KC - Kingsoft Cloud: A Hold Is Maintained In Spite Of Results Beat

2024-03-22 17:48:18 ET

Summary

• Kingsoft Cloud's Q4 2023 losses were narrower than what the analysts had anticipated, which drove a +16.2% jump in its share price on the day results were released.
• My view is that KC's EBITDA profitability inflection point will likely happen sometime later, so it seems too early to turn positive on the stock now.
• I retain my Hold rating for Kingsoft Cloud, after considering its valuation metrics, its recent quarterly financial performance, and its operating profitability outlook.

Elevator Pitch

I rate Kingsoft Cloud Holdings ( KC ) [3896:HK] as a Hold.

My previous December 26, 2023 article touched on the prospects for KC's public cloud services (which includes the Content Delivery Network or CDN business that it is scaling down) and enterprise cloud services segments. In this latest write-up, I review Kingsoft Cloud's most recent fourth quarter financial results....

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