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    Wenting Yu • CLSA Limited

    Wenting Yu's questions to Kingsoft Cloud Holdings Ltd (KC) leadership

    Wenting Yu's questions to Kingsoft Cloud Holdings Ltd (KC) leadership • Q2 2025

    Question

    Wenting Yu of CLSA Limited inquired about Kingsoft Cloud's business outlook for the second half of 2025 and the first half of 2026, the investment pace of Xiaomi in AI, and trends in AI computing demand. She also asked about the impact of leasing compute resources on the company's gross margin and the target ratio for leased versus owned capacity.

    Answer

    CEO Zhou Tao projected that revenue growth in the second half of the year would be stronger than the first half. He confirmed the ongoing delivery of a large computing cluster for Xiaomi and noted that overall market demand for AI remains very strong, with varied investment patterns in training versus inference among different players. Regarding margins, Mr. Zhou explained the strategic shift from a high-CapEx self-procurement model to resource pool and profit-sharing models. This change, while slightly pressuring the gross profit margin, successfully reduced CapEx and gearing ratios. He also introduced a new 'agent model' and expects the gross profit margin to stabilize around current levels.

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    Wenting Yu's questions to Kingsoft Cloud Holdings Ltd (KC) leadership • Q1 2025

    Question

    Wenting Yu from CLSA inquired about the gross margin trends for AI cloud leasing services amid industry price competition and the impact of DeepSeek's open-sourcing of its R1 model on the demand for model training.

    Answer

    Management, including a response attributed to SVP Mr. Liu Tao, acknowledged external pricing pressure on new large projects due to customer concentration, but noted that existing long-term contracts are unaffected. They also explained that a new strategy of using partners' servers for non-top customers impacts gross margin due to profit-sharing. Regarding DeepSeek's open-source model, they see a mixed but overall non-negative impact: while some traditional large model companies have shrinking demand, a new group of customers has been inspired to pursue model training, creating new demand.

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    Wenting Yu's questions to Kingsoft Cloud Holdings Ltd (KC) leadership • Q4 2024

    Question

    Wenting Yu from CLSA asked how falling prices for high-performance AI services and improved supply of inference servers would affect Kingsoft Cloud's GPU cloud pricing strategy, revenue, and earnings.

    Answer

    CFO Haijian He responded cautiously, citing business confidentiality due to strong performance. He confirmed that AI services carry higher margins than traditional services. He emphasized that pricing is based on the high value proposition of AI as a core production tool for clients, which justifies higher fees. The company's strategic shift to an 'AI cloud and solution services company' fundamentally alters its pricing model away from traditional IT services.

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