Understanding the Market | KINGSOFT CLOUD rose over 8% in the late trading session, recently completing a placement fundraising. The company directly benefits from Xiaomi and Kingsoft's increased investment in AI
KINGSOFT CLOUD surged over 8% in the late trading session, reaching an increase of 8.28% as of the time of publication, priced at HKD 6.54, with a trading volume of HKD 993 million. The company completed a fundraising of approximately USD 291.5 million through a placement, with the funds to be used for infrastructure upgrades, technology development, and working capital. Citigroup believes this placement plan is reasonable, while Shenwan Hongyuan pointed out that KINGSOFT CLOUD directly benefits from the AI investments of Xiaomi and Kingsoft, expecting future revenue to continue to grow
According to Zhitong Finance APP, Kingsoft Cloud (03896) rose over 8% in late trading, with an increase of 8.28% as of the time of writing, priced at HKD 6.54, with a transaction volume of HKD 993 million.
In terms of news, Kingsoft Cloud previously announced a plan to issue additional ADS and a placement plan, raising approximately USD 291.5 million, which is intended for investment in upgrading and expanding infrastructure; investment in technology and product development; and general corporate and operational funding purposes. Citigroup published a research report stating that considering Kingsoft Cloud's high net debt ratio of 59% as of the fourth quarter of last year, along with its aggressive capital expenditure plans, the placement plan is not surprising.
Shenwan Hongyuan pointed out that Kingsoft Cloud is the core cloud provider for Xiaomi and Kingsoft's ecosystem, directly benefiting from increased AI investments by Xiaomi and Kingsoft Software Group. Kingsoft Cloud's revenue from Xiaomi and Kingsoft Software Group grew by 76% year-on-year in Q4 2024. At the end of 2024, Kingsoft Cloud renewed its strategic framework agreement with Xiaomi and Kingsoft Software Group, with a total annual cap for cloud services of RMB 2.8 billion, 3.7 billion, and 4.8 billion for 2025-2027, representing year-on-year growth of 41%, 35%, and 29%, ensuring a basic growth foundation for the company's revenue; in addition, Kingsoft Cloud signed a financing service framework with Xiaomi to ensure capital expenditure investments. Xiaomi is establishing a comprehensive ecosystem for people, vehicles, and homes, with a clear new growth curve in automotive business beyond mobile phones and IoT, actively investing in intelligent driving, and a clear increase in AI demand