Goldman Sachs Slashes Kingsoft's Price Target By Half

Goldman Sachs analyst Piyush Mubayi downgraded Kingsoft Cloud Holdings Ltd KC to Neutral from Buy with a price target of $18, down from $37. The price target implies a 14.3% upside.

• Mubayi stays constructive on China's cloud market that is likely to grow at 37% CAGR in 2020-2025 as per CAICT.
• Related Content: Kingsoft Stock Drops On Q3 Revenue Miss, Margin Contraction
• Mubayi observes Kingsoft accounted for 4.8% 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%/27%/24% 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%/57%/80% in 2021/2022/2023, citing the negative impact from COVID resurgence on project deployment and slower traditional enterprises' digitalization.
• Price Action: KC shares closed lower by 0.25% at $15.75 on Friday.