KINGSOFT CLOUD(US:KC)2024-04-30 12:42Financial Performance - Total revenues for the year ended December 31, 2023, were RMB 8,180.1 million, a decrease of 13.8% from RMB 7,047.5 million in 2022[11]. - Gross profit for 2023 was RMB 429.5 million, representing a significant increase of 97.9% from RMB 850.2 million in 2022[11]. - Net loss attributable to Kingsoft Cloud Holdings for 2023 was RMB 2,688.4 million, an increase of 18.8% compared to RMB 2,183.6 million in 2022[11]. - Non-GAAP adjusted gross profit for 2023 was RMB 859.9 million, up 93.2% from RMB 445.2 million in 2022[24]. - Average revenues per Public Cloud Service Premium Customer decreased to RMB 20.1 million in 2023 from RMB 26.7 million in 2022[21]. - Revenues from public cloud services were RMB 4,381.7 million, while revenues from enterprise cloud services were RMB 2,664.0 million in 2023[24]. - Gross margin improved to 12.1% in 2023, compared to 5.3% in 2022[24]. - Adjusted net loss margin for 2023 was 18.3%, an improvement from 24.4% in 2022[17]. Customer and Market Metrics - The number of Public Cloud Service Premium Customers increased to 214 in 2023 from 197 in 2022[21]. - Revenues from public cloud services were RMB 4,381.7 million (US$617.2 million), representing a decrease of 18.3% from RMB 5,360.3 million in 2022[36]. - The single largest customer accounted for 14.7% of total revenue, while the top five customers accounted for 47.3% of total revenue for the year ended December 31, 2023[136]. Research and Development - Research and development expenses were RMB 784.8 million (US$110.5 million), down from RMB 971.2 million in 2022[39]. - The workforce in the Wuhan R&D team grew to over 500 people, accounting for approximately 40% of total R&D personnel[31]. - The company established an AI Research and Development Center in 2023, focusing on application, algorithm, and platform capabilities[30]. Capital and Assets - Total capital expenditure for 2023 was RMB 1,964.7 million (US$276.7 million)[28]. - Cash and cash equivalents as of December 31, 2023, amounted to RMB 2,255.3 million (US$317.7 million), a decrease of 34.0% from RMB 3,419.2 million in 2022[42]. - The total assets of the Consolidated Affiliated Entities amounted to RMB 8,042.7 million as of December 31, 2023, representing approximately 53.4% of the total assets of the Group[123]. Corporate Governance - Kingsoft Cloud is committed to high corporate governance standards, ensuring the protection of shareholder interests and enhancing corporate value[186]. - The Board comprises seven members, including two executive Directors, two non-executive Directors, and three independent non-executive Directors, meeting the independence requirements of the Listing Rules[191][196]. - The Company has fully complied with all code provisions of the Corporate Governance Code during the reporting period[187]. - The Board met five times during the reporting period, with all Directors actively participating in meetings[194]. Loans and Financial Arrangements - Kingsoft Corporation has agreed to provide a loan facility of up to RMB 1.5 billion to the Group from December 5, 2023, to December 31, 2025[85]. - The Group borrowed RMB 500 million from the Unsecured Loan Facility at a fixed annual interest rate of 3.75%, to be fully repaid by September 2024[87]. - Kingsoft Cloud Holdings Limited has entered into multiple loan agreements with Ms. Qiu Weiqin, providing interest-free loans, with repayment structured through equity transfers[105]. Impairment and Recoverability - The company recognized a total impairment loss of RMB 653.67 million (US$92.067 million) on long-lived assets for the year ended December 31, 2023, due to declines in public cloud service revenue[68]. - The company performed a recoverability test for the public cloud asset group as of December 31, 2023, and no further impairment was considered necessary[69]. Compliance and Regulatory Matters - The company has complied with relevant laws and regulations impacting its operations, including the Hong Kong Companies Ordinance and the Corporate Governance Code[80]. - Kingsoft Cloud is in the process of applying for VAT Licenses for value-added telecommunications services, which are essential for its cloud service offerings[118]. - The contractual arrangements are designed to navigate foreign investment restrictions in the PRC, particularly in the telecommunications sector[115]. Employee and Management Structure - The company has a total of 10,493 employees, with 79% (8,265) in solution development and services, 12% (1,243) in research and development, 6% (613) in general and administrative, and 3% (372) in sales and marketing[49]. - The Company has taken out liability insurance to provide appropriate coverage for the Directors[151]. - The roles of chairman and chief executive officer are separated, with Mr. Lei Jun as Chairman and Mr. Zou Tao as acting CEO[198].