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Kingsoft Nearly Doubles Its Market Cap to HKD 51 Billion since Jan 2020
COVID-19 and China
Kingsoft celebrated the 30th anniversary in 2018. Image credit: Kingsoft

Kingsoft (03888:HK) saw a sharp slope on stock performance in the mid-year, reaching the highest stock price at HKD 47.6 in July. In the third quarter, Kingsoft's stock price was on a roller coaster ride but maintained at the range between HKD 35 and 45.

Since 2015, Kingsoft’s stock price had stayed below HKD 34 until July 2020. The company started to pick up at the end of 2018, a year before Kingsoft Office (688111:SH) went public on Shanghai Star Market. After spinning off Kingsoft Office in 2019, the company split its cloud business Kingsoft Cloud (KC:NASDAQ) and listed it on the US stock market in the mid-2020.

Cloud business and gaming were the two pillars of Kingsoft revenue prior to the cloud business’ spin-off. In the first half, Due to the pandemic, indoor entertainment and online working drove Kingsoft-controlled companies to realize high growth, which cast a positive influence on the parent company’s stock performance. Adding on the IPO of its cloud services company, the stock performance reached a new height in July.

After the spin-offs of three listed companies including Cheetah Mobile (CMCM:NYSE), Kingsoft Office and Kingsoft Cloud, gaming becomes the main pillar of Kingsoft’s revenue. The company now has turned into a more investor-like company – making gains from its controlled firms. Making its gaming business unit SEASUN Entertainment independent and public might be the next big move of the 30-year-old corporate, which will make Kingsoft a true ‘investment firm’ by recognizing gains from its investees.

https://equalocean.com/analysis/2020081014470

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