- Kingsoft Cloud is a leading cloud service provider in China, and the country’s biggest cloud-only player.
- China’s market for cloud infrastructure is expected to reach approximately $85 billion by 2026—implying a 5-year CAGR of 25%.
- Kingsoft is poised to benefit from the structural growth trend in China’s Cloud market and the large addressable market.
- Kingsoft Cloud (KC) is down approximately 85% from ATH. While the company has certainly traded at rich valuations in the past, the company now appears very cheap at x0.71 P/B and x0.8 P/S.
- I value Kingsoft Cloud based on a residual earnings framework and calculate a fair base-case target price equal to $6.37/share, implying 50% upside potential.
For further details see:
Kingsoft Cloud: Betting On China's Cloud Market