＜Research＞Jefferies Drops KINGDEE INT'L (00268.HK) TP to $18.19; Faintly Weaker Rev. Hike Overly Punished

　　Share price of KINGDEE INT'L (00268.HK) -0.150 (-2.362%) Short selling $7.84M; Ratio 4.368% has been overly punished by the market after a two-day slump of about 17% as the 1H24 revenue growth missed the company's 2024 guidance amid external influence, according to Jefferies' research report. The broker cited SMEs as a culprit, but LEs and MEs are likely to perform in line with expectations due to strong localized demand. The management said that revenue growth in FY2024 will likely be at the lower end of its target range, but that annualized recurring revenue (ARR) growth for cloud subscription services should be 25%, rather than the 30% previously suggested.

　　Jefferies trimmed its earnings forecast slightly for KINGDEE, but still expected it to be profitable by 2025. The broker lowered its revenue forecast for each of the next three years by 1%-2%, projecting the company to record a loss of RMB94 million this year and turn around to a profit of RMB231 million next year. It also foresaw KINGDEEs profit to grow briskly after 2025, owing to double-digit revenue growth, higher GM and economies of scale in R&D and S&M.

　　Related NewsM Stanley Drops KINGDEE INT'L (00268.HK) TP to $10; Weak SME Demand Brings Downside Risk to Guidance

　　The broker cut its target price on KINGDEE INT'L from HK$19.78 to HK$18.19 and maintained a Buy rating. The broker viewed that the recent sell-off of the stock provides buying opportunity for long-term investors with a 1-3 years of time horizon.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-17 16:25.)

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