Goldman Sachs analyst Piyush Mubayi downgraded Kingsoft Cloud Holdings Ltd. to Neutral from Buy with a price target of $18, down from $37. The price target implies a 14.3 percent upside.
Mubayi stays constructive on China’s cloud market that is likely to grow at 37 percent CAGR in 2020–2025 as per CAICT.
Mubayi observes Kingsoft accounted for 4.8 percent of China’s IaaS + PaaS public cloud market in the first half of 2021.
Mubayi expects Kingsoft to see slower public cloud revenue growth of 23 percent/27 percent/24 percent in 2021/2022/2023, partially offset by multi-cloud adoption trends and Kingsoft’s industry neutrality.
Meanwhile, Mubayi cut Kingsoft’s organic enterprise cloud revenue growth to 66 percent/57 percent/80 percent in 2021/2022/2023, citing the negative impact from COVID resurgence on project deployment and slower traditional enterprises’ digitalization.
