Kingsoft Cloud Announces Proposed Offering of New Shares

Rhea-AI Summary

Kingsoft Cloud (NASDAQ: KC), a leading Chinese cloud service provider, has announced a proposed offering of 282,000,000 ordinary shares to non-U.S. persons in offshore transactions. The offering will be conducted under Regulation S, with Morgan Stanley Asia Limited serving as the placing agent.

The company plans to utilize the proceeds by December 31, 2028, allocating 80% to support its AI business infrastructure and cloud service capabilities, while the remaining 20% will be used for working capital and other corporate purposes. The shares will not be registered under the U.S. Securities Act or offered to the public in Hong Kong.

Positive

• 80% of proceeds dedicated to AI business expansion and cloud capabilities enhancement
• Strategic focus on AI infrastructure development
• Strengthening of working capital position

Negative

• Potential dilution of existing shareholders' value through new share issuance
• Limited to non-U.S. investors, restricting potential investor base
• Extended timeline for proceeds utilization (until December 2028)

Insights

Investment Banking Analyst

Kingsoft Cloud's 282M share offering will dilute ownership but provides crucial capital for AI expansion and debt reduction.

Kingsoft Cloud has announced a substantial share offering of 282 million ordinary shares through an offshore placement to non-U.S. persons. This significant capital raise signals both opportunities and challenges for the company and its shareholders.

The planned allocation of proceeds reveals Kingsoft's strategic priorities: 80% will support AI infrastructure and cloud capabilities, while 20% will address working capital needs. This heavy weighting toward AI reflects the company's recognition of artificial intelligence as a critical growth driver in the cloud services market.

From a capital structure perspective, this offering will inevitably dilute existing shareholders' ownership stakes. Without specific pricing details, the exact dilution impact remains unclear, but given the size of the offering, it will be substantial. The company's decision to raise equity capital rather than debt suggests management may be prioritizing balance sheet flexibility over ownership concentration.

The timing of this offering is notable. With a long expenditure window extending to December 2028, management appears to be securing funding well in advance of actual deployment needs. This extended timeline provides operational flexibility but also raises questions about immediate capital requirements and the company's current cash position.

For investors, this move represents Kingsoft Cloud's strategic bet on AI as the future growth engine of its cloud services business in China. The substantial capital commitment demonstrates management's confidence in AI's potential return on investment, though execution risks remain significant in this highly competitive and rapidly evolving sector.

BEIJING, Sept. 23, 2025 /PRNewswire/ -- Kingsoft Cloud Holdings Limited ("Kingsoft Cloud" or the "Company") (NASDAQ: KC and HKEX: 3896), a leading cloud service provider in China, today announced that it proposes to offer 282,000,000 ordinary shares of the Company (the "Placing Shares") in offshore transactions outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), subject to market conditions and other factors (the "Placing").

Morgan Stanley Asia Limited has been appointed as the placing agent.

The Company currently plans to use the net proceeds from the Placing (the "Placing Proceeds") by December 31, 2028 in the following manners: (i) 80% of the Placing Proceeds to support our AI business, including expand infrastructure and enhance cloud service capabilities, and (ii) 20% of the Placing Proceeds to replenish working capital and other corporate purposes.

The Placing Shares have not been and will not be registered under the Securities Act or any state securities laws or be registered in Hong Kong or elsewhere. They may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. They will not be offered to any members of the "public" (within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Chapter 32 of the Laws of Hong Kong).

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, in the United States, Hong Kong or elsewhere, and shall not constitute an offer, solicitation or sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

This press release contains information about the pending Placing, and there can be no assurance that the Placing will be completed.

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. 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

View original content:https://www.prnewswire.com/news-releases/kingsoft-cloud-announces-proposed-offering-of-new-shares-302564237.html

SOURCE Kingsoft Cloud Holdings Limited

FAQ

How many new shares is Kingsoft Cloud (KC) offering in its proposed placement?

Kingsoft Cloud is offering 282,000,000 ordinary shares in offshore transactions to non-U.S. persons under Regulation S.

How will Kingsoft Cloud use the proceeds from its 2025 share offering?

Kingsoft Cloud will allocate 80% of proceeds to support AI business infrastructure and cloud capabilities, and 20% for working capital and other corporate purposes by December 31, 2028.

Who is the placing agent for Kingsoft Cloud's 2025 share offering?

Morgan Stanley Asia Limited has been appointed as the placing agent for the offering.

Can U.S. investors participate in Kingsoft Cloud's 2025 share offering?

No, the offering is limited to offshore transactions outside the United States to non-U.S. persons under Regulation S.

When does Kingsoft Cloud plan to utilize the proceeds from the share offering?

Kingsoft Cloud plans to use the proceeds by December 31, 2028 for AI business support and working capital purposes.