Kingdee International Software : IR Newsletter 2Q 2017

17 Years of effort results in Kingdee Tianyan's listing in Beijing

On 29 June, the bell-ringing ceremony to mark the successful listing of Shenzhen Kingdee Tianyan Middleware Company Limited ("Kingdee Tianyan", Stock Code: 871155) on the New Third Board at National Equities Exchange and Quotations Center in Beijing was held. Mr. Lin Bo, chairman of Kingdee Tianyan; and Mr. Chen Qifa, general manager of Kingdee Tianyan, led the management

of the company and Mr. Shen Longzhe, the special guest and vice president of Taiji Computer

Corporation Limited, to host the listing ceremony and witness this historic moment.

The successful listing of Kingdee Tianyan will create a dynamic environment for capital raising, provide a broad development platform for domestic small and medium-sized software enterprises, improve China's software value chain, and further enhance the innovation and growth of domestically-made infrastructure software. Meanwhile, the company will be better align with China's strategies in terms of information security, Big Data and "Internet+", in a way to realize the Chinese dream of a becoming a "Software Giant". As a subsidiary of Kingdee International, Kingdee Tianyan has long been committed to domestic infrastructure software. Its listing on the New Third Board will establish long-term financing channels for the company's sustainable development as well as further enhance its corporate governance, hence laying a systematic foundation for the company's healthy growth. Kingdee Tianyan will leverage the platform of the New Third Board to capture favorable development opportunities of the industry, promote the company's brand influence as well as facilitate its growth.

On 4 May 2017, Kingdee announced the launch of Kingdee Cloud at Peking University, where the "May Fourth Movement" began. At the launch ceremony, Mr. Robert Xu, the founder of Kingdee, together with Professor Chen Chunhua at the National School of Development of Peking University

and other guests smashed the "ERP" and the chairs which symbolized enterprise owners and the

identity of the CEO.

The fast-growing Kingdee Cloud ERP product line will be officially upgraded to Kingdee Cloud (http://www.ik3cloud.com). The new Kingdee Cloud services incorporate financial Cloud, supply chain Cloud, human resources Cloud, omni-channel marketing Cloud, manufacturing Cloud and Big Data Cloud. Clients can gain access to all of these Cloud services through CloudHub, thereby achieving the mobility, decentralization and socialization of these services. Kingdee Cloud is no longer a complicated process system. Instead, it has become convenient and reliable to use, similar to how water and electricity are consumed. It is an enterprise Big Data system which helps enterprises to greatly enhance their data analytics capabilities. With the mantra of "The sky is the limit", Kingdee believes that everyone can think like a CEO.

On 19 May, Kingdee Jingdou Cloud (www.jdy.com) App, which allows customers to "manage business at their fingertips", was officially launched. Integrating the enterprise management services provided by Jingdou Cloud with the real-time communication and mobile office services offered by CloudHub (China's leading mobile office platform), this

App helps micro and small- sized enterprises to deal with the management challenges arising

from digitalization and to enhance internal and external communication. More than 20,000 downloads were recorded on the first day of its launch.

On 18 April 2017, the second anniversary meeting for the strategic cooperation between Kingdee ("Amazon AWS China") was held in Shenzhen. A number of prominent figures in the market, including Mr. Sun Yanfei, President of Kingdee China; Mr. Zhang Haijun,

Cloud ERP Business Unit General Manager of Kingdee China; and Mr. Rong Yongkang, Global Vice president of Amazon, attended it. Both companies reviewed progress in their cooperation over the past two years at the meeting and looked forward to continued close cooperation in technology, talents and international market development. In the past two years, Kingdee achieved impressive results through cooperation with Amazon AWS China. According to Kingdee's 2016 annual results, its annual income from Kingdee Cloud ERP exceeded RMB200 million. Many world-class enterprises, such as Huawei, Tencent and Jaguar Land Rover, have become the users of Kingdee Cloud ERP.

The 2017 China International Big Data Expo officially opened and attracted wide attention. With the advancement of data collection and storage technology, the retail industry has gradually developed its own Big Data system. Addressing the question of how to use these data to create business value and to drive more innovations, Kingdee offered the notion of "Being Digital and Restructuring" and put forth new solution: "Intelligent New Retail". It offers omni-channel, customer profiling, precision marketing, intelligent supply chain services to traditional enterprises and help them to seize opportunities arising from transformation.

On 13 April 2017, Kingdee signed a strategic cooperation agreement with Advantech, thereby leveraging their respective strengths in "Software + Hardware" and "ERP + Internet of Things (IoT)" to jointly provide "Intelligent Manufacturing" and "Intelligent Factory" solutions under "Industry 4.0" framework. The partnership is aimed at ensuring a smooth

upgrade of Chinese manufacturers from traditional manufacturing to intelligent manufacturing promoted by the "Made in China 2025" initiative amid a rapid changing environment. Senior management from both sides, including Mr. Sun Yanfei, President of Kingdee China; Mr. Lin Feng, Senior Vice President of Kingdee; and Mr. Cai Qinan, General Manager of China IoT Business Group of Advantech, attended the signing ceremony.

In the afternoon of 13 April 2017, the "meeting for implementation of Kingdee Cloud ERP project by Tencent" was held at Tencent Building. Mr. Zeng Minhong, CFO of Tencent Financial Shared Services Management Center, and Mr. Zhang Haijun, General Manager of Kingdee Cloud ERP business division, attended the meeting. In early 2016, Tencent Technology Co., Ltd. signed a formal agreement with Kingdee for procurement of its Cloud ERP supply chain and financial modules. The excellent project execution team from Kingdee Software Shenzhen Branch followed up its implementation.

While commenting on the reasons of choosing Kingdee Cloud ERP, Mr. Zeng Minhong said, "Tencent needs an efficient and effective system to support the rapid growth of our product sales. Therefore, we deliberately picked Kingdee Cloud ERP because it has a short deployment time and high expansion flexibility without the need for hardware investment. Furthermore, Kingdee Cloud ERP enables us to reduce IT staffing. In view of these benefits, we believe that this more flexible system meets our requirements for the development of new businesses." Last but not least, Mr. Zeng Minhong expressed his expectations about Kingdee Cloud ERP, "The selection of Kingdee Cloud ERP allows Tencent to make a new attempt by tapping into SaaS field. This is just a start. We hope that Kingdee will continue to maintain close cooperation with Tencent's users after the project acceptance, and attach great importance to customer value. Kingdee is a reliable partner and we look forward to more cooperation with it in the future."

On 2 April 2017, a forum featuring "Enterprise Cloud Computing and Digitalization" was held during China (Shenzhen) IT Leaders Summit. IT gurus such as Mr. Xu Shaochun, the founder of Kingdee; Mr. Zhang Chen, CTO of JD Group;

Mr. Zhang Wenlin, President of Strategic Department of Huawei; and Mr. Huo Jinjie, President of

IDC China, exchanged views with each other on the ways to help Chinese enterprises implement digital transformation under the trend of Cloud services. Mr. Xu suggested that artificial intelligence is incomparable with humanity as our creativity cannot be replaced by AI. In the Cloud era, the essence of management is to "activate" our creativity.