20220325-招银国际-Bottoming_out_9页_1mb

报告摘要

CMB International Global Markets | Equity Research | Company Update Summary

Core Content

This report provides an analysis of Kingsoft Cloud (KC US), a company within the China Software & IT Services sector. The focus is on its FY4Q21 financial performance, strategic adjustments, and valuation outlook.

Key Financial Highlights

FY4Q21E Results

Revenue: RMB2,660mn (+38% YoY, +10% QoQ), in-line with estimates.
Public Cloud Revenue: RMB1,530mn (+12% YoY, -9% QoQ).
Enterprise Cloud Revenue: RMB1,129mn (+111% YoY, +55% QoQ).
Gross Margin: 1.0% (-3.8 pct pts YoY, -2.6 pct pts QoQ), missed due to:
- Higher IDC costs (+25.7% YoY) from unused bandwidth.
- Increased staff costs from Camelot consolidation.
Adj. EBITDA Margin: -10.5% (-9.5 pct pts YoY, -4.6 pct pts QoQ).
Net Loss: -RMB478mn, which is narrower than the previous quarter's -RMB508mn, aided by one-off gains of RMB199mn.

FY22E Outlook

Revenue Growth: Expected to be 12% YoY.
CDN Business: Down-sizing to improve margins.
Adj. EBITDA Breakeven: Targeted for FY4Q22.
Core Cloud Services: Expected to grow by 49-55% YoY.

Valuation and Investment Recommendation

Current Valuation: Trading at 1.6x net cash, considered undemanding.
Target Price: Revised to US$7.87 (up from US$6.37), based on:
- Improved adj. EBITDA margins.
- Potential HK dual listing and share repurchase.
Rating: Maintain BUY.
Up/Downside: +25.5% from current price of US$6.27.

Peer Comparison (12M Forward P/S)

Company	Ticker	P/S (FY22E)	P/S (FY23E)	EV/Sales (FY22E)	EV/Sales (FY23E)	Sales CAGR	EBITDA Margin (FY21)
Kingsoft Cloud	KC US	1.0	0.8	0.5	0.5	12%	-6%
Ucloud	688158 CH	1.5	1.0	1.9	1.3	49%	8%
Agora	API US	7.5	6.1	3.6	3.3	21%	5%
Glodon	002410 CH	9.2	7.0	10.8	8.8	23%	12%
Yonyou	600588 CH	7.0	6.0	8.2	7.0	16%	13%
Kingdee	268 HK	9.1	8.6	10.5	8.6	25%	4%
Alibaba	BABA US	2.4	2.0	2.2	1.8	25%	30%
Tencent	700 HK	4.6	3.3	4.8	2.8	15%	38%
Baidu	BIDU US	2.5	2.0	2.2	2.0	13%	25%
Microsoft	MSFT US	11.3	11.1	13.2	11.1	17%	46%
Average	-	5.2	4.9	5.8	4.9	-	33%

Share Performance

1-Month: -11.1% absolute, -15.6% relative.
3-Months: -59.7% absolute, -55.5% relative.
6-Months: -78.9% absolute, -77.6% relative.

Shareholding Structure

Kingsoft Group (3888 HK): 42.5%
Xiaomi (1810 HK): 13.4%
Jun LEI: 13.4%

Operating Model

Revenue Breakdown:
- Public Cloud Services: Dominant segment with decreasing share from 68% in FY21 to 61% in FY22E.
- Enterprise Cloud Services: Growing segment with increasing share from 32% in FY21 to 39% in FY22E.
- Others: Minimal contribution.
Cost of Sales Breakdown:
- IDC costs: Largest component, decreasing as a percentage of total cost from 59% in FY21 to 43% in FY22E.
- Staff costs: Increased significantly due to Camelot consolidation.
- Depreciation and amortization: Rising costs.
- Other costs: Also rising.

Financial Summary

Income Statement (RMB mn)

Revenue: FY20A: 6,577; FY21A: 9,061; FY22E: 10,188; FY23E: 11,552; FY24E: 13,208.
Cost of Sales: FY20A: 6,220; FY21A: 8,709; FY22E: 9,745; FY23E: 10,632; FY24E: 11,670.
Gross Profit: FY20A: 357; FY21A: 351; FY22E: 444; FY23E: 919; FY24E: 1,538.
Adj. EBITDA: FY20A: -119; FY21A: -522; FY22E: -192; FY23E: 158; FY24E: 747.

Cash Flow Summary (RMB mn)

Net Cash from Operating: FY20A: -290; FY21A: -709; FY22E: -783; FY23E: -189; FY24E: 123.
Net Cash from Investing: FY20A: -4,314; FY21A: -422; FY22E: -1,528; FY23E: -751; FY24E: -859.
Net Cash from Financing: FY20A: 6,124; FY21A: 2,212; FY22E: 2,100; FY23E: 1,457; FY24E: -685.
Net Change in Cash: FY20A: 1,520; FY21A: 1,082; FY22E: -212; FY23E: 516; FY24E: -1,421.

Balance Sheet (RMB mn)

Non-current Assets: FY20A: 2,384; FY21A: 8,665; FY22E: 9,020; FY23E: 8,414; FY24E: 7,798.
Current Assets: FY20A: 9,545; FY21A: 12,413; FY22E: 11,723; FY23E: 12,872; FY24E: 12,232.
Current Liabilities: FY20A: 3,466; FY21A: 7,516; FY22E: 7,485; FY23E: 8,816; FY24E: 8,850.

Strategic Adjustments and Catalysts

Downsizing CDN Business: Aimed at improving adj. EBITDA margin.
Potential HK Dual Listing: Seen as a positive catalyst for the share price.
Share Repurchase Program: Also expected to positively impact the share price.
Valuation Consideration: Current P/S is 1.0x, suggesting potential for re-rating.

Conclusion

Kingsoft Cloud is in a transition phase with a focus on margin improvement and restructuring. Despite a decline in CDN services, the core cloud services are expected to drive growth. The company's valuation is seen as undemanding, and potential catalysts like a HK dual listing and share repurchase could support the share price. The investment rating is maintained at BUY with a revised target price of US$7.87.

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