Kingsoft Cloud (KC, Financial) saw its shares rise by 9% in pre-market trading, reaching $6.30. The surge follows the announcement of a renewed and revised related-party transaction framework agreement with Kingsoft Corporation and Xiaomi. Kingsoft Corporation directly holds about 37.40% of Kingsoft Cloud, while Xiaomi holds approximately 12.25% directly and indirectly.
The revised agreement covers the period from 2025 to 2027 and involves Kingsoft Cloud providing cloud services to these affiliates and receiving financial services in return. This renewal is expected to enhance the revenue visibility from both Xiaomi and the Kingsoft ecosystem.
According to the announcement, the upper limit for cloud service revenue from Kingsoft Corporation and Xiaomi was approximately 808.9 million yuan and 4.0775 billion yuan for the years 2022 to 2024. The average annual usage rates for these limits were 91.13% and 71.87% for 2022 and 2023, respectively.
Looking ahead to 2025 through 2027, the revenue caps from Kingsoft Corporation and Xiaomi are projected to be approximately 1.8416 billion yuan and 9.4832 billion yuan, marking a year-over-year growth of 128% and 133%. This implies a compound annual growth rate of 29% and 32%, respectively.
