Key Takeaways:
- Guosheng Securities initiated Kingsoft Cloud with Buy and 8 HKD target
- AI cloud revenue exceeded 50% of public cloud revenue in Q1 2026
- Xiaomi's 600 billion yuan AI investment drives demand through 2028
Back
Kingsoft Cloud initiated Buy at Guosheng on Xiaomi AI ecosystem demand
Guosheng Securities initiated coverage of Kingsoft Cloud with a Buy rating and 8 HKD target price, citing AI ecosystem demand from Xiaomi.
"Kingsoft Cloud is the exclusive strategic cloud platform for the Xiaomi-Kingsoft ecosystem and will capture a significant share of Xiaomi's 600 billion yuan AI investment over the next three years," the Guosheng Securities report said.
The brokerage forecasts revenue of 126 billion yuan in 2026, 155 billion yuan in 2027 and 194 billion yuan in 2028, representing year-over-year growth of 32 percent, 23 percent and 25 percent. Kingsoft Cloud's intelligent computing revenue already accounted for more than 50 percent of its public cloud revenue in the first quarter of 2026, the report showed.
The initiation comes as Chinese cloud providers race to capture AI-driven demand. Kingsoft Cloud's related-party cloud service annual caps with Xiaomi and Kingsoft are set at 46 billion yuan for 2026 and 68 billion yuan for 2027, providing a visible revenue base as the company transitions from a traditional infrastructure provider to a full-stack AI services company.
The company's Starflow platform has been upgraded from a resource management tool to an integrated training-inference platform supporting nearly 40 mainstream models, offering MaaS (Model as a Service) capabilities. Guosheng applied a 2.5x multiple on 2026 estimated revenue to derive its 8 HKD target, with a corresponding 15 USD target for its US-listed shares.
Kingsoft Cloud, dual-listed in New York since 2020 and Hong Kong since 2022, competes with larger players including Alibaba Cloud and Baidu AI Cloud. The brokerage noted that internet cloud providers are gaining pricing power as AI workloads shift toward inference, while telecom-backed cloud operators face margin pressure.
The Buy initiation signals that Guosheng sees Kingsoft Cloud as a direct beneficiary of Xiaomi's AI infrastructure buildout. Investors will watch the company's next quarterly report for further evidence that external customer adoption is broadening beyond the Xiaomi-Kingsoft ecosystem.
This article is for informational purposes only and does not constitute investment advice.
