Kingsoft Cloud Announces Pricing of Public Equity Offering

Rhea-AI Summary

Kingsoft Cloud (NASDAQ: KC) has announced the pricing of its public offering of 18.5 million American depositary shares (ADSs) at US$11.27 per ADS, with each ADS representing 15 ordinary shares. The total offering includes 277.5 million ordinary shares priced at HK$5.83 per share.

The company has granted underwriters a 30-day option to purchase up to an additional 2.775 million ADSs. Concurrently, existing shareholder Kingsoft has agreed to purchase 69.375 million ordinary shares in a private placement.

The combined gross proceeds from both the public offering and private placement are expected to be approximately US$260.7 million. The funds will be used for infrastructure upgrades, technology development, and general corporate purposes. Major underwriters include Morgan Stanley, Goldman Sachs, and CICC.

Positive

• Significant capital raise of US$260.7 million strengthens company's financial position
• Strong backing from major shareholder Kingsoft through private placement
• Proceeds will fund strategic infrastructure and technology investments

Negative

• Potential dilution for existing shareholders due to large share issuance
• Additional dilution possible if underwriters exercise option for extra ADSs

Insights

Equity Capital Markets Analyst

Kingsoft Cloud's US$260.7 million capital raise consists of a public offering of 18.5 million ADSs at $11.27 each and a concurrent private placement with Kingsoft for 69.4 million ordinary shares. The pricing represents a 14.6% discount to the current share price of $13.20, which is consistent with typical secondary offering discounts.

This offering will increase Kingsoft Cloud's share count substantially, with the new shares representing approximately 8.2% of the company's $3.18 billion market capitalization. Existing shareholders will experience dilution, though the capital infusion strengthens the company's balance sheet and provides resources for the stated purposes: infrastructure upgrades, technology development, and working capital.

The participation of Kingsoft in the concurrent private placement is significant as it demonstrates continued support from a major shareholder. However, this private placement requires independent shareholder approval at a future meeting and is contingent on the completion of the public offering.

The underwriting syndicate includes major global investment banks (Morgan Stanley, Goldman Sachs, CICC, Deutsche Bank, HSBC, and BofA Securities), providing strong distribution capabilities for the offering. The company has also granted underwriters a 30-day option to purchase up to an additional 2.8 million ADSs, which could increase total proceeds if exercised.

Given the significant size of this capital raise relative to Kingsoft Cloud's market capitalization, the transaction structurally changes the company's financial position while creating notable shareholder dilution at a discounted price.

BEIJING, April 16, 2025 (GLOBE NEWSWIRE) -- Kingsoft Cloud Holdings Limited (“Kingsoft Cloud” or the “Company”) (NASDAQ: KC and HKEX: 3896), a leading cloud service provider in China, today announced the pricing of its underwritten public offering (the “Public Offering”) of 18,500,000 of American depositary shares (the “ADSs”), each representing 15 ordinary shares of the Company, at a price of US$11.27 per ADS or a total of 277,500,000 ordinary shares at a price of HK$5.83 per ordinary share, based upon each ADS representing 15 ordinary shares and an exchange rate of HK$7.7574 to US$1.00, the spot rate of exchange at the time of pricing. All ADSs will be offered by Kingsoft Cloud. Investors have an option to receive ordinary shares of the Company to be traded on the HKEX (the “Shares”) in lieu of ADSs in this offering.

Subject to customary closing conditions, the underwriters expect to (i) deliver the ADSs against payment to the purchasers on or about April 17, 2025, on a “T+1” basis, through the facilities of the Depository Trust Company in the U.S.; and (ii) deliver the ordinary shares against payment therefor through the facilities of the Central Clearing and Settlement System in Hong Kong on or about April 25, 2025, on a “T+5” basis. In addition, Kingsoft Cloud has granted the underwriters a 30-day option to purchase up to an additional 2,775,000 ADSs at the Public Offering price, less underwriting discounts and commissions, which purchase, if applicable, will be settled only in ADSs.

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 are acting as the underwriters for the Public Offering.

Concurrently with, and subject to, among other closing conditions, the completion of the Public Offering, the Company’s existing shareholder, Kingsoft Corporation Limited (“Kingsoft Corporation”) has agreed to purchase from the Company 69,375,000 of its ordinary shares at a price per share equal to the Public Offering price per ordinary shares, in a concurrent private placement (the “Concurrent Private Placement”). The Concurrent Private Placement to Kingsoft Corporation is being made pursuant to Regulation S of the Securities Act of 1933, as amended. The Concurrent Private Placement constitutes connected transactions within the meaning of the Listing Rules of The Stock Exchange of Hong Kong Limited and are subject to, among other conditions, (i) the approval by independent shareholders in a shareholder meeting the Company plans to convene, and (ii) the completion of the Public Offering.

The gross proceeds to Kingsoft Cloud from the Public Offering and the Concurrent Private Placement, assuming the underwriters do not exercise its option to purchase additional ADSs, before deducting underwriting discounts and commissions and other offering expenses, are expected to be approximately US$260.7 million. The Company plans to use the net proceeds from the Public Offering and the Concurrent Private Placement for (i) investments in upgrading and expanding infrastructure, (ii) investments in technology and product development, and (iii) general corporate and working capital purposes.

The ADSs and ordinary shares are offered in the Public Offering pursuant to an automatic shelf registration statement on Form F-3 filed with the SEC and is available on the SEC’s website at http://www.sec.gov. A preliminary prospectus supplement and an accompanying prospectus related to the proposed Public Offering have been filed with the SEC and are available on the SEC’s website at http://www.sec.gov. The final prospectus supplement will be filed with the SEC and will be available on the SEC’s website at: http://www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained by contacting Morgan Stanley Asia Limited, c/o Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, United States, or by telephone at +1-866-718-1649 or by emailing prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com; China International Capital Corporation Hong Kong Securities Limited, 29/F International Finance Center, No.1 Harbor View Street, Central, Hong Kong, by email at ecm_supernova_plus@cicc.com.cn; Deutsche Bank AG, Hong Kong Branch, Attention: Asia Equity Capital Market, Level 60, International Commerce Centre, 1 Austin Road West Kowloon, Hong Kong, or by phone at +852 2203-8166 or by email at asia.ecm.internal@list.db.com; HSBC Securities (USA) Inc. sales representative or by emailing ny.equity.syndicate@us.hsbc.com; or Merrill Lynch (Asia Pacific) Limited, c/o BofA Securities, Inc., Attention: Prospectus Department, One Bryant Park, New York, NY, 10036, United States, or by telephone at +1 (800) 294-1322 or by email at dg.prospectus_requests@bofa.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy ADSs, Shares or any other securities of the Company, nor shall there be any sale of ADSs or Shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely to”, “could”, “potential” or other similar expressions. Among other things, the Business Outlook, and quotations from management in this announcement, as well as Kingsoft Cloud’s strategic and operational plans, contain forward-looking statements. Kingsoft Cloud may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Kingsoft Cloud’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Kingsoft Cloud’s goals and strategies; Kingsoft Cloud’s future business development, results of operations and financial condition; relevant government policies and regulations relating to Kingsoft Cloud’s business and industry; the expected growth of the cloud service market in China; Kingsoft Cloud’s ability to monetize its customer base; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Kingsoft Cloud’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Kingsoft Cloud does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Kingsoft Cloud Holdings Limited

Kingsoft Cloud Holdings Limited (NASDAQ: KC and HKEX:3896) is a leading cloud service provider in China. With extensive cloud infrastructure, cutting-edge cloud-native products based on vigorous cloud technology research and development capabilities, well-architected industry-specific solutions and end-to-end fulfillment and deployment, Kingsoft Cloud offers comprehensive, reliable and trusted cloud service to customers in strategically selected verticals.

For more information, please visit: http://ir.ksyun.com.
  
For investor and media inquiries, please contact:

Kingsoft Cloud Holdings Limited
Nicole Shan
Tel: +86 (10) 6292-7777 Ext. 6300
Email: ksc-ir@kingsoft.com

FAQ

How much is Kingsoft Cloud (KC) raising in its latest public offering?

Kingsoft Cloud is raising approximately US$260.7 million in combined gross proceeds from the public offering and concurrent private placement.

What is the pricing of Kingsoft Cloud's (KC) ADS offering?

Kingsoft Cloud priced its ADSs at US$11.27 per ADS, with each ADS representing 15 ordinary shares.

How will Kingsoft Cloud (KC) use the proceeds from its 2025 offering?

The proceeds will be used for infrastructure upgrades, technology and product development, and general corporate purposes.

What is Kingsoft 's involvement in KC's 2025 offering?

Kingsoft agreed to purchase 69,375,000 ordinary shares in a concurrent private placement at the same price as the public offering.

How many additional ADSs can underwriters purchase in KC's offering?

Underwriters have a 30-day option to purchase up to 2,775,000 additional ADSs at the public offering price.