Financial Data and Key Metrics Changes - Kingsoft Cloud reported a year-over-year revenue growth of 11%, reaching RMB1.97 billion [8][19] - Non-GAAP gross profit increased by 9.6% year-over-year, totaling RMB327.7 million, but saw a quarter-over-quarter decrease of 23.4% [22] - Non-GAAP EBITDA margin improved to 16.2%, up from 1.9% in the same quarter last year [24] Business Line Data and Key Metrics Changes - Public cloud revenue reached RMB1.35 billion, a 14% increase year-over-year, driven by AI-related business [8][20] - AI gross billing surged to RMB525 million, representing over 200% year-over-year growth and accounting for 39% of public cloud revenue [10][13] - Enterprise cloud revenue was RMB616 million, up 5% year-over-year, but experienced a 25% sequential decline due to seasonal factors [20][21] Market Data and Key Metrics Changes - Revenue from the Xiaomi and Tingsoft ecosystem reached RMB500 million, a 50% increase year-over-year, contributing 25% to total revenue [11] - The public service sector is advancing AI applications, with Kingsoft Cloud building a rich set of model resources through an open-source model marketplace [14] Company Strategy and Development Direction - The company is focusing on high-quality and sustainable development, particularly in AI [8] - Kingsoft Cloud aims to strengthen its ecosystem cooperation and computing infrastructure deployment to advance its AI cloud services [12][18] - The company is leveraging partnerships for financing AI infrastructure, including financial leasing and bank loans [46] Management Comments on Operating Environment and Future Outlook - Management acknowledged market pressures and supply chain uncertainties but expressed confidence in long-term strategies [12] - The company expects better operating margins in the second half of the year, driven by top-line growth and AI project deployments [41] - Management highlighted the importance of tracking gross margin and EBITDA margin profiles as indicators for future performance [41] Other Important Information - Total capital expenditure for the quarter was RMB605 million, with a focus on AI infrastructure [20][46] - The company is prepared for potential impacts from chip restrictions, having built inventory and strengthened local partnerships [49][51] Q&A Session Summary Question: What are the reasons behind the weaker growth in public and enterprise cloud? - Management noted seasonality impacts, particularly due to the Chinese New Year and project delivery cycles, affecting enterprise cloud revenue [29] Question: Can management elaborate on the latest demand from Xiaomi? - The demand from Xiaomi is significant, with their new language model trained on Kingsoft's cluster, indicating potential for future revenue growth [30] Question: What are the business opportunities in the government affairs AI field? - The market for AI in government affairs is developing rapidly, leading to a joint solution with Kingsoft Office [34][35] Question: What is the outlook for non-GAAP operating margin in subsequent quarters? - Management expects improved operating margins in the second half of the year, contingent on top-line growth and project deployments [40][41] Question: How is the AI CapEx and OpEx structured? - Total CapEx for the quarter was RMB605 million, with a breakdown of OpEx including R&D and sales expenses [48]

Kingsoft Cloud Holdings (KC) Q1 2025 Earnings Call May 28, 2025 08:15 AM ET Speaker0 and thank you for standing by. Welcome to the Kingsford Cloud First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Schen, IR Director of Kingsoft Cl ...

Core Viewpoint - Kingsoft Cloud reported a revenue of 1.97 billion yuan for Q1 2025, reflecting a year-on-year growth of 10.9% [1] Revenue Breakdown - Public cloud revenue reached 1.35 billion yuan, up 14.0% year-on-year [1] - Industry cloud revenue amounted to 620 million yuan, showing a year-on-year increase of 4.8% [1] EBITDA Performance - Adjusted EBITDA grew 8.6 times year-on-year, reaching 320 million yuan [1] - Adjusted EBITDA margin improved to 16.2%, an increase of 14.3 percentage points year-on-year, primarily driven by the rising contribution of AI revenue [1] AI Revenue Contribution - AI billing revenue for the quarter was 530 million yuan, with a year-on-year growth exceeding 200% [1] - AI revenue accounted for 39% of public cloud revenue during the quarter [1]

Group 1 - The company reported an unaudited financial performance for the three months ending March 31, 2025, with total revenue reaching 1.97 billion yuan (271.51 million USD), representing a year-on-year growth of 10.9% [1] - Public cloud service revenue was 1.354 billion yuan (186.5 million USD), showing a year-on-year increase of 14.0% [1] - Industry cloud service revenue amounted to 617 million yuan (85.0 million USD), with a year-on-year growth of 4.8% [1] Group 2 - Adjusted gross profit was 328 million yuan (45.2 million USD), reflecting a year-on-year increase of 9.6% [1] - Adjusted operating loss narrowed to 55.8 million yuan (7.7 million USD), a reduction of 56% year-on-year [1] - Adjusted EBITDA profit reached 319 million yuan (43.9 million USD), with an adjusted EBITDA margin of 16.2% [1]

Revenue Performance - Total revenue for the first quarter reached RMB 1,970.0 million (approximately USD 271.51 million), representing a year-on-year increase of 10.9% compared to RMB 1,775.7 million in the same quarter of 2024[9]. - Revenue from public cloud services was RMB 1,353.5 million (USD 186.5 million), a year-on-year increase of 14.0% from RMB 1,187.4 million, driven primarily by growing demand for artificial intelligence[9]. - Revenue from industry cloud services was RMB 616.5 million (USD 85.0 million), a year-on-year increase of 4.8% from RMB 588.2 million, but a quarter-on-quarter decrease of 25.0% due to seasonal impacts[11]. - The company experienced a seasonal decline in revenue, with a quarter-on-quarter decrease of 11.7% from RMB 2,232.1 million in the previous quarter[9]. - Kingsoft Cloud's public cloud services revenue for the three months ended March 31, 2025, was RMB 1,353,479 thousand (approximately USD 186,514 thousand), a decrease from RMB 1,409,804 thousand in the previous quarter[30]. Profitability and Loss - Adjusted gross profit was RMB 327.7 million (USD 45.2 million), a year-on-year increase of 9.6%, with an adjusted gross margin of 16.6% compared to 16.8% in the same quarter of 2024[8]. - Operating loss was RMB 234.2 million (USD 32.3 million), improving from RMB 274.2 million in the same quarter last year and from RMB 43.5 million in the previous quarter[15]. - Net loss was RMB 316.1 million (USD 43.6 million), compared to RMB 363.6 million in the same quarter last year and RMB 200.6 million in the previous quarter[16]. - Non-GAAP EBITDA was RMB 318.5 million (USD 43.9 million), with an EBITDA margin of 16.2%, compared to 1.9% in the same quarter last year and 16.1% in the previous quarter[16]. - The improvement in net loss is attributed to enhanced revenue quality, revenue mix adjustment, and strict cost control measures[16]. Operating Expenses - Operating expenses totaled RMB 552.5 million (USD 76.1 million), a decrease of 2.6% year-on-year, but an increase of 17.7% quarter-on-quarter[13]. - General and administrative expenses were RMB 182.0 million (USD 25.1 million), a decrease of 16.8% year-over-year from RMB 218.7 million and a slight increase of 1.4% quarter-over-quarter from RMB 179.5 million[14]. - Research and development expenses were RMB 226.2 million (USD 31.2 million), a decrease of 2.5% year-over-year from RMB 232.0 million and an increase of 29.9% quarter-over-quarter from RMB 174.2 million[15]. - The increase in operating costs was primarily due to investments in AI computing resources[12]. Cash Flow and Financial Position - Cash and cash equivalents as of March 31, 2025, were RMB 2,322.7 million (USD 320.1 million), down from RMB 2,648.8 million as of December 31, 2024, primarily due to operational investments and procurement of computing power equipment[17]. - Total assets increased to RMB 19,721,074 thousand (approximately USD 2,717,636 thousand) as of March 31, 2025, from RMB 17,592,654 thousand as of December 31, 2024[27]. - Total liabilities as of March 31, 2025, were RMB 14,376,429 thousand (approximately USD 1,981,124 thousand), an increase from RMB 12,087,334 thousand as of December 31, 2024[28]. - The company reported a significant increase in accounts receivable, net amounting to RMB 1,807,011 thousand (approximately USD 249,013 thousand) as of March 31, 2025, compared to RMB 1,468,663 thousand as of December 31, 2024[27]. Future Outlook and Strategic Focus - The CEO highlighted a 228% year-on-year growth in AI business revenue, amounting to RMB 525 million, which accounted for 39% of public cloud services[8]. - The company is confident in the sustainable development of its AI-related investments and business[8]. - The company continues to focus on strategic vertical industries, leveraging its extensive cloud infrastructure and advanced cloud-native products[24]. - The company plans to hold an earnings conference call on May 28, 2025, to discuss financial results and future outlook[18].

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Kingsoft Cloud reported strong Q1 2025 performance with 228% AI business gross billing growth, 10.9% revenue increase to RMB 1,970.0 million, significantly narrowed adjusted operating loss, and positive adjusted EBITDA of RMB 318.5 million [Management Commentary](index=1&type=section&id=Management%20Commentary) Kingsoft Cloud reported strong Q1 2025 performance with 228% AI business gross billing growth, 10.9% revenue increase to RMB 1,970.0 million, significantly narrowed adjusted operating loss, and positive adjusted EBITDA of RMB 318.5 million - The gross billing of the AI business surged by **228% year-over-year**, reaching **RMB 525 million** and constituting **39% of public cloud services revenue**[3](index=3&type=chunk) Financial Metrics (RMB) | Financial Metric | Q1 2025 (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenues | 1,970.0M | +10.9% | -11.7% | | Adjusted Gross Profit | 327.7M | +9.6% | -23.4% | | Adjusted Gross Margin | 16.6% | -0.2 p.p. | -2.6 p.p. | | Adjusted Operating Loss | 55.8M | Narrowed by 56% | - | | Adjusted EBITDA Profit | 318.5M | - | - | | Adjusted EBITDA Margin | 16.2% | - | - | [Detailed Financial Results](index=1&type=section&id=First%20Quarter%2025%20Financial%20Results) This section provides a comprehensive breakdown of the company's financial performance for the first quarter of 2025, covering revenues, costs, profits, and key financial positions [Revenues](index=1&type=section&id=Revenues) Total revenues for Q1 2025 increased 10.9% year-over-year to RMB 1,970.0 million, driven by ecosystem and AI growth, despite a seasonal 11.7% sequential decrease Total Revenues (RMB) | Period | Total Revenues (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Q1 2025 | 1,970.0 M | +10.9% | -11.7% | | Q4 2024 | 2,232.1 M | - | - | | Q1 2024 | 1,775.7 M | - | - | - The year-over-year increase was mainly attributed to expanded revenue from Xiaomi and Kingsoft Ecosystem, growth in AI-related customers, and deeper penetration into enterprise cloud customers[4](index=4&type=chunk) [Public Cloud Services Revenue](index=1&type=section&id=Public%20cloud%20services) Public cloud services revenue grew 14.0% year-over-year to RMB 1,353.5 million, driven by AI demand, despite a 4.0% sequential decrease Public Cloud Revenue (RMB) | Period | Public Cloud Revenue (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Q1 2025 | 1,353.5 M | +14.0% | -4.0% | | Q4 2024 | 1,409.8 M | - | - | | Q1 2024 | 1,187.4 M | - | - | - The year-over-year growth was mainly driven by increased AI demands[5](index=5&type=chunk) [Enterprise Cloud Services Revenue](index=1&type=section&id=Enterprise%20cloud%20services) Enterprise cloud services revenue increased 4.8% year-over-year to RMB 616.5 million, but saw a 25.0% sequential decrease due to seasonal and project delivery impacts Enterprise Cloud Revenue (RMB) | Period | Enterprise Cloud Revenue (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Q1 2025 | 616.5 M | +4.8% | -25.0% | | Q4 2024 | 822.3 M | - | - | | Q1 2024 | 588.2 M | - | - | - The sequential decrease was attributed to the Chinese New Year impact and different delivery schedules for projects[6](index=6&type=chunk) [Cost of Revenues](index=2&type=section&id=Cost%20of%20revenues) Cost of revenues rose 11.4% year-over-year to RMB 1,651.7 million due to AI investments, despite lower IDC costs, while depreciation significantly increased from new AI servers Cost Components (RMB) | Cost Component | Q1 2025 (RMB) | Q1 2024 (RMB) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | IDC Costs | 722.8 M | 768.5 M | -6.0% | Strict procurement cost control | | Depreciation & Amortization | 378.5 M | 183.5 M | +106.3% | Depreciation of new servers for AI | | Solution Development & Services | 505.2 M | 446.0 M | +13.3% | Solution personnel expansion | [Gross Profit and Gross Margin](index=2&type=section&id=Gross%20profit) Gross profit increased 8.5% year-over-year to RMB 318.3 million with a 16.2% margin, while sequential margin decreased due to AI investments and delayed high-margin projects Gross Profit and Margin (RMB) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Q4 2024 (RMB) | | :--- | :--- | :--- | :--- | | Gross Profit (GAAP) | 318.3 M | 293.3 M | 426.0 M | | Gross Margin (GAAP) | 16.2% | 16.5% | 19.1% | | Gross Profit (Non-GAAP) | 327.7 M | 299.1 M | 427.7 M | | Gross Margin (Non-GAAP) | 16.6% | 16.8% | 19.2% | - The sequential decrease in margin was mainly due to growing investment in AI and the delay of high-margin enterprise cloud projects in the first quarter[9](index=9&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20expenses) Total operating expenses were RMB 552.5 million, decreasing 2.6% YoY due to cost control but increasing 17.7% QoQ from higher selling, marketing, and R&D expenses Total Operating Expenses (RMB) | Period | Total Operating Expenses (RMB) | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Q1 2025 | 552.5 M | -2.6% | +17.7% | | Q4 2024 | 469.5 M | - | - | | Q1 2024 | 567.4 M | - | - | [Selling and Marketing Expenses](index=2&type=section&id=Selling%20and%20marketing%20expenses) Selling and marketing expenses increased to RMB 144.3 million, up 23.6% YoY and 24.7% QoQ, primarily due to a one-time share-based compensation bonus - The increase in S&M expenses was due to a one-time bonus of share-based compensation[10](index=10&type=chunk) [General and Administrative Expenses](index=2&type=section&id=General%20and%20administrative%20expenses) General and administrative expenses were RMB 182.0 million, decreasing 16.8% YoY due to lower credit loss expenses, despite a slight 1.4% QoQ increase - The year-over-year decrease was mainly due to a reduction in credit loss expense[11](index=11&type=chunk) [Research and Development Expenses](index=2&type=section&id=Research%20and%20development%20expenses) Research and development expenses were RMB 226.2 million, down 2.5% YoY but up 29.9% QoQ, reflecting continued investment in R&D personnel and share-based compensation - The sequential increase was driven by continuous investment in R&D personnel and an increase in share-based compensation[12](index=12&type=chunk) [Operating Loss](index=2&type=section&id=Operating%20loss) Operating loss narrowed year-over-year to RMB 234.2 million due to higher gross profit and expense control, though sequential loss increased from lower gross profit and higher share-based compensation Operating Loss (RMB) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Q4 2024 (RMB) | | :--- | :--- | :--- | :--- | | Operating Loss (GAAP) | (234.2 M) | (274.2 M) | (43.5 M) | | Operating Loss (Non-GAAP) | (55.8 M) | (127.0 M) | 24.4 M (Profit) | [Net Loss and EBITDA](index=3&type=section&id=Net%20loss%20and%20EBITDA) Net loss improved to RMB 316.1 million, with Non-GAAP net loss narrowing to RMB 190.6 million, and Non-GAAP EBITDA reaching a profit of RMB 318.5 million with a 16.2% margin, driven by AI business growth Net Loss and EBITDA (RMB) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Q4 2024 (RMB) | | :--- | :--- | :--- | :--- | | Net Loss (GAAP) | (316.1 M) | (363.6 M) | (200.6 M) | | Net Loss (Non-GAAP) | (190.6 M) | (217.3 M) | (70.3 M) | | Non-GAAP EBITDA | 318.5 M | 33.2 M | 359.7 M | | Non-GAAP EBITDA Margin | 16.2% | 1.9% | 16.1% | | Basic & Diluted EPS | (0.08) | (0.10) | (0.05) | [Financial Position](index=3&type=section&id=Financial%20Position) Cash and cash equivalents stood at RMB 2,322.7 million as of March 31, 2025, a decrease from year-end 2024 due to operational investments and computing power equipment procurement - Cash and cash equivalents stood at **RMB 2,322.7 million** as of March 31, 2025[18](index=18&type=chunk) - The decrease in cash was primarily due to investments in operations and the procurement of computing power equipment[18](index=18&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive loss, and cash flow statements [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to RMB 19.72 billion as of March 31, 2025, driven by property and equipment, while total liabilities grew to RMB 14.38 billion and total equity slightly decreased Balance Sheet Items (in thousands RMB) | Balance Sheet Item (in thousands RMB) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 2,322,674 | 2,648,764 | | Total current assets | 7,138,289 | 6,840,786 | | Property and equipment, net | 6,514,205 | 4,630,052 | | Total assets | 19,721,074 | 17,592,654 | | Total current liabilities | 9,797,843 | 9,159,435 | | Total liabilities | 14,376,429 | 12,087,334 | | Total equity | 5,344,645 | 5,505,320 | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) For Q1 2025, the company reported total revenues of RMB 1,970.0 million, gross profit of RMB 318.3 million, and a narrowed net loss of RMB 316.1 million compared to Q1 2024 Income Statement Items (in thousands RMB) | Income Statement Item (in thousands RMB) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total revenues | 1,969,977 | 2,232,142 | 1,775,684 | | Gross profit | 318,306 | 425,972 | 293,253 | | Operating loss | (234,201) | (43,511) | (274,157) | | Net loss | (316,110) | (200,642) | (363,616) | | Net loss per share (Basic and diluted) | (0.08) | (0.05) | (0.10) | [Reconciliation of GAAP and Non-GAAP Results](index=8&type=section&id=RECONCILIATION%20OF%20GAAP%20AND%20NON-GAAP%20RESULTS) This section details adjustments from GAAP to non-GAAP metrics, including adding back share-based compensation and amortization for adjusted operating loss and further adjustments for adjusted EBITDA Reconciliation of Gross Profit (in thousands RMB) | | Q1 2025 (RMB) | Q1 2024 (RMB) | | :--- | :--- | :--- | | Gross profit (GAAP) | 318,306 | 293,253 | | Share-based compensation | 9,365 | 5,814 | | **Adjusted gross profit (Non-GAAP)** | **327,671** | **299,067** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands RMB) | | Q1 2025 (RMB) | Q1 2024 (RMB) | | :--- | :--- | :--- | | Net Loss (GAAP) | (316,110) | (363,616) | | Share-based compensation | 134,611 | 103,595 | | Foreign exchange (loss) gain | (9,051) | 42,737 | | **Adjusted net loss (Non-GAAP)** | **(190,550)** | **(217,284)** | | Adjustments (Interest, Tax, D&A) | 509,093 | 250,471 | | **Adjusted EBITDA (Non-GAAP)** | **318,543** | **33,187** | Reconciliation of Operating Loss (in thousands RMB) | | Q1 2025 (RMB) | Q1 2024 (RMB) | | :--- | :--- | :--- | | Operating loss (GAAP) | (234,201) | (274,157) | | Share-based compensation | 134,611 | 103,595 | | Amortization of intangible assets | 43,781 | 43,517 | | **Adjusted operating loss (Non-GAAP)** | **(55,809)** | **(127,045)** | [Unaudited Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) Net cash used in operating and investing activities for Q1 2025 totaled RMB 418.4 million and RMB 490.4 million respectively, partially offset by RMB 550.0 million from financing, resulting in a RMB 343.8 million net cash decrease Cash Flow Activities (in thousands RMB) | Cash Flow Activity (in thousands RMB) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | (418,390) | 570,222 | (321,336) | | Net cash used in investing activities | (490,393) | (1,337,978) | (1,169,017) | | Net cash from financing activities | 549,998 | 1,802,762 | 1,112,096 | | **Net (decrease) increase in cash** | **(343,757)** | **1,019,712** | **(398,721)** | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides additional details regarding the company's investor relations activities and the methodology for non-GAAP financial measures [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Kingsoft Cloud will host an earnings conference call on May 28, 2025, at 8:15 am U.S. Eastern Time, with pre-registration and a live webcast available on the investor relations website - The earnings call is scheduled for **May 28, 2025, at 8:15 am U.S. Eastern Time** (8:15 pm Beijing/Hong Kong Time)[20](index=20&type=chunk) - A live and archived webcast will be accessible on the company's investor relations website at **http://ir.ksyun.com**[21](index=21&type=chunk) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures, including gross profit, operating loss, net loss, and EBITDA, to supplement U.S. GAAP results for internal evaluation and understanding of operating performance - The company uses non-GAAP measures to review and assess operating performance, as they are used by management to evaluate performance and formulate business plans[24](index=24&type=chunk) - Key non-GAAP measures include: **Non-GAAP gross profit, Non-GAAP operating (loss) profit, Non-GAAP net loss, and Non-GAAP EBITDA**, along with their respective margins[24](index=24&type=chunk) - The company acknowledges limitations of non-GAAP measures and provides reconciliations to the nearest U.S. GAAP performance measure[25](index=25&type=chunk)[26](index=26&type=chunk)

Core Viewpoint - The independent cloud manufacturers are betting on the intelligent computing (智算) business as a potential lifeline amidst challenges in the cloud computing market, driven by the rise of generative AI and the need for differentiated services [2][11][28]. Group 1: Market Dynamics - The independent cloud manufacturers have faced significant challenges, including a price drop of 30-40% in computing power rental prices compared to last year, leading to difficulties in profitability [4][14]. - The emergence of generative AI has provided a glimmer of hope, with the price of computing resources skyrocketing, such as the A800 server reaching 1-2 million yuan [2][11]. - The market is witnessing a shift from large, centralized clients to smaller, fragmented demand, with clients now renting fewer machines than before [17][18]. Group 2: Business Models - Independent cloud manufacturers are diversifying their offerings into two main categories: computing resources and intelligent computing platforms, often opting for asset-light models due to funding constraints [6][10]. - Companies like UCloud are leveraging idle computing power from personal computers and internet cafes to expand their service offerings [6][7]. - The intelligent computing platforms are seen as high-margin businesses, with companies like QingCloud reporting over 50% gross margins on their software platforms [10][11]. Group 3: Challenges Faced - The independent cloud manufacturers are struggling with a lack of stable demand and the need for high customization in deploying intelligent computing platforms, which complicates profitability [11][12]. - The competitive landscape is tough, with larger cloud providers often undercutting prices or offering free trials to secure contracts, making it difficult for smaller players to compete [15][19]. - The market is also facing issues with contract defaults, where rental agreements are often broken if market prices drop significantly, leading to increased financial risk for independent cloud manufacturers [19][20]. Group 4: Strategic Opportunities - Despite the challenges, independent cloud manufacturers can capitalize on the growing demand for customized solutions in niche markets, particularly among small to medium-sized enterprises [25][27]. - Collaborations with local enterprises and government projects can provide independent cloud manufacturers with opportunities to establish a foothold in regional markets [26][27]. - The focus on building technical capabilities and operational efficiencies can help independent cloud manufacturers differentiate themselves from larger competitors [26][28].

Investment Rating - The report maintains an "Outperform" rating for the computer industry, indicating a positive outlook compared to the market [3]. Core Insights - The report highlights significant developments in the domestic AI chip sector, particularly the upcoming launch of the Harmony PC and advancements in AI applications, which are expected to drive growth in the cloud computing market [3][4]. - The performance of major players like Meta and Tencent shows a mixed trend, with capital expenditures declining, raising concerns about market dynamics [4]. - The report emphasizes the increasing demand for AI applications, with a notable surge in the usage of large models, indicating a robust growth trajectory for the industry [63]. Summary by Sections Industry Data - In Q1 2025, the software industry revenue reached 3.15 trillion yuan, growing by 10.6% year-on-year, with profit margins also improving [12][13]. - The IC design sector showed the highest growth rate at 19.7%, driven by the demand for AI applications and the need for domestic chip production [17]. Domestic Developments - The report discusses the impact of U.S. export controls on AI chips, which have led to increased uncertainty for domestic server ecosystems [26][30]. - The launch of the Harmony PC on May 19, 2025, is seen as a critical step towards enhancing the domestic operating system landscape [56][58]. AI Sector - The report notes that the demand for AI applications has exploded, with daily token usage for the Doubao large model reaching 12.7 trillion, a 3.18-fold increase from December 2024 [63]. - The upcoming release of the DeepSeek-R2 model, which boasts 1.2 trillion parameters, is expected to be a focal point in the market [72]. Computing Power - The report indicates a clear differentiation in the performance of data center operators, with traditional IDC competition intensifying while AIDC is experiencing rapid growth [4]. - Major tech companies are increasing their capital expenditures for AI and core business investments, with Meta raising its investment range for 2025 to between 64 billion and 72 billion USD [4].

Core Viewpoint - The article presents the market capitalization rankings of the top 50 Chinese technology and internet companies as of May 15, 2025, highlighting significant players in the industry and their respective valuations. Group 1: Top Companies by Market Capitalization - Alibaba leads the list with a market capitalization of $319.81 billion [3] - Xiaomi Group follows with a valuation of $170.38 billion [3] - Pinduoduo ranks third at $168.78 billion [3] - Meituan is valued at $107.61 billion, placing it fourth [3] - JD.com has a market cap of $51.51 billion, ranking eighth [4] Group 2: Notable Rankings and Valuations - Other notable companies include Baidu at $31.80 billion [4], and Ideal Auto at $30.74 billion [4] - Kuaishou is valued at $28.87 billion, while Tencent Music stands at $26.32 billion [4] - Xpeng Motors and iFlytek have market caps of $19.90 billion and $15.22 billion respectively [4] Group 3: Additional Companies in the Rankings - Companies like Kingsoft and Hengsheng Electronics have valuations of $7.28 billion and $7.01 billion respectively [5] - Yonyou Network is valued at $6.45 billion, while Qifu Technology stands at $6.33 billion [5] - Other companies in the lower rankings include 360 Security Technology at $10.03 billion and NIO at $9.35 billion [6]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 Kingsoft Cloud Holdings Limited 金山云控股有限公司 （於開曼群島註冊成立的有限公司） 電話會議的網上直播或錄音亦可於本公司投資者關係網站 https://ir.ksyun.com 收 聽。 承董事會命 金山云控股有限公司 副董事長、執行董事兼代理首席執行官 鄒濤先生 （納斯達克股票代碼：KC） 董事會會議召開日期 金山云控股有限公司（「本公司」）之董事會（「董事會」）謹此宣佈，本公司將於二 零二五年五月二十八日（星期三）舉行董事會會議，以（其中包括）考慮及通過本公 司、其子公司及併表聯屬實體截至二零二五年三月三十一日止三個月的未經審計 第一季度業績及其發佈。 本公司的管理層將於北京╱香港時間二零二五年五月二十八日（星期三）下午八時 十五分（即美國東部時間同日上午八時十五分）舉行業績電話會議。 有意參加電話會議的參與者請在會議計劃開始時間前使用下文提供的連結完成在 線登記。於 ...