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KINGSOFT CLOUD Nosedives ~7% as Nomura Flags 1Q GM Decline as Warning Sign; BofAS, Jefferies See 2Q Recovery
Recommend 13 Positive 20 Negative 15 |
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KINGSOFT CLOUD (03896.HK) opened 1.33% higher today, reaching a peak of HKD6.96 before reversing to a trough of HKD6.24. It last traded at HKD6.29, down 7.23%, with turnover of 79.9531 million shares involving HKD518 million. KINGSOFT CLOUD announced its results for 1Q26 after market close on May 27. Revenue grew 37% YoY to RMB2.7 billion, mainly driven by revenue growth from XIAOMI-W (01810.HK), the Kingsoft ecosystem and AI-related customers, as well as deeper penetration into enterprise cloud clients. --------------------------------------------------------------------------------------------- Nomura said in a report that KINGSOFT CLOUD's gross margin for 1Q declined 3.4 ppts YoY to 12.8%, owing to higher server costs, AI business expansion and upfront costs incurred for specific clients. The company recorded a non-GAAP net loss of RMB237.1 million during the period, compared with a net loss of RMB94.6 million in 4Q25. Nomura attributed the widening loss to the lower gross margin. Nomura maintained its Buy rating on KINGSOFT CLOUD with an unchanged TP of HKD8.5. --------------------------------------------------------------------------------------------- BofA Securities said in a research report that KINGSOFT CLOUD's 1Q results were in line. Revenue rose 37% YoY to RMB2.7 billion, 4% and 3% above market consensus and the broker's forecasts, respectively, given strong public cloud revenue growth. Adjusted EBITDA surged 135% YoY to RMB748 million, 4% above consensus, while non-GAAP net loss widened 24% YoY to RMB237 million. Gross margin for the quarter fell 3.4 ppts YoY to 12.8%, due to seasonal revenue mix changes and temporarily low server utilization. The broker expected gross margin to recover starting from 2Q. It lifted the TP for KINGSOFT CLOUD (03896.HK) from HKD10.8 to HKD10.9, and raised the US share TP for Kingsoft Cloud Holdings Limited (KC.US) from USD20.8 to USD21.0. ----------------------------------------------------------------------------------------------------------------- Jefferies estimated in a research report that 2Q total revenue will grow 13% QoQ and 30% YoY to RMB3.1 billion, in light of increased AI revenue contribution from XIAOMI-W. Gross margin is expected to improve QoQ to above 15%, while adjusted EBITDA margin is forecast to rise QoQ to around 30%. The broker maintained its Buy rating and USD19 TP on the US shares of KINGSOFT CLOUD. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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