Kingsoft Cloud launches public offering of ADSs

BEIJING - Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX: 3896), a prominent cloud service provider in China with a market capitalization of $27 million, has initiated an underwritten public offering of 18,500,000 American depositary shares (ADSs), with each ADS representing 15 ordinary shares. The company’s stock has declined over 16% year-to-date, according to InvestingPro data. This translates to a total offering of 277,500,000 ordinary shares. The company has also provided underwriters a 30-day option to purchase additional ADSs.

Investors are given the choice to receive ordinary shares to be traded on the HKEX in place of ADSs. The underwriting team for this public offering includes Morgan Stanley Asia Limited, Goldman Sachs (Asia) L.L.C., China International Capital Corporation Hong Kong Securities Limited, Deutsche Bank AG, Hong Kong Branch, The Hongkong and Shanghai Banking Corporation Limited, and Merrill Lynch (Asia Pacific) Limited.

The offering’s completion is contingent on market conditions and other factors, and there is no certainty regarding the timing or completion of the offering.

Concurrently, subject to the public offering’s closing conditions, Kingsoft Corporation Limited, an existing shareholder, has agreed to a concurrent private placement, purchasing a certain number of ordinary shares at the public offering price. This private placement is subject to approval by independent shareholders and the completion of the public offering.

Kingsoft Cloud plans to allocate the net proceeds from both the public offering and the private placement towards infrastructure upgrades, technology and product development, and general corporate purposes. This capital raise comes as InvestingPro data shows the company facing significant financial challenges, with a current ratio of 0.69 and negative free cash flow of $13.37 million in the last twelve months. InvestingPro subscribers have access to 7 additional key insights about Kingsoft Cloud’s financial health.

The ADSs and ordinary shares in this offering are being made available under an automatic shelf registration statement filed with the SEC, which can be accessed on the SEC’s website.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, and the sale of ADSs or shares will not be lawful in any jurisdiction where such offer, solicitation, or sale would be unlawful without registration or qualification under the securities laws of that jurisdiction. Based on InvestingPro Fair Value analysis, the stock currently appears to be trading above its intrinsic value, with a debt-to-equity ratio of 2.62 highlighting the company’s significant leverage position.

The information in this article is based on a press release statement from Kingsoft Cloud Holdings Limited.

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