Kingdee International Software : Bucks the Market Trend with Robust 2016 Interim Resu ...

(17 August 2016, Hong Kong) Kingdee International Software Group Company Limited ("Kingdee" or the "Group", stock code: 268.HK), a leading enterprise Internet services provider, today announced its interim results for the six months ended 30 June 2016 (the "Period").

During the Period, while Chinese enterprises leveraged the "Internet +" strategy to further promote business transformations, they attached greater importance to management software, and drove increasing demand for these products. The market was filled with tremendous opportunities. As the Group drove business transformations and structural optimization, reinforced the applications of advanced technologies in mobile Internet, social networking, Cloud computing and Big Data, and made relentless efforts in product and services innovation, it achieved sustainably strong business growth during the reporting period. Cloud services business revenue recorded significant growth of 138.3% year-on-year.

During the Period, the Group recorded revenue of RMB913,204,000, representing an increase of 20.5% year-on-year. The Cloud services business contributed RMB194,910,000 in revenue or over 20% to the Group's total revenue. Meanwhile, revenue from the enterprise resources planning ("ERP") system business increased by 6.2% year-on-year to RMB718,294,000. Profit attributable to owners of the Company surged 47.2% year-on-year to RMB134,834,000 (1H2015: RMB91,597,000). Basic earnings per share increased from RMB3.465 cents for 1H2015 to RMB4.655 cents.

With growing confidence of the Chinese enterprises, the Group saw tremendous potential and ample room for growth in the ERP market. It launched one-stop IT solutions to meet the needs of small and medium-sized enterprises ("SME") for E- commerce ERP systems. According to IDC, Kingdee maintained the top position in China's SME software market in 2015 and retained its market leadership for twelve consecutive years.

The Group has cooperated with a number of automation manufacturers to launch the "Smart Factory Solution". It showcased at the Hannover Messe how manufacturing enterprises can combine the ERP systems with intelligent industrial equipment. The Group achieved solid growth in large enterprise market, which "Share Finance

Solutions" has optimized in terms of business applications, standardized level and business intelligence. The Group has actively sought joint strategic partnership and signed major projects with Mengniu Group and New Times Group etc.

During the Period, demand for SaaS business management software continued its significant growth. The Group's Cloud ERP business achieved outstanding performance with retention rate of paying users of public Cloud ERP services maintaining at 98% during the Period. The Group signed contracts with Tencent, Coca-Cola, Vanke and other well-known enterprises with revenue from this segment more than doubling when compared with the same period of last year.

In addition, the Group implemented comprehensive strategies and reinforced the development of Cloud services for small and micro enterprises. Youshang.com (which was upgraded to Jingdou Cloud) provided one-stop Cloud services to enterprise users, including mobile office, online accounting, bookkeeping and database for financial services. The number of registered users jumped by more than 50% from a year ago, while the revenue from online SaaS services surged over 60% year-on-year and the retention rate of paying users stayed above 75%.

During the Period, the Group integrated Mobile Office Cloud services with ERP system to create the competitive advantages through product differentiation. The newly added customers included various well-known brands, such as LeTV, BGI, PetroChina, China State Construction and Liby, with daily user activity of more than 30 million.

The Group expects the Cloud ERP business and the Cloud services for small and micro enterprises to experience significant growth. The combination of mobile office cloud and Cloud ERP is disrupting the traditional way of management, and big data of enterprises is becoming strategic assets. Mr. Xu Shaochun, Chairman of the Board of Kingdee, said, "Over the past 23 years, Kingdee has made relentless efforts to expand the enterprise software and Cloud services and focused its attention on the application of management innovation. Going forward, we will continue to fulfill our mission, to strengthen the core competitive edge of the ERP business and to innovate our Cloud ERP solutions. Kingdee will continue to deliver more high value-added services and ultimate product experience to customers. We are going to redefine management and grow with millions of Chinese enterprises."

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About Kingdee

Headquartered in Shenzhen, the PRC, Kingdee International Software Group Company Limited ("Kingdee International" or "Kingdee"; stock code: 268.HK) was established in 1993. With the commitment to its core values of "acting in all conscience, with integrity and righteousness", Kingdee strives to be the most trustworthy Big Data service provider. It provides management software, Cloud services and Internet finance products to more than 6 million enterprises, government agencies and other organizations in the world. The number of its registered users exceeds 60 million. As the leading enterprise Internet services provider in Asia, Kingdee retains leadership in ERP, financial sharing services, human resources management and industry solutions sectors. It has been named the "No.1 ERP solutions provider for SME" for twelve consecutive years.