Kingsoft Cloud formally submitted an application on July 27 for a dual primary listing to the Hong Kong Stock Exchange (HKEx). The company expects to be dual-listed on the Nasdaq and the HKEx upon the completion of the listing.
Kingsoft Cloud, a cloud computing enterprise under Kingsoft, was founded in Beijing in 2012 and successfully listed in the United States in May 2020, with a stock price as high as $74.67. However, since February 2021, its share price has been declining by more than 90%.
According to Frost & Sullivan, Kingsoft Cloud is the largest independent cloud services provider in China and the country’s fourth-largest cloud services provider, with a market share of 3.1%. Based on cloud services revenue, in 2021, the market share of the top seven companies in China’s cloud service market totaled 53.0%. In 2021, Kingsoft Cloud ranked as the fifth-largest public cloud services provider.
With the continuous expansion of the cloud market and more and more players in the industry, Kingsoft Cloud faces the problem that its market share is being squeezed. According to a report released by IDC, in the third quarter of 2021, Alibaba Cloud, Tencent Cloud and Baidu AI Cloud accounted for 37%, 18%, 16% and 9% of market share respectively, while Kingsoft Cloud ranked eighth with a 2.89% market share.
According to its prospectus, Kingsoft Cloud‘s annual revenue and losses are both expanding. In 2019, 2020 and 2021, the company’s revenue was 3.956 billion yuan ($586 million), 6.577 billion yuan and 9.061 billion yuan respectively, and net loss was 1.111 billion yuan, 962 million yuan and 1.592 billion yuan.
Kingsoft Cloud said in its prospectus that it expects costs and expenses to still increase in the future. In addition, it will continue to invest heavily to expand infrastructure, improve technology and provide more products, which will lead to the increase of the company’s operating costs and R&D expenses.
Kingsoft, Xiaomi and Xiaomi‘s founder Lei Jun are the three major shareholders of Kingsoft Cloud, holding 37.4%, 11.82% and 11.82% of shares respectively. It is worth noting that Kingsoft and Xiaomi are also customers of Kingsoft Cloud. In 2021, the revenue from Xiaomi and Kingsoft accounted for 10.9% and 2.2% of the total revenue respectively.