Understanding the Market | Kingsoft Cloud rises over 6%, with a cumulative increase of over 65% after earnings; revenue from Xiaomi and Kingsoft is expected to accelerate growth

Zhitong
2024.12.04 02:03
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Kingsoft Cloud rose over 6% again, with a cumulative increase of over 65% after earnings. As of the time of writing, it rose 4.91% to HKD 4.06, with a transaction volume of HKD 157 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; non-GAAP EBITDA was approximately RMB 185 million, turning from loss to profit year-on-year. The announcement stated that the year-on-year increase in revenue was mainly due to the growth in revenue from Xiaomi and the Kingsoft ecosystem, as well as clients related to artificial intelligence, and the increased demand for industry cloud, 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) has risen over 6% again, with a cumulative increase of over 65% since its earnings report. As of the time of writing, it is up 4.91%, priced at HKD 4.06, with a transaction volume of HKD 157 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 the growth in revenue from Xiaomi and the Kingsoft ecosystem as well as clients related to artificial intelligence, 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, building on the positive results of 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, the revenue elasticity from the ecosystem is promising, and profitability is expected to continue to improve. The firm expects the company's adjusted operating profit margin to turn positive by 2025

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