Jinwu Financial News | HAITONG INT'L released a research report stating that Kingsoft Cloud (03896) was established in 2012, gradually building a complete Cloud Computing infrastructure and Operation system based on over thirty years of enterprise-level service experience from Kingsoft Group, and providing over 150 multi-field solutions by organically combining with advanced technologies such as Big Data, AI, and Edge Computing, serving more than 500 quality clients with high-quality Cloud Computing Service.

The firm believes that the company is a leading Cloud Computing Service provider in China, with ongoing improvements in technology, products, and service capabilities; the company's Global Strategy has shifted to fully embrace AI, strategically optimizing its revenue structure to enhance profitability has already achieved significant results. Benefitting from the large future Cloud Computing Service demand from Xiaomi Group and KINGSOFT Group, and considering the large framework agreements renewed with KINGSOFT Group and Xiaomi Group, public Cloud Computing Service revenue is expected to grow rapidly. The firm expects the company’s public Cloud Computing Service revenue growth rates for 2024-2026 will be 15.0%/20.0%/22.5% year-on-year; it is also anticipated that as the company's Cloud Computing products continue to expand into advantageous vertical industries, the growth rate of industry Cloud Computing Service revenue will remain stable, with the firm forecasting year-on-year growth rates of 3.0%/4.0%/5.0% for industry Cloud Computing Service revenue during 2024-2026. As the company optimizes its revenue structure, the proportion of public Cloud Computing Service revenue continues to increase, further leveraging the economies of scale of public Cloud Computing, the firm expects the company's gross margin to continue rising, reaching 17.0%/21.0%/24.0% in 2024-2026.

The firm expects the company’s revenue for 2024-2026 to be 7.784/8.902/10.405 billion yuan, with year-on-year growth of 10.5%/14.4%/16.9%; net income attributed to shareholders would be -1.57/-0.831/-0.32 billion yuan. Referencing comparable companies, a PS of 3.0 times is assigned to the company for 2025, with a Target Price of 7.63 HKD (based on 1 HKD = 0.92 RMB conversion). Initiating coverage with a rating of 'Outperform the Market'.