Strong growth spurs 10pc rise in Kingdee stock

PUBLISHED : Thursday, 17 March, 2011, 12:00am
UPDATED : Thursday, 17 March, 2011, 12:00am

Shares of Kingdee International Software Group, a major provider of enterprise resource planning software on the mainland, yesterday jumped 10.1 per cent to HK$5.13 as the company announced the strongest growth in seven years.

The firm posted record turnover of 1.44 billion yuan (HK$1.7 billion) last year, up 44 per cent year on year, while net profit increased 28 per cent to 272 million yuan.

The company declared a final dividend of 3.4 HK cents per share, 55 per cent higher than in 2009, and also two bonus shares for every 10 held by shareholders.

Enterprise resource planning integrates different management information in an organisation and automates this activity with an integrated software application to facilitate the flow of information between all business functions.

The company attributed the growth to integrated management and information technology solution services. Income from services increased 51 per cent, amounting to 42 per cent of turnover.

Now serving the 'informatisation' needs of more than a million enterprises and government organisations, Kingdee said it would continue to transform from a product company to a management consulting and integrated IT solutions and services provider.

The company said it would reinforce its presence on the mainland, its principal market, by opening about 40 branch offices this year. Last year, the number of branches on the mainland increased to 98.

'We will continue to strengthen business in China,' said executive director Duke Chen Dengkun. 'There is still huge potential as the second and third-tier cities are developing very fast.'

He said the company was also seeking stronger performance overseas, hoping to make the foreign market a new growth driver. 'Overseas markets are now less than 10 per cent of total revenue,' he said. 'We hope to reach 20 per cent this year.'

Chen said the company would look for opportunities to expand business in the Asia-Pacific region and that a new research and development centre had been set up in Singapore last year. It would also invest in a software park and step up mergers and acquisitions.