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Kingsoft Cloud Holdings Ltd (HK:3896)
:3896
Hong Kong Market

Kingsoft Cloud Holdings Ltd (3896) AI Stock Analysis

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HK

Kingsoft Cloud Holdings Ltd

(3896)

Rating:54Neutral
Price Target:
HK$7.00
▲(2.79%Upside)
Kingsoft Cloud Holdings Ltd's overall stock score reflects significant financial challenges, particularly in profitability and cash flow, despite some operational improvements. The technical analysis suggests mixed market sentiment, while valuation metrics highlight concerns due to ongoing losses. The earnings call provides some optimism with growth in the cloud and AI sectors, but challenges in profitability remain a significant risk.
Positive Factors
Public Cloud Revenue
Xiaomi and Kingsoft ecosystem contributed significantly to public cloud revenue, showing 36% year-over-year growth due to the rapid growth of Xiaomi’s EV demand and Kingsoft’s AI business.
Revenue Growth
Kingsoft Cloud reported a 16% year-over-year revenue increase, driven by further AI revenue ramp-up and a solid recovery of enterprise cloud business.
Negative Factors
Cash Flow Concerns
Despite strong AI business growth, achieving positive free cash flow is expected to take time.

Kingsoft Cloud Holdings Ltd (3896) vs. iShares MSCI Hong Kong ETF (EWH)

Kingsoft Cloud Holdings Ltd Business Overview & Revenue Model

Company DescriptionKingsoft Cloud Holdings Limited provides cloud services to businesses and organizations in China. The company's products portfolio includes cloud products, including infrastructure as a service (IaaS) infrastructure, platform as a service (PaaS) middleware, and software as a service (SaaS) applications that primarily consist of cloud computing, storage, and delivery solutions. It offers research and development services, as well as enterprise digital solutions and related services. The company also provides public cloud services to customers in various verticals, including video, game, entertainment, e-commerce, education, traveling, advertising, intelligent mobility, office automation, artificial intelligent, and mobile internet; and enterprise cloud services to customers in financial service, public service, and healthcare businesses. Kingsoft Cloud Holdings Limited was incorporated in 2012 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyKingsoft Cloud Holdings Ltd generates revenue primarily through its cloud services offerings. The company's revenue model is based on a combination of subscription-based and consumption-based pricing for its cloud infrastructure services, including computing, storage, and network resources. Key revenue streams include Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) solutions. Kingsoft Cloud has established significant partnerships with enterprises across various sectors, which contribute to its earnings. Additionally, the company benefits from the growing demand for digital transformation and cloud adoption in China, which enhances its market position and expands its customer base.

Kingsoft Cloud Holdings Ltd Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q1-2025)
|
% Change Since: -0.29%|
Next Earnings Date:Aug 26, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strong growth in public cloud and AI business, significant contributions from the Xiaomi and Kingsoft ecosystem, and improvements in non-GAAP EBITDA margin. However, the enterprise cloud segment faced challenges with a revenue decline, and the company experienced fluctuations in gross margin and an operating loss. Despite these challenges, the company's long-term strategy focuses on AI and cloud services.
Q1-2025 Updates
Positive Updates
Revenue Growth
Kingsoft Cloud Holdings Limited reported year-over-year revenue growth of 11%, reaching RMB 1.97 billion for the first quarter of 2025.
Public Cloud Performance
Public cloud revenue increased by 14% year-over-year, reaching RMB 1.35 billion, with AI gross billing contributing significantly.
AI Business Expansion
AI gross billing reached RMB 525 million, representing a year-over-year increase of over 200% and contributing 39% of public cloud revenue.
Xiaomi and Kingsoft Ecosystem Growth
Revenue from Xiaomi and Kingsoft ecosystem reached RMB 500 million, up 50% year-over-year.
Non-GAAP EBITDA Margin Improvement
The non-GAAP EBITDA margin improved to 16.2%, an increase of 14.3 percentage points year-over-year.
Negative Updates
Enterprise Cloud Revenue Decline
Enterprise cloud revenue increased by only 5% year-over-year but experienced a sequential decrease of 25% due to seasonal slowdowns.
Gross Margin Fluctuation
Non-GAAP gross margin declined by 2.6 percentage points quarter-over-quarter to 16.6% due to lower profit contribution from enterprise cloud revenue and front-loaded investments.
Non-GAAP Operating Loss
The company reported a non-GAAP operating loss of RMB 55 million, with an operating margin of negative 2.8%.
Company Guidance
In the first quarter of 2025, Kingsoft Cloud Holdings Limited reported significant advancements in its AI-driven strategies and financial metrics. The company achieved a year-over-year revenue growth of 11%, reaching RMB 1.97 billion, with public cloud services contributing RMB 1.35 billion, marking a 14% increase. AI gross billing surged to RMB 525 million, a year-over-year increase exceeding 200%, now accounting for 39% of public cloud revenue. Revenue from the Xiaomi and Kingsoft ecosystem climbed by 50% year-over-year to RMB 500 million, comprising 25% of total revenue. Despite a 2.6 percentage point decline in the non-GAAP gross margin quarter-over-quarter to 16.6%, non-GAAP EBITDA margin improved to 16.2%, up 14.3 percentage points year-over-year. The company experienced a non-GAAP operating loss of RMB 55 million, with a negative operating margin of 2.8%, an improvement from a 7.2% loss in the same period last year. Despite fluctuations due to market conditions and supply chain challenges, Kingsoft Cloud remains focused on its long-term strategy, emphasizing ecosystem collaboration and AI cloud services.

Kingsoft Cloud Holdings Ltd Financial Statement Overview

Summary
Kingsoft Cloud Holdings Ltd faces ongoing challenges with profitability and cash flow. Despite some improvement in revenue and gross profit margins, rising debt levels and negative free cash flow present potential risks. While there are signs of operational improvements, significant efforts are needed to achieve financial stability and sustainable profitability.
Income Statement
55
Neutral
Kingsoft Cloud Holdings Ltd has shown inconsistent revenue growth with a decline from 2019 to 2023, but a slight recovery in 2024. The gross profit margin improved in 2024 to 17.2% from 12.1% in 2023, suggesting better cost management. However, net profit margins remain negative, indicating persistent unprofitability. The EBIT and EBITDA margins have been negative over the years, reflecting ongoing operational challenges.
Balance Sheet
60
Neutral
The company's debt-to-equity ratio increased significantly in 2024, indicating higher leverage and potential financial risk. Return on equity remains negative due to ongoing losses, but the equity ratio of 29.4% in 2024 suggests a reasonable equity base relative to total assets. Overall, while the company maintains a solid asset base, increased debt levels raise concerns about financial stability.
Cash Flow
45
Neutral
Free cash flow has been consistently negative, highlighting cash management issues. The operating cash flow turned positive in 2024, yet the free cash flow remains under pressure due to high capital expenditures. The operating cash flow to net income ratio improved but is still not ideal, reflecting challenges in converting sales to cash.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.79B7.05B8.18B9.06B6.58B
Gross Profit
1.34B850.17M429.54M351.29M356.98M
EBIT
-1.74B-2.11B-2.25B-1.81B-1.21B
EBITDA
443.80M-1.08B-1.37B-776.06M-388.83M
Net Income Common Stockholders
-1.97B-2.18B-2.69B-1.59B-962.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.74B2.26B4.67B6.71B6.12B
Total Assets
17.59B15.07B17.32B21.08B11.96B
Total Debt
5.91B1.72B1.17B1.62B612.27M
Net Debt
3.26B-532.82M-2.25B-2.60B-2.81B
Total Liabilities
12.09B7.82B7.73B9.59B3.72B
Stockholders Equity
5.17B6.89B8.80B10.60B8.24B
Cash FlowFree Cash Flow
-3.05B-2.13B-1.25B-1.44B-1.88B
Operating Cash Flow
628.42M-169.07M188.97M-708.87M-290.43M
Investing Cash Flow
-3.62B-673.19M-32.87M-421.62M-4.31B
Financing Cash Flow
3.26B-227.85M-1.15B2.21B6.12B

Kingsoft Cloud Holdings Ltd Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.81
Price Trends
50DMA
6.83
Negative
100DMA
7.61
Negative
200DMA
5.18
Positive
Market Momentum
MACD
-0.06
Negative
RSI
49.64
Neutral
STOCH
70.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3896, the sentiment is Positive. The current price of 6.81 is above the 20-day moving average (MA) of 6.68, below the 50-day MA of 6.83, and above the 200-day MA of 5.18, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 70.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3896.

Kingsoft Cloud Holdings Ltd Risk Analysis

Kingsoft Cloud Holdings Ltd disclosed 98 risk factors in its most recent earnings report. Kingsoft Cloud Holdings Ltd reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Kingsoft Cloud Holdings Ltd Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$11.97B10.29-7.47%2.99%7.32%-8.06%
54
Neutral
HK$27.96B-33.05%13.37%3.82%
$108.04B19.1223.82%
$8.83B23.2911.45%0.85%
$178.94B40.9114.98%
84
Outperform
HK$408.27B8.1319.79%23.49%7.67%90.63%
81
Outperform
HK$2.14T15.0613.02%2.83%3.92%27.80%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:3896
Kingsoft Cloud Holdings Ltd
6.78
5.28
352.00%
MPNGF
Meituan
17.65
2.91
19.74%
SNPTF
Sunny Optical Technology (Group) Co
8.03
1.46
22.22%
XIACF
Xiaomi
6.90
4.68
210.81%
HK:9618
JD.com, Inc. Class A
130.90
20.86
18.96%
HK:9988
Alibaba Group Holding Ltd.
112.90
41.99
59.22%

Kingsoft Cloud Holdings Ltd Corporate Events

Kingsoft Cloud Announces CFO Resignation and Future Plans
Jun 11, 2025

Kingsoft Cloud Holdings Ltd announced the resignation of Mr. He Haijian from his roles as executive director and chief financial officer, effective June 30, 2025, due to personal commitments. The company expressed gratitude for Mr. He’s contributions and leadership over the past five years and plans to appoint a new CFO soon. The board remains committed to the company’s strategic priorities and confident in its long-term outlook.

The most recent analyst rating on (HK:3896) stock is a Buy with a HK$10.00 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud Approves Key Resolutions at AGM
Jun 9, 2025

Kingsoft Cloud Holdings Ltd announced that all resolutions proposed at their Annual General Meeting held on June 9, 2025, were approved by shareholders. Key resolutions included the re-election of directors, authorization for the board to fix director remuneration, reappointment of Ernst & Young as auditors, and granting mandates for share issuance, resale, and repurchase. These resolutions are expected to strengthen the company’s governance and operational flexibility, potentially impacting its market position positively.

The most recent analyst rating on (HK:3896) stock is a Buy with a HK$10.00 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud Announces Board Composition and Roles
Jun 9, 2025

Kingsoft Cloud Holdings Limited announced the composition of its board of directors, highlighting the roles and functions of each member. This announcement provides clarity on the company’s governance structure, potentially impacting its strategic direction and reassuring stakeholders about its leadership stability.

The most recent analyst rating on (HK:3896) stock is a Buy with a HK$10.00 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud Announces Director Changes
May 28, 2025

Kingsoft Cloud Holdings Ltd announced the resignation of Mr. Feng Honghua as a non-executive director due to other business commitments, effective after the annual general meeting on June 9, 2025. Mr. Zhang Duo has been appointed as the new non-executive director, bringing extensive experience from his previous roles at Xiaomi Corporation, which may enhance the company’s strategic direction and governance.

The most recent analyst rating on (HK:3896) stock is a Hold with a HK$1.70 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud Releases Q1 2025 Financial Results
May 28, 2025

Kingsoft Cloud Holdings Limited announced its unaudited financial results for the first quarter of 2025, prepared according to U.S. GAAP. The announcement, made under regulatory obligations, highlights the company’s financial performance and advises caution to shareholders and potential investors regarding the results.

The most recent analyst rating on (HK:3896) stock is a Hold with a HK$1.70 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud to Announce Q1 2025 Results and Host Earnings Call
May 13, 2025

Kingsoft Cloud Holdings Ltd announced a board meeting scheduled for May 28, 2025, to review and approve the company’s unaudited first-quarter results for 2025. The company will also host an earnings conference call on the same day, providing stakeholders an opportunity to gain insights into its financial performance and strategic direction.

The most recent analyst rating on (HK:3896) stock is a Hold with a HK$2.00 price target. To see the full list of analyst forecasts on Kingsoft Cloud Holdings Ltd stock, see the HK:3896 Stock Forecast page.

Kingsoft Cloud Announces 2025 AGM and Key Resolutions
May 9, 2025

Kingsoft Cloud Holdings Limited has announced its Annual General Meeting scheduled for June 9, 2025, in Beijing. The meeting will address several resolutions, including the adoption of the 2024 financial statements, re-election of directors, and re-appointment of Ernst & Young as auditors. Additionally, a mandate will be discussed to allow directors to issue and deal with company shares and securities, which could impact the company’s financial strategy and shareholder value.

Kingsoft Cloud Completes ADS and Ordinary Shares Offering
Apr 25, 2025

Kingsoft Cloud Holdings Ltd announced the successful closing of its offering of American Depositary Shares (ADSs) and Ordinary Shares under a general mandate, including the full exercise of an option by underwriters to purchase additional ADSs. The gross proceeds from these offerings are intended to be used for infrastructure upgrades, technology and product development, and general corporate purposes, which could enhance the company’s operational capabilities and market position.

Kingsoft Cloud Files Annual Report for Fiscal Year 2024
Apr 15, 2025

Kingsoft Cloud Holdings Limited announced the filing of its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the United States Securities and Exchange Commission. This filing is a regulatory requirement and provides comprehensive details on the company’s financial performance and operational highlights, potentially impacting its market positioning and stakeholder interests.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.