HK Stock Market Move | KINGSOFT CLOUD (03896) surges over 8% again, with more than 70% increase in the month. Institutions predict that it will expand its investment in AI in the future.

KINGSOFT CLOUD (03896) rose by over 8% again, with a monthly increase of over 70%. As of the time of writing, it has risen by 3.33% to HKD 11.16, with a turnover of HKD 1128.09. China International Capital Corporation (CICC) released a research report stating that since the second half of 2023, the company's investment in AI infrastructure has significantly accelerated. It is estimated that in the year since 3Q23, the company's capital expenditure has exceeded RMB 3.6 billion, primarily invested in AI computing power. The bank believes that the company's widening financing channels will provide more sufficient support for future quarters' investment in AI computing power. At the same time, the related investments have already achieved substantial income conversion, with the company's AI business revenue reaching RMB 330 million in 2Q24, accounting for approximately 26% and 17% of the public cloud/overall revenue respectively. Morgan Stanley believes that as the demand for Edge AI and Advanced Driver Assistance Systems (ADAS) of Xiaomi-W's new electric vehicle business, a major client of KINGSOFT CLOUD, continues to rise, it is very likely to expand its AI-related investment. If the investment scale is large, it can significantly alleviate the capital expenditure burden of KINGSOFT CLOUD, and drive KINGSOFT CLOUD towards asset-light operations.