com.hk

Yoriko Huang

Kingdee International Software Group Co., Ltd. Tel：86-755-8607 2591

Email:yanni_huang@kingdee.com

Henry Chik PRChina Limited Tel: 852-2522 1838

Email: hchik@prchina.com.hk