Focus on Low-Position, Low-Valuation Cloud Vendor Kingsoft Cloud

English summary

The core contradictions behind Kingsoft Cloud's previous decline were that upstream price increases squeezed the beta of cloud vendors' ROI, and the company's own pace of capital expenditure affected revenue trends; we believe these are both being resolved: 1) Alibaba Cloud Q2 preview and North American CSP Q2 earnings both confirm the cloud industry is turning upward with positive ROI. 2) Kingsoft Cloud's Q2 computing resource investment was relatively small, and supply capacity failed to fully absorb AI cloud demand, causing a temporary divergence in revenue growth from industry trends. If subsequent capital expenditure and computing deployment recover, revenue growth is expected to converge toward industry trends. The company is backed by Kingsoft and Xiaomi ecosystem, and its current valuation and position are low (at July 30 close, 2026 PS 1.5x, significantly low in both horizontal and vertical comparisons), offering significant elasticity in both earnings and valuation.