Understanding the Market | Kingsoft Cloud rose over 10% in early trading, with institutions stating that revenue from Xiaomi and the Kingsoft Software ecosystem is expected to accelerate growth

Zhitong
2024.11.28 01:41
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Kingsoft Cloud rose over 10% in early trading, and as of the time of writing, it has increased by 6.48%, trading at HKD 3.45 with a transaction volume of HKD 100 million. In terms of news, Kingsoft Cloud previously announced its third-quarter results, with total revenue reaching RMB 1.886 billion, an increase of 16.0% year-on-year; gross profit was RMB 303.4 million, an increase of 54.6% year-on-year; and non-GAAP EBITDA was approximately RMB 185 million, turning from a loss to a profit year-on-year. The announcement stated that the year-on-year revenue increase was mainly due to revenue growth from Xiaomi and the Kingsoft ecosystem as well as clients related to artificial intelligence, along with increased demand for industry cloud services, while part of the increase was offset by the company's proactive reduction in the scale of low-margin content delivery network (CDN) services. Everbright Securities pointed out that Kingsoft Cloud's adjusted EBITDA margin continued to improve steadily in the third quarter, following a positive trend in the previous two quarters, and significantly increased by 12.6 percentage points year-on-year, fully demonstrating the strong growth momentum of the company's operations. The firm believes that as the only strategic cloud platform within the Xiaomi & Kingsoft ecosystem, Kingsoft Cloud's revenue elasticity from the ecosystem is promising, and its profitability is expected to continue to improve. The firm expects the company's adjusted operating profit margin to turn positive by 2025

According to Zhitong Finance APP, Kingsoft Cloud (03896) rose over 10% in early trading, and as of the time of writing, it is up 6.48%, priced at HKD 3.45, with a transaction volume of HKD 100 million.

In terms of news, Kingsoft Cloud previously announced its third-quarter performance, with total revenue reaching RMB 1.886 billion, an increase of 16.0% year-on-year; gross profit was RMB 303.4 million, an increase of 54.6% year-on-year; and non-GAAP EBITDA was approximately RMB 185 million, turning from loss to profit year-on-year. The announcement stated that the year-on-year revenue increase was mainly due to revenue growth from Xiaomi and the Kingsoft ecosystem as well as AI-related clients, along with increased demand for industry cloud services, while part of the increase was offset by the company's proactive reduction in the scale of low-margin content delivery network (CDN) services.

Everbright Securities pointed out that Kingsoft Cloud's adjusted EBITDA margin continued to improve steadily in the third quarter, following a positive trend in the previous two quarters, and increased significantly by 12.6 percentage points year-on-year, fully demonstrating the strong growth momentum of the company's operations. The firm believes that as the only strategic cloud platform within the Xiaomi & Kingsoft ecosystem, Kingsoft Cloud's revenue elasticity from the ecosystem is promising, and its profitability is expected to continue improving. The firm anticipates that the company's adjusted operating profit margin is likely to turn positive by 2025

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