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IPO Update: Kingsoft Cloud Holdings Proposes IPO Terms

May 04, 2020 1:49 PM ETKingsoft Cloud Holdings Limited (KC) Stock


  • Kingsoft Cloud Holdings aims to raise $425 million in a U.S. IPO.
  • The company provides a range of software and services to assist Asia-based enterprises in transitioning to cloud-based IT invironments.
  • KC has grown revenue but other financial metrics are lacking, so I'll watch this IPO from the sidelines.
  • Looking for more stock ideas like this one? Get them exclusively at IPO Edge. Get started today »

Quick Take

Kingsoft Cloud Holdings (NASDAQ:KC) has filed to raise $425 million from the sale of ADSs representing underlying ordinary shares, per an amended F-1/A registration statement.

The company provides enterprises in Asia with a suite of cloud-based service offerings.

KC has produced revenue growth but no gross profit and is generating large operating losses and operational cash burn. I'll be watching this IPO but not participating.

Company & Technology

Beijing, China-based Kingsoft was founded to provide enterprises with complementary cloud services as an alternative to their on-premise information technology systems. Kingsoft is a spinoff from Hong Kong-listed Kingsoft Corporation (HK:3888).

Management is headed by Chief Executive Officer Mr. Yulin Wang, who has been with the firm since 2012 and was previously EVP at Phoenix New Media Limited and COO at CNEC.

Below is a brief overview video of the Kingsoft Cloud antivirus system:

Source: languy99

The company’s primary offerings include:

  • Compute

  • Networking

  • Storage & CDN

  • Database

  • Data Analysis

  • Security

Kingsoft has received at least $1.1 billion from investors including parent firm Kingsoft, Xiaomi and FutureX.

Customer Acquisition

Kingsoft is the largest independent cloud service provider in China and focuses its efforts by industry vertical: gaming, video and financial services.

The firm seeks marquee customers in each vertical to be able to demonstrate its capabilities and market more efficiently to other prospects in the vertical.

Selling and marketing expenses as a percentage of total revenue have been dropping as revenues have increased, as the figures below indicate:

Selling & Marketing

Expenses vs. Revenue







Source: Company registration statement

The Selling and Marketing efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Selling and marketing spend, was a very strong 5.3x in the most recent

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This article was written by

Donovan Jones profile picture

Donovan Jones is a research specialist with 15 years of experience identifying opportunities for IPOs and software companies.

He also leads the investing group

IPO Edge

which offers: actionable information on growth stocks through first look S-1 filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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