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Kingsoft Cloud Holdings Ltd (HK:3896)
:3896
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Kingsoft Cloud Holdings Ltd
(3896)
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Rating:60Neutral
Price Target:
HK$8.50
▲(3.53% Upside)
Kingsoft Cloud Holdings Ltd's overall stock score reflects a mix of strong technical momentum and positive earnings call highlights, offset by weak financial performance and valuation concerns. The company's growth in AI and cloud services is promising, but persistent profitability issues and financial risks weigh heavily on the stock's attractiveness.
Positive Factors
AI-Driven Success
The significant growth in AI billings highlights Kingsoft Cloud's strong position in the AI sector, which is expected to drive long-term demand and revenue growth as AI adoption continues across industries.
Xiaomi and Kingsoft Ecosystem
The robust growth from strategic partnerships with Xiaomi and Kingsoft enhances Kingsoft Cloud's ecosystem, providing a competitive edge and diversified revenue streams, supporting sustainable growth.
Public Cloud Revenue Growth
Strong growth in public cloud revenue underscores Kingsoft Cloud's effective market penetration and service expansion, positioning it well for continued success in the expanding cloud services market.
Negative Factors
Gross Margin Pressure
Ongoing pressure on gross margins due to high service costs and price competition may impact profitability, challenging Kingsoft Cloud's ability to maintain cost efficiency and margin stability.
High CapEx and Indebtedness
Substantial capital expenditures and rising indebtedness could strain financial resources, limiting flexibility for future investments and potentially affecting long-term financial health.
Supply Chain Uncertainty
Geopolitical tensions affecting chip supply pose a risk to Kingsoft Cloud's operations, potentially disrupting service delivery and increasing costs, impacting long-term strategic planning.
Kingsoft Cloud Holdings Ltd (3896) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$34.43B
Dividend YieldN/A
Average Volume (3M)120.79M
Price to Earnings (P/E)―
Beta (1Y)2.27
Revenue Growth19.98%
EPS Growth-9.04%
CountryHK
Employees12,335
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.12
Shares Outstanding4,193,784,700
10 Day Avg. Volume142,791,523
30 Day Avg. Volume120,792,354
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)2.63
Price to Sales (P/S)1.74
P/FCF Ratio-4.45
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$10.03Price Target Upside22.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 service offerings. The company charges its clients based on their usage of its cloud infrastructure, which includes computing power, storage, and data transfer. Additionally, Kingsoft Cloud earns income from its platform services by offering tools and solutions that assist businesses in developing and deploying applications more efficiently. Another significant revenue stream comes from its software services, where it provides tailored SaaS solutions to various industries. Strategic partnerships with technology companies and continued investment in expanding its data center capacity also play a crucial role in enhancing its service delivery and driving revenue growth.
Kingsoft Cloud Holdings Ltd Earnings Call Summary
Earnings Call Date:Aug 20, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue growth driven by AI and strong performance in both public and enterprise cloud segments. However, the company faces pressure on gross margins, high CapEx, and supply chain uncertainties. While growth prospects remain positive, operational challenges persist.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Q2 revenue reached RMB 2.35 billion, representing a year-over-year growth of 24%, with public cloud revenue increasing by 32% to RMB 1.63 billion.
AI-Driven Success
AI gross billings reached RMB 728 million, a year-over-year increase of over 120% and a quarter-over-quarter growth of 39%, accounting for 45% of public cloud revenue.
Xiaomi and Kingsoft Ecosystem
Revenue from Xiaomi and Kingsoft ecosystem reached RMB 629 million, up 70% year-over-year, contributing 27% to total revenue.
Enterprise Cloud Growth
Enterprise cloud revenue reached RMB 724 million, a year-over-year increase of 10%, driven by demand for IT delivery services.
Financial Health
Non-GAAP EBITDA profit was RMB 406 million, increased by 5.7 times compared to the same quarter last year, with a margin of 73%.
Negative Updates
Gross Margin Pressure
Adjusted gross margin was 17% this quarter, affected by higher cost of service, upfront costs for new customers, and price pressure of scale clusters.
High CapEx and Indebtedness
CapEx expenditures reached 10 billion for the year, with 5 billion already spent in the first half, indicating high infrastructure investment.
Supply Chain Uncertainty
Concerns about chip supply due to geopolitical tensions, with potential long-term impacts on domestic chip production capabilities.
Company Guidance
During the Kingsoft Cloud Second Quarter 2025 Earnings Conference Call, the company reported a revenue of RMB 2.35 billion, reflecting a year-over-year increase of 24%. Public cloud revenue rose significantly by 32% to RMB 1.63 billion, while enterprise cloud revenue climbed 10% to RMB 724 million. The AI segment showed robust growth, with AI gross billings reaching RMB 728 million, marking a 120% year-over-year increase and accounting for 45% of public cloud revenue. The company also highlighted strong growth from its Xiaomi and Kingsoft ecosystem, with revenue from this segment surging 70% year-over-year to RMB 629 million, contributing 27% to the total revenue. Kingsoft Cloud emphasized its strategy of embracing AI opportunities and enhancing its technical capabilities, which has driven incremental demand across various sectors including public services, healthcare, and enterprise services.Kingsoft Cloud Holdings Ltd Financial Statement Overview
Summary
Kingsoft Cloud Holdings Ltd faces significant operational challenges with persistent losses and negative margins. Despite improvements in cash flow, the balance sheet shows potential risks due to moderate leverage and declining equity. The company needs to address profitability and stabilize its financial structure to improve its financial health.Income Statement
Kingsoft Cloud Holdings Ltd has shown a declining trend in revenue from 2021 to TTM 2025. The Gross Profit Margin in TTM 2025 was 17.12%, which suggests moderate cost control. However, the company has consistently reported negative EBIT and Net Income, indicating an inability to achieve profitability. The Net Profit Margin for TTM 2025 is -24.07%, reflecting ongoing operational challenges.45
Neutral
Balance Sheet
The company's Debt-to-Equity Ratio as of TTM 2025 is approximately 0.93, which is moderately leveraged. The Equity Ratio stands at 25.40%, indicating a balanced use of equity in financing assets. However, declining stockholders' equity from 2022 to TTM 2025 raises concerns about financial stability.50
Neutral
Cash Flow
The Operating Cash Flow to Net Income Ratio for TTM 2025 is -0.28, showing cash flow challenges. However, Free Cash Flow turned positive in TTM 2025, indicating improvements in cash management. The Free Cash Flow to Net Income Ratio suggests a cautious yet positive shift in cash flow relative to earnings.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.44B | 7.79B | 7.05B | 8.18B | 9.06B | 6.58B |
| Gross Profit | 1.39B | 1.34B | 850.17M | 429.54M | 351.29M | 356.98M |
| EBITDA | 271.69M | 443.80M | -1.08B | -1.37B | -956.79M | -449.21M |
| Net Income | -2.03B | -1.97B | -2.18B | -2.66B | -1.59B | -962.20M |
Balance Sheet | ||||||
| Total Assets | 24.83B | 17.59B | 15.07B | 17.32B | 21.08B | 11.96B |
| Cash, Cash Equivalents and Short-Term Investments | 5.46B | 2.74B | 2.26B | 4.67B | 6.71B | 6.12B |
| Total Debt | 5.63B | 5.91B | 1.72B | 2.10B | 1.62B | 612.27M |
| Total Liabilities | 17.77B | 12.09B | 7.82B | 7.73B | 9.59B | 3.72B |
| Stockholders Equity | 6.72B | 5.17B | 6.89B | 8.80B | 10.60B | 8.24B |
Cash Flow | ||||||
| Free Cash Flow | 1.84B | -3.05B | -2.13B | -1.25B | -1.44B | -1.88B |
| Operating Cash Flow | 1.84B | 628.42M | -169.07M | 188.97M | -708.87M | -290.43M |
| Investing Cash Flow | -3.17B | -3.62B | -673.19M | -32.87M | -421.62M | -4.31B |
| Financing Cash Flow | 4.72B | 3.26B | -227.85M | -1.15B | 2.21B | 6.12B |
Kingsoft Cloud Holdings Ltd Technical Analysis
Positive
8.21
Price Trends
7.91
Positive
7.36
Positive
7.28
Positive
Market Momentum
0.22
Positive
49.44
Neutral
19.41
Positive
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 8.21 is below the 20-day moving average (MA) of 8.31, above the 50-day MA of 7.91, and above the 200-day MA of 7.28, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 49.44 is Neutral, neither overbought nor oversold. The STOCH value of 19.41 is Positive, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | HK$810.53M | 9.76 | 21.64% | 9.90% | -6.93% | -18.99% | |
68 Neutral | HK$54.74B | 19.21 | 15.34% | ― | -4.23% | 108.65% | |
60 Neutral | HK$34.43B | ― | -30.89% | ― | 19.98% | -9.04% | |
60 Neutral | HK$9.20B | 21.13 | 8.15% | 2.57% | -17.90% | 56.67% | |
54 Neutral | HK$11.21B | 378.79 | 3.69% | ― | 115.40% | ― | |
45 Neutral | HK$6.87B | -103.07 | -4.03% | 2.71% | -17.48% | 83.80% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
HK:3896
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Kingsoft Cloud Holdings Ltd Corporate Events
Kingsoft Cloud Enters Strategic Agreement with Xiaomi
Jul 29, 2025
Kingsoft Cloud Holdings Ltd has entered into the 2025 Xiaomi Cooperation Framework Agreement with Xiaomi, effective from July 29, 2025. This agreement involves Xiaomi providing IDC related services to Kingsoft Cloud for three years and selling network hardware devices for one year. As Xiaomi holds a significant share in Kingsoft Cloud, the transactions are classified as continuing connected transactions under Hong Kong Listing Rules. These transactions are subject to reporting and annual review requirements but do not require independent shareholders’ approval.
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.
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.