Investment Rating - The report maintains a "Buy" rating for the company [2] Core Insights - The company achieved a revenue of 2.2 billion HKD in Q4 2024, representing a year-on-year growth of 30%, with the adjusted operating profit turning positive for the first time at 24.37 million HKD, corresponding to a profit margin of 1.1% [7] - For the full year of 2024, the company reported a revenue of 7.8 billion HKD, a year-on-year increase of 10.5%, with an adjusted net loss of 830 million HKD, narrowing the loss margin by 8 percentage points [7] - The public cloud service revenue in Q4 2024 reached 1.4 billion HKD, growing 34% year-on-year, driven by a significant increase in AI cloud business revenue, which surged approximately 500% to 470 million HKD [7] - The industry cloud service revenue hit a historical high of 800 million HKD in Q4 2024, reflecting a 23% year-on-year growth, with continuous improvement in operational performance [7] - The company's gross margin improved to 19% in Q4 2024, with a full-year gross margin of 17%, an increase of 5 percentage points year-on-year [7] - The company benefits from strategic partnerships with Xiaomi and Kingsoft, with revenue from these collaborations growing 76% year-on-year in Q4 2024 [7] - Revenue forecasts for 2025 and 2026 have been raised to 9.867 billion HKD and 11.412 billion HKD, respectively, with a new forecast for 2027 set at 12.871 billion HKD [7] Financial Data and Earnings Forecast - Projected revenues (in million HKD) for the years 2023 to 2027 are as follows: 7,047 (2023), 7,785 (2024), 9,867 (2025E), 11,412 (2026E), and 12,871 (2027E) [6] - Adjusted net profit forecasts (in million HKD) for the same period are: -1,291 (2023), -825 (2024), -428 (2025E), -178 (2026E), and 173 (2027E) [6] - The projected earnings per share (in HKD) are: -0.36 (2023), -0.23 (2024), -0.11 (2025E), -0.05 (2026E), and 0.05 (2027E) [6]

Core Viewpoint - Kingsoft Cloud (KC.US) has shown impressive growth, with Q4 revenue reaching 2.23 billion yuan, a year-on-year increase of 30%, and has achieved overall profitability. The AI revenue has surged by 500% year-on-year, indicating a strong future growth trajectory for the company [1][2]. Group 1 - The strong growth in AI revenue is expected to drive Kingsoft Cloud's future performance, with institutions optimistic about its development [1][2]. - Kingsoft Cloud's partnership with Xiaomi and the framework agreement is projected to generate a total revenue of 11.3 billion yuan from 2025 to 2027 [1]. - The demand for computing power is increasing across various industries, driven by the deployment of large models, which will further enhance Kingsoft Cloud's growth prospects [1]. Group 2 - The anticipated increase in transaction amounts from Xiaomi's AIoT division is expected to exceed 50% in 2024, contributing over 500 million yuan annually to Kingsoft Cloud from 2025 to 2027 [2]. - Analysts predict that Kingsoft Cloud's AI business revenue will expand rapidly, while the non-AI business structure will stabilize [2]. - Citigroup has raised Kingsoft Cloud's target price to $21.5, indicating a potential upside of nearly 40% from the current stock price, reflecting a positive outlook for the company [2].

Summary of Kingsoft Cloud Conference Call Company Overview - **Company**: Kingsoft Cloud - **Founded**: 2012 - **Industry**: Cloud Computing - **Key Products**: Cloud storage, cloud security, big data, artificial intelligence, blockchain, edge computing - **Ownership**: Kingsoft Group (46.8%), Xiaomi (13.8%) - **Stock Listings**: Nasdaq (May 2020), Hong Kong (January 2023) [10][28] Financial Performance - **Q424 Revenue**: Rmb2.23 billion, up 30% YoY and 15% QoQ, exceeding expectations of 22% [2][3] - **Gross Margin**: Increased to 19% YoY, up 3 percentage points QoQ, surpassing the expected 17% [2] - **Operating Expenses**: Excluding impairment loss, fell by 13%, beating market expectations [2] - **Non-GAAP Operating Profit**: Positive for the first time at Rmb24.4 million due to higher gross profit margin and cost discipline [2] - **Non-GAAP Net Loss**: Narrowed to Rmb70 million from Rmb236.7 million in Q324 [2] Segment Performance - **Public Cloud Revenue**: Grew 34% YoY, driven by AI compute demand [2] - **Enterprise Cloud Revenue**: Increased by 23% YoY, supported by demand from public service and state-owned enterprises [2] AI Business Insights - **AI Revenue**: Rmb474 million, up 500% YoY, accounting for 34% of public cloud revenue [3] - **Future Expenditures**: Management anticipates AI-related expenditures (data center leasing, power, and server capex) could reach Rmb10 billion in 2025 [3] - **Ecosystem Revenue**: From Xiaomi and Kingsoft Group was Rmb490 million, up 76% YoY [3] - **Demand Pipeline**: Strong demand expected from Xiaomi and Kingsoft Group over the next three years as AI integrates into various products [3] Cost Management and Profitability - **Data Center Costs**: Reduced to 32% of Q424 revenues, down 7 percentage points QoQ due to resource optimization [3] - **Depreciation Costs**: Approximately 15.4% of revenues increased due to higher AI server depreciation [3] 2025 Outlook - **Management Confidence**: Adjusted operating profit expected to turn positive in 2025, with continued improvement in Q2-Q425 [4] - **Revenue Growth**: Anticipated slight deceleration in Q125 due to enterprise demand seasonality, but potential reacceleration from Q225 as AI capacity increases [4] Valuation and Market Sentiment - **Rating**: Under review with a price target of US$12.50 [6] - **Market Capitalization**: US$4.40 billion [7] - **Forecast Stock Return**: Expected to decline by 32.2% [9] - **Key Investor Debates**: Include sustainability of Xiaomi ecosystem demand, potential uplift in non-AI cloud services due to AI demand, and the possibility of equity financing for AI capex/opex [5] Risks and Challenges - **Downside Risks**: Include lower-than-industry revenue growth, failure to reach net income breakeven, general cloud demand weakness, and slower-than-expected AI development and enterprise adoption [12] Conclusion Kingsoft Cloud demonstrated strong growth in Q424, particularly in its AI segment, with management optimistic about future profitability and revenue growth. However, potential risks and market uncertainties remain, necessitating careful monitoring of the company's performance and market conditions.

Summary of Key Points from the Conference Call Company Overview - **Company**: Kingsoft Cloud - **Industry**: Cloud Computing Core Insights and Arguments - Kingsoft Cloud achieved operating profit ahead of schedule, becoming one of the few profitable companies in China's cloud computing sector, with financial metrics exceeding Bloomberg's expectations, marking a significant improvement in profitability [1][3] - The company's gross margin increased dramatically from 1.2% to 19%, nearing the levels of leading domestic cloud enterprises, with a projected 30% year-on-year revenue growth in Q4 2024, indicating strong growth momentum [1][4] - Kingsoft Cloud has recorded three consecutive quarters of positive operating cash flow, supported by a substantial turnaround in EBITDA, providing solid funding for investments in AI-related infrastructure [1][5] - AI-related business is a key growth driver for Kingsoft Cloud, with a year-on-year growth exceeding 500%, accounting for 36% of total revenue, significantly above the industry average [1][6] - The company has secured a substantial related party transaction amounting to 11 billion, approved by the shareholders' meeting and the Hong Kong Stock Exchange, with DMC technology development expected to attract more external customers [1][10] Financial Performance - Kingsoft Cloud's financial performance in the latest quarter set multiple historical highs since its establishment, with operating profit turning positive, which was initially expected to be achieved by 2027 [3] - The revenue structure adjustment led to a 10% year-on-year decline in revenue for 2023, but significant growth is anticipated in 2024, with Q4 expected to show a 30% increase [4] - The company expects total expenditures of 10 billion in 2025, with quarterly development expenditures exceeding 1 billion [1][17] AI Business Impact - The AI business has a high gross margin and profit margin, with a target to maintain a gross margin above 20% [2][21] - AI revenue is projected to account for 70% of total revenue by 2025, with a payback period of 3 to 4 years [13] - Kingsoft Cloud's AI-related revenue has shown a remarkable growth of 500%, with a significant contribution from both internal and external customers [35] Strategic Direction and Market Outlook - The company has adjusted its strategic direction since 2022 to enhance profitability and better serve its ecosystem, including Xiaomi and Kingsoft, with AI revenue from these partners increasing by 80% [7] - The outlook for 2025 remains optimistic, with expected revenue growth driven by both internal and external demand for AI models and computing resources [9] - Kingsoft Cloud's industry cloud business, while experiencing slower growth, maintains high profitability with a gross margin of 32% or more [32] Investment and Capital Expenditure - Kingsoft Cloud plans to manage capital expenditures flexibly, utilizing leasing for data centers and collaborating with partners to support AI business development [15][16] - The company anticipates that its 10 billion expenditure in 2025 could support approximately 2.5 billion to 3.33 billion in revenue [25] Competitive Position and Future Growth - Kingsoft Cloud aims to exceed the growth rates of competitors, with a focus on maintaining a competitive edge in profitability and market share [38] - The company is positioned to benefit from the ongoing AI wave, with significant demand expected to drive growth in the coming years [11][45] Conclusion - Kingsoft Cloud is well-positioned in the cloud computing industry, with strong financial performance, a robust AI business, and a strategic focus on profitability and growth, making it an attractive investment opportunity in the current market landscape [45]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company achieved positive adjusted operating profit in 4Q24, driven by accelerated revenue from ecological AI and industry cloud projects [1][2] - The public cloud revenue grew significantly, with AI-related revenue increasing by 500% year-on-year in 4Q24, contributing to a robust growth trajectory [2] - The company is expected to continue enhancing its AI capabilities and expand its market presence, with revenue forecasts for 2025-2027 showing substantial growth [3] Summary by Sections Financial Performance - In 4Q24, the company reported revenue of 22.32 billion RMB, a year-on-year increase of 29.6% and a quarter-on-quarter increase of 18.4% [1] - The gross profit for 4Q24 was 4.26 billion RMB, with an adjusted gross margin of 19.2%, reflecting a 4.0 percentage point increase year-on-year [1] - For the full year 2024, total revenue reached 77.85 billion RMB, a 10.5% increase compared to 2023, with a net loss narrowing to 19.79 billion RMB [1] AI and Cloud Services - Public cloud revenue in 4Q24 was 14.10 billion RMB, up 34.0% year-on-year, with AI-related revenue accounting for 34% of public cloud revenue [2] - The company has established strong partnerships within the Xiaomi and Kingsoft ecosystems, leading to a 76% year-on-year increase in revenue from ecosystem partners [2] Industry Cloud Development - Industry cloud revenue reached 8.22 billion RMB in 4Q24, marking a 22.7% year-on-year growth [2] - The company is focusing on high-value sectors such as public services, healthcare, and finance, with several benchmark projects underway [2] Future Outlook - The company plans to enhance its AI computing capabilities and expects to increase capital expenditures in 2025 [3] - Revenue forecasts for 2025 and 2026 have been raised to 97 billion RMB and 119 billion RMB, respectively, with a new forecast for 2027 set at 138 billion RMB [3]

Summary of Kingsoft Cloud's Earnings Call Company Overview - **Company**: Kingsoft Cloud - **Industry**: Cloud Computing Key Points and Arguments 1. **Profitability Achievement**: Kingsoft Cloud achieved profitability in Q4 2024, two years ahead of market expectations, marking it as one of the only two companies in China's cloud computing sector to achieve full profitability, alongside Alibaba Cloud [3][4] 2. **Gross Margin**: The company's gross margin is close to 20%, comparable to Alibaba Cloud, indicating high operational quality and product value recognition in the market [4][14] 3. **AI Revenue Growth**: In Q4 2024, AI revenue accounted for 35.5% of public cloud revenue, with a year-on-year growth exceeding 500%, significantly outpacing Alibaba Cloud's 20% [4][5] 4. **Impact of Xiaomi Ecosystem**: The strong performance of Xiaomi has positively influenced Kingsoft Cloud, similar to the relationship between AWS and Amazon, leading to a revaluation of the entire ecosystem [4][6] 5. **Internal Demand for AI**: The growth in AI business is primarily driven by strong demand from internal clients like Xiaomi and Kingsoft, with the company prioritizing internal needs while balancing external client demands [4][8] 6. **Cost Structure Optimization**: The shift to a supply-driven model has improved cost efficiency and profit margins, allowing Kingsoft Cloud to enhance its market competitiveness [4][9] 7. **Deployment of AI Services**: New AI computing services are being deployed in western provinces to leverage lower electricity costs and renewable energy, significantly reducing operational costs [4][22] 8. **Funding Strategies**: Kingsoft Cloud employs various strategies to address funding costs, including off-balance-sheet financing and asset leasing, to support computing power construction [4][17] 9. **Response to Supply Chain Risks**: The company has developed strategies to mitigate risks associated with potential supply chain disruptions, such as the rumored halt of NVIDIA H20 supplies [4][18] 10. **IDC Cost Dynamics**: The geographical distribution of Internet Data Centers (IDCs) is shifting due to rising electricity costs, with western provinces becoming more economically viable for data center construction [4][21] 11. **Future Growth in Tech Sector**: The Chinese tech industry is expected to experience rapid growth and revaluation, with Kingsoft Cloud positioned to play a significant role in emerging markets [4][7] 12. **Capital and Operating Expenditure**: Kingsoft Cloud's operating expenditure was approximately 2.9 billion RMB, while capital expenditure ranged from 4 to 5 billion RMB over the past four quarters [4][16] 13. **Profitability Targets**: The company aims to maintain a gross margin of around 20% and expects EBITDA margins to continue improving, with a target for significant profit growth in 2025 [4][24] 14. **Client Demand Dynamics**: The proportion of external client services decreased to about 50% in the latter half of 2024 due to increased internal demand from Xiaomi [4][26] 15. **Market Positioning**: Kingsoft Cloud is exploring opportunities to serve mid-tier clients, which may offer higher profit margins compared to large clients [4][30] Additional Important Insights - **AI Democratization**: The democratization of AI is expanding the external customer base, allowing smaller enterprises to access AI capabilities without significant investment [4][28] - **Strategic Pricing**: The company emphasizes the importance of selecting high-quality clients willing to pay, which has allowed it to maintain margins despite competitive pricing pressures [4][31] - **2025 Outlook**: While specific revenue and profit forecasts for 2025 were not disclosed, the company is confident in outperforming competitors [4][32]

Summary of Kingsoft Cloud Conference Call Company Overview - **Company**: Kingsoft Cloud - **Date**: March 19, 2025 Key Points Industry and Company Structure - Kingsoft Cloud's shareholding structure includes major shareholders Xiaomi and Kingsoft, holding approximately 50% combined, with Lei Jun as the actual controller [3] - Xiaomi and Kingsoft contribute about 20% to Kingsoft Cloud's total revenue, with this percentage gradually increasing [4][3] - A related transaction agreement with Xiaomi will provide Kingsoft Cloud with 4.4 billion yuan annually for the next three years, including financing leasing and guarantees, ensuring strong support in resource acquisition, market expansion, and funding [4][3] Financial Performance - Kingsoft Cloud's revenue returned to double-digit growth in Q3 2024, with adjusted EBITDA margin reaching 10% [4][5] - Expectations for Q4 2024 include further improvements in key financial metrics, including gross margin and adjusted operating profit, with a noticeable reduction in net loss, indicating potential for regional profitability [4][5] Business Segmentation - Kingsoft Cloud's operations are divided into AI and non-AI segments, with AI revenue accounting for nearly 20% and growing rapidly, potentially reaching half of total revenue in the next couple of years [4][6] - Non-AI business includes public cloud and industry cloud, with industry cloud revenue recovering to double-digit growth and non-AI public cloud stabilizing [4][6] Capital Expenditure - Since the second half of 2023, capital expenditures have primarily focused on AI, totaling approximately 5 billion yuan by Q3 2024, reflecting expectations for revenue growth in AI [4][7] - Non-AI capital expenditure depreciation has largely been completed, resulting in a clean balance sheet that supports a focus on high-growth areas [4][7] AI Demand and Future Opportunities - AI demand in 2025 is expected to arise from Xiaomi's large model training needs, as well as increased inference demands from mobile and automotive sectors [4][8] - Xiaomi plans to invest 30 billion yuan in AI research and development, with a quarter allocated to AI, positioning Kingsoft Cloud as a strategic beneficiary [4][8] - The increase in inference computing demand and potential customer expansion from investments by Shunwei Capital present significant growth opportunities for Kingsoft Cloud in the coming years [4][8] Investment Considerations - Current stock price adjustments present a noteworthy opportunity for investors to focus on Kingsoft Cloud, especially with Xiaomi's increased investment in AI and the growing industry demand for inference computing [4][9] - Long-term prospects suggest that this period is a critical opportunity for positioning in the market [4][9]

Revenue Growth - Total revenue for Q4 2024 reached RMB 2,232.1 million (USD 305.8 million), a year-on-year increase of 29.6% compared to RMB 1,722.5 million in Q4 2023[12] - The company achieved a sequential revenue increase of 18.4% from Q3 2024, which was RMB 1,885.6 million[14] - Total revenue reached RMB 7,785.2 million ($1,066.6 million), an increase of 10.5% from RMB 7,047.5 million in 2023, driven by strong demand in AI and industry cloud projects[21] - The company expects total revenue for the fiscal year 2024 to be between RMB 7,785,180,000 and RMB 8,000,000,000, indicating a growth outlook[38] AI Business Performance - AI business revenue grew by 300% year-on-year to RMB 474 million, accounting for 34% of public cloud revenue[14] - Public cloud service revenue was RMB 1,409.8 million ($193.1 million), a 34.0% increase year-over-year from RMB 1,052.0 million, primarily due to rising AI demand[16] - Industry cloud service revenue was RMB 822.3 million ($112.7 million), a 22.7% increase year-over-year from RMB 670.3 million, focusing on specific verticals enhanced by AI capabilities[16] Profitability and Losses - Non-GAAP operating profit reached RMB 24.4 million (USD 3.3 million), a significant improvement from a loss of RMB 187.6 million in Q4 2023[12] - Operating loss decreased to RMB 43.5 million (USD 6.0 million) from RMB 342.7 million in Q4 2023[12] - Net loss narrowed to RMB 200.6 million ($27.5 million), down from RMB 286.8 million and RMB 1,061.1 million in the same quarter and previous quarter of 2023[18] - Non-GAAP operating loss narrowed significantly to RMB 431.3 million (USD 59.1 million) from RMB 1,092.8 million in 2023, with a non-GAAP operating loss margin of 5.5%, improving from 15.5% in 2023[24] - Net loss for 2024 was RMB 1,979.0 million (USD 271.1 million), a significant reduction from RMB 2,183.6 million in 2023[24] Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 2,648.8 million ($362.9 million) as of December 31, 2024, up from RMB 1,617.9 million as of September 30, 2024, due to increased cash from operating activities[20] - The net increase in cash and cash equivalents for the three months ended December 31, 2023, was RMB 1,019,712 thousand, a significant recovery from a decrease of RMB (1,044,245) thousand in the same period last year[46] - The cash flow from financing activities for the three months ended December 31, 2024, was RMB 246,977 thousand, indicating strong financing support[46] Operating Expenses - Operating costs were RMB 6,444.3 million ($882.9 million), a slight increase of 4.0% compared to RMB 6,197.3 million in 2023[22] - Research and development expenses were RMB 174.2 million ($23.9 million), a slight decrease of 0.6% from RMB 175.2 million in 2023, attributed to reduced equity incentive costs[17] - Sales and marketing expenses rose to RMB 479.4 million (USD 65.7 million) from RMB 460.2 million in 2023, mainly due to increased equity incentive expenses[24] Asset and Liability Management - The total liabilities increased from RMB 7,824,374 in 2023 to RMB 12,087,334 in 2024, indicating a significant rise in financial obligations[36] - The company's total equity decreased from RMB 6,890,152 in 2023 to RMB 5,168,040 in 2024, reflecting a decline in shareholder value[36] - Long-term borrowings surged from RMB 100,000 in 2023 to RMB 1,660,584 in 2024, indicating increased leverage[36] Future Outlook - The company is focused on building advanced cloud infrastructure to support the growing demand in the AI sector[12] - The company plans to focus on market expansion and new product development in the upcoming quarters[41] - The company will hold an earnings conference call on March 19, 2025, at 8:15 AM ET[26]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported revenue of RMB 7,785,180, representing a 10.5% increase from RMB 7,047,461 in 2023[4] - Gross profit for the same period was RMB 1,340,926, a significant increase of 57.7% compared to RMB 850,169 in 2023[4] - The company reported a pre-tax loss of RMB (1,980,566), which is an 8.5% improvement from the loss of RMB (2,165,688) in the previous year[4] - Net loss for the fiscal year was RMB (1,979,042), reflecting a 9.4% decrease from RMB (2,183,647) in 2023[4] - Total revenue for 2024 reached RMB 7,785.2 million (USD 1,066.6 million), an increase of 10.5% year-over-year[16] - Public cloud service revenue was RMB 5,007.3 million (USD 686.0 million), up 14.3% year-over-year[16] - Gross profit increased to RMB 1,340.9 million (USD 183.7 million), a 57.7% increase from RMB 850.2 million in 2023, with a gross margin of 17.2%[16] - The net loss for 2024 was RMB 1,979.0 million (USD 271.1 million), a decrease from RMB 2,183.6 million in 2023[12] - Adjusted net loss margin improved to (10.6%) in 2024 from (18.3%) in 2023[13] - Operating loss narrowed to RMB 1,739.0 million (USD 238.2 million) from RMB 2,108.6 million in 2023, with a significant improvement in non-GAAP operating loss margin from 15.5% to 5.5%[31] Adjusted Metrics - The adjusted gross profit for 2024 was RMB 1,357,794, with an adjusted gross margin of 17.4%, up from 12.2% in 2023[10] - The adjusted net loss for 2024 was RMB (1,966,680), with an adjusted net loss margin of 25.3%[11] - Adjusted EBITDA for 2024 was RMB 638.9 million (USD 87.5 million), compared to a loss of RMB 265.1 million in 2023, marking the first year of profitability[16] Investment and Development - The company plans to continue focusing on product development and market expansion strategies to drive future growth[4] - The company is committed to enhancing its technology offerings and exploring potential mergers and acquisitions to strengthen its market position[4] - The company plans to maintain a high-quality and sustainable development strategy, continuously investing in technology R&D and enhancing AI capabilities[25] - Research and development expenses amounted to RMB 846.0 million (USD 115.9 million), an increase from RMB 784.8 million in 2023, primarily due to higher personnel-related costs[30] - R&D personnel reached 1,188 as of December 31, 2024, reflecting the company's ongoing investment in talent[23] Cash and Liabilities - As of December 31, 2024, the company's cash and cash equivalents amounted to RMB 2,648.8 million (USD 362.9 million), representing a 17.4% increase from RMB 2,255.3 million as of December 31, 2023[32] - The company's capital debt ratio as of December 31, 2024, was 127.2%, a significant increase from 36.2% as of December 31, 2023[35] - The company reported a net cash inflow from operating activities of RMB 628,419 for the year, compared to an outflow of RMB 169,070 in 2023[59] - The company reported a cumulative loss of RMB 14,291,957 (USD 1,957,990) and net current liabilities of RMB 2,318,649 (USD 317,653) as of December 31, 2024[63] Market Position and Strategy - The company continues to focus on high-quality cloud services and cost control, leading to improved revenue structure and profitability[15] - The company has expanded its business into selected vertical industries, enhancing its market position through industry-specific solutions[17] - Ongoing investment in infrastructure aims to enhance cloud service quality and achieve economies of scale[19] - The total revenue from customer contracts for the year ended December 31, 2024, was RMB 7,785,180, an increase from RMB 7,047,461 in 2023, representing a growth of approximately 10.5%[69] - The revenue from public cloud services recognized over time for the year ended December 31, 2024, was RMB 5,007,251, up from RMB 4,381,741 in 2023, indicating a growth of about 14.2%[69] Corporate Governance and Compliance - The company has integrated ESG into its daily operations and management, with a commitment to publish its fifth ESG report in April 2025[24] - The audit committee reviewed the unaudited financial results for the year ending December 31, 2024, and agreed with the accounting policies adopted by the company[46] - The company has no significant litigation or arbitration that could adversely affect its operations[45] - There were no significant events affecting the company reported after December 31, 2024[49] Shareholder Information - The company does not plan to declare a final dividend for the year ending December 31, 2024[50] - The group did not declare any dividends for the years ended December 31, 2023, and 2024[75] - Basic and diluted loss per share was RMB 0.61 for 2023, improving to RMB 0.54 for 2024[75] - The weighted average number of ordinary shares outstanding was 3,558,354,940 for 2023, increasing to 3,658,088,876 for 2024[75]

Core Viewpoint - The article highlights the increasing interest of private equity firms in Hong Kong stocks, particularly in the technology sector, as they seek to capitalize on perceived undervaluation in Chinese assets [1][2]. Group 1: Market Performance - The Hang Seng Index and Hang Seng Tech Index opened high, with the Hang Seng Tech Index increasing by 3% [1]. - The Hong Kong Technology 30 ETF (513160) opened strongly, rising by 2.39% with a trading volume nearing 200 million yuan within the first 15 minutes [1]. - Major tech stocks such as Kingsoft Cloud surged over 6%, while Alibaba-W and Kuaishou-W saw increases close to 6% and 5%, respectively [1]. Group 2: Private Equity Activity - Private equity giants are actively investing in Hong Kong stocks, viewing them as a value opportunity amid a global shift towards Chinese assets [1]. - Notably, high-profile private equity firms like Jinglin Asset have sold off their U.S. holdings to focus on Hong Kong stocks [1]. - The article mentions that several well-known private equity firms are targeting sectors such as technology and pharmaceuticals for investment [1]. Group 3: Market Outlook - Analysts suggest that the recent rally in Hong Kong stocks is driven by improved earnings expectations and a stabilization of the Chinese economy [2]. - The long-term investment themes in the Hong Kong market include technology stocks with promising earnings, consumer sectors supported by government policies, and high-dividend yielding stocks [2]. - The article indicates that foreign capital is expected to gradually return to the Chinese market as economic reforms and technology value reassessment unfold [2].