Kingsoft Cloud Holdings Ltd (NASDAQ: KC)

Sector: Technology Industry: Software - Application CIK: 0001795589
Market Cap 2.98 Bn
P/B 3.15
P/E -21.80
P/S 2.35
ROIC (Qtr) -40.94
Div Yield % 0.00
Rev 1y % (Qtr) 31.42
Total Debt (Qtr) 882.76 Mn
Debt/Equity (Qtr) 0.93

About

Kingsoft Cloud Holdings Ltd (KC) is a Chinese company that operates in the cloud computing industry. The company's main business activities involve providing a range of cloud computing services, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). Kingsoft Cloud's offerings are designed to help customers reduce costs, increase efficiency, and improve scalability. The company's primary products include cloud storage, cloud computing, and cloud security services. These products are targeted...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 467.50M provides robust 0.53x coverage of total debt 882.76M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 2.88B provides 3.26x coverage of total debt 882.76M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 467.50M provides 2.34x coverage of SG&A expenses 199.40M, showing efficient operational cost management.
  • Operating cash flow of 467.50M provides strong 544.07x coverage of operating expenses 859269.66, showing operational efficiency.
  • Free cash flow of 467.50M provides exceptional 8.19x coverage of interest expense 57.09M, showing strong debt service ability.

Bear case

  • Operating cash flow of 467.50M barely covers its investment activities of (764.05M), with a coverage ratio of -0.61, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (764.05M) provide weak support for R&D spending of 111.55M, which is -6.85x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 467.50M shows concerning coverage of minority interest expenses of (1.19M), which is -391.97x, suggesting complex corporate structure risks.
  • Retained earnings of (2.12B) provide limited buffer against comprehensive income items of 71.86M, which is -29.45x, indicating elevated exposure to market risks.
  • Tangible assets of 2.88B provide limited backing for working capital of (94.45M), which is -30.44x, suggesting increased operational risk in market downturns.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.10 2.65
EV to Cash from Ops. EV/CFO -0.79 13.37
EV to Debt EV to Debt -0.42 57.69
EV to EBIT EV/EBIT 4.68 19.12
EV to EBITDA EV/EBITDA 6.21 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF -0.79 14.69
EV to Market Cap EV to Market Cap -0.12 -92.28
EV to Revenue EV/Rev -0.29 4.60
Price to Book Value [P/B] P/B 3.15 4.26
Price to Earnings [P/E] P/E -21.80 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) -1.38 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 136.80 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 69.32 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 69.45 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 52.83 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 57.89 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 277.86 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 25.34 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.58
Cash Payout Ratio Cash Payout Ratio 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.39 3.75
Current Ratio Curr Ratio (Qtr) 0.94 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.93 0.17
Interest Cover Ratio Int Coverage (Qtr) -1.38 -52.32
Times Interest Earned Times Interest Earned (Qtr) -1.38 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -100.06
EBIT Margin % EBIT Margin % (Qtr) -44.24 -164.24
EBT Margin % EBT Margin % (Qtr) -10.71 -116.94
Gross Margin % Gross Margin % (Qtr) 16.20 58.20
Net Profit Margin % Net Margin % (Qtr) -10.80 -121.65