Kingdee International Software Group Company Limited (0268.HK) Earnings Call Transcript & Summary

Ladies and gentlemen, I would like to welcome you to join us for Kingdee International 2021 annual results release. Please allow me to introduce the managers joining us here today. They are the Board Chair as well as the CEO of Kingdee International, Mr. Xu Shao Chun, and let's also welcome our CFO, Mr. Lin Bo, and also the China President, Mr. Zhang Yong, and let's also welcome IR [ Wes ] Manager, Mr. [ Wu Dhao ] to join us for this meeting. Coming next, let's welcome Mr. Lin Bo, the CFO, to walk you through the performance release for 2021 and the business strategy, please.

Okay. Great. Thank you. Thanks for the moderator. Dear investors and my media friends and especially those ones who actually interested in Kingdee International, good morning. And I know it's pretty challenging nowadays. Probably, there are some international and the micro changes. There are so many fluctuations for the Hong Kong stock market and many investors actually care about our business. But I'd like to say that for Kingdee, our majority of our business are actually in Mainland China. So international environment somewhat is more like an opportunity to us. So please allow me to walk you through the 2021 performance. And we'd like to first go through the performance highlights and updates on the cloud strategy. So please go to Slide -- Page 4. You can see in the year 2021, our revenue grew by 24.4% and reached CNY 4.174 billion; and the cloud service revenue grew by 44.2% reached CNY 2.758 billion and the revenue of the traditional software and others declined by 2%, which actually works with our business strategy. The profit attributable to the parent company is a negative CNY 302 million level, above CNY 33 million compared with 2020. Companies still in the investment stage, especially for the large enterprises market. Our net operating cash flow is CNY 661 million, grew by 39.6% because of the very robust growth from cloud subscription business. Please go to Page 5. You can clearly see on the slide, the cloud service revenue contribution ratio further elevated, already reached 66.1%, which is already CNY 2.758 billion. Let's go to Page 6. We can clearly say that the company continued to focus on the high-quality cloud subscription service and the cloud subscription ARR by the end of 2021, already reached CNY 1.57 billion, grown by 58.5%. And I would like to emphasize again, because many investors may worried about our ARR, especially they'd like to know what's inside the ARR. And I would like to emphasize again our ARR only includes the recurring revenue from cloud product subscription, excluding the maintenance and the software licensing recurring revenue. Let's go to Page 7. Let's also take a look at the cloud contract liability. By the end of 2021, the cloud contract liability grew by 71.9% and the contract liability related to subscription reached CNY 1.358 billion, grow by 64.6%. The contracted liability, the pre-collection or the deferred revenue, and its growth is much faster than the revenue growth, which shows the robust growth of our subscription business. Now let's go to Page 8. Let's now take a look at the operational expenses breakdown. S&M grew by 22.2% because the labor cost was growing by 20%. And you can see sales promotion marketing grew by 42.4% and its revenue contribution down by 0.8%. G&A grew by 12.6% because the labor costs grew by 17.6% and its revenue contribution down by 1.1%. We would like to emphasize R&D and it was growing by 20.4%, but actually, the R&D investment grew by 42.8% reached CNY 1.26 billion. And why there is total difference is because our capital (sic) [ capitalization ] rates been down by 2%, which already be 33.6% -- because in 2020, and this number was dropped greatly. So that's the reason you can say that our amortization also being greatly reduced by a big number. So that's the reason. The R&D expenses grew by 20.4%, but actually, our R&D investment grow by 42.8%. Coming next, I'm going to walk you through the Cloud Cosmic and Cloud Constellation business. Please go to Page 10. In the year 2021, Kingdee continue to work with the international and industrial peers in the large enterprises market. Our new clients include CCB Finance (sic) [ Fintech ], Yixintang, BGI and Chinasoft International, altogether, 316 new customers, and we also have 235 upsell customers for Cosmic and Constellation product. The dollar retention rate is already more than 120%. And the contracted value is already CNY 700 million grow by 50%, and the dollar retention rate is already more than 120%. While at the same time, Kingdee is also leading the so-called localized IT solution. For the past 2 years, the Cosmic and Constellation altogether helped 102 large enterprises to seek for this local IT solution. We supported Huawei, Vanke, China Merchants Group, HBIS Group as well as SPIC for their digitally managed restructuring. Now let's go to Page 11. Besides working with more large enterprises in the market, and we also started to make a high investment and continue to literate our technology for the self-owned yet controllable technology. And I would like to walk you through 1 to 2 technologies to let you know the R&D we have now. And in this way, you can truly understand the technical progress we made nowadays. And first of all, we have the Cosmic self-developed multidimensional database and our new generation EPM Systems, which is a leading-edge platform with a multidimensional model. It has flexible rules and also be featured with high efficiency and transparency. It can also be applied in multiple terminals. No matter on the web server or on the mobile phone side, it can actually realize the multiterminal application. It also have smart analytics capacity, which is already leading the home market and which can also help us to support more enterprises to build their best practice. It is worth mentioning those clients, including SPIC, CICO and the China Tobacco Yunnan industry and ITG Holding. Please go to Page 12. And actually, from us a business perspective, you can see that we -- our subscription client hybrid and the penetration ratio already reached 60% in 2021. And in the middle part, it shows where the client comes from. You can see around 30% of the customer are the new ones and the 28 of them are the ERP upgraded clients. While in Cosmic Constellation client profile, you can say that the public service clients, manufacturing clients and high-tech clients are the 3 major streams of the clients for us. While at the same time, of course, we deliver our solution to different industries, especially in HR, in finance, in taxation and even in platform industry, we can still maintain our leadership. And we fully believe we're not going to actually be impacted due to one industrial's performance, and that the company will always be able to grow the business sustainably because what we provide is truly the need of the market. And please go to Page 13. And this are the slide showing the subscription distribution. You can see Cosmic finance cloud. Its contribution goes up to 42%, platform 36.4% in 2021, and the Cosmic taxation cloud and the manufacturing cloud started to contribute the subscription revenue. And we fully believe in this year, our Constellation product started to contribute more to the company because -- and we managed to integrate the best management experience with the cutting-edge technology from Kingdee, which can provide a primary solution to the market. Please go to Slide 14 and 15, and let's also take a look at Cloud Galaxy. You can see that for Kingdee Cloud Galaxy, by the end of 2021, our accumulated customer reach 25,300 (sic) [ 25,400 ]. The dollar retention rate has been greatly improved to the historic high level, which is 98.6%. The customer retention still being stabilized. And you can see our operating profit rate grew by 20%, more than 20%. And why we have such a good dollar retention rate is because the customer has a better understanding of our product and which also lay a solid foundation for our future sustainable growth. The subscription ARR grew by 60.3%. Still we further grow compared with 57.7% in H1 of this year, which can also see the robust growth from our cloud subscription business, especially the new customer engagement. On the right side you can see the logo of our new customers. Some of them are the private companies, and they are also listed company and some leading companies in the emerging market. They are already our customer now. And for example like INNO Laser, Casio Technology, Weigao, and also [ Damic ], and they are already our client for the Cloud Galaxy product. Okay. Let's go to Page 16. What you can see that the bar chart shows the Galaxy subscription distribution. We can say that as the product started to get more mature, and more modules be well established. We also identified that the supply chain module and the manufacturing cloud client subscription ratio being further improved besides the financial module and which can also show how we deep manage the customer operation to leverage our upsells and cross-sells. On the right side and the pie chart shows us the more than 6,000 new customers for the Galaxy product. Around 35% of them are coming from Kingdee on-presemise (sic) [ on-premise ] customer upgrade. Okay. Let's continue. And let's also take a look at Cloud Stellar and Cloud Jingdou. And please go to Page 18. You can see that SaaS being launched in 2020, as Stellar has already served 11,000 clients, the dollar retention rate is already 82%. While for Cloud Jingdou, the accumulated customer number is already 212,000 and the retention rate is already 84.1% and this number used to be only 80% for the past. And now let's also take a look at the cloud business landscape and also the market dynamics analysis. Especially you can say that Kingdee is truly focused in the platform, finance taxation, HR. And what would be the landscape look like? Let me walk you through it one by one. For PaaS system, it actually includes multiple kinds of the PaaS. According to our forecast along with Gartner's forecast and we find out in 2030, the AIMPaaS market is going to -- the market for that is going to reach CNY 23 billion. Please go to Page 21. You can see that in finance and taxation software and subsegment. And Kingdee is committed to provide a comprehensive service from record to report, and we also started to upgrade our financial segment to be more automatic. So according to such a market trend, the third-party segment and the financial planning and analysis market penetration ratio will be improved greatly. According to Gartner forecast, the related market size will reach CNY 47.5 billion by 2030. So you can say that we believe we still have a big market to explore, no matter for platform or for HR SaaS segment. Please go to Page 22. In the human capital software and the SaaS market, the core HR will comprehensively embrace automation, upgrading and also talent development, and management market penetration ratio will also be greatly improved. STA&P will become the [ regic demand ] for the large enterprises, for example, and for Huawei, our clients and the Kingdee cloud Constellation HR product will be launched in H1 of this year to the market. This will truly become a world-class HR product, according to the forecast made by Gartner and us. In 2030, base market, the size will be around CNY 44 billion. Okay. Let's now go back to our strategy and the guidance. I would like to say that we literate was still going to stick to the strategy of Platform + Finance, HR, Tax and Ecosystem on Page 24 but still stick to this strategy to further grow our business. Please go to page 25. You can see that the company also attached great importance to customer satisfaction. We take Xu Shaochun’s WeChat public account to actually promote the customer end-to-end whole journey transformation. In 2021, we received 35,000 (sic) [ over 35,000 ] inquiries and messages from our customers, and our Net Promoter Score improved by 16%. Now please go to Page 26. You can say that regarding our guidance, we would like to maintain ARR CAGR for the next 3 years be more than 50%. And in 2023, we believe the revenue for subscription would be around CNY 3.3 billion. So we'd like to leverage cloud subscription business to further double our business size. While in the near future, we're going to continue to focus on the business growth for cloud subscription service, working with more clients and to make sure we delivered our solution directly to our clients, which can also further improve our GP margin in the longer run. So we don't provide the guidance to the cloud service at all. And so from the granularity perspective, we hope that we can become a product, especially SaaS product-oriented company. So we would like to focus more on the cloud subscription business in the near future. Okay. So you can see that the rest slides, please go to Page 28. And right after Page 28, you will be able to see the financials and it also be included into our annual report. And especially for this year and our top sales costs, they are being further improved. And why the top sales cost has been increased. The first reason is because we deliver more product to the large client in recent years. And we would also like to work with our partners to further help us to deliver the solution so that we can reduce the cost and then improve the GP margin for the company as a whole. Okay. That's all for the presentation for me today. I would like to thanks for all the investors. Thanks for the interest in Kingdee International. Moderator. Here comes to the end of the presentation.

[Operator Instructions] Let's welcome the first question. Now let's welcome Duan Bing from Nomura to ask the first question.

Duan Bing from Rota, and I'd like to -- Nomura. Actually, I would like to congratulate on your good performance last year. And I'd like to ask about your product regarding Galaxy solution. And aside out, actually, the business growth being slowed down and it is around 24%. But it seems that your dollar retention rate has been greatly improved. And I'd like to ask you the reason why you have such a robust dollar retention rate for cloud Galaxy. Well, for this year, what would be the trend, especially on revenue and dollar retention -- I mean the guidance for the market for cloud Galaxy? And the second part of my question is regarding HR SaaS, and also the Constellation solution. And I know that it takes time for the business to be more mature. What would be the guidance for the revenue? Would you mind to provide us the corresponding information, and what are those industries you would like to focus more? And my third question is that I know that you are growing the team and you also put more R&D investment. So is it possible for the management team to share with us whether the team expansion or the investment in R&D is going to be slowed down for this year? Do you already has a guidance for the profitability?

And thanks for Duan Bing from Nomura. Let me just -- sorry, because it is a teleconference, so probably I didn't catch part of your question. Let me respond to your third question first regarding the team [ cosure ] for the company. We truly noticed that the macro environment is pretty challenging, while at the same time we should also make sure we continue to invest in our product and solution. In the year of 2021, especially been disclosed in our annual report, we now have more than 11,000 staff working for the company. Around 40% of them are R&D staff. And in the year of 2022, according to our general business planning, we're still going to grow the team a little bit, but we'll make sure that we recruited less than 1,000 people. Those people, newly hired one will be put into the R&D team to further consolidate our technical leadership. That's my response for the team building for this year. You also mentioned about the Galaxy solution and its landscape. Later, I'm going to ask Zhang Yong to give you more specifics. Regarding the Cloud Galaxy, you know that we are working very hard in promoting Cloud Galaxy growth. And you find out our dollar retention rate is going up for the past 2 years. And especially, we would like to promote the partner direct delivery and also to further reform our subscription model and while not achieving for a higher revenue growth. For sure, our business growth is very important, but which also [ would ] more on the subscription business growth. I'd like to say that in 2021, our subscription ARR for Cloud Galaxy still grew by 60.3% on a Y-o-Y basis. It will also be consolidated into future trends. I still believe Cloud Galaxy in the near future as it has a large customer base, jointly speaking, we hope the growth would be more than 20% in the near future. Regarding the industrial [ certainty ], let me ask Zhang Yong to give more comment on that.

You can say that as a Constellation platform based Cloud Galaxy solution being launched. And we provided a solution more resilient, more flexibility. And the Cloud Galaxy used to be quite strong in the manufacturing industry. So for the next generation product, it will still be focused on the manufacturing, on finance and also on health care industry. For example, we're going to build some solutions from our eco-partners to make sure we will be able to leverage this new solution to serve more industries in the near future. Let me just add another point. You can see for Cloud Galaxy ARR, we believe the CAGR would be still more than 50%, CNY 5 billion.

Let's welcome Xin Jun Miao from Tianfeng Securities.

I am Xin Jun Miao from Tianfeng Securities. I'd like to congratulate the company for such a good performance. So I have 2 to 3 more questions. The first question, as we can see in 2021, your ARR and the contract liability and also the contracted value are all growing very well, and especially the Cloud Galaxy bring you a lot of good cash flow, especially I find out its net profit rate is pretty good. Its net profit rate is already more than 14%. So what -- how sustainable such profitability is going to be in the near future for Cloud Galaxy product?

Just now, in my answer, I have already mentioned, if we're going to continue to work on the subscription business growth, we believe the profit rate is still going to be up. And currently, it was also growing by 20%, and we would like to grow it further in year 2022.

Okay. I have the second question. The second question is regarding Cosmic Constellation product. It seems the business growth being further accelerated and the revenue was also doubled and the backlog grew by 50%, and they also started to serve more large enterprise clients. In 2022 for Cosmic Constellation, are we going to see a better growth for revenue and backlog? Would you like to share more data with our investors, especially the revenue and the backlog guidance for Cosmic Constellation product, please.

Actually, for the large enterprise market, and we still have a high expectation, especially for Cosmic Constellation, and we believe we'd like to double the contracted value and making sure the dollar retention rate should be more than 100%, and that's the guidance or expectation we have of our Cosmic Constellation product. Okay?

Just now you also mentioned another point, you would like to double the Cosmic Constellation revenue and the backlog in 2022. So regarding your Cosmic Constellation product share capacity, what's the landscape now?

What are you talking about?

The production capacity for Cosmic Constellation products.

Let me answer the question. Okay. Great. As you can see that for Kingdee International, especially from IDC report, in SME, we always consolidate our leadership. Well for last year [ on ], and we understand we are more capable in the large enterprises market. So after 1 year operation for this year, we hope in the large enterprises market we're still going to pursue a high growth point. And we hope that our Cosmic Constellation, especially in the large enterprises market, the revenue and the backlog should be doubled. So we further deep refine our management and also list the key clients we actual work with, where in order to make sure we have doubled our revenue and backlog and also engage with new customers. And we started to further deploy the production capacities for our own team and our partners. And purely speaking, we'll be able to take care of the backlog from the large enterprises market, and we're capable of deriving the solution there. Okay?

Let's now welcome Mark Li from Citi to raise a question.

My name is Li [ Roo ] Mark from Citibank. Congratulations on your good performance. I noticed that in your Cosmic product and manufacturing and the tech industry is already accounted for 30%, respectively. And you also mentioned about the Cloud Galaxy development. So in the near future, and for the Cloud Galaxy, for example, cloud and high-tech clients. And how Cosmic Constellation and Cloud Galaxy is going to work as a synergy to serve those clients in those industries?

Let me simply respond. And for Cloud Galaxy, it was targeting those growing enterprises. So for some key industries, for example, very good enterprises or the unicorn companies will leverage Cloud Galaxy product to serve them. Especially in some key industries and growing companies where, for Cosmic Constellation, we are leveraging the product for the large enterprises, especially those enterprises in the advanced manufacturing; equipment manufacturing, for example, like [ ASEC ] and also the Shandong vehicle, and we leveraged the Cosmic Constellation to cover those super large enterprises. That's the difference we have over the 2 products.

One more question from me, management team because I also noticed that for your company, especially, you started to buy back your shares in the market. And -- is it because of the fundamentals development in the near future? Or do you also take care of the PE or market value? Do you have a time line here?

This is a very good question. I think for the whole company, and for the last round of the payback -- buyback, it was driven by certain events. You can say the company will accelerate our investment in the business development, but we also would like to guarantee a healthy cash flow when the capital market fluctuates again. And of course we would like to maintain our market value, that's a reason we buy back some shares, but it was not in large volume. So there will be no special statement we make here. But in such a challenging market, probably we're also going to buy back and also establish the equity incentive spend to our staff.

Coming next, let's welcome [ Alicia Feng from Guangfa Securities ].

Can you hear me, management team?

Yes, we can hear you, please.

I'm [ Alicia Feng from Guangfa Securities ]. I have a few questions. First of all, as other investor has already mentioned about the Galaxy growth. And you mentioned about 20% growth for Galaxy business. So if you're going to maintain a 20% Galaxy growth and in such a challenging environment nowadays and what would be your assumption of the market? And how confident you can deliver that 20% business growth for Cloud Galaxy? And my second question is regarding Cosmic Constellation product. Since the year of 2020, we started to pay more attention to IaaS and -- and IaaS, and I noticed that what would be the policy changes for this business? And especially for your IaaS product? And what are those market constraints and especially the regulation change is going to impact the Cosmic Constellation business?

Mr. Zhang Yong, would you mind to actually start, talk about -- respond to the second part of the question?

For Galaxy product, we hope that we can further grow the business for Cloud Galaxy. Well, one assumption is that if -- the COVID-19 actually bring us a lot of uncertainties. If pandemic continue to impact our lives and our work, then it's pretty challenging for us to grow our business. But if the COVID-19 could be well contained, we're still very confident to grow the Galaxy business by 20% for this year. And first of all, we further consolidate our product performance and our Galaxy product has been more competitive. The flagship Galaxy product will also help to further consolidate our leadership as a solution provider in this market. In order to engage with a new customer and also have more upsells and dollar retention rate, and we actually made a very deep breakdown of this business and the KPI indicators been formulated. So from organizational HR perspective and the policy perspective, we would like to further improve our competitiveness in the Cloud Galaxy market. And we hope that after 1 year's hard efforts, we can grow Galaxy business by 20% in 2022. And regarding IaaS, last year, we made some good performance. Currently, we have more than 1,000 IaaS partners that are working with us in our ecosystem. And we also launched more than 1,000 product and solution based upon Cosmic Constellation platform, where you can see for Kingdee for IaaS product, it's already been a part of our product management team business, and our team is going to truly understand our industrial trend and the vertical trend. We provide many IT departments support to make sure the quality and R&D of the product can truly work with the future strategy we have. While at the same time, we also started to work with more partners for the product delivery. And you can see around 2 weeks ago in [ Hainan ]. And in our Kingdee IoT partner conference, we signed around 10 domestic delivery partners, and we're going to grow our partner ecosystem further. And we also have a CNY 1 billion industrial funds, and which will mainly be built into the IaaS market, especially those eco partners. We're going to make financial investments into those companies to help them to further expand their business and support our delivery capacity. So in some niche market, we're also going to support some leading software company. For example and there is a company in the pharma retail business. We hope that by working with them, we'll be able to further consolidate our business in the pharma chain store business, so that you know this company will become the #1 player in their market.

And is there any quantitative data so that we can truly understand what would be the landscape for IaaS? For example, the revenue, how many clients you're going to have? And for IaaS clients, many of them are actually the very small enterprises. And for example, you provide probably tailor-made solutions for those enterprises. And do you believe that those partners are going to have high incentives to help you to grow your business? And so your partner number and your revenue target? And do you have any data to share with us regarding the IaaS business?

Last year, after 1 year's hard efforts, and we now put more emphasis on the quality, quantity is no longer an absolute indicator for us. But for sure, we also would like to grow our business partners. So you can say that for IaaS platform altogether, we're going to have a [ CNY 300 million ] revenue, which doubled the number in 2021. When regarding the volume, and we actually don't have the so-called quantity requirements, we would like to emphasize more the Cosmic platform R&D capacity enhancement. At the same time, we also would like to make sure that for our contracted partners would like to have the support plan, including the top partner support plan and the general partner support plan to make sure that their business can grow by 30% to 50% by having us to support them. Well, regarding our IaaS delivery partner, we also made a guidance to the market. For our 10 delivery partners in China, we're going to spare CNY 100 million to even CNY 300 million. It really depends on different company situation to support our business partners, our business capacity building and the delivery capacity enhancement.

I forgot to ask you one market for IaaS and your subsidiaries, how you're going to break down the profit or pay the profit.

Regarding financials, actually there are different requirements. For example, we have the net profit GP margin requirement. It truly depends on different products in different business lines.

Let me respond to this question. We're talking about Galaxy growth. As you can see from our interim results, our dollar retention was growing very fast, which can lay a very solid foundation for our future business growth. This is a good signal for us. We're in such a challenging environment full of uncertainties, and that's the reason internally, we probably have a more challenging target for the business growth for Galaxy, but what we can disclose to the market is at least 20%.

Due to the time reason, I would like to welcome the last question. Let's welcome Livy from JPMorgan.

And I have a question to you. We attach great importance to the external environment or the macro environment. So according to your observation, is there any big enterprises or small enterprises and who started to see some major [ prioritization ] and how the micro environment going to impact the software budget for private enterprises. Are they going to tighten their budget or are they going to make more investment on software in order to do a good internal cost control? And my second question is that for the management team, how are you going to comment on the long-term cloud service profitability? Especially the profit rate in the longer run, if you like to make sure you make the profit -- when would the revenue be, to make sure that we hit that profit target? And what would be the R&D and sales expenses growth in the near future?

Okay. Let me respond to the question first. As you can clearly say, for the past 2 years, and there are so many external factors that are impacting our sales production and even our customers' business operation. But we noticed some enterprises, they leverage this great opportunity to further consolidate their internal management. They also started the next generation digital [ abucreray ] and the transformation. So we still see the market bring a lot of opportunities to us. Well, regarding large enterprises, this is what we can observe. Especially for large enterprises, they have a deep understanding of the business, and they also would like to grow their business in the pandemic background and also some policy from the government. No matter for the ministry or for the SOE, they are being [ policied ] to accelerate their growth of a world-class financial system internally. So that's the reason for the ultra large enterprises that are going to embrace digitalization and intelligent trend to further support their digital transformation. So that's the reason we'd like to grasp the opportunity there for the large enterprises client. But recently, right after the Russia-Ukraine war, many of the overseas brands suspended their service and support in both countries. And I also took some phone call from the big private companies. As our clients, they'd like to ask for the business migration, and data migration and started to try our product. So you can see that for the ultra-large enterprises, the market was delivering a lot of positive signals. That's also the reason we believe in the large enterprises market. We're going to grow our business more substantially and which can also improve our market share in the large enterprises market. For SME enterprises market, I think there are going to be more pressure for small and micro enterprises. But I can say that in some high-tech and special industry, the government also made heavy investments. And those SMEs in those verticals are actually the one with the best growing potential. So I believe they are the one with greater growth potential. As far as I can talk to those clients for those SMEs, even if in the most challenging time nowadays, they are still going to further expand their business. So I think SME is going to provide us a lot of growth opportunity. We are still very positive over the large enterprises and SME. We're going to further enhance our studies and the product performance to truly honor our commitment to the client to hit their expectation. We also make sure our product and service can support our customers to refine their operations, to improve their digital transformation, and to further consolidate their competitiveness. So I truly believe after 1 year's hard efforts in SME and in large enterprises market, Kingdee is going to have a very good scorecard. So Mr. Lin Bo, please help us to respond to the following question.

Okay. You can see the growth Galaxy, our profit rate is already 20%. This is sustainable. Well, we actually did a forecast model, but there are so many variables inside. So I don't think it is right time for us to disclose that model or more data. Well, let me just give you some hint. And in January and February, we still have a robust performance, and our net profit and revenue or even [ see traction ] is higher than our expectation in March because of the pandemic and we still see many uncertain cases. We would like to keep an eye on the performance of the company. Well, for sure, as I mentioned, for the company, we would like to maintain our long-term health operations, while we also would like to make investment. We'd like to draw your attention to operating cash flow and also our high-quality growth for the subscription business.

Coming next, let's welcome Mr. Xu Shao Chun, our CEO, to give the closing remarks.

Ladies and gentlemen, I would like to thank you. Thanks for being interested in Kingdee International. Well for Kingdee for us, and for the next 10 years, we're still full of confidence to grow our business. We believe in the year 2023, and we're going to leverage cloud subscription service to build another Kingdee, which means our business size will be doubled. And to make sure we become the best PaaS platform solution provider in China, hope that in 2030, we could become a world-class enterprise SaaS service provider. So we have a very clear strategy internally. While you can say, for the past few years, we took many business transformation, especially right after the year 2014. Every year, we took multiple measures to promote, reform and the transformation, and we started to embark the cloud subscription service, and we accumulated a lot of experience here. We deeply feel that as long as Kingdee continue to further consolidate our innovative culture and also to care about our employees, to encourage them to be healthy, to mobilize the team to work harder. And in this way, I believe the Kingdee is still going to seek for robust and sustainable growth in the near future. Cloud subscription model is pretty easy. But if you well play it, and I believe our growth is still going to be quite promising. Thank you. Thanks for all the investors of interested in Kingdee International and supporting us for the past few years. And our management team will work harder to make sure that we deliver more value to you. Thank you.

Thanks, Mr. Xu. Here comes to the end of the meeting. Thanks for your participation, and thanks for supporting Kingdee International for so many years. See you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]