Kingsoft Cloud (03896.HK) - Hot Stock: Changjiang Securities Initiates Coverage with "Buy" Rating, AI Cloud Services Drive Growth

Kingsoft Cloud (03896.HK) became a hot stock in the Hong Kong stock market on January 7, 2026, driven by multiple catalysts. As the only strategic cloud platform under the Kingsoft Group, the company is deeply integrated with Xiaomi’s AI ecosystem, benefiting from the surge in AI computing demand and the early-2026 revaluation of Chinese tech assets[1][2][3]. On January 6, Changjiang Securities initiated coverage of the stock with a “Buy” rating, clearly identifying three growth drivers for the company, which served as the core catalyst for the recent stock price attention[1].

On the day, Kingsoft Cloud’s share price fell 2.25% to close at HK$5.650, with a trading volume of 43.58 million shares and a turnover of HK$244 million, representing a significant increase compared to recent average levels[5]. The stock price is currently in the lower-middle range of its 52-week band (HK$4.480 - HK$11.400), having dropped approximately 50.4% from its 52-week high. Short selling data shows that the short selling amount was approximately US$12 million, with a short ratio of 8.493%, indicating some divergence in the market[4].

In its initiation report, Changjiang Securities identified three certain growth drivers for Kingsoft Cloud: first, computing demand from Xiaomi’s self-developed large model training; second, computing demand from Xiaomi’s full-stack self-developed intelligent driving system; third, inference demand after integrating large models into end devices, particularly the edge inference scenarios of Xiaomi Miloco’s “Large Model + Smart Home” solution, which connects nearly 1 billion IoT devices[1]. The company expects its revenue to reach RMB9.45 billion, RMB11.13 billion, and RMB12.88 billion in 2025, 2026, and 2027 respectively, with year-on-year growth rates of 21.4%, 17.8%, and 15.7%, corresponding to current price-to-sales ratios of approximately 2.5x, 2.1x, and 1.8x[1].

Kingsoft Cloud is simultaneously benefiting from three market themes: first, the revaluation trend of Chinese tech assets, as the Hong Kong stock market’s “strong start” on January 2, 2026, drove the Hang Seng Tech Index up 4%[2][3]; second, the structural growth in AI computing demand, which is driving valuation recovery across the cloud computing industry; third, the synergy effect of Xiaomi’s ecosystem, with the company clearly positioned as the core cloud service provider for Xiaomi’s AI strategy. Notably, the company’s ADS listed on the U.S. stock market (KC.US) also attracted capital attention, rising over 5% on January 2[3].

The primary risk facing Kingsoft Cloud is its

. As a growth-stage cloud service provider, its profitability remains unproven, and its valuation relies on the realization of growth expectations. Second, are significant: giants such as Alibaba Cloud, Huawei Cloud, and Tencent Cloud dominate the market, squeezing the survival space of mid-sized and small cloud service providers. In addition, the company has a ; any adjustment to Xiaomi’s AI strategy could directly impact the company’s revenue. The commercialization process of large models is uncertain, and as well as such as Sino-US tech competition and changes in regulatory policies also require attention[1].

From a positive perspective, professional institutions have started to pay attention to the company’s value, and Changjiang Securities’ “Buy” rating carries signaling significance[1]. The deep integration with Xiaomi’s AI ecosystem provides clear growth momentum, and the continuous net inflow through the Hong Kong Stock Connect program indicates that mainland capital remains interested in Hong Kong-listed tech stocks[2][3]. The current price-to-sales ratio is approximately 2.5x, which is relatively attractive given the company’s growth potential.

The key short-term support level is around HK$5.50 - HK$5.54 (the day’s low), with strong support at the integer level of HK$5.00; the short-term resistance level is HK$5.80 - HK$6.00, which needs to be broken to confirm a stabilization. The medium-term resistance is in the previous high-trading-density range of HK$6.50 - HK$7.00, and the long-term resistance is the 52-week high of HK$11.40. Given that Changjiang Securities just released its initiation report, institutional research and capital allocation demand may provide support in the short term, but investors need to pay attention to subsequent financial reports to verify growth expectations.

The core catalysts for Kingsoft Cloud becoming a hot stock include: Changjiang Securities initiating coverage with a “Buy” rating, the company’s deep integration with Xiaomi’s AI ecosystem benefiting from the surge in computing demand, and capital inflows driven by the early-2026 revaluation of Chinese tech assets[1][2][3]. Positioned as the only strategic cloud platform under the Kingsoft Group, the company undertakes the AI demand of Xiaomi and Kingsoft, and expects its revenue to grow at a 15-20% CAGR from 2025 to 2027. However, investors should note risk factors such as the company’s lack of profitability, competitive pressure from industry giants, and an over 50% drop in share price from its 52-week high. Technically, the stock price is in a correction phase, but the increased trading volume indicates rising attention, with the key support level at HK$5.50 - HK$5.54.

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• Market price data is based on real-time market conditions on January 7, 2026[5]
• Analyst ratings and financial forecasts are based on Changjiang Securities’ initiation coverage report[1]
• Market sentiment and capital flow data are based on overall Hong Kong stock market performance data[2][3][4]