Good News on Listing | Frost & Sullivan Assists Kingsoft Cloud Holdings Limited in Successful Hong Kong Listing (3896.HK)

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as overview, competitive advantages and strategies, industry overview, business, and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

The company is a leading cloud service provider in China and a neutral and trustworthy cloud service provider in China;

The company has profound cloud computing R & D capabilities and has established a comprehensive and reliable cloud platform, including a wide range of cloud infrastructure, advanced cloud-native products, industry-specific solutions, and end-to-end services;

The company has strong customer conversion capabilities and marketing efficiency, and is committed to providing continuous and long-term services for customers;

The company implements a high-quality customer strategy, focusing on covering leading enterprises in selected vertical industries, and has accumulated a large, loyal, and growing high-quality customer base;

The company has strategic synergies and highly trusted industrial partners, driving the development of the industry;

The company is backed by Kingsoft Software Group, which has more than 30 years of enterprise service experience;

The company has a management team with a shared mission and great vision.

According to Frost & Sullivan's report, in terms of revenue in 2021, the company:

ranked fourth among Chinese cloud service providers;

ranked fifth among Chinese public cloud service providers;

was ranked second in terms of average annual compound growth rate from 2019 to 2021 among the top seven Chinese cloud service providers;

was ranked second in terms of average annual compound growth rate from 2019 to 2021 among the top seven Chinese public cloud service providers.

Compared with the US cloud service market, the Chinese market is still in a relatively early stage. Given its relatively low cloud service penetration rate and multi-cloud deployment rate, resulting in a small market scale, it has great potential. According to Frost & Sullivan's report, the market scale of China's cloud service industry was $45.4 billion in 2021 and is expected to reach $120 billion by 2026, with a compound annual growth rate of 21.4% from 2021 to 2026. The penetration rate of cloud services in China was 9.7% in 2021 and is expected to reach 21.1% by 2026.

To prevent data loss and downtime due to local component failures in a single cloud, ensure continuous high-quality performance, reduce latency by processing the geographical distribution of requests, minimize dependence on a single cloud service provider, and given the changing regulatory environment, multi-cloud deployment has become an inevitable trend in China. In 2021, 48.7% of Chinese enterprises with more than 1,000 employees had carried out multi-cloud deployment, which is expected to further increase to 70.0% by 2026.

The cloud service market in China can be divided into Internet enterprise services (or Internet cloud service market) and non-Internet enterprises (mainly traditional enterprises and institutions).

Chinese Internet Cloud Service Market

Internet cloud refers to cloud services provided to Internet companies, including video, gaming, e-commerce, collaborative office, and others. According to Frost & Sullivan's data, the massive data demand in the Internet industry has driven the rapid development of the Chinese cloud service market. The Chinese Internet cloud service market increased from RMB 25 billion in 2017 to RMB 893 billion in 2021, with an average annual compound growth rate of 37.5%. As more Internet companies adopt cloud services and their cloud computing budgets continue to increase, it is expected that the Chinese Internet cloud service market will reach RMB 1786 billion by 2026, with an average annual compound growth rate of 14.9% from 2021 to 2026.

Chinese Non-Internet Cloud Service Market

Non-Internet cloud services mainly refer to using cloud technology to assist traditional non-Internet enterprises and institutions in digital transformation. As digital transformation deepens, cloud technology continues to integrate with the daily operations of traditional enterprises and institutions, and adopting dedicated services provided by cloud providers has become an inevitable development trend for the digital transformation of enterprises and institutions.

According to Frost & Sullivan's data, driven by the huge demand released by traditional non-Internet industries such as public services, financial services, manufacturing, and healthcare, the non-Internet cloud service market has developed. The Chinese non-Internet cloud service market increased from RMB 61 billion in 2017 to RMB 2,039 billion in 2021, with a compound annual growth rate of 35.2%; it is expected to reach RMB 5,656 billion by 2026, with a compound annual growth rate of 22.6% from 2021 to 2026.

According to Frost & Sullivan's data, based on the market growth compound annual growth rate from 2017 to 2021, Chinese public cloud is one of the fastest-growing cloud service markets globally. The market scale of Chinese public cloud increased from RMB 356 billion in 2017 to RMB 1,550 billion in 2021, with a compound annual growth rate of 44.4%, and is expected to reach RMB 3,730 billion by 2026, with a compound annual growth rate of 19.2% from 2021 to 2026.

Public cloud services can be further divided into three sub-markets: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). IaaS has grown significantly in recent years and has become the largest component of the Chinese public cloud service market. Looking ahead, due to enterprises' need for higher digital transformation services, the basic demand for IT infrastructure and IaaS continues to grow.

The cloud service market in China is relatively concentrated. According to Frost & Sullivan's report, in 2021, the revenue scale of the top seven Chinese cloud service providers accounted for 53.1% of the national cloud service provider revenue scale, among which Kingsoft Cloud had a market share of 3.1%.

Based on the compound annual growth rate of total cloud service revenue from 2019 to 2021, Kingsoft Cloud ranked second among the main leading cloud service providers in China, with an annual compound growth rate of 51.3%.

In 2021, the revenue scale of the top seven public cloud service providers in the Chinese public cloud service market accounted for 66.0% of the national public cloud service provider revenue scale. Among all participants, Kingsoft Cloud ranked fifth with a market share of 4.0% in 2021.

Based on the compound annual growth rate of public cloud service revenue from 2019 to 2021, Kingsoft Cloud ranked second among the main leading public cloud service providers in China, with a compound annual growth rate of 33.4%.

• Large high-growth demand from Internet vertical industries

The Internet penetration rate in China has been increasing, with the number of mobile users constantly growing. Many enterprises are transforming to provide Internet-based services to their customers. In particular, vertical industries such as video, gaming, and e-commerce have been growing, driving further demand for cloud resources. The demand for Internet cloud services in these vertical industries is expected to continue growing in the future.

• The cloud penetration rate of traditional enterprises and institutions is continuously strengthening

It is expected that the cloud service penetration rate of traditional enterprises and institutions will increase. Customers in traditional Chinese industries are beginning to recognize the benefits of cloud services and are motivated by cost savings, security, and production efficiency advantages to migrate to the cloud. Most importantly, with the increasing penetration rate of cloud services for car manufacturing, autonomous driving, and research and development, the demand for cloud services in China's automotive industry is strong. According to Frost & Sullivan's data, in 2021, the market scale of the Chinese cloud service market divided into smart cars was RMB 1.8 billion and will reach RMB 362 billion by 2026, with a compound annual growth rate of 81.7% from 2021 to 2026.

• Large-scale rollout of new technologies such as 5G, AI, VR/AR, and the Internet of Things

The deployment of 5G technology provides significantly faster transmission speeds and greatly reduces latency for Internet and mobile users. The improvements are activated through the application of deep learning and AI functions on terminal devices, supporting the widespread adoption of AI applications.

Frost & Sullivan has rich research experience in the TMT industry and has assisted well-known enterprises in successfully listing on the capital market. Successful listing cases include: Hao Ping Technology (2440.HK), Xuan Wu Cloud Technology (2392.HK), Huitongda (9878.HK), Innoventive Intelligence (2121.HK), SenseTime (0020.HK), Qinhuai Data (NASDAQ:CD), Mingyuan Cloud (0909.HK), Century Group (1849.HK), WeCom Group (2013.HK), Wancall Group (1762.HK), AsiaInfo Technology (1675.HK), Hong Kong Asia Holdings (1723.HK), Aurora Mobile (NASDAQ:JG), King Crown Holdings (8606.HK), Qiyi Technology (1739.HK), WeBank (2003.HK), Tenpay (1806.HK), Atlinks (8043.HK), Zioncom (8287.HK), ISP Global (8487.HK), Vobile (3738.HK), Aibo Technology (2708.HK), iClick (NASDAQ:ICLK), Shengye Capital (6069.HK), Anlink International (8410.HK), Anke Systems (8353.HK), Junmeng International (8062.HK), Feida (8342.HK), Future Data (8229.HK), and YAS Backup (8290.HK).

01. Frost & Sullivan helps Hao Ping Technology successfully list in Hong Kong (2440.HK)

02. Frost & Sullivan helps Xuan Wu Cloud Technology successfully list in Hong Kong (2392.HK)

03. Frost & Sullivan helps Huitongda successfully list in Hong Kong (9878.HK)

04. Frost & Sullivan helps Innoventive Intelligence successfully list in Hong Kong (2121.HK)

05. Frost & Sullivan helps SenseTime successfully list in Hong Kong (0020.HK)

06. Frost & Sullivan helps Qinhuai Data successfully list in the US (NASDAQ:CD)

07. Frost & Sullivan helps Mingyuan Cloud successfully list in Hong Kong (0909.HK)

08. Frost & Sullivan helps Century Group successfully list in Hong Kong (1849.HK)

09. Frost & Sullivan helps WeCom Group successfully list in Hong Kong (2013.HK)

10. Frost & Sullivan helps Wancall Group successfully list in Hong Kong (1762.HK)

11. Frost & Sullivan helps AsiaInfo Technology successfully list in Hong Kong (1675.HK)

12. Frost & Sullivan helps Hong Kong Asia Holdings successfully list in Hong Kong (1723.HK)

13. Frost & Sullivan helps Aurora Mobile successfully list in the US (NASDAQ:JG)

14. Frost & Sullivan helps King Crown Holdings successfully list in Hong Kong (8606.HK)

15. Frost & Sullivan helps Qiyi Technology successfully list in Hong Kong (1739.HK)

16. Frost & Sullivan helps WeBank successfully list in Hong Kong (2003.HK)

17. Frost & Sullivan helps Tenpay successfully list in Hong Kong (1806.HK)

18. Frost & Sullivan helps Atlinks successfully list in Hong Kong (8043.HK)

19. Frost & Sullivan helps Zioncom successfully list in Hong Kong (8287.HK)

20. Frost & Sullivan helps ISP Global successfully list in Hong Kong (8487.HK)

21. Frost & Sullivan helps Vobile successfully list in Hong Kong (3738.HK)

22. Frost & Sullivan helps Aibo Technology successfully list in Hong Kong (2708.HK)

23. Frost & Sullivan helps iClick successfully list in the US (NASDAQ:ICLK)

24. Frost & Sullivan helps Shengye Capital successfully list in Hong Kong (6069.HK)

25. Frost & Sullivan helps Anlink International successfully list in Hong Kong (8410.HK)

26. Frost & Sullivan helps Anke Systems successfully list in Hong Kong (8353.HK)

27. Frost & Sullivan helps Junmeng International successfully list in Hong Kong (8062.HK)

28. Frost & Sullivan helps Feida successfully list in Hong Kong (8342.HK)

29. Frost & Sullivan helps Future Data successfully list in Hong Kong (8229.HK)

30. Frost & Sullivan helps YAS Backup successfully list in Hong Kong (8290.HK)