Kingdee's ERP growth reaccelerated in 2025, while Inspur's growth momentum weakened
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Kingdee's ERP growth reaccelerated in 2025, while Inspur's growth momentum weakened
Morgan Stanley noted that Kingdee kept revenue growth at 12% in 2025 and emerged as the biggest share winner in the China ERP market, while Inspur's ERP revenue fell 2.7% year on year, suggesting the strong growth trend driven by state-owned enterprise localization has likely come to an end.
- Kingdee's 2025 revenue growth was about 12%, with roughly a 2 percentage point acceleration, outperforming major peers.
- Inspur (0596.HK, not covered) saw 2025 ERP revenue decline 2.7% year on year; cloud revenue grew 6.4%, while software revenue fell 12.5%.
- Yonyou's revenue grew 2.6% year on year, turning positive after a sharp decline in 2024; SAP China grew at a similar low-single-digit pace.
- The report labels Greater China IT Services and Software as In-Line, implying the industry is not seeing a broad-based upward revision; internal share shifts matter more.
Report interpretation
Overview
This report is Morgan Stanley's review of 2025 revenue growth in the China ERP market, with a core comparison of Kingdee, Inspur, Yonyou, and SAP China. The report concludes that Kingdee maintained relatively stable momentum and reaccelerated, while Inspur's strong growth since 2022, driven by state-owned enterprise localization demand, slowed materially in 2025.
Core views
The report's core view is that China's ERP market has shifted from broadly benefiting from localization demand to a more pronounced divergence among vendors. Kingdee kept revenue growth at 12% and became the biggest market share winner; Inspur's ERP revenue fell 2.7% year on year, indicating the earlier strong share-gain momentum has ended; Yonyou and SAP China both delivered low-single-digit growth, steady but unspectacular.
Analysis framework
The analysis is mainly based on a horizontal comparison of 2025 ERP revenue growth, and further breaks down Inspur's cloud and software businesses to assess revenue momentum, market share changes, and the competitive landscape. The report also uses Morgan Stanley's industry-view framework, positioning Greater China IT Services and Software as In-Line.
Methodology notes
Year-on-year revenue growth and share changes
By comparing the 2025 year-on-year ERP revenue growth of Kingdee, Inspur, Yonyou, and SAP China, the report determines who gained or lost share in the China ERP market.
Revenue growth by segment
The report splits Inspur's ERP revenue into cloud growth and software decline, showing that the overall decline was not uniform across all businesses, with software acting as the bigger drag.
In-Line
In-Line means the analyst expects the covered industry to perform broadly in line with the relevant broad market benchmark over the next 12-18 months.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Kingdee International Software GroupThe main beneficiary and share winner in the China ERP market
- Strengths
- 2025 revenue grew 12%, momentum stayed stable and reaccelerated, and market share performance led peers.
- Weaknesses
- The report does not provide details on margins, valuation, or order quality, so profitability leverage cannot be judged from revenue growth alone.
- Comparison
- Compared with Inspur, Yonyou, and SAP China, Kingdee delivered the strongest 2025 growth.
- Risks
- Growth sustainability could be affected if enterprise software budgets slow, cloud transition falls short of expectations, or competition intensifies.
- Inspur 0596.HKA former high-growth participant in the China ERP market whose momentum weakened in 2025; the report marks it as not covered
- Strengths
- Cloud revenue still grew 6.4% year on year, showing that some business lines continue to expand.
- Weaknesses
- Overall ERP revenue fell 2.7%, software revenue dropped 12.5%, and the high growth driven by state-owned enterprise localization appears to have ended.
- Comparison
- Compared with Kingdee's 12% growth, Inspur underperformed materially; compared with Yonyou and SAP China's low-single-digit growth, Inspur turned negative overall.
- Risks
- Slower state-owned enterprise localization demand, continued software decline, share loss, and worsening revenue mix.
- Yonyou Network Technology Co LtdA peer comparison company in China's ERP market
- Strengths
- 2025 revenue grew 2.6% year on year, turning positive after a sharp decline in 2024.
- Weaknesses
- Growth was only low-single-digit and weaker than Kingdee.
- Comparison
- Performance was similar to SAP China, but clearly lagged Kingdee.
- Risks
- Limited growth recovery; if demand or competition worsens, the rebound may prove unstable.
- SAP ChinaA peer comparison company in China's ERP market
- Strengths
- Delivered low-single-digit growth similar to Yonyou.
- Weaknesses
- Growth was moderate and did not show meaningful share expansion.
- Comparison
- Below Kingdee's 12% growth, and broadly close to Yonyou.
- Risks
- Localization competition, client budget changes, and substitution pressure from domestic vendors.
Key data
- Kingdee 2025 revenue growth12%The report says Kingdee maintained solid growth and became the biggest share winner in the China ERP market.
- Kingdee growth accelerationabout 2 percentage pointsThe report says Kingdee maintained relatively stable momentum and saw about 2 percentage points of growth acceleration.
- Inspur 2025 ERP revenue growth-2.7% YoYInspur 0596.HK is not covered; the report believes the earlier strong growth momentum slowed in 2025.
- Inspur cloud revenue growth+6.4% YoYCloud revenue still grew.
- Inspur software revenue growth-12.5% YoYThe decline in software revenue was an important drag on Inspur's ERP revenue turning negative.
- Yonyou 2025 revenue growth+2.6% YoYRevenue turned positive after a sharp decline in 2024.
- SAP China growthlow-single-digit growthThe report says SAP China grew at a pace similar to Yonyou.
- Industry viewIn-LineApplies to the Greater China IT Services and Software industry view.
Impact & implications
For investors, the report reinforces the logic of renewed share redistribution within China's ERP sector: Kingdee's growth resilience and reacceleration are more positive signals, while Inspur faces pressure to prove growth after the slowdown in state-owned enterprise localization benefits. The overall industry view remains In-Line, meaning the key is not simply betting on sector beta, but distinguishing execution quality, product mix, and share shifts among vendors.
Risks
- Inspur's growth, previously driven by state-owned enterprise localization, may have ended, and future growth needs fresh validation.
- Software revenue declines could drag on overall ERP revenue, and cloud growth alone may not fully offset the weakness.
- Share divergence in China's ERP market is intensifying, and vendors with low-single-digit growth may face relative share pressure.
- The report includes conflicts-of-interest disclosures; Morgan Stanley has, or may seek, investment banking relationships with some covered or mentioned companies, so investors should treat the report as one input among many rather than the sole basis for decisions.
What to watch
- Whether Kingdee can sustain double-digit revenue growth and expand market share further.
- Whether Inspur's software business stabilizes, and whether cloud growth can offset legacy software weakness.
- Whether Yonyou's recovery after the 2024 decline remains durable.
- Changes in the competitive landscape between SAP China and domestic ERP vendors.
- Whether state-owned enterprise localization demand continues to slow in 2026 and beyond.