Investment Thesis
In our first article, we will focus on the cloud services segment of Kingsoft (KSFTF). The company is currently up approximately 68% YTD and is trading at a price of HKD 18.16. In our view, the stock price currently seems undervalued as we believe that the local stock market participants are concerned regarding the decline of both operating and gross margins over the last couple of years. Margin's contraction was driven by increased cloud services related to operational costs. However, we anticipate that as the company increases its scale it can