HomeCloud service provider Kingsoft’s shares soar over 25% in U.S. market debut- Technology News, FirstpostTechCloud service provider Kingsoft’s shares soar over 25% in U.S. market debut- Technology News, Firstpost

Cloud service provider Kingsoft’s shares soar over 25% in U.S. market debut- Technology News, Firstpost

 Cloud service provider Kingsofts shares soar over 25% in U.S. market debut

(Reuters) – Shares of China’s Kingsoft Cloud Holdings Ltd jumped over 25% on debut, indicating strong investor interest at a time when capital markets globally have been whipsawed by an economic crisis brought on by the COVID-19 pandemic.

Beijing-based Kingsoft opened at $20.37 per share and rose to as much as $22.02 in early trade.

Kingsoft is the first Chinese company to list in the United States since the coronavirus pandemic outbreak sent markets tumbling.

Earlier, the company raised $510 million after pricing its IPO at $17 per share in the middle of its marketed range, valuing it at roughly $3.7 billion.

The cloud services provider had planned to sell 25 million shares but increased the size of the deal to 30 million on Friday due to better-than-expected demand from shareholders.

The IPO is also the first gauge of U.S. investor demand for Chinese companies going public in New York after a fraud scandal sent shares in Chinese coffee chain Luckin Coffee into a free-fall last month.

Following Luckin’s fallout, the U.S. Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) issued a joint statement warning investors against Chinese companies with regard to risks, including financial reporting.

Kingsoft’s services include cloud infrastructure as well as enterprise cloud and artificial intelligence of things. Cloud computing has so far been one of the sectors boosted by the novel coronavirus outbreak, as it drives more businesses to operate digitally and rely on cloud services.

Existing shareholders Kingsoft Group, Xiaomi and Carmignac Gestion anchored the IPO, with Kingsoft buying up to $25 million of the stock offered, and Xiaomi and Carmignac buying up to $50 million each, the company said.

Kingsoft’s estimated revenue for the first three months of 2020 was between 1.35 billion yuan ($190.41 million) and 1.4 billion yuan, an year-on-year increase in the range of 59.6% to 65.5%. The company incurred a net loss of 1.1 billion yuan in 2019, compared with a net loss of 1 billion yuan in 2018.

JPMorgan, UBS, Credit Suisse and China International Capital Corp Ltd (CICC) were the lead underwriters for the IPO.($1 = 7.0901 Chinese yuan renminbi)

(Reporting by Abhishek Manikandan in Bengaluru; Editing by Vinay Dwivedi)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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