REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
N/A |
* | Not for trading, but only in connection with the listing of the American depositary shares on the Nasdaq Global Select Market. |
☒ | Accelerated filer | ☐ | Non-accelerated filer |
☐ | ||||||
Emerging growth company |
† |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
International Financial Reporting Standards as issued | Other ☐ | |||||||
by the International Accounting Standards Board | ☐ |
• | “ADSs” refers to the American depositary shares, each representing 15 ordinary shares; |
• | “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau Special Administrative Region; |
• | “Enterprise Cloud Service Premium Customer” refers to a customer with annual revenues of over RMB700,000 generated from enterprise cloud services for a historical year; |
• | “GPU” refers to graphics processing unit; |
• | “Hong Kong” or “HK” refers to the Hong Kong Special Administrative Region of the PRC; |
• | “IaaS” refers to Infrastructure as a Service, a category of cloud services that provides high-level application programming interface used to dereference various low-level details of underlying network infrastructure like physical computing resources, location, data partitioning, scaling, security, backup, etc.; |
• | “independent cloud service providers” refers to cloud service providers that are not belonging to any large-scale conglomerates that are involved in a wide range of businesses where they could potentially compete with their customers; |
• | “Kingsoft Cloud Information” refers to Kingsoft Cloud (Beijing) Information Technology Co., Ltd., a VIE; |
• | “Kingsoft Group” refers to Kingsoft Corporation Limited (HKEx: 3888), its subsidiaries and consolidated affiliated entities, our largest shareholder; |
• | “Nanjing Qianyi” refers to Nanjing Qianyi Shixun Information Technology Co., Ltd., one of our Consolidated Affiliated Entities; |
• | “net dollar retention rate of Public Cloud Service Premium Customers” is calculated by dividing the revenues from our Public Cloud Service Premium Customers, who were also our Public Cloud Service Premium Customers in the previous year, in the indicated period by the revenues from all of our Public Cloud Service Premium Customers in the previous corresponding period; |
• | “ordinary share” refers to our ordinary shares, par value US$0.001 per share; |
• | “PaaS” refers to Platform as a Service, a category of cloud services that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app; |
• | “Premium Customer” refers to a customer with annual revenues of over RMB700,000 for a historical year; |
• | “Public Cloud Service Premium Customer” refers to a customer with annual revenues of over RMB700,000 generated from public cloud services for a historical year; |
• | “RMB” or “Renminbi” refers to the legal currency of the People’s Republic of China; |
• | “SaaS” refers to Software as a Service, a category of cloud services that provides a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted; |
• | “Shanghai Jinxun Ruibo” refers to Shanghai Jinxun Ruibo Network Technology Co., Ltd., one of our Consolidated Affiliated Entities; |
• | “US$,” “dollars” or “U.S. dollars” refers to the legal currency of the United States; |
• | “variable interest entities” or “VIEs” refers to the PRC entities of which we have power to control the management, and financial and operating policies and have the right to recognize and receive substantially all the economic benefits and in which we have an exclusive option to purchase all or part of the equity interests and all or a portion of the assets at the minimum price possible to the extent permitted by PRC law; |
• | “we,” “us,” “our company,” the “Company,” and “our” refer to Kingsoft Cloud Holdings Limited, a Cayman Islands company and its subsidiaries and, in the context of describing our consolidated financial information, business operations and operating data, its consolidated variable interest entities, or VIEs; |
• | “Wuhan Kingsoft Cloud” refers to Wuhan Kingsoft Cloud Information Technology Co., Ltd., one of our Consolidated Affiliated Entities; |
• | “VAT License” refers to the business operation license for value-added telecommunication services; |
• | “Xiaomi” refers to Xiaomi Corporation (HKEx: 1810), its subsidiaries and consolidated affiliated entities, one of our shareholders; and |
• | “Zhuhai Kingsoft Cloud” refers to Zhuhai Kingsoft Cloud Technology Co., Ltd., a VIE. |
• | our goals and growth strategies; |
• | our future business development, results of operations and financial condition; |
• | relevant government policies and regulations relating to our business and industry; |
• | general economic and business conditions in China; and |
• | assumptions underlying or related to any of the foregoing. |
ITEM 1 |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2 |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3 |
KEY INFORMATION |
3.A. |
[Reserved] |
3.B. |
Capitalization and Indebtedness |
3.C. |
Reason for the Offer and Use of Proceeds |
3.D. |
Risk Factors |
• | We have experienced rapid growth and expect our growth to continue, but if we fail to effectively manage our growth, then our business, results of operations and financial condition could be adversely affected. |
• | We have a history of net loss and we may not be able to achieve or subsequently maintain profitability. |
• | To support our business growth, we are continuously optimizing and expanding our infrastructure including data centers, and investing substantially and efficiently in our research and development efforts, which may negatively impact our cash flow, and may not generate the results we expect to achieve. |
• | We have recorded negative cash flows from operating activities historically. If we fail to collect accounts receivable from our customers in a timely manner, our business operations and financial results may be materially and adversely affected. |
• | Although we have been increasing and diversifying our customer base, we receive a substantial portion of our revenues from a limited number of customers, and the loss of, or a significant reduction in usage by, one or more of our Premium Customers would result in lower revenues and could harm our business. |
• | We operate in a fast-growing market. If our market does not grow as we expect, or if we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, our products and solutions may become less competitive. |
• | Security incidents and attacks on our platform, products or solutions, or our global network infrastructure could lead to significant costs and disruptions that could harm our business, financial results, and reputation. |
• | Sanctions, export controls and other economic or trade restrictions imposed on Chinese companies may affect our business, financial condition and results of operations. |
• | If our expansion into new verticals is not successful, our business, prospects and growth momentum may be materially and adversely affected. |
• | The market in which we participate is competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed. |
• | If we are no longer able to benefit from our business cooperation with Kingsoft Group or Xiaomi and its ecosystem, our business may be adversely affected. |
• | Kingsoft Group and Xiaomi are our existing customers, from which we received a portion of revenues. Failure to maintain the relationships with them would result in lower revenues and could adversely impact our business, operation results and financial conditions. |
• | Any policy changes, punishment or litigation against Kingsoft Group or Xiaomi, or any negative developments in Kingsoft Group ’ s or Xiaomi ’ s market position, brand recognition or financial condition may materially and adversely affect our reputation, business, results of operations and financial condition. |
• | Certain existing shareholders have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders. |
• | There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the agreements that establish the contractual arrangement for our operations in China, including potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements with the VIEs and, consequently, significantly affect the financial condition and results of operations performance of our Company. If the PRC government finds such agreements that establish the structure for operating our businesses in China non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs. |
• | Uncertainties exist with respect to the interpretation and implementation of Foreign Investment Law and its implementing rules and other foreign investment related laws and regulations and how they may impact our business, financial condition and results of operations. |
• | We rely on contractual arrangements with the VIEs and their respective shareholders for a large portion of our business operations, which may not be as effective as direct ownership in providing operational control. |
• | Any failure by the VIEs or their respective shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business. |
• | A severe or prolonged downturn in the PRC or global economy could materially and adversely affect our business, results of operations and financial condition. |
• | Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations. |
• | Uncertainties with respect to the PRC legal system , including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in policies, laws and regulations in China, could adversely affect us. |
• | You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named based on foreign laws. |
• | The filing, approval or other administrative requirements of the CSRC or other PRC government authorities may be required to maintain our listing status or conduct future offshore securities or debt offerings. |
• | We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business. |
• | The PCAOB is currently unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor deprives our investors with the benefits of such inspections. |
• | Our ADSs may be delisted and our ADSs and shares prohibited from trading in the over-the-counter 16, 2021, the PCAOB issued the HFCAA Determination Report, according to which our auditor is one of the registered public accounting firms that the PCAOB is unable to inspect or investigate completely. Under the current law, delisting and prohibition from over-the-counter non-U.S. exchange or that a market for our shares will develop outside of the U.S. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. |
• | The potential enactment of the Accelerating Holding Foreign Companies Accountable Act would decrease the number of non-inspection years from three years to two years, thus reducing the time period before our ADSs may be delisted or prohibited from over-the-counter over-the-counter |
• | The price and trading volume of our ADSs may be volatile, which could lead to substantial losses to investors. |
• | If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our securities , the market price for our ADSs and trading volume could decline. |
• | Techniques employed by short sellers may drive down the market price of our ADSs. |
• | Due to recent substantial fluctuations of our ADSs’ trading prices there is a significant risk that we will be a passive foreign investment company for U.S. federal income tax purposes for 2022 or future taxable years. |
• | lead to the dissemination of proprietary information or sensitive, personal, or confidential data about us, our employees, or our customers—including personally identifiable information of individuals involved with our customers and their end-users; |
• | lead to interruptions or degradation of performance in our platform, products and solutions; |
• | threaten our ability to provide our customers with access to our platform, products and solutions, and negatively affect our abilities to retain existing customers; |
• | generate negative publicity about us; |
• | result in litigation and increased legal liability or fines; or |
• | lead to governmental inquiry or oversight. |
• | our future business development, financial condition and results of operations; |
• | general market conditions for financing activities; and |
• | macro-economic and other conditions in China and elsewhere. |
• | challenges in the integration of operations and systems and in managing the expanded operations; |
• | challenges in achieving anticipated business opportunities and growth prospects from combining the businesses of Camelot with the rest of our businesses; |
• | challenges in navigating complex regulatory requirements or to respond to future changes in regulatory environment in an effective and timely manner; and |
• | unanticipated additional costs and expenses resulting from integrating into our business additional personnel, operations, products, services, technology, internal controls and financial reporting responsibilities. |
• | the effectiveness of our sales force, particularly new salespeople, as we increase the size of our sales force; |
• | the discretionary nature of customers’ purchasing decisions and budget cycles; |
• | customers’ procurement processes, including their evaluation of our products and solutions; |
• | economic conditions and other factors affecting customer budgets; |
• | the regulatory environment in which our customers operate; |
• | integration complexity for a customer deployment; |
• | the customer’s familiarity with our products and solutions; |
• | evolving customer demands; and |
• | competitive conditions. |
• | failure to achieve the intended objectives, benefits or revenue-enhancing opportunities; |
• | non-occurrence of anticipated or speculative transactions and any resulting negative impact; |
• | costs and difficulties of integrating acquired businesses and managing a larger business; |
• | in the case of investments where we do not obtain management and operational control, lack of influence over the controlling partner or shareholder, which may prevent us from achieving our strategic goals in the investments; |
• | possible unsatisfactory operational or financial performance, including financial loss, or fraudulent activities of a target business; |
• | possible loss of key employees of a target business; |
• | potential claims or litigation regarding our board’s exercise of its duty of care and other duties required under applicable law in connection with any of our significant acquisitions or investments approved by the board; |
• | diversion of resources and management attention; |
• | regulatory hurdles and compliance risks, including the anti-monopoly and competition laws, rules and regulations of China and other jurisdictions and the enhanced compliance requirement for outbound acquisitions and investment under the laws and regulations of China; and |
• | in the case of acquisitions of businesses or assets outside of China, the need to integrate operations across different business cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries. |
• | issue additional equity securities that would dilute our existing shareholders; |
• | use cash that we may need in the future to operate our business; |
• | incur large charges or substantial liabilities; |
• | incur debt on terms unfavorable to us or that we turn out to be unable to repay; |
• | encounter difficulties in retaining key employees of the acquired company or integrating diverse software codes or business cultures; |
• | encounter difficulties in conducting sufficient and effective due diligence on potential targets and unforeseen or hidden liabilities or additional incidences of non-compliance, operating losses, costs and expenses that may adversely affect us following our acquisitions or investments or other strategic transactions; and |
• | become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges. |
• | the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; |
• | our ability to effectively price our products in competitive international markets; |
• | new and different sources of competition; |
• | potentially greater difficulty collecting accounts receivable and longer payment cycles; |
• | higher or more variable network service provider fees outside of China; |
• | the need to adapt and localize our products for specific countries; |
• | the need to offer customer support in various languages; |
• | difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; |
• | difficulties with differing technical and environmental standards, data privacy and telecommunications regulations and certification requirements outside China, which could prevent customers from deploying our products or limit their usage; |
• | compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and United Kingdom Bribery Act of 2010; |
• | tariffs and other non-tariff barriers, such as quotas and local content rules; |
• | more limited protection for intellectual property rights in some countries; |
• | adverse tax consequences; |
• | fluctuations in currency exchange rates, which could increase the price of our products outside of China, increase the expenses of our international operations and expose us to foreign currency exchange rate risk; |
• | currency control regulations, which might restrict or prohibit our conversion of other currencies into RMB; |
• | restrictions on the transfer of funds; and |
• | political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location. |
• | investigations, enforcement actions, and sanctions; |
• | mandatory changes to our network and products; |
• | disgorgement of profits, fines, and damages; |
• | civil and criminal penalties or injunctions; |
• | liability for breaches of agreements with, and claims for damages by our customers; |
• | termination of contracts; |
• | loss of intellectual property rights; |
• | failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings necessary to conduct our operations; and |
• | temporary or permanent debarment from sales to public service organizations. |
• | macro-economic and other conditions in China and worldwide; |
• | fluctuations in demand for or pricing of our solutions and products; |
• | our ability to attract new customers; |
• | our ability to retain our existing customers; |
• | fluctuations in the usage of our products by our customers, which is directly related to the amount of revenues that we recognize from our customers; |
• | fluctuations in customer delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; |
• | changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; |
• | the timing of customer payments and any difficulty in collecting accounts receivable from customers; |
• | potential and existing customers choosing our competitors’ products or developing their own products in-house; |
• | timing of new functionality of our existing platform; |
• | the political or economic relationships between China and the United States; |
• | the stability and management of our supply chain; |
• | our ability to control costs, including our operating expenses; |
• | the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; |
• | the amount and timing of non-cash expenses, including share-based compensation, impairment of long-lived assets, and other non-cash charges; |
• | the amount and timing of costs associated with recruiting, training, and integrating new employees; |
• | the effects of acquisitions or other strategic transactions; |
• | expenses in connection with acquisitions or other strategic transactions; |
• | general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; |
• | the ability to maintain our relationship with business partners; |
• | the impact of new accounting pronouncements; |
• | changes in the competitive dynamics of our market, including consolidation among competitors or customers; |
• | significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform; and |
• | awareness of our brand and our reputation in our target markets. |
• | Collaboration with Kingsoft Group and Xiaomi. We have a number of cooperation arrangements with Kingsoft Group and Xiaomi, respectively. These collaboration arrangements may be less favorable to us than similar arrangements negotiated between unaffiliated third parties. Specifically, pursuant to the strategic cooperation and anti-dilution framework agreements entered into with each of Kingsoft Corporation Limited and Xiaomi Corporation, respectively, the Company has granted each of Kingsoft Corporation Limited and Xiaomi Corporation an anti-dilution right to acquire new shares under future securities offerings up to such amount so as to maintain the same shareholding percentage in the total issued share capital of our company immediately before and after such future securities offerings. |
• | Allocation of business opportunities. There may arise business opportunities in the future that both we, Kingsoft Group and Xiaomi are interested in and which may complement each of our respective businesses. Kingsoft Group and Xiaomi hold a large number of business interests, some of which may directly or indirectly compete with us. Kingsoft Group and Xiaomi may decide to take up business opportunities themselves, which would prevent us from taking advantage of those opportunities. |
• | Sale of shares in our company. Subject to its lock-up arrangements Kingsoft Group and Xiaomi may have with us and the underwriters and applicable securities laws, Kingsoft Group or Xiaomi may decide to sell all or a portion of the shares that they hold in our company to a third party, including to one of our competitors, thereby giving that third party substantial influence over our business and our affairs. Such a sale could be contrary to the interests of our employees or our other shareholders or holders of the ADS. |
• | Developing business relationships with Kingsoft Group’s and Xiaomi’s competitors. We may be limited in our ability to do business with Kingsoft Group’s and Xiaomi’s competitors, which may limit our ability to serve the best interests of our company and our other shareholders or holders of the ADS. |
• | Our directors may have conflicts of interest. Certain of our directors are also employees of Kingsoft Group or Xiaomi. Despite our policies in relation to conflict of interests, we cannot assure you that these relationships will not create, or appear to create, conflicts of interest when these persons are faced with decisions with potentially different implications for Kingsoft Group, Xiaomi and us. |
• | revoking the business licenses and/or operating licenses of such entities; |
• | discontinuing or placing restrictions or onerous conditions on our operation through any transactions between our PRC subsidiaries and the VIEs; |
• | imposing fines, confiscating the income from our PRC subsidiaries or the VIEs, or imposing other requirements with which our PRC subsidiaries or the VIEs may not be able to comply; |
• | requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIEs; or |
• | deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIEs. |
• | macro-economic factors in China |
• | variations in our revenues, earnings, or cash flow; |
• | fluctuations in operating metrics; |
• | announcements of new investments, acquisitions, strategic partnerships, capital raisings or capital commitments or joint ventures by us or our competitors; |
• | announcements of new offerings, solutions and services and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | detrimental negative publicity about us, our services or our industry; |
• | announcements of new regulations, rules or policies relevant to our business; |
• | additions or departures of key personnel; |
• | allegations of a lack of effective internal control over financial reporting, inadequate corporate governance policies, or allegations of fraud, among other things, involving China-based issuers; |
• | our major shareholders’ business performance and reputation; |
• | release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; |
• | regulatory developments affecting us or our industry; |
• | political or trade tensions between the United States and China; |
• | actual or potential litigation or regulatory investigations; |
• | any share repurchase program; |
• | proceedings instituted by the SEC against PRC-based accounting firms, including our independent registered public accounting firm; |
• | fluctuations of exchange rates between Renminbi and the U.S. dollar; and |
• | sales or perceived potential sales of additional ADSs. |
• | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
ITEM 4 |
INFORMATION ON THE COMPANY |
4.A. |
History and Development of the Company |
Taxation Scenario (1) |
||||
Statutory Tax and Standard Rates |
||||
Hypothetical pre-tax earnings(2) |
100 | % | ||
Tax on earnings at statutory rate of 25% |
(25 | )% | ||
Net earnings available for distribution |
75 | % | ||
Withholding tax at standard rate of 10% (3) |
(7.5 | )% | ||
Net distribution to Parent/Shareholders |
67.5 | % |
(1) | The tax calculation has been simplified for the purpose of this example. The hypothetical book pre-tax earnings amount, which does not consider timing differences, is assumed to equal the taxable income in the PRC. |
(2) | Under the terms of the VIE agreements, sales service fees are charged by our PRC subsidiaries to the VIEs and their subsidiaries. For all the periods presented, these fees are recognized as cost of revenues of the VIEs and their subsidiaries with a corresponding amount as service income by our PRC subsidiaries and eliminated in consolidation. For income tax purposes, our PRC subsidiaries, VIEs and their subsidiaries file income taxes on a separate company basis. The fees paid are recognized as a tax deduction by the VIEs and their subsidiaries and as income by our PRC subsidiaries and are tax neutral. Upon the instance that the VIEs and their subsidiaries reach a cumulative level of profitability, because our PRC subsidiaries occupy certain trademarks and copyrights, the agreements will be updated to reflect charges for such trademarks and copyrights usage on the basis that they will qualify for tax neutral treatment. |
(3) | China’s Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a Foreign Invested Enterprises (“FIE”) to its immediate holding company outside of China. A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to a qualification review at the time of the distribution. For the purpose of this hypothetical example, this table has been prepared based on a taxation scenario under which the full withholding tax would be applied. |
For the Year Ended December 31, 2019 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Total revenues (1) |
— | 129,889 | 3,882,352 | (55,888 | ) | 3,956,353 | ||||||||||||||
Net loss (2) |
(1,111,199 | ) | (213,519 | ) | (970,344 | ) | 1,183,863 | (1,111,199 | ) |
For the Year Ended December 31, 2020 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Total revenues (1) |
— | 474,262 | 6,377,158 | (274,113 | ) | 6,577,307 | ||||||||||||||
Net loss (2) |
(962,259 | ) | (48,756 | ) | (922,908 | ) | 971,725 | (962,198 | ) |
For the Year Ended December 31, 2021 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Total revenues (1) |
— | 1,347,970 | 7,972,143 | (259,329 | ) | 9,060,784 | ||||||||||||||
Net loss (2) |
(1,588,712 | ) | 51,751 | (1,556,904 | ) | 1,502,109 | (1,591,756 | ) |
(1) | The eliminations are mainly related to the service fees charged between our subsidiaries and VIEs and their subsidiaries. |
(2) | The eliminations are mainly related to the investment loss picked up from subsidiaries. |
As of December 31, 2020 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Current Assets: |
||||||||||||||||||||
Cash and cash equivalents |
68,012 | 1,927,154 | 1,429,508 | — | 3,424,674 | |||||||||||||||
Restricted cash |
— | — | — | — | — | |||||||||||||||
Accounts receivable, net |
— | 76,558 | 2,258,313 | — | 2,334,871 | |||||||||||||||
Short-term investments |
217,448 | 2,475,571 | — | — | 2,693,019 | |||||||||||||||
Prepayments and other assets |
266,280 | — | 630,121 | (9,315 | ) | 887,086 | ||||||||||||||
Amounts due from related parties |
— | 793 | 204,275 | — | 205,068 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
551,740 |
4,480,076 |
4,522,217 |
(9,315 |
) |
9,544,718 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-current assets: |
||||||||||||||||||||
Property and equipment, net |
— | 229,170 | 1,727,620 | — | 1,956,790 | |||||||||||||||
Intangible assets, net |
— | 1,593 | 14,980 | — | 16,573 | |||||||||||||||
Prepayments and other assets |
— | 1,846 | 9,978 | — | 11,824 | |||||||||||||||
Goodwill |
— | — | — | — | — | |||||||||||||||
Equity investments |
— | 40,332 | 86,251 | — | 126,583 | |||||||||||||||
Investments in subsidiaries |
— | — | — | — | — | |||||||||||||||
Amounts due from related parties |
— | 1,046 | 4,712 | — | 5,758 | |||||||||||||||
Operating lease right-of-use |
— | 56,630 | 210,338 | — | 266,968 | |||||||||||||||
Deferred tax assets |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-current assets |
— |
330,617 |
2,053,879 |
— |
2,384,496 |
|||||||||||||||
Amounts due from subsidiaries of the Group |
7,983,060 |
12,076,587 |
1,631,592 |
(21,691,239 |
) |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
8,534,800 |
16,887,280 |
8,207,688 |
(21,700,554 |
) |
11,929,214 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current Liabilities: |
||||||||||||||||||||
Accounts payable |
— | 43,927 | 2,013,428 | — | 2,057,355 | |||||||||||||||
Accrued expenses and other liabilities |
256,630 | 67,437 | 521,307 | — | 845,374 | |||||||||||||||
Short-term bank loans |
— | — | 278,488 | — | 278,488 | |||||||||||||||
Long-term bank loan, current portion |
— | — | 74,351 | — | 74,351 | |||||||||||||||
Income tax payable |
2,524 | 17,995 | 45 | — | 20,564 | |||||||||||||||
Amounts due to related parties |
407 | 55,796 | 56,795 | — | 112,998 | |||||||||||||||
Current operating lease liabilities |
— | 20,208 | 56,261 | — | 76,469 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
259,561 |
205,363 |
3,000,675 |
— |
3,465,599 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-current liabilities: |
||||||||||||||||||||
Deferred tax liabilities |
— | — | 29 | — | 29 | |||||||||||||||
Other liabilities |
33,558 | — | 7,020 | — | 40,578 | |||||||||||||||
Non-current operating lease liabilities |
— | 36,946 | 146,012 | — | 182,958 | |||||||||||||||
Amounts due to related parties |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
33,558 |
36,946 |
153,061 |
— |
223,565 |
|||||||||||||||
Amounts due to subsidiaries of the Group |
1,692 |
13,418,377 |
8,271,146 |
(21,691,215 |
) |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
294,811 |
13,660,686 |
11,424,882 |
(21,691,215 |
) |
3,689,164 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||
Current Assets: |
||||||||||||||||||||
Cash and cash equivalents |
69,393 | 1,938,488 | 2,209,647 | — | 4,217,528 | |||||||||||||||
Restricted cash |
— | 149,389 | 89,704 | — | 239,093 | |||||||||||||||
Accounts receivable, net |
— | 400,115 | 3,170,860 | — | 3,570,975 | |||||||||||||||
Short-term investments |
1,029,472 | 1,461,584 | — | — | 2,491,056 | |||||||||||||||
Prepayments and other assets |
53,618 | 726,053 | 907,350 | — | 1,687,021 | |||||||||||||||
Amounts due from related parties |
— | 23,006 | 184,137 | — | 207,143 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
1,152,483 |
4,698,635 |
6,561,698 |
— |
12,412,816 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-current assets: |
||||||||||||||||||||
Property and equipment, net |
— | 207,010 | 2,157,093 | — | 2,364,103 | |||||||||||||||
Intangible assets, net |
— | 1,076,105 | 93,662 | — | 1,169,767 | |||||||||||||||
Prepayments and other assets |
— | 2,030 | 27,036 | — | 29,066 | |||||||||||||||
Goodwill |
— | 4,561,033 | 64,082 | — | 4,625,115 | |||||||||||||||
Equity investments |
— | 44,922 | 162,244 | — | 207,166 | |||||||||||||||
Investments in subsidiaries |
5,328,424 | — | — | (5,328,424 | ) | — | ||||||||||||||
Amounts due from related parties |
— | 1,046 | 4,712 | — | 5,758 | |||||||||||||||
Operating lease right-of-use |
— | 71,543 | 184,908 | — | 256,451 | |||||||||||||||
Deferred tax assets |
— | 7,798 | — | — | 7,798 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-current assets |
5,328,424 |
5,971,487 |
2,693,737 |
(5,328,424 |
) |
8,665,224 |
||||||||||||||
Amounts due from subsidiaries of the Group |
5,508,311 |
15,446,362 |
2,157,428 |
(23,112,101 |
) |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
11,989,218 |
26,116,484 |
11,412,863 |
(28,440,525 |
) |
21,078,040 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable |
— | 205,145 | 2,733,487 | — | 2,938,632 | |||||||||||||||
Accrued expenses and other liabilities |
182,075 | 832,897 | 1,208,868 | — | 2,223,840 | |||||||||||||||
Short-term bank loans |
— | — | 1,348,166 | — | 1,348,166 | |||||||||||||||
Long-term bank loan, current portion |
— | — | — | — | — | |||||||||||||||
Income tax payable |
3,307 | 55,884 | 1,026 | — | 60,217 | |||||||||||||||
Amounts due to related parties |
829 | 37,875 | 797,731 | — | 836,435 | |||||||||||||||
Current operating lease liabilities |
— | 37,918 | 70,672 | — | 108,590 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
186,211 |
1,169,719 |
6,159,950 |
— |
7,515,880 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-current liabilities: |
||||||||||||||||||||
Deferred tax liabilities |
— | 205,889 | — | — | 205,889 | |||||||||||||||
Other liabilities |
1,194,212 | 31,490 | 6,975 | — | 1,232,677 | |||||||||||||||
Non-current operating lease liabilities |
— | 37,232 | 121,057 | — | 158,289 | |||||||||||||||
Amounts due to related parties |
— | — | 472,882 | — | 472,882 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
1,194,212 |
274,611 |
600,914 |
— |
2,069,737 |
|||||||||||||||
Amounts due to subsidiaries of the Group |
4,846 |
14,022,681 |
9,084,471 |
(23,111,998 |
) |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
1,385,269 |
15,467,011 |
15,845,335 |
(23,111,998 |
) |
9,585,617 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,2019 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||
Net cash (used in) generated from operating activities |
(2,538,479 | ) | 2,884,725 | (785,378 | ) | — | (439,132 | ) | ||||||||||||
Net cash generated from (used in) investing activities |
2,166,312 | (1,143,151 | ) | (836,981 | ) | 697,067 | 883,247 | |||||||||||||
Net cash generated from (used in) financing activities |
370,294 | (1,226,822 | ) | 1,618,102 | (697,067 | ) | 64,507 |
For the Year Ended December 31, 2020 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||
Net cash (used in) generated from operating activities |
(6,203,310 | ) | 6,746,356 | (833,479 | ) | — | (290,433 | ) | ||||||||||||
Net cash used in investing activities |
(218,674 | ) | (5,247,293 | ) | (1,471,637 | ) | 2,623,601 | (4,314,003 | ) | |||||||||||
Net cash generated from financing activities |
5,945,666 | — | 2,802,088 | (2,623,601 | ) | 6,124,153 |
For the Year Ended December 31, 2021 |
||||||||||||||||||||
Kingsoft Cloud |
Subsidiaries |
VIEs and their subsidiaries |
Eliminations |
Consolidated |
||||||||||||||||
(RMB in thousands) | ||||||||||||||||||||
Net cash generated from (used in) operating activities |
1,178,019 | (928,140 | ) | (958,748 | ) | — | (708,869 | ) | ||||||||||||
Net cash (used in) generated from investing activities |
(1,179,393 | ) | 1,170,356 | (843,586 | ) | 431,000 | (421,623 | ) | ||||||||||||
Net cash (used in) generated from financing activities |
(815 | ) | 31,739 | 2,612,563 | (431,000 | ) | 2,212,487 |
4.B. |
Business Overview |
• | Extensive cloud infrastructure. |
• | Cutting-edge cloud-native products. |
• | Well-architected industry-specific solutions. |
• | End-to-end fulfillment and deployment. . |
• | Kingsoft Cloud Elastic Compute (“KEC”): KEC provides flexible and scalable computing capacity, enabling developers to easily perform large scale computing and deployment in the required server environment. Cloud servers can be deployed at any time on-demand to improve operation and maintenance efficiency. Powered by our automatic scaling technology, users are able to automatically adjust the computing resources based on their business needs, thereby enhancing the efficiency of computing power consumption and reducing the total cost of usage. For users with strong demands for on-premise resource allocation, security and compliance, we also offer Kingsoft Cloud Dedicated Host (“KDH”) to provide an exclusive virtual resource pool. |
• | Kingsoft Cloud Bare Metal Servers—Elastic Physical Compute (“EPC”): EPC provides exclusive physical servers with excellent performance and native cloud network function support. It helps users quickly build and expand application services with high performance requirements. Users can easily manage the EPC server’s network configuration, storage configuration and operating system interface. |
• | Kingsoft Cloud GPU Elastic Physical Compute (“GEPC”): GEPC provides accelerated computing based on GPUs. It can be used in scientific computing, deep learning, image rendering, and GPU-based audio and video codec scenarios to provide stable, fast and elastic computing services and convenient unified cloud server management services. |
• | Kingsoft Cloud Edge Node Computing (“KENC”): KENC is a distributed edge computing resource pool. It provides customers with edge virtual machines, edge dockers, network security groups, load balancing, virtual private cloud and other functions. It helps users reduce access delay, save costs, and enables integration of more industry-specific applications. |
• | Kingsoft Cloud Container Engine (“KCE”): KCE is developed and adapted based on the native Kubernetes to seamlessly integrate containers with other basic computing, storage and network resources, products and services we offer. It provides users with reliable and scalable container management services with high performance. |
• | Kingsoft Cloud Container Instance (“KCI”): KCI provides a server-less container service that helps users to manage the full life-cycle of their containers in the cloud without purchasing or managing the underlying servers. Based on KCI, we provide users with container services that are fully compatible with the Kubernetes ecosystem. Users can directly deploy containerized applications and manage them in a Kubernetes-native way without the need to purchase or manage underlying nodes. This facilitates the deployment of Kubernetes applications. |
• | Server Load Balancing (“SLB”): SLB is a network service that distributes traffic to multiple cloud servers within a computing cluster. Traffic distribution can quickly improve the external service capability of the application system. SLB hides the actual service port, enhances the security of the internal system and improves the availability of the application system by eliminating single point service failures. |
• | Elastic IP (“EIP”): EIP is an IP address associated with the user account, which can be bound to any cloud server, cloud physical host or load balancing of the user. With EIP, users can quickly re-map an address to another cloud server, cloud physical host or load balancing in their accounts to shield instance failures. |
• | Virtual Private Cloud (“VPC”): VPC helps users build a customized, logically isolated and proprietary network. Users can use a dedicated connection or VPN connection to build a hybrid cloud network with VPC and their existing data centers. All cloud resources can be connected to a VPC network, which also allows users to establish and manage security policies and network access control policies. We also provide peering service to connect two VPCs for data synchronization, enable users to reside multiple VPCs across different regions. |
• | Cloud Enterprise Network: Cloud Enterprise Network enable customers to establish connections between different VPC networks, and between VPC networks and local data centers. Cloud Enterprise Network features fast, high-quality and secured transmission, helping customers build an enterprise-level network. |
• | Kingsoft Cloud Relational Database Service (“KRDS”): KRDS is a stable, reliable and flexible online relational database that can be used at any time. It has multiple security protection features and an optimized performance monitoring system, and provides database backup, recovery and optimization features. We offer various versions of KRDS at users’ choice based on the type of their servers. |
• | Kingsoft Cloud NoSQL Database: In addition to relational databases, we also offer NoSQL databases, which are non-tabular databases built for specific non-relational data models and have flexible schemas for building modern applications. Based on the types of data, we offer high-performance, stable and reliable NoSQL database for Redis for key-value storage, NoSQL database for MongoDB for document storage, and NoSQL database for InfluxDB for time series data. |
• | DragonBase: We provide distributed database DragonBase for enterprises and organizations. Featuring distributed deployment, high availability, smooth up-scaling, and enterprise-level security, DragonBase focuses on solutions to address customer’s needs on massive data storage and high-concurrency operation and it also provides supportive systems and facilitate automated performance monitoring, operation, maintenance and security audit. |
• | Kingsoft Cloud Data Warehouse (KDW): KDW is data warehouse service deployed on a massively parallel processing architecture, enabling users to use a large number of computers to simultaneously perform coordinated computations in parallel and thus enhancing computation performance. It is a large-scale PB-level cloud database warehouse solution with smooth upscaling ability that supports the separation of computing and storage, multi-dimensional online data analysis and retrieval, and offline data processing. KDW enables interactive query and analytics of massive relational data and is advantageous in both internet and traditional industries. |
• | Kingsoft Cloud MapReduce (“KMR”): KMR is a cloud big data platform allowing users to process vast amounts of data quickly and cost-effectively at scale. KMR gives users the engine and elasticity to run large-scale analysis at a fraction of the cost of traditional on-premise clusters. |
• | Kingsoft Cloud DataCloud (“DataCloud”): Based on a cutting-edge data processing framework, DataCloud provides one-stop cloud-based data services, including data consolidation, integration, processing, management and analysis. DataCloud can be deployed on-premise to enhance control and security. With the help of DataCloud, through advanced data lake architectures, users can manage and process ultra-large-scale structured and unstructured data, build data-lake architecture, and create middleware data platform for enterprise data. It empowers users with full lifecycle data management capability. |
• | Kingsoft Cloud Elasticsearch Service (“KES”): KES is a cloud-based, fully managed service based on the open source search engine, Elasticsearch. It integrates Kibana, an open source data visualization dashboard software, and common plug-ins to provide near-real-time storage, search, and analysis features that allow user to manage ultra-large datasets in a visualized, real-time and efficient manner. |
• | Kingsoft Cloud Advanced Defense (“KAD”): KAD is a managed Distributed Denial of Service (DDoS) protection service that safeguards our users’ applications running on our cloud from attack. |
• | Kingsoft Cloud Host Security (“KHS”): KHS ensures all-round host security for cloud server and EPC, and is able to quickly identify security problems, monitor security status and comply with security requirements. |
• | Kingsoft Cloud Web Application Firewall (“WAF”): WAF is a firewall for web applications, ensuring security and reliability of users’ websites. Users can seamlessly deploy WAF without altering any system structure. |
• | Kingsoft Cloud Standard Storage Service (“KS3”): KS3 is a massive, low-cost, secure and highly reliable distributed cloud storage product to address users’ pain points such as storage expansion, data security and distributed access. KS3 offers exabyte-level storage with high queries per second per single bucket. Users can conveniently store and retrieve various data files such as pictures, audio, video and text. |
• | Elastic Block Storage (“EBS”): EBS is a block-level data storage service provided for cloud server instances that can be connected to any running KEC instance in the same data center. EBS features high availability, reliability, flexibility and ease of use. It also supports advanced features such as snapshots and mirroring. |
• | Kingsoft Cloud File Storage (“KFS”): KFS is a file storage service for KEC, EPC and container services. With standard file access protocols, users do not need to modify existing applications. KFS offers users a distributed file system with unlimited capacity, performance scaling, single namespace, multi-party sharing, high reliability and availability. |
• | Kingsoft Cloud Archive Storage (“KArchive”): KArchive provides offline storage services that are cost-effective, reliable, and easy to manage. It applies to long-term archive and redundancy backup of a large amount of data. |
• | KingStorage: KingStorage series are enterprise-level hybrid cloud storage products that include distributed blocks, files and objects cloud storage resources. They provide cloud native benefits and address customers’ demands for massive data storage, while ensuring high reliability and seamless compatibility with customers’ original IT infrastructure. |
• | Kingsoft Cloud Live-video Service (“KLS”): KLS is a network system based on Kingsoft Cloud’s comprehensive IaaS infrastructure. Through industry-leading video-encoding technology and powerful distribution capacities, KSL provides low-latency, high-concurrency, and stable live streaming services. KLS supports live streaming upload and download acceleration, as well as real-time transcoding, recording, watermarking, screenshots, second-level streams status management, delayed playback and many other value-added functions and applications. Meanwhile, KLS can be seamlessly integrated with the PaaS platform of Kingsoft Cloud Video Cloud, and it features fast access, multi-terminal adaptation, multi-protocol support, and easy-to-use. |
• | Kingsoft Cloud Media Transcoder is a distributed system for multi-media processing service. Based on the deep learning of massive multimedia data, Kingsoft Cloud Media Transcoder establishes a scientific video quality evaluation system, combined with powerful encoding/decoding technology, to provide fast, intelligent and stable media processing service. |
• | Kingsoft Cloud Edge Computing Network (“KECN”): KECN is a distributed edge computing network that supports edge computing scenarios such as edge bandwidth, AI inference, image rendering, gaming and IoT. As of the date of this annual report, we have established over 0.5 million end nodes and 6,000 edge nodes, covering most regions and operators in China and ensuring high-speed and low-latency for customers. |
• | Kingsoft Cloud Delivery Network (“KCDN”): KCDN is a distributed network consisting of server clusters of edge nodes covering different regions, which distributes user content to edge nodes, effectively resolves the congestion of an internet network, and improves the response speed of users to visit the websites and the availability of the websites. |
• | Kingsoft Cloud Image Enhancement (“KIE”): KIE is an intelligent image enhancement product, which is able to recover and enhance image details by deep learning algorithms. It can also enhance resolution and output high-quality images. |
• | Kingsoft Cloud Smart High Definition (“KSHD”): KSHD integrates various computer vision and video coding technologies to substantially improve the quality of experience. It uses deep-learning-based denoise and enhance algorithms to reduce compression artifacts as well as enhance details. Meanwhile, KSHD is capable of analyzing video by way of classification and quality assessment, so as to improve the coding efficiency of video codec. |
• | Scalability at large scale: Galaxy Stack enables large-scale physical node deployment, massive tenant management and customer service capabilities, which strongly support customers’ massive business operations. Customers can easily adjust the physical node deployment based on their real-time demands. |
• | Security: Privatized deployment meets the requirements of enterprises and organizations for high-grade information security protection, data security and business continuity. |
• | Autonomous control: Galaxy Stack supports customers’ autonomous control operation and maintenance. |
• | High speed: Our video cloud solutions provide a quick and uninterrupted video streaming and archiving experience. |
• | Stability: Our video cloud solutions offer high stability and ensure performance. The distributed network eliminates incidents and disruptions, which can effectively lower packet loss rate. |
• | Security: Our video cloud solutions are able to maximize data security by configuring authentication settings for content. |
• | High definition: Our video cloud solutions provide optimized encoding and decoding solutions that allow 4K-8K ultra high definition video transmission through the internet. |
• | Digitalization: Public service organizations are able to connect data across multiple departments, improve work efficiency and enhance security, which ultimately realize digital transformation. |
• | Reliability: The cloud platform adopts high-availability technology and security protection system, which can guarantee the stable and uninterrupted operation of the platform. |
• | Comprehensiveness: We can provide a series of services from the construction of underlying cloud data center, big data management, big data analytics, etc., which meets the public service organizations’ requirements for critical aspects of cloud platform product functions. |
• | Digitalization: Leveraging our comprehensive Picture Archiving & Communication System (“PACS”), we provide solutions of medical image storage, sharing, management, quality control, and related applications. We help healthcare institutions develop a complete medical image ecosystem by leveraging unified data resources, data processing and computing to support unified system construction, deployment, and service solutions. We help healthcare institutions and hospitals improve radiology workflow, better manage the storage of images, and realize healthcare interoperability. |
• | Intelligent and Collaborative Operation: We help customers build regional healthcare platforms with unified cloud infrastructure, cloud-native technology for the middle office, big data platforms and medical resource systems. We provide DataOps capability to help the healthcare industry solve data silos, improve collaboration and the automation of data flow, and enhance collaborative synergies among regional healthcare systems. |
• | Low cost construction and on demand use: All the application systems are based on the cloud computing architecture and can be used as needed without heavy assets investment. |
• | Improving private medical service capability: The solution represents a cloud upgrade for grassroots information system to provide private medical services and enhance functions such as intelligent assistance and remote medical service, which significantly improves private medical service capability. |
• | Implementation of hierarchical diagnosis and treatment system: The solution breaks through the information barrier between superior and subordinate medical institutions in the same region, which realizes information interaction and data sharing. |
• | High concurrency: Our game cloud solutions can effectively reduce the system requirements and pressure for game servers through large-scale and simultaneous cloud computation, which in turn allows for a large number of concurrent players. |
• | Low latency: Developed upon our extensive network infrastructure across the world at large scale, we are able to satisfy game companies’ demands for low latency and enable them to deliver high-speed game experiences. |
• | Security: Our game cloud solutions offer various security protections against isolated incidents and security failures to ensure player experience is not affected and to maintain high-availability at all times. |
• | Failure recovery: By integrating high-quality EBS, Elastic IP and SLB products, our game cloud solutions enable game companies to easily recover from failures in application or underlying layers within seconds. |
• | Disaster recovery: Our game cloud solutions provide multipath BGP and cross-region elastic deployment, eliminating operation risks from failures in any single data center |
• | Digital transformation: Our customized financial service architecture solutions, by providing high-performance cloud computing service at lower costs, enable financial institutions to achieve digital transformation and migrate to cloud. |
• | Cloud native benefits: Our financial service cloud native solutions enable financial institutions to enjoy various benefits brought by cloud technologies, including high security, reliability, availability and flexibility. |
• | Business innovation: Our intelligent financial service solutions equip financial institutions with big data analytics capabilities, enabling them to easily and efficiently realize business innovations. |
• | We put every effort into protecting user privacy and data security. See “—Data Privacy and Security.” |
• | Dedicated to providing cutting-edge cloud products and solutions, intellectual property rights protection is of paramount importance to us. We firmly protect our own innovation achievements and also fully respects that of other parties. |
• | We dedicate ourselves to building a fair and transparent working environment and adopt a zero-tolerance attitude towards corruption, bribery and any other unethical behaviors. |
License/Permit |
Entity Holding the License/ Permit |
Grant Date |
Expiration Date | |||
VAT License |
Kingsoft Cloud Network |
July 22, 2020 |
March 18, 2024 | |||
VAT License |
Kingsoft Cloud Network |
February 24, 2021 |
April 11, 2023 | |||
VAT License |
Beijing Jinxun Ruibo |
September 17, 2019 |
August 23, 2022 Note 1 | |||
VAT License |
Beijing Jinxun Ruibo |
February 18, 2022 |
February 18, 2027 | |||
VAT License |
Kingsoft Cloud Information |
January 17, 2019 |
January 17, 2024 | |||
VAT License |
Kingsoft Cloud Information |
September 30, 2021 |
September 30, 2026 | |||
VAT License |
Kingsoft Cloud Network |
November 28, 2017 |
November 28, 2022 | |||
VAT License |
Nanjing Qianyi |
April 9, 2018 |
January 9, 2023 | |||
VAT License |
Nanjing Qianyi |
April 3, 2018 |
December 7, 2022 | |||
VAT License |
Wuhan Kingsoft Cloud |
December 14, 2018 |
December 14, 2023 | |||
VAT License |
Wuhan Kingsoft Cloud |
September 30, 2021 |
December 14, 2025 | |||
VAT License |
Shanghai Jinxun Ruibo |
January 24, 2022 |
January 24, 2027 | |||
VAT License |
Shenzhen Yunfan |
July 30, 2021 |
October 26, 2025 |
4.C. |
Organizational Structure |
• | the licensing of software, copyrights and know-how legally owned by Beijing Kingsoft Cloud; |
• | the provision of comprehensive consultancy services related to business operation, management and technology; |
• | the development, maintenance and updates of hardware and database; |
• | the development of application software and related operational support and updates; |
• | the provision of technical training for employees; |
• | the collection and research of technical information; and |
• | the provision of other related services as required by Zhuhai Kingsoft Cloud from time to time. |
• | the ownership structures of Beijing Kingsoft Cloud, Zhuhai Kingsoft Cloud, Yunxiang Zhisheng and Kingsoft Cloud Information, did not violate any applicable PRC laws, regulations or rules currently in effect; and |
• | the agreements among Beijing Kingsoft Cloud, Zhuhai Kingsoft Cloud and its shareholders, Yunxiang Zhisheng, and Kingsoft Cloud Information and its shareholders governed by PRC laws, as described above, are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules and regulations currently in effect, and do not violate any applicable PRC laws, rules or regulations currently in effect. |
4.D. |
Property, Plant and Equipment |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5 |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
5.A. |
Operating Results |
For the Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Public Cloud Services |
||||||||||||
Number of Public Cloud Service Premium Customers |
175 | 191 | 222 | |||||||||
Net dollar retention rate of Public Cloud Service Premium Customers (1) |
155 | % | 146 | % | 114 | % | ||||||
Enterprise Cloud Services |
||||||||||||
Number of Enterprise Cloud Service Premium Customers |
67 | 124 | 382 | |||||||||
Total |
||||||||||||
Number of Premium Customers (2) |
243 | 322 | 597 | |||||||||
Average revenues per Premium Customer (RMB in million) (3) |
15.9 | 20.0 | 14.9 |
(1) | Net dollar retention rate of Public Cloud Service Premium Customers is calculated by dividing the revenues from our Public Cloud Service Premium Customers, who were also our Public Cloud Service Premium Customers in the previous year, in the indicated period by the revenues from all of our Public Cloud Service Premium Customers in the previous corresponding period. |
(2) | The number of Premium Customers for 2021 also includes customers of Camelot and Shenzhen Yunfan with revenue of over RMB700,000 for the same year. |
(3) | Average revenues per Premium Customer for 2021 is calculated by dividing (i) consolidated revenues of our Group, by (ii) the number of Premium Customers for 2021. |
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||
Public cloud services |
3,458,843 | 87.4 | 5,166,851 | 78.5 | 6,159,085 | 966,495 | 68.0 | |||||||||||||||||||||
Enterprise cloud services |
486,308 | 12.3 | 1,372,689 | 20.9 | 2,897,817 | 454,731 | 32.0 | |||||||||||||||||||||
Others |
11,202 | 0.3 | 37,767 | 0.6 | 3,882 | 609 | 0.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Revenues |
3,956,353 |
100.0 |
6,577,307 |
100.0 |
9,060,784 |
1,421,835 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenues |
||||||||||||||||||||||||||||
IDC costs |
2,856,591 | 72.3 | 4,058,848 | 65.2 | 5,101,528 | 800,541 | 58.6 | |||||||||||||||||||||
Depreciation and amortization costs |
599,193 | 15.2 | 746,245 | 12.0 | 785,173 | 123,211 | 9.0 | |||||||||||||||||||||
Fulfillment costs |
411,438 | 10.4 | 1,206,679 | 19.4 | 1,851,342 | 290,516 | 21.3 | |||||||||||||||||||||
Solution development and services costs |
43,954 | 1.2 | 37,148 | 0.6 | 678,178 | 106,421 | 7.8 | |||||||||||||||||||||
Other costs |
37,468 | 0.9 | 171,404 | 2.8 | 293,275 | 46,021 | 3.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total cost of revenues |
3,948,644 |
100.0 |
6,220,324 |
100.0 |
8,709,496 |
1,366,710 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||
Research and development expenses |
595,169 | 51.7 | 775,130 | 49.5 | 1,043,811 | 163,797 | 48.2 | |||||||||||||||||||||
Selling and marketing expenses |
317,426 | 27.6 | 409,211 | 26.2 | 518,167 | 81,312 | 23.9 | |||||||||||||||||||||
General and administrative expenses |
238,648 | 20.7 | 379,892 | 24.3 | 601,702 | 94,420 | 27.8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
1,151,243 |
100.0 |
1,564,233 |
100.0 |
2,163,680 |
339,529 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Research and development Expenses |
||||||||||||||||||||||||||||
Staff expenses (excluding share-based compensation) |
483,308 | 81.2 | 590,480 | 76.2 | 744,697 | 116,859 | 71.4 | |||||||||||||||||||||
Share-based compensation |
42,974 | 7.2 | 88,129 | 11.4 | 150,389 | 23,599 | 14.4 | |||||||||||||||||||||
Other miscellaneous expenses |
68,887 | 11.6 | 96,521 | 12.4 | 148,725 | 23,339 | 14.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total research and development expenses |
595,169 |
100.0 |
775,130 |
100.0 |
1,043,811 |
163,797 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Selling and Marketing Expenses |
||||||||||||||||||||||||||||
Staff expenses (excluding share-based compensation) |
187,908 | 59.2 | 261,068 | 63.8 | 308,077 | 48,344 | 59.5 | |||||||||||||||||||||
Share-based compensation |
37,808 | 11.9 | 62,270 | 15.2 | 72,594 | 11,392 | 14.0 | |||||||||||||||||||||
Marketing and promotion expenses |
29,271 | 9.2 | 15,348 | 3.8 | 24,039 | 3,772 | 4.6 | |||||||||||||||||||||
Depreciation and amortization expenses |
662 | 0.2 | 841 | 0.2 | 50,559 | 7,934 | 9.8 | |||||||||||||||||||||
Other miscellaneous expenses |
61,777 | 19.5 | 69,684 | 17.0 | 62,898 | 9,870 | 12.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total selling and marketing expenses |
317,426 |
100.0 |
409,211 |
100.0 |
518,167 |
81,312 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
General and Administrative Expenses |
||||||||||||||||||||||||||||
Staff expenses (excluding share-based compensation) |
90,154 | 37.8 | 79,590 | 21.0 | 165,861 | 26,027 | 27.6 | |||||||||||||||||||||
Share-based compensation |
31,988 | 13.4 | 169,101 | 44.5 | 193,886 | 30,425 | 32.2 | |||||||||||||||||||||
Credit losses |
61,920 | 25.9 | 31,881 | 8.4 | 114,124 | 17,909 | 19.0 | |||||||||||||||||||||
Other miscellaneous expenses |
54,586 | 22.9 | 99,320 | 26.1 | 127,831 | 20,059 | 21.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total general and administrative expenses |
238,648 |
100.0 |
379,892 |
100.0 |
601,702 |
94,420 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Gross profit |
7,709 | 356,983 | 351,288 | 55,125 | ||||||||||||
Adjustments: |
||||||||||||||||
Share-based compensation (allocated in cost of revenues) |
8,509 | 10,614 | 17,481 | 2,743 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted gross profit |
16,218 | 367,597 | 368,769 | 57,868 | ||||||||||||
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
(%) |
||||||||||||
Gross margin |
0.2 | 5.4 | 3.9 | |||||||||
Adjusted gross margin |
0.4 | 5.6 | 4.1 |
For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Net loss |
(1,111,199 |
) |
(962,198 |
) |
(1,591,756 |
) |
(249,781 |
) | ||||||||
Adjustment: |
||||||||||||||||
Share-based compensation |
121,279 | 330,114 | 434,350 | 68,159 | ||||||||||||
Foreign exchange loss/(gain) |
38,961 | (188,800 | ) | (37,822 | ) | (5,935 | ) | |||||||||
other gain, net |
— | (14,301 | ) | (83,606 | ) | (13,120 | ) | |||||||||
Other (income)/expense, net |
(6,612 | ) | 10,810 | (95,047 | ) | (14,915 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted net loss |
(957,571 |
) |
(824,375 |
) |
(1,373,881 |
) |
(215,592 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted net loss |
(957,571 |
) |
(824,375 |
) |
(1,373,881 |
) |
(215,592 |
) | ||||||||
Adjustments: |
||||||||||||||||
Interest income |
(78,612 | ) | (77,118 | ) | (71,942 | ) | (11,289 | ) | ||||||||
Interest expense |
4,925 | 9,453 | 52,040 | 8,166 | ||||||||||||
Income tax expense |
9,003 | 14,904 | 15,741 | 2,470 | ||||||||||||
Depreciation and amortization |
604,581 | 758,038 | 855,604 | 134,263 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
(417,674 |
) |
(119,098 |
) |
(522,438 |
) |
(81,982 |
) | ||||||||
|
|
|
|
|
|
|
|
For the Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
(%) |
||||||||||||
Net loss margin |
(28.1 | ) | (14.6 | ) | (17.6 | ) | ||||||
Adjusted net loss margin |
(24.2 | ) | (12.5 | ) | (15.2 | ) | ||||||
Adjusted EBITDA margin |
(10.6 | ) | (1.8 | ) | (5.8 | ) |
5.B. |
Liquidity and Capital Resources |
For the Year Ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Net cash used in operating activities |
(439,132 | ) | (290,433 | ) | (708,869 | ) | (111,236 | ) | ||||||||
Net cash generated from (used in) investing activities |
883,247 | (4,314,003 | ) | (421,623 | ) | (66,162 | ) | |||||||||
Net cash generated from financing activities |
64,507 | 6,124,153 | 2,212,487 | 347,187 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in cash, cash equivalents and restricted cash |
508,622 | 1,519,717 | 1,081,995 | 169,789 | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of the year |
1,507,071 | 2,023,263 | 3,424,674 | 537,406 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
7,570 | (118,306 | ) | (50,048 | ) | (7,854 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at end of the year |
2,023,263 |
3,424,674 |
4,456,621 |
699,341 |
||||||||||||
|
|
|
|
|
|
|
|
5.C. |
Research and Development |
5.D. |
Trend Information |
5.E. |
Critical Accounting Estimates |
ITEM 6 |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
6.A. |
Directors and Senior Management |
Directors and Executive Officers |
Age |
Position/Title | ||
Jun Lei | 52 | Chairman of the Board of Directors | ||
Tao Zou | 47 | Vice Chairman of the Board of Directors | ||
Yulin Wang | 46 | Director, Chief Executive Officer | ||
Haijian He | 40 | Chief Financial Officer | ||
Hangjun Ye | 45 | Director | ||
Shouxing Liang | 42 | Chief Operating Officer | ||
Shouhu Wang | 52 | President | ||
Tao Liu | 40 | Senior Vice President | ||
Kaiyan Tian | 44 | Vice President | ||
Yifeng Qian | 36 | Vice President | ||
Mingto Yu | 59 | Independent Director | ||
Hang Wang | 50 | Independent Director | ||
Jingyuan Qu | 49 | Independent Director |
6.B. |
Compensation |
Ordinary Shares Underlying Share-Based Awards Granted |
Exercise Price (US$/Share) |
Date of Grant |
Date of Expiration |
|||||||||||||
Jun Lei |
— | — | — | — | ||||||||||||
Tao Zou |
— | — | — | — | ||||||||||||
Yulin Wang |
35,200,000 | nil to 0.86978 | January 20, 2020 | January 20, 2030 | ||||||||||||
Haijian He |
* | nil to 0.86978 | |
various dates from February 8, 2020 to June 15, 2020 |
|
|
various dates from February 8, 2030 to June 15, 2030 |
| ||||||||
Hangjun Ye |
— | — | — | — | ||||||||||||
Shouxing Liang |
* | nil to 0.86978 | |
various dates from February 15, 2016 to December 5, 2019 |
|
|
various dates from February 15, 2026 to December 5, 2029 |
| ||||||||
Shouhu Wang |
— | — | — | — | ||||||||||||
Tao Liu |
* | nil to 0.86978 | |
various dates from February 15, 2016 to December 5, 2019 |
|
|
various dates from February 15, 2026 to December 5, 2029 |
| ||||||||
Kaiyan Tian |
* | nil to 0.86978 | |
various dates from April 15, 2018 to December 5, 2019 |
|
|
various dates from January 1, 2023 to November 26, 2024 |
| ||||||||
Yifeng Qian |
* | nil to 0.86978 | |
various dates from April 16, 2015 to December 5, 2019 |
|
|
various dates from April 16, 2025 to December 5, 2029 |
| ||||||||
Mingto Yu |
— | — | — | — | ||||||||||||
Hang Wang |
— | — | — | — | ||||||||||||
Jingyuan Qu |
— | — | — | — |
* | Less than 1% of our total outstanding shares. |
6.C. |
Board Practices |
• | reviewing and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor; |
• | approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors; |
• | evaluating the independent auditor’s qualifications, performance and independence; |
• | reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; |
• | discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices; |
• | reviewing and approving all proposed related party transactions, as defined in Item 7 of Form 20-F; |
• | reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our board for inclusion in our annual reports; |
• | discussing the annual audited financial statements with management and the independent registered public accounting firm; |
• | periodically reviewing and reassessing the adequacy of the committee charter; |
• | approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function; |
• | meeting separately and periodically with management and the independent registered public accounting firm; |
• | monitoring compliance with our code of business conduct and ethics, and reporting such compliance to the board; and |
• | reporting regularly to the board. |
• | overseeing the development and implementation of compensation programs in consultation with our management; |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our executive officers; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements; |
• | periodically reviewing and reassessing the adequacy of the committee charter; |
• | selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management; and |
• | reporting regularly to the board. |
• | recommending nominees to the board for election or reelection to the board, or for appointment to fill any vacancy on the board; |
• | reviewing and evaluating the size, composition, function and duties of the board consistent with its needs; |
• | reviewing candidates’ qualifications for membership on the board or a committee of the board based on the criteria approved by the board; |
• | making recommendations to the board as to determinations of director independence; |
• | reviewing and approving compensation (including equity-based compensation) for our directors; |
• | periodically reviewing and reassessing the adequacy of the committee charter; and |
• | evaluating the performance and effectiveness of the board as a whole. |
Board Diversity Matrix (As of the date of this annual report) |
||||||||||||||||
Country of Principal Executive Offices: |
People’s Republic of China | |||||||||||||||
Foreign Private Issuer |
Yes | |||||||||||||||
Disclosure Prohibited Under Home Country Law |
No | |||||||||||||||
Total Number of Directors |
7 | |||||||||||||||
Female |
Male |
Non-Binary |
Did Not Disclose Gender |
|||||||||||||
Part I: Gender Identity |
||||||||||||||||
Directors |
1 | 6 | 0 | 0 | ||||||||||||
Part II: Demographic Background |
||||||||||||||||
Underrepresented Individual in Home Country Jurisdiction |
— | |||||||||||||||
LGBTQ+ |
— | |||||||||||||||
Did Not Disclose Demographic Background |
— |
6.D. |
Employees |
Function |
Number of Employees |
Percentage (%) |
||||||
Research and development |
1,358 | 13.3 | ||||||
Sales and marketing |
575 | 5.6 | ||||||
General and administrative |
805 | 7.9 | ||||||
Solution development and services |
7,471 | 73.2 | ||||||
|
|
|
|
|||||
Total |
10,209 | 100.0 | ||||||
|
|
|
|
6.E. |
Share Ownership |
• | each of our directors and executive officers; |
• | each person known to us to beneficially own more than 5% of our ordinary shares; and |
• | each selling shareholder. |
Ordinary Shares Beneficially Owned |
||||||||
Number |
%** |
|||||||
Directors and Executive Officers:† |
||||||||
Jun Lei (1) * |
449,701,000 | 12.3 | ||||||
Tao Zou |
— | — | ||||||
Yulin Wang (2) * |
54,329,425 | 1.5 | ||||||
Haijian He |
* | * | ||||||
Hangjun Ye |
— | — | ||||||
Shouxing Liang |
* | * | ||||||
Shouhu Wang |
— | — | ||||||
Tao Liu |
* | * | ||||||
Kaiyan Tian |
* | * | ||||||
Yifeng Qian |
* | * | ||||||
Mingto Yu |
— | — | ||||||
Hang Wang |
— | — | ||||||
Jingyuan Qu |
— | — | ||||||
All directors and executive officers as a group (3) * |
519,961,332 | 14.2 | ||||||
Principal Shareholders: |
||||||||
Kingsoft Corporation Limited (4) * |
1,423,246,584 | 39.0 | ||||||
Xiaomi Corporation (5) * |
449,701,000 | 12.3 | ||||||
First Trust Portfolios L.P. (6) |
206,010,930 | 5.6 |
* | Less than 1% of our total outstanding shares. |
** | For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of (i) 3,653,179,567, being the number of ordinary shares outstanding as of March 31, 2022, and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable and share awards that will become vested within 60 days after March 31, 2022. |
† | The address of our directors and executive officers is Building E, Xiaomi Science and Technology Park, No. 33 Xierqi Middle Road, Haidian District Beijing, 100085, the People’s Republic of China. |
(1) | Mr. Lei has the majority voting power in Xiaomi Corporation and is deemed to beneficially own our shares held by Xiaomi Corporation. |
(2) | Represent (i) 38,729,425 Shares held by Autogold Limited, a BVI company wholly-owned by Prosper River Group Limited and ultimately controlled by The YTCM Trust. The YTCM Trust is a trust established under the laws of the Republic of Singapore and managed by Vistra Trust (Singapore) Pte. Limited as the trustee. Mr. Wang Yulin is the settlor of The YTCM Trust, and Mr. Wang Yulin and his family members are the beneficiaries of The YTCM Trust; and (ii) 9,600,000 Shares held by River Jade Holdings Limited, a BVI company ultimately controlled by Mr. Wang Yulin; and (iii) Mr. Wang Yulin’s entitlement to receive up to 6,000,000 Shares underlying the restricted share units granted to him under the 2013 Share Award Scheme. |
(3) | Including an aggregate of 5,735,482 ordinary shares underlying share awards held by our directors and executive officers that are exercisable within 60 days after March 31, 2021. |
(4) | Represent 1,423,246,584 ordinary shares, directly held by Kingsoft Corporation Limited, a Cayman Islands company. The registered address of Kingsoft Corporation Limited is Clifton House, 75 Fort Street, George Town, Grand Cayman, Cayman Islands. |
(5) | Represent 449,701,000 ordinary shares directly held by Xiaomi Corporation, a Cayman Islands company. The registered office of Xiaomi Corporation is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
(6) | Represent 13,734,062 ADSs, each representing 15 ordinary shares, of the Company, as reported in a Schedule 13G jointly filed by First Trust Portfolios L.P., First Trust Advisors L.P. and The Charger Corporation with the SEC on January 31, 2022. The principal business office of First Trust Portfolios L.P., First Trust Advisors L.P. and The Charger Corporation is 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, the United States. For more information, please see the Schedule 13G jointly filed by First Trust Portfolios L.P., First Trust Advisors L.P. and The Charger Corporation with the SEC on January 31, 2022. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
7.A. |
Major Shareholders |
7.B. |
Related Party Transactions |
ITEM 8. |
FINANCIAL INFORMATION |
8.A. |
Consolidated Statements and Other Financial Information |
8.B. |
Significant Changes |
ITEM 9. |
THE OFFER AND LISTING |
9.A. |
Offering and Listing Details |
9.B. |
Plan of Distribution |
9.C. |
Markets |
9.D. |
Selling Shareholders |
9.E. |
Dilution |
9.F. |
Expenses of the Issue |
ITEM 10. |
ADDITIONAL INFORMATION |
10.A. |
Share Capital |
10.B. |
Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us and is accompanied by the certificate for the shares to which it relates and such other evidence as our directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of share; |
• | the instrument of transfer is properly stamped (in circumstances where stamping is required); and |
• | a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rates, conversion rights and voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
10.C. |
Material Contracts |
10.D. |
Exchange Controls |
10.E. |
Taxation |
• | certain financial institutions; |
• | dealers or certain electing traders in securities that use a mark-to-market |
• | persons holding ADSs or ordinary shares as part of a straddle, integrated or similar transaction; |
• | persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; |
• | entities classified as partnerships for U.S. federal income tax purposes and their partners; |
• | persons who acquired our ADSs or ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation; |
• | tax-exempt entities, “individual retirement accounts” or “Roth IRAs”; |
• | persons that own or are deemed to own ADSs or ordinary shares representing 10% or more of our voting power or value; or |
• | persons holding ADSs or ordinary shares in connection with a trade or business outside the United States. |
• | a citizen or individual resident of the United States; |
• | a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or |
• | an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. |
10.F. |
Dividends and Paying Agents |
10.G. |
Statement by Experts |
10.H. |
Documents on Display |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
12.A. |
Debt Securities |
12.B. |
Warrants and Rights |
12.C. |
Other Securities |
12.D. |
American Depositary Shares |
Persons depositing or withdrawing shares or ADS holders must pay: |
For: | |
• $5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
• Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property | |
• Cancelation of ADS, for the purpose of withdrawal, including if the deposit agreement terminates | ||
• $.05 (or less) per ADS |
• Any cash distribution to ADS holders | |
• A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs |
• Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
• $.05 (or less) per ADS per calendar year |
• Depositary services | |
• Registration or transfer fees |
• Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
• Expenses of the depositary |
• Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement) | |
• Converting foreign currency to U.S. dollars | ||
• Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes |
• As necessary | |
• Any charges incurred by the depositary or its agents for servicing the deposited securities |
• As necessary |
ITEM 13. |
ITEM DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
14.E. |
Use of Proceeds |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16.A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16.B. |
CODE OF ETHICS |
ITEM 16.C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, |
||||||||
Services |
2020 |
2021 |
||||||
RMB |
RMB |
|||||||
(in thousands) |
||||||||
Audit Fees (1) |
5,010 | 7,889 | ||||||
Audit-Related Fees (2) |
1,349 | — | ||||||
Tax Fees (3) |
1,009 | 708 | ||||||
Others (4) |
1,120 | 1,386 | ||||||
|
|
|
|
|||||
Total |
8,488 |
9,983 |
||||||
|
|
|
|
(1) | “Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financial statements and the review of our comparative interim financial statements. In 2021, the audit refers to financial audit and audit pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | “Audit-related fees” means the aggregate fees billed for professional services rendered by our principal auditors for the assurance and related services, which mainly included the audit and review of financial statements and are not reported under “Audit fees” above. |
(3) | “Tax fees” means the aggregate fees billed for professional services rendered by our principal auditors for tax compliance, tax advice and tax planning. |
(4) | “Others” means the aggregate fees billed for professional services rendered by our principal auditors other than the professional services reported under “audit fees”, “audit-related fees” and “tax fees”. In 2021, the professional services were related to other attestation services rendered by our principle auditors. |
ITEM 16.D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16.E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16.F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16.G. |
CORPORATE GOVERNANCE |
ITEM 16.H. |
MINE SAFETY DISCLOSURE |
ITEM 16.I. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
* | Filed herewith |
** | Furnished herewith |
Kingsoft Cloud Holdings Limited | ||
By: |
/s/ Haijian He | |
Name: | Haijian He | |
Title: | Chief Financial Officer |
Page |
||||
F-2 |
||||
F-5 |
||||
F-7 |
||||
F-9 |
||||
F-12 |
||||
F-15 |
Impairment of Long-Lived Assets | ||
Description of the Matter |
At December 31, 2021, the Company’s long lived assets, comprising of property and equipment, intangible assets, and operating lease right-of-use Auditing management’s impairment assessment required subjective auditor judgment due to the estimation uncertainty in determining the future undiscounted cash flows of an asset group with impairment indicators. Significant assumptions used in the future undiscounted cash flows of the asset group included revenue growth rates and gross margin. These significant assumptions are forward looking and could be affected by future economic and market conditions. |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s long-lived asset impairment assessment process. For example, we tested the controls over management’s review of the significant assumptions described above used to develop the undiscounted cash flows projections. To test the Company’s impairment assessment of the long-lived assets, we performed audit procedures that included, among others, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used. We compared the revenue growth rates and gross margin used by management to the historical results of the asset group, current industry, market and economic trends and other relevant external data. We also performed sensitivity analyses of significant assumptions discussed above to evaluate the changes in the future undiscounted cash flows of the asset group resulting from changes in the assumptions. |
As at December 31 |
||||||||||||||||
Notes |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
US$ |
||||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Restricted cash |
||||||||||||||||
Accounts receivable, net of allowance for credit losses of RMB |
6 | |||||||||||||||
Short-term investments |
||||||||||||||||
Prepayments and other assets |
7 | |||||||||||||||
Amounts due from related parties |
20 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Non-current assets: |
||||||||||||||||
Property and equipment, net |
8 | |||||||||||||||
Intangible assets, net |
9 | |||||||||||||||
Goodwill |
10 | |||||||||||||||
Prepayments and other assets |
7 | |||||||||||||||
Equity investments |
2 | |||||||||||||||
Amounts due from related parties |
20 | |||||||||||||||
Deferred tax assets |
14 | |||||||||||||||
Operating lease right-of-use |
11 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
LIABILITIES, NON-CONTROLLING INTEREST, AND SHAREHOLDERS’ EQUITY |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable (including accounts payable of the consolidated VIEs and their subsidiaries without recourse to the primary beneficiary of RMB |
||||||||||||||||
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIEs and their subsidiaries without recourse to the primary beneficiary of RMB |
12 | |||||||||||||||
Short-term bank loans (including short-term bank loans of the consolidated VIE s and their subsidiaries without recourse to the primary beneficiary of RMB |
13 | |||||||||||||||
Long-term bank loan, current portion (including long-term bank loan, current portion of the consolidated VIE s and their subsidiaries without recourse to the primary beneficiary of RMB |
13 | |||||||||||||||
Income tax payable (including income tax payable of the consolidated VIEs their without recourse to the primary beneficiary of RMB 2020 and 2021, respectively) |
14 | |||||||||||||||
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs their |
20 | |||||||||||||||
Current operating lease liabilities (including current operating lease liabilities of the consolidated VIEs and their subsidiaries without recourse to the primary beneficiary of RMB |
11 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||||||
Notes |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
US$ |
||||||||||||||
Non-current liabilities: |
||||||||||||||||
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs their |
20 | |||||||||||||||
Deferred tax liabilities (including deferred tax liabilities of the consolidated VIEs their |
14 | |||||||||||||||
Other liabilities (including other liabilities of the consolidated VIEs their |
12 | |||||||||||||||
Non-current operating lease liabilities (including non-current operating lease liabilities of the consolidated VIEs their |
11 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Commitments and contingencies |
21 | |||||||||||||||
Shareholders’ equity: |
||||||||||||||||
Ordinary shares (par value of US$ |
19 | |||||||||||||||
Additional paid-in capital |
||||||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||||||
Accumulated other comprehensive loss |
22 | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|||||||||||
Total Kingsoft Cloud Holdings Limited shareholders’ equity |
||||||||||||||||
Non-controlling interests |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total equity |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total liabilities, non-controlling interests and shareholders’ equity |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||
Revenues: |
5, 20 | |||||||||||||||||
Public cloud services (including related party amounts of RMB |
||||||||||||||||||
Enterprise cloud services (including related party amounts of RMB |
||||||||||||||||||
Others (including related party amounts of RMB |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Cost of revenues (including related party amounts of RMB |
20 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
||||||||||||||||||
Operating expenses: |
||||||||||||||||||
Selling and marketing expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
General and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total operating expenses |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Operating loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
Interest income |
||||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Foreign exchange (loss) gain |
( |
) | ||||||||||||||||
Other gain, net |
— | |||||||||||||||||
Other income (expense), net |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Loss before income taxes |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
Income tax expense |
14 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
Less: net income (loss) attributable to non-controlling interests |
— | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to Kingsoft Cloud Holdings Limited |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Accretion to redemption value of redeemable convertible preferred shares |
15 | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to ordinary shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Net loss per share: |
||||||||||||||||||||
Basic and diluted |
18 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Shares used in the net loss per share computation: |
||||||||||||||||||||
Basic and diluted |
18 | |||||||||||||||||||
Other comprehensive income (loss), net of tax of nil: |
||||||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Less: Comprehensive income (loss) attributable to non-controlling interests |
— | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss attributable to Kingsoft Cloud Holdings Limited shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Accretion to redemption value of redeemable convertible preferred shares |
( |
) | ( |
) | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss attributable to ordinary shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
Series A convertible preferred shares |
Ordinary shares |
Additional paid-in capital |
Accumulated other comprehensive income |
Accumulated deficit |
Total shareholders’ deficit |
|||||||||||||||||||||||||||
Number of shares |
Amount |
Number of shares* |
Amount |
|||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||
Balance as of January 1, 2019 |
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
Net loss for the year |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Share-based compensation (Note 16) |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Exercise and vesting of share-based awards (Note 16) |
— | — | — | — | ||||||||||||||||||||||||||||
Accretion to redemption value of redeemable convertible preferred shares (Note 15) |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2019 |
( |
) | ( |
) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A convertible preferred shares |
Ordinary shares |
Additional paid-in capital |
Accumulated other comprehensive income (loss) |
Accumulated deficit |
Total Kingsoft Cloud Holdings Limited shareholders’ (deficit) equity |
Non- controlling interests |
Total shareholders’ (deficit) equity |
|||||||||||||||||||||||||||||||||
Number of shares |
Amount |
Number of shares* |
Amount |
|||||||||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||||
Net (loss) profit for the year |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Accretion to redemption value of redeemable convertible preferred shares (Note 15) |
— | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Repurchase of ordinary shares (Note 19) |
— | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Issuance of ordinary shares upon initial public offering (“IPO”) (Note 19) |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Conversion of Series A convertible preferred shares into ordinary shares (Note 19) |
( |
) | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
Conversion of Series B convertible preferred shares and Series C, Series D and Series D+ redeemable convertible preferred shares into ordinary shares (Note 19) |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon follow-on offering (Note 19) |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Share-based compensation (Note 16) |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Exercise and vesting of share-based awards (Note 16) |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2020 |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
Additional paid-in capital |
Accumulated other comprehensive loss |
Accumulated deficit |
Total Kingsoft Cloud Holdings Limited shareholders’ equity |
Non-controlling interests |
Total shareholders’ equity |
||||||||||||||||||||||||||
Number of shares* |
Amount |
|||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
||||||||||||||||||||||||||
Balance as of December 31, 2020 |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Adoption of ASC 326 |
— | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||
Net loss for the year |
— | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Business acquisition |
— | — | ||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | ( |
) | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Share-based compensation (Note 16) |
— | — | — | — | — | |||||||||||||||||||||||||||
Exercise and vesting of share-based awards (Note 16) |
— | — | — | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2021 |
( |
) | ( |
) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of December 31, 2021, in US$ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | As of December 31, 2019, , |
For the year ended December 31 |
||||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||
Share-based compensation |
||||||||||||||||||
Provision for credit losses |
||||||||||||||||||
Gain on disposal of property and equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Changes in fair value of equity investments |
— | ( |
) | ( |
) | ( |
) | |||||||||||
Gain on disposal of equity investments |
— | — | ( |
) | ( |
) | ||||||||||||
Changes in fair value of purchase |
— | — | ||||||||||||||||
Changes in fair value of contingent consideration of a business acquisition |
— | — | ( |
) | ( |
) | ||||||||||||
Issuance costs expensed for follow-on offering |
— | — | — | |||||||||||||||
Foreign exchange loss (gain) |
( |
) | ( |
) | ( |
) | ||||||||||||
Deferred income tax |
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) | |
|
( |
) |
Non-cash operating lease expense |
— | |||||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Prepayments and other assets |
( |
) | ( |
) | ||||||||||||||
Amounts due from related parties |
( |
) | ( |
) | ( |
) | ||||||||||||
Accounts payable |
||||||||||||||||||
Accrued expenses and other liabilities |
( |
) | ( |
) | ||||||||||||||
Operating lease liabilities |
— | ( |
) | ( |
) | ( |
) | |||||||||||
Amounts due to related parties |
( |
) | ||||||||||||||||
Income tax payable |
||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net cash used in operating activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Disposal of property and equipment |
— | |||||||||||||||||||
Purchases of intangible assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Purchases of short-term investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Proceeds from maturities of short-term investments |
||||||||||||||||||||
Purchases of land use rights |
— | ( |
) | — | — | |||||||||||||||
Acquisition of equity investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Disposal of equity investments |
— | — | ||||||||||||||||||
Acquisition of business, net of cash acquired |
— | — | ||||||||||||||||||
Asset-related government grants received |
||||||||||||||||||||
Loans to senior executives |
( |
) | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash generated from (used in) investing activities |
( |
) |
( |
) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||||||
Repayment of long-term bank loan |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Repayment of short-term bank loans |
— | — | ( |
) | ( |
) | ||||||||||||||
Proceeds from short-term bank loans |
— | |||||||||||||||||||
Proceeds from IPO, net of offering costs |
19 | — | — | — | ||||||||||||||||
Proceeds from follow-on offering, net of offering costs |
19 | — | — | — | ||||||||||||||||
Proceeds from loans due to related parties |
— | — | ||||||||||||||||||
Repayment of loans due to a related party |
( |
) | — | — | — | |||||||||||||||
Proceeds from exercise of options |
||||||||||||||||||||
Proceeds from redeemable convertible preferred shares, net of issuance costs |
— | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash generated from financing activities |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
( |
) | ( |
) | ( |
) | ||||||||||||||
Net increase in cash, cash equivalents, and restricted cash |
||||||||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of year |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash, cash equivalents, and restricted cash at end of year |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Supplemental disclosures of cash flow information: |
||||||||||||||||||||
Restricted cash |
— | — | ||||||||||||||||||
Income taxes paid |
||||||||||||||||||||
Interest expense paid |
||||||||||||||||||||
Cash payments for operating leases |
— | |||||||||||||||||||
Non-cash investing and financing activities: |
||||||||||||||||||||
Purchases of property and equipment included in accrued expenses and other liabilities |
12 | |||||||||||||||||||
Acquisitions of equity investments included in accrued expenses and other liabilities |
12 | — | — | — | ||||||||||||||||
Purchase consideration included in accrued expense s and other liabilities |
— | — | ||||||||||||||||||
Settlement of senior executive loans by repurchase of ordinary shares |
19 | — | — | — | ||||||||||||||||
Right-of-use |
— | |||||||||||||||||||
Series D+ redeemable convertible preferred shares issuance costs included in accrued expenses and other liabilities |
— | — | — | |||||||||||||||||
Non-cash acquisition of business |
4 | — | — |
1. | ORGANIZATION AND BASIS OF PRESENTATION |
Name |
Place of establishment |
Date of establishment/ acquisition |
Percentage of equity interest attributable to the Company |
Principal activities | ||||||||||
Subsidiaries: |
||||||||||||||
Kingsoft Cloud Corporation Limited |
% | |||||||||||||
Kingsoft Cloud (Tianjin) Technology Development Co., Ltd . |
% | |||||||||||||
Wuhan Kingsoft Cloud Information Technology Co., Ltd. |
% | |||||||||||||
Beijing Kingsoft Cloud Technology Co., Ltd. (“Beijing Kingsoft Cloud”)* |
% | |||||||||||||
Beijing Yunxiang Zhisheng Technology Co., Ltd. (“Yunxiang Zhisheng”)* |
% | |||||||||||||
Camelot Technology Co (“Beijing ., L td . Camelot”) |
% | | ||||||||||||
Variable interest entities: |
||||||||||||||
Zhuhai Kingsoft Cloud Technology Co., Ltd. (“Zhuhai Kingsoft Cloud”) |
Nil | |||||||||||||
Kingsoft Cloud (Beijing) Information Technology Co., Ltd. (“Kingsoft Cloud Information”) |
Nil | |||||||||||||
Variable interest entities’ subsidiaries: |
||||||||||||||
Beijing Kingsoft Cloud Network Technology Co., Ltd. (“Beijing Kingsoft Cloud Network Technology”) |
Nil | |||||||||||||
Beijing Jinxun Ruibo Network Technology Co., Ltd. (“Beijing Jinxun Ruibo”) |
Nil | |||||||||||||
Nanjing Qianyi Shixun Information Technology Co., Ltd. |
Nil |
* | Collectively , the “WFOE” |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
a) |
Shareholder Voting Right Trust Agreements |
• | The shareholder voting right trust agreements are valid as long as the Nominee Shareholders remain the shareholders of the VIEs. |
b) |
Exclusive Purchase Option Agreements |
• | Without the prior consent of the WFOE, the VIEs and the Nominee Shareholders shall not: (i) amend the articles of association, (ii) increase or decrease the registered capital, (iii) sell or otherwise dispose of their assets or beneficial interest, (iv) create or allow any encumbrance on their assets or other beneficial interests, (v) extend any loans to third parties, (vi) enter into any material contracts (except those contracts entered into in the ordinary course of business), (vii) merge with or acquire any other persons or make any investments, or (viii) distribute dividends to their shareholders. |
• | Any proceeds received by the Nominee Shareholders from the exercise of the option, distribution of profits or dividends, shall be remitted to the WFOE or their designated person(s), to the extent permitted under PRC laws. |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
c) |
Exclusive Consultation and Technical Service Agreements |
• | The exclusive consultation and technical services agreements will remain effective unless terminated by the WFOE at its sole discretion. |
d) |
Financial Support Undertaking Letter |
• | Pursuant to the financial support undertaking letter, the Company is obligated and hereby undertakes to provide unlimited financial support to the VIEs, to the extent permissible under the applicable PRC laws and regulations, whether or not any such operational loss is actually incurred. The Company will not request repayment of the loans or borrowings if the VIEs or its Nominee Shareholders do not have sufficient funds or are unable to repay. |
e) |
Resolutions of all Shareholders and resolution of the Board of Directors of the Company |
• | The Shareholders and the Company’s Board of Directors resolved that the rights under the Shareholder Voting Right Trust Agreements and the Exclusive Purchase Option Agreements were assigned to the Board of Directors of the Company or any officer authorized by the Board of Directors. |
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Restricted cash |
— | |||||||||||
Accounts receivable, net of allowance for credit losses of RMB RMB (US$ |
||||||||||||
Prepayments and other assets |
||||||||||||
Amounts due from related parties |
||||||||||||
Amounts due from subsidiaries of the Group |
||||||||||||
|
|
|
|
|
|
|||||||
Total current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current assets: |
||||||||||||
Property and equipment, net |
||||||||||||
Intangible assets, net |
||||||||||||
Prepayments and other assets |
||||||||||||
Goodwill |
— | |||||||||||
Equity investments |
||||||||||||
Amounts due from related parties |
||||||||||||
Operating lease right-of-use |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total assets |
||||||||||||
|
|
|
|
|
|
|||||||
Current liabilities |
||||||||||||
Accounts payable |
||||||||||||
Accrued expenses and other liabilities |
||||||||||||
Short-term bank loans |
||||||||||||
Long-term bank loan, current portion |
— | — | ||||||||||
Income tax payable |
||||||||||||
Amounts due to related parties |
||||||||||||
Current operating lease liabilities |
||||||||||||
Amounts due to subsidiaries of the Group |
||||||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current liabilities |
||||||||||||
Deferred tax liabilities |
— | — | ||||||||||
Other liabilities |
||||||||||||
Non-current operating lease liabilities |
||||||||||||
Amounts due to related parties |
— | |||||||||||
Amounts due to subsidiaries of the Group |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
|
|
|
|
|
|
1. |
ORGANIZATION AND BASIS OF PRESENTATION (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Revenues |
||||||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash generated from financing activities |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|
|
|
|
|
Category |
Estimated Useful Life |
|||
Electronic equipment |
||||
Office equipment and fixtures |
||||
Data center machinery and equipment |
||||
Building |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Category |
Estimated Useful Life |
|||
Customer relationships |
||||
Patents and technologies |
||||
Trademarks and domain names |
||||
Software and copyrights |
||||
Others |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
3. |
CONCENTRATION OF RISKS |
4. |
BUSINESS COMBINATION |
4. |
BUSINESS COMBINATION (Continued) |
Camelot |
||||||||
RMB |
US$ |
|||||||
Total fair value of purchase consideration |
||||||||
Less: |
||||||||
Cash and cash equivalents |
||||||||
Restricted cash |
||||||||
Accounts receivable and other assets |
||||||||
Property and equipment, net |
||||||||
Intangible assets: |
||||||||
Customer relationship |
||||||||
Trademarks |
||||||||
Copyrights |
||||||||
Deferred tax assets |
||||||||
Deferred tax liabilities |
( |
) | ( |
) | ||||
Accounts payable and other liabilities |
( |
) | ( |
) | ||||
Non-controlling interests |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Goodwill |
||||||||
|
|
|
|
5. |
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Public cloud services recognized over time |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Enterprise cloud services: |
||||||||||||||||
Recognized at a point in time |
||||||||||||||||
Recognized over time |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Others: |
||||||||||||||||
Recognized at a point in time |
||||||||||||||||
Recognized over time |
— | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RMB |
US$ |
|||||||
Within one year |
||||||||
More than one year |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Revenue recognized from amounts included in contract liabilities at the beginning of the period |
6. |
ACCOUNTS RECEIVABLE, NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Accounts receivable |
||||||||||||
Allowance for credit losses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Accounts receivable, net |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Balance at beginning of the year |
||||||||||||||||
Adoption of ASC 326* |
— | — | ||||||||||||||
Provision for expected credit losses |
||||||||||||||||
Write-offs charged against the allowance |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Recoveries during the year |
— | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of the year |
||||||||||||||||
|
|
|
|
|
|
|
|
* |
Starting from January 1, 2021, the Group adopted ASC 326, which amends previously issued the guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group used a modified retrospective approach with a cumulative effect of increasing the opening balance of accumulated deficit approximately of RMB |
7. |
PREPAYMENTS AND OTHER ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Current portion: |
||||||||||||
Prepayments to suppliers |
||||||||||||
Contract costs* |
||||||||||||
Contract assets, net** |
— | |||||||||||
VAT prepayments |
||||||||||||
Interest receivable |
||||||||||||
Individual income tax receivable*** (Note 12) |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Non-current portion: |
||||||||||||
Prepayments for electronic equipment |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
* | Represents costs incurred in advance of revenue recognition arising from direct and incremental cost s related to enterprise cloud services provided. Such contract costs are recognized as cost of revenue upon the recognition of the related revenues. |
** | Represents the Group’s rights to consideration for work completed in relation to its services performed but not billed at the report date. The increase in contract assets as compared to December 31, 2020 is a result of a business acquisition. n contract assets and write-offs charged against the allowance were RMBand RMB , respectively, |
*** | Represents amounts due from certain employees related to their individual income taxes (“IIT”) arising from exercise and vesting of share-based awards. |
8. |
PROPERTY AND EQUIPMENT, NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Electronic equipment |
||||||||||||
Office equipment and fixtures |
||||||||||||
Data center machinery and equipment |
||||||||||||
Building |
— | |||||||||||
Construction in progress |
||||||||||||
|
|
|
|
|
|
|||||||
Less: accumulated depreciation |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Property and equipment, net |
||||||||||||
|
|
|
|
|
|
9. |
INTANGIBLE ASSETS, NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Customer relationships |
— | |||||||||||
Patents and technologies |
— | |||||||||||
Trademarks and domain names |
||||||||||||
Software and copyrights |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Less: accumulated amortization |
||||||||||||
Customer relationships |
— | ( |
) | ( |
) | |||||||
Patents and technologies |
— | ( |
) | ( |
) | |||||||
Trademarks and domain names |
( |
) | ( |
) | ( |
) | ||||||
Software and copyrights |
( |
) | ( |
) | ( |
) | ||||||
Others |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
( |
) | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Intangible assets, net |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RMB |
US$ |
|||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 and thereafter |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
10. |
GOODWILL |
|
|
|
|
|
RMB |
||||
Balance as of December 31, 2020 |
||||
Goodwill acquired in business combinations (Note 4) |
||||
|
|
|||
Balance as of December 31, 2021 |
||||
|
|
|||
Balance as of December 31, 2021, in US$ |
||||
|
|
11. |
LEASES |
|
|
|
|
|
|
|
|
|
RMB |
US$ |
|||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 and thereafter |
||||||||
|
|
|
|
|||||
Total future lease payments |
||||||||
Less: imputed interest |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total lease liability balance |
||||||||
|
|
|
|
12. |
ACCRUED EXPENSES AND OTHER LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Current portion: |
||||||||||||
Customer advances* |
||||||||||||
Salary and welfare payable |
||||||||||||
Purchase of property and equipment |
||||||||||||
Accrued expenses |
||||||||||||
Other tax and surcharges payable |
||||||||||||
Deferred government grants |
||||||||||||
Purchase consideration payable** |
— | |||||||||||
Individual income tax payable*** (Note 7) |
||||||||||||
Others**** |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Non-current portion: |
||||||||||||
Deferred government grants |
||||||||||||
Purchase consideration payable** |
— | |||||||||||
Others**** |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
* | The amount represents contract liabilities for the rendering of services. The increase in customer advances as compared to December 31, 2020 is a result of the increase in consideration received from the Group’s customers. |
** | The amount represents the purchase consideration to acquire Camelot. RMBremaining . A total of RMB the Company’s ordinary shares. |
*** | Represents IIT payable to the tax bureau on behalf of certain employees related to their exercise and vesting of share-based awards. |
**** | In July 2020, the Company received a reimbursement of US$ non-current portion of accrued expenses and other liabilities, respectively. The ADS Reimbursement will be released to the consolidated statements of comprehensive loss in equal amounts over the ADS program term. |
13. |
BANK LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Short-term bank loans |
||||||||||||
Long-term third-party bank loan guaranteed by a related party (Note 20): |
||||||||||||
Current portion |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
14. |
TAXATION |
14. |
TAXATION (Continued) |
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
PRC |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Non-PRC |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
( |
) |
( |
) |
( |
) |
( |
) | |||||||||
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Current income tax expense |
||||||||||||||||
Deferred income tax benefit |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Loss before income tax |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Income tax computed at the PRC statutory tax rate of 25% |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Effect of tax holiday and preferential tax rates |
( |
) |
||||||||||||||
Effect of different tax rates in different jurisdictions |
( |
) |
( |
) |
( |
) | ||||||||||
Other non-taxable income |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Non-deductible expenses |
||||||||||||||||
Share-based compensation costs |
||||||||||||||||
Research and development super deduction |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Withholding tax and others |
||||||||||||||||
Change in valuation allowance |
||||||||||||||||
True-up adjustments in respect of prior year’s annual tax filing |
— |
( |
) |
( |
) | ( |
) | |||||||||
Tax rate change on deferred items |
( |
) |
( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax expense |
||||||||||||||||
|
|
|
|
|
|
|
|
14. |
TAXATION (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Deferred tax assets: |
||||||||||||
Tax loss carried forward |
||||||||||||
Accrued expenses |
||||||||||||
Depreciation |
||||||||||||
Allowance for doubtful accounts |
||||||||||||
Government grant |
||||||||||||
Operating lease liabilities |
||||||||||||
Accrued interest |
||||||||||||
Others |
||||||||||||
Less: valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities: |
||||||||||||
Operating lease right-of-use |
||||||||||||
One-time deduction for fixed asset purchases |
||||||||||||
Long-lived assets arising from business acquisitions |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
14. |
TAXATION (Continued) |
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of the year |
||||||||||||
Additions from the business acquisitions |
||||||||||||
Additions based on tax positions related to current year |
||||||||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
||||||||||||
|
|
|
|
|
|
15. |
CONVERTIBLE PREFERRED SHARES AND REDEEMABLE CONVERTIBLE PREFERRED SHARES |
16. |
SHARE-BASED PAYMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of options |
Weighted- average exercise price |
Weighted- average grant-date fair value |
Weighted- average remaining contractual term |
Aggregate intrinsic value |
||||||||||||||||
US$ |
US$ |
Years |
US$ |
|||||||||||||||||
Outstanding, December 31, 2020 |
||||||||||||||||||||
Granted |
||||||||||||||||||||
Forfeited |
( |
) | ||||||||||||||||||
Exercised |
( |
) | ||||||||||||||||||
|
|
|||||||||||||||||||
Outstanding, December 31, 2021 |
||||||||||||||||||||
|
|
|||||||||||||||||||
Vested and expected to vest at December 31, 2021 |
||||||||||||||||||||
|
|
|||||||||||||||||||
Exercisable at December 31, 2021 |
||||||||||||||||||||
|
|
16. |
SHARE-BASED PAYMENTS (Continued) |
|
|
|
|
|
|
|
|
|
Number of shares |
Weighted-average grant date fair value |
|||||||
US$ |
||||||||
Outstanding, December 31, 2020 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
|
|
|
|
|||||
Outstanding, December 31, 2021 |
||||||||
|
|
|
|
|||||
Expected to vest at December 31, 2021 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of options |
Weighted- average exercise price |
Weighted- average grant- date fair value |
Weighted- average remaining contractual term |
Aggregate intrinsic value |
||||||||||||||||
US$ |
US$ |
Years |
US$ |
|||||||||||||||||
Outstanding, December 31, 2020 |
||||||||||||||||||||
Exercised |
( |
) | ||||||||||||||||||
Forfeited |
( |
) | ||||||||||||||||||
|
|
|||||||||||||||||||
Outstanding, December 31, 2021 |
||||||||||||||||||||
|
|
|||||||||||||||||||
Vested and expected to vest at December 31, 2021 |
||||||||||||||||||||
|
|
|||||||||||||||||||
Exercisable at December 31, 2021 |
||||||||||||||||||||
|
|
16. |
SHARE-BASED PAYMENTS (Continued) |
|
|
|
|
|
|
|
For the year ended December 31 | ||||||
2019 |
2020 |
2021 | ||||
Risk-free rate |
||||||
Expected volatility range |
||||||
Exercise multiple |
||||||
Fair market value per ordinary share as at valuation dates |
US$ |
US$ |
US$ |
16. |
SHARE-BASED PAYMENTS (Continued) |
2021 |
||||
Risk-free rate |
% | |||
Expected volatility range |
% | |||
Exercise multiple |
||||
Fair market value per Camelot’s ordinary share |
RMB |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Cost of revenues |
||||||||||||||||
Selling and marketing expenses |
||||||||||||||||
General and administrative expenses |
||||||||||||||||
Research and development expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
17. |
RESTRICTED NET ASSETS |
18. |
LOSS PER SHARE |
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Numerator: |
||||||||||||||||
Net loss attributable to Kingsoft Cloud Holdings Limited |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Accretion to redemption value of redeemable convertible preferred shares |
( |
) | ( |
) | — | — | ||||||||||
Net loss attributable to ordinary shareholders - basic and diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Denominator: |
||||||||||||||||
Weighted average number of ordinary shares outstanding - basic and diluted |
||||||||||||||||
Basic and diluted loss per share |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
19. |
SHAREHOLDERS’ EQUITY |
19. |
SHAREHOLDERS’ EQUITY (Continued) |
20. |
RELATED PARTY TRANSACTIONS |
a) |
Related Parties |
|
|
|
Name of related parties |
Relationship with the Group | |
Kingsoft Corporation Limited and its subsidiaries (other than all of entities of the Group) (“Kingsoft Group”) |
||
Cheetah Mobile Inc. and its subsidiaries (“Cheetah Group”) |
||
Xiaomi Corporation and its subsidiaries (“Xiaomi Group”) |
b) |
The Group had the following related party transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Revenues: |
||||||||||||||||
Public cloud services provided to Xiaomi Group |
||||||||||||||||
Public cloud services provided to Kingsoft Group |
||||||||||||||||
Public cloud services provided to Cheetah Group |
— | — | ||||||||||||||
Enterprise cloud services provided to Xiaomi Group |
— | — | ||||||||||||||
Enterprise cloud services provided to Kingsoft Group |
— | — | ||||||||||||||
Other services provided to Xiaomi Group |
— | — | ||||||||||||||
Other services provided to Kingsoft Group |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Purchase of devices from Xiaomi Group |
||||||||||||||||
Interest expense on loan s due to Xiaomi Group |
— | — | ||||||||||||||
Interest expense on loan due to Kingsoft Group |
— | |||||||||||||||
Rental of building from Xiaomi Group* |
||||||||||||||||
Rental of office space, and administrative services from Kingsoft Group** |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
20. |
RELATED PARTY TRANSACTIONS (Continued) |
* | The Group entered into agreements to lease building and office space from Xiaomi Group. As of December 31, 2020 and 2021, the related operating lease right-of-use |
** | The Group entered into short-term agreements to lease office space from Kingsoft Group in 2019 . The agreements expired in December 2019. The amounts in 2020 and 2021 were administrative services from Kingsoft Group. |
c) |
The Group had the following related party balances at the end of the year: |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Amounts due from related parties: |
||||||||||||
Xiaomi Group |
||||||||||||
Kingsoft Group |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Amounts due to related parties: |
||||||||||||
Kingsoft Group* |
||||||||||||
Xiaomi Group** |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
* | During 2021, the Group entered into a loan agreement with Kingsoft Group for an aggregate principal amount of RMB |
** | During 2021, the Group entered into several loan agreements with a weighted average interest rate of with Xiaomi Group which are secured by the Group’s electronic equipment. As of December 31, 2021, the current portion and non-current portion of the loans was RMB , respectively.Under the terms of the agreements, the Group will repay in fixed quarterly installments over according to the following schedule: |
2021 |
2021 |
|||||||
RMB |
US$ |
|||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
|
|
|
|
|||||
|
|
|
|
21. |
COMMITMENTS AND CONTINGENCIES |
22. |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
RMB |
||||
Balance as of January 1, 2020 |
||||
Foreign currency translation adjustments, net of tax of nil |
( |
) | ||
Balance as of December 31, 2020 |
( |
) | ||
Foreign currency translation adjustments, net of tax of nil |
( |
) | ||
Balance as of December 31, 2021 |
( |
) | ||
Balance as of December 31, 2021, in US$ |
( |
) | ||
23. |
SUBSEQUENT EVENTS |
24. |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY |
As at December 31 |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Short-term investments |
||||||||||||
Prepayments and other assets |
||||||||||||
Amounts due from subsidiaries |
||||||||||||
Total current assets |
||||||||||||
Non-current assets: |
||||||||||||
Investments in subsidiaries |
— | |||||||||||
Total non-current assets |
— | |||||||||||
Total assets |
||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accrued expenses and other liabilities |
||||||||||||
Income tax payable |
||||||||||||
Amounts due to subsidiaries |
||||||||||||
Amounts due to related parties |
||||||||||||
Total current liabilities |
||||||||||||
Other liabilities |
||||||||||||
Total non-current liabilities |
||||||||||||
Total liabilities |
||||||||||||
Commitments and contingencies |
||||||||||||
Shareholders’ equity: |
||||||||||||
Ordinary shares (par value of US$ |
||||||||||||
Additional paid-in capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Total Kingsoft Cloud Holdings Limited shareholders’ equity |
||||||||||||
Total liabilities and shareholders’ equity |
||||||||||||
24. |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Continued) |
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Operating expenses: |
||||||||||||||||
General and administrative expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
||||||||||||||||
Interest income |
||||||||||||||||
Foreign exchange (loss) gain |
( |
) | ||||||||||||||
Other (expenses) income, net |
( |
) | ||||||||||||||
Share of losses of subsidiaries and the VIEs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Other comprehensive income (loss), net of tax of nil: |
||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to Kingsoft Cloud Holdings Limited shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Accretion to redemption value of redeemable convertible preferred shares |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to ordinary shareholders |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
For the year ended December 31 |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Net cash (used in) generated from operating activities |
( |
) | ( |
) | ||||||||||||
Net cash generated from (used in) investing activities |
( |
) | ( |
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24. |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Continued) |
Exhibit 4.23
CONFIDENTIAL
KINGSOFT CLOUD HOLDINGS LIMITED
2021 SHARE INCENTIVE PLAN
Adopted on November 15, 2021
1. Purposes of the Plan. The purposes of this Share Incentive Plan (the Plan) is to promote the success and enhance the value of Kingsoft Cloud Holdings Limited, an exempted company formed under the laws of the Cayman Islands (the Company), by linking the personal interests of the members of the Board, Employees, and Consultants to those of the Companys shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Companys shareholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Companys operation is largely dependent.
2. Definitions. The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the definition contained in this Section 2.
(a) Administrator means the Committee or one or more executive officers of the Company to whom the Board or the Committee may delegate the authority to grant Awards to Participants.
(b) Applicable Laws means the legal requirements relating to the Plan and the Awards under applicable corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system.
(c) Articles means the memorandum and articles of association of the Company, as may be amended and restated from time to time.
(d) Award means the grant of Restricted Shares, Restricted Share Units (together with Restricted Shares, Share Awards), Incentive Share Options, Non-statutory Share Options (together with Incentive Share Options, Share Options), or other types of awards or benefit authorized to be granted under the Plan.
(e) Award Agreement means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium. The Award Agreement shall be subject to the terms and conditions of the Plan.
(f) Board means the board of directors of the Company.
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(g) Change in Control means the occurrence of any of the following events:
(i) any person becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Companys then outstanding voting securities;
(ii) the consummation of the sale, lease, or disposition by the Company of all or substantially all of the Companys assets; or
(iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
Anything in the foregoing to the contrary notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the legal jurisdiction of the Companys incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction.
(h) Committee means the Compensation Committee of the Board.
(i) Consultant means any person (other than an Employee or a Director, solely with respect to rendering services in such persons capacity as an Employee or Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.
(j) Continuous Service means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Participants Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Participant provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any leave of absence approved by the Company or any Related Entity, including sick leave, military leave, or any other personal leave, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement).
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(k) Control means the possession, direct or indirect, of the power to direct, or cause the direction of, the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
(l) Director means a member of the Board or the board of directors of any Related Entity.
(m) Disability means total and permanent physical disability.
(n) Employee means any person, including an officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a Directors fee by the Company or a Related Entity shall not be sufficient to constitute employment by the Company.
(o) Fair Market Value means, the closing price of a Share as stated in the daily quotations sheet of the relevant stock exchange on which the Shares are traded, or if Shares are not so traded, the Fair Market Value as determined by the Administrator in good faith and in its discretion.
(p) Group Companies the Company and/or any of its Subsidiary.
(q) Participant means an Employee, Director or Consultant who receives an Award under the Plan.
(r) Ordinary Share means an ordinary share of the Company, as adjusted in accordance with Section 12 hereof.
(s) Plan means this 2021 Share Incentive Plan, as amended from time to time.
(t) Related Entity means any Subsidiary of the Company and any business, corporation, partnership, limited liability company or other entity Controlled by the Company or a Subsidiary of the Company.
(u) Subsidiary means, with respect to a specific entity, (i) any entity (x) more than fifty percent (50%) of whose shares or other interests entitled to vote in the election of directors or (y) more than a fifty percent (50%) interest in the profits or capital of such entity are owned or controlled directly or indirectly by the subject entity or through one (1) or more Subsidiaries of the subject entity, (ii) any entity whose assets, or portions thereof, are consolidated with the net earnings of the subject entity and are recorded on the books of the subject entity for financial reporting purposes in accordance with the applicable accounting standards, or (iii) any entity with respect to which the subject entity has the power to otherwise direct the business and policies of that entity directly or indirectly through another Subsidiary.
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3. Shares Subject to the Plan.
(a) Subject to the provisions of Section 11 below, the maximum aggregate number of Shares which may be issued pursuant to Awards granted under the Plan shall be no more than 209,216,310 of the Ordinary Shares, proportionally adjusted to reflect any share dividends, share splits, or similar transactions.
(b) Any Shares covered by an Award (or portion of an Award) which is forfeited, cancelled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at the lower of their original purchase price or their Fair Market Value at the time of repurchase, such Shares shall become available for future grant under the Plan. To the extent not prohibited by the Applicable Law and the listing requirements of the applicable stock exchange or national market system on which the Ordinary Shares are traded, any Shares covered by an Award which are surrendered (i) in payment of the Award exercise or purchase price or (ii) in satisfaction of tax withholding obligations incident to the exercise of an Award shall be deemed not to have been issued for purposes of determining the maximum number of Shares which may be issued pursuant to all Awards under the Plan, unless otherwise determined by the Administrator.
4. Administration of the Plan.
(a) Plan Administrator.
(i) Administration. The Plan shall be administered by the Administrator.
(ii) Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this Section 4(a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to: (i) designate Participants to receive Awards;
(ii) determine the type or types of Awards to be granted to each Participant;
(iii) determine the number of Awards to be granted and the number of Shares to which an Award will relate;
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(iv) determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;
(v) determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(vi) prescribe the form of each Award Agreement, which need not be identical for each Participant;
(vii) decide all other matters that must be determined in connection with an Award;
(viii) establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(ix) interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
(x) make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.
(c) Effect of Administrators Decision. The Administrators interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.
(d) Indemnification. To the extent allowable pursuant to Applicable Laws, each member of the Committee or the executive officer of the Company authorized by the Committee hereunder shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member or executive officer in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Articles, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
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5. Eligibility. Persons eligible for the grant of the Awards include Employees, Consultants, and all members of the Board, or trusts or entities established in connection with any employee benefit plan of the Company (including the Plan) for the benefit of a Participant, as determined by the Administrator.
6. Terms and Conditions of Awards.
(a) Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Restricted Shares, (ii) Restricted Share Units, (iii) Share Options with a fixed or variable exercise price related to the Fair Market Value of the Shares, which may be amended or adjusted in the absolute discretion of the Administrator, or (iv) other types of shares or other types of awards or benefit authorized to be granted under the Plan.
(b) Designation of Award. Each Award shall be designated in the Award Agreement.
(c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria as specified in the Award Agreement.
(d) Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, share purchase, asset purchase or other form of transaction.
(e) Term of Award. The term of each Award shall be the term stated in the Award Agreement.
(f) Non-transferability of Awards. Unless otherwise determined by the Administrator and provided in the applicable Award Agreement, as the same may be amended, no Award shall be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner (whether by operation of law or otherwise) other than by will or Applicable Laws of descent and distribution or pursuant to a qualified domestic relations order, and shall not be subject to execution, attachment, or similar process. Upon any attempt to pledge, assign, hypothecate, transfer, or otherwise dispose of any Award or of any right or privilege conferred by this Plan contrary to the provisions hereof, or upon the sale, levy or attachment or similar process upon the rights and privileges conferred by this Plan, such Award shall thereupon terminate and become null and void. Awards may be exercised during the lifetime of the Participant only by the Participant.
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(g) Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which such Award is deemed to be granted and accepted, or such other date as is determined by the Administrator.
7. Terms and Conditions of Share Awards.
(a) Issuance and Restrictions. Share Awards shall be subject to such restrictions on transferability and other restrictions as the Administrator may impose. These restrictions may lapse separately on in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Administrator determines at the time of the grant of the Award or thereafter. Unless the Administrator determines otherwise, Share Awards shall be held by the Company as escrow agent until the restrictions on such Share Awards have lapsed.
(b) Forfeiture and Repurchase. Except as otherwise determined by the Administrator at the time of the grant of the Award or thereafter, upon termination of the Participants Continuous Service during the applicable restriction period, Share Awards that are at that time subject to restrictions shall be forfeited to the Company for no consideration. Notwithstanding the foregoing, the Administrator may:
(i) provide in any Award Agreement that restrictions or forfeiture and repurchase conditions relating to Share Awards will be waived in whole or in part in the event of terminations resulting from specific causes; and
(ii) In other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Share Awards.
(c) Removal of Restrictions. Except as otherwise provided in the Plan, Share Awards granted shall be released from escrow as soon as practicable after the last day of the period of restriction. The Administrator, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Shares shall
become unrestricted and freely transferable by the Participant, subject to applicable legal restrictions, any lock-up agreement between the Company and any underwriter or depositary bank in connection with an offering, and the provisions of the Award Agreement, provided however, that unless approved by the Administrator, the Participant shall not transfer any Shares issued upon the expiration or removal of any restriction imposed on any Restricted Shares, or
any interest therein, to any person or entity that is a competitor of the Company, as determined by the Administrator in its sole discretion.
(d) Termination of Service. Unless otherwise provided in the Award Agreement, if a Participants Continuous Service terminates for any reason, the Share Awards granted to such Participant, to the extent not vested, shall terminate upon the Participants termination of Continuous Service. The Award Agreement may provide for conditions and other limitations in respect of the Share Awards granted to a Participant if such Participants Continuous Service terminates for any reason.
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(e) Termination by Death. If the Participants employment or service terminates as a result of death, any distribution or delivery to be made to the Participant under the Award Agreement will be made to the Participants designated beneficiary, provided that such beneficiary has been designated prior to the Participants death in a form acceptable to the Committee or, if no such beneficiary has been designated or survives the Participant, the administrator or executor of the Participants estate. Any such transferee must furnish to the Committee with (i) written notice of his or her status as transferee, and (ii) evidence satisfactory to the Committee to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
8. Terms and Conditions of Share Options.
(a) Exercise of Share Options. The Share Options may not be exercised until vested pursuant to the applicable Award Agreement. The Administrator shall determine the time or times at which a Share Option may be exercised in whole or in part, including exercise prior to vesting; provided that the term of any Share Option granted under the Plan shall not exceed ten (10) years, subject to approval by the Administrator of extension of the exercise period for an Share Option beyond ten (10) years from the date of the grant. The Administrator shall also determine any conditions, if any, that must be satisfied before all or part of a Share Option may be exercised. Once vested, the vested portion of the Share Option may be exercised in whole or in any part, at any time, subject to the terms of the Plan and the Award Agreement.
(b) Exercise Price. The exercise price per share subject to an Option shall be determined by the Administrator and set forth in the Award Agreement and may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option may be amended or adjusted in the absolute discretion of the Administrator, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by applicable laws, rules and regulations, a downward adjustment of the exercise prices of Options mentioned in the preceding sentence shall be effective without the approval of the Companys shareholders or the approval of the affected Participants.
(c) Transfer Restrictions. Unless approved by the Administrator, the Participant shall not transfer any Shares issued upon the exercise of any Option, or any interest therein, to any person or entity that is a competitor of the Company, as determined by the Administrator in its sole discretion. Subject to the prior approval of the Administrator, transfer to one or more natural persons who are the Participants family members or entities owned and controlled by the Participant and/or the Participants family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participants family members, or to such other persons or entities as may be expressly approved by the Administrator. The Participant shall give written notice to the Administrator setting forth such desire to transfer, the number of Shares to be transferred, and at least the name and address of the proposed transferee. Upon receipt of the notice, the Administrator shall (i) have an assignable option to purchase any or all of such Shares, or (ii) approve or disapprove such transfer.
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(d) Termination of Service. Unless otherwise provided in the Award Agreement, if a Participants Continuous Service terminates for any reason, the Share Options granted to such Participant, to the extent not vested and exercisable on the date of such Participants termination of Continuous Service, shall terminate upon the Participants termination of Continuous Service. The Award Agreement may provide for conditions on exercise and other limitations in respect of the Share Options granted to a Participant if such Participants Continuous Service terminates for any reason.
(e) Termination by Death. If the Participants employment or service terminates as a result of death, any distribution or delivery to be made to the Participant under the Award Agreement will be made to the Participants designated beneficiary, provided that such beneficiary has been designated prior to the Participants death in a form acceptable to the Committee or, if no such beneficiary has been designated or survives the Participant, the administrator or executor of the Participants estate. Any such transferee must furnish to the Committee with (i) written notice of his or her status as transferee, and (ii) evidence satisfactory to the Committee to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
9. Award Exercise or Purchase Price, Consideration and Taxes.
(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be determined by the Administrator. Notwithstanding the foregoing provisions of this Section 10(a), in the case of an Award issued pursuant to Section 6(d) above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award, in each case, the value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Laws.
(b) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator.
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(c) Taxes. No Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participants payroll tax obligations) required or permitted by Applicable Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental taxable income.
10. Exercise of Award.
(a) Procedure for Exercise; Rights as a Shareholder.
(i) Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.
(ii) An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares.
(b) Exercise of Award Following Termination of Continuous Service.
(i) An Award may be exercised following the termination of a Participants Continuous Service only to the extent provided in the Plan or the Award Agreement.
(ii) Where the Plan or the Award Agreement permits a Participant to exercise an Award following the termination of the Participants Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.
(c) Exercise in Violation of Applicable Laws. Notwithstanding the foregoing, regardless of whether an Award has otherwise become exercisable, the Award may not be exercised if the Administrator (in its sole discretion) determines that an exercise could violate any Applicable Laws or any lock-up agreement between the Company and any underwriter or depositary bank in connection with an offering.
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(d) Exercise in Violation of applicable policies of the Company. Notwithstanding the foregoing, regardless of whether an Award has otherwise become exercisable, the Award may not be exercised if the Administrator (in its sole discretion) determines that an exercise could violate any applicable policies of the Company.
11. Conditions Upon Issuance of Shares.
(a) Unless otherwise provided in the Plan or the Award Agreement, Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the advice of counsel for the Company with respect to such compliance.
(b) As a condition to the issuance of Shares under of an Award and unless otherwise determined by the Administrator, the Participant shall have achieved applicable performance targets prior to the date of such exercise.
12. Adjustments Upon Changes in Capitalization. Subject to any requirements of the Articles and applicable laws, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Participant in any fiscal year of the Company, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, or (ii) as the Administrator may determine in its discretion, any other transaction with respect to Ordinary Shares including a corporate merger, consolidation, acquisition of property or equity, separation (including a spin-off or other distribution of shares or property), reorganization, liquidation (whether partial or complete) or any similar transaction. Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive.
13. Change in Control.
(a) In the event that the Company is a party to a Change in Control, or upon a merger or consolidation involving the Company or any other event with respect to which the Administrator deems it appropriate, in all cases without the consent of the Participant, the Administrator may cause the Award to be:
(i) assumed by the surviving corporation or its parent;
(ii) continued by the Company if it is the surviving corporation;
(iii) accelerated to become vested and exercisable, in full or in part, as the Administrator deems appropriate;
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(iv) cancelled with or without consideration; or
(v) exchanged or replaced with a substitute award, in each case with or without additional consideration.
(b) To the extent not previously exercised, vested or settled, the Awards shall terminate immediately prior to the dissolution or liquidation of the Company
14. Effective Date and Term of Plan. The Plan shall become effective upon the date hereof (the Effective Date). Unless otherwise terminated by the Board or the Committee pursuant to Section 16(a), the Plan shall continue in effect for a term of ten (10) years after the Effective Date. Subject to Applicable Laws, Awards may be granted under the Plan upon its becoming effective.
15. Amendment, Suspension or Termination of the Plan.
(a) The Administrator may at any time amend, suspend or terminate the Plan, subject to any requirement of the Applicable Laws.
(b) No Award may be granted during any suspension of the Plan or after termination of the Plan.
16. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times reserve such number of Shares as shall be sufficient to satisfy the Companys obligations to deliver Shares pursuant to the requirements of the Plan.
(b) The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Companys counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
17. Legending Share Certificates. In order to enforce any restrictions imposed upon Shares issued upon the exercise of Awards, the Administrator may cause a legend or legends to be placed on any share certificates representing the Shares, which legend or legends shall make appropriate reference to the restrictions, including, without limitation, a restriction against sale of the Shares for any period as may be required by Applicable Laws.
18. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Participant any right with respect to the Participants Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Participants Continuous Service at any time and with or without notice.
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19. No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation.
20. Vesting Schedule. The Awards to be issued to any Participant under the Plan shall be subject to the vesting schedule as specified in the Award Agreement.
21. Unfunded Obligation. The Plan is intended to be an unfunded plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary of the Company.
22. Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term or is not intended to be exclusive, unless the context clearly requires otherwise.
23. Governing Law. The Plan shall be governed by and construed in accordance with the laws of the Cayman Islands.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Exhibit 4.24
STRATEGIC COOPERATION AND ANTI-DILUTION FRAMEWORK AGREEMENT
BETWEEN KINGSOFT AND KINGSOFT CLOUD
This Strategic Cooperation and Anti-Dilution Framework Agreement (the Agreement) dated January 27, 2022, is made and entered into by and between the following parties in the Peoples Republic of China (PRC, for the purpose of the Agreement, excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan):
Party A |
: | Kingsoft Cloud Holdings Limited (NASDAQ Stock Code: KC, hereinafter referred to as Kingsoft Cloud. Kingsoft Cloud, the subsidiaries included in its consolidated financial statements, and affiliated entities, collectively referred to as Kingsoft Cloud Group) | ||||
Address |
: | Building E, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC | ||||
Party B |
: | Kingsoft Corporation Limited (HKEX Stock Code: 03888, hereinafter referred to as Kingsoft; Kingsoft, the subsidiaries included in its consolidated financial statements, and affiliated entities, collectively referred to as Kingsoft Group) | ||||
Address |
: | Building D, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC |
WHEREAS:
1. Kingsoft Group and Kingsoft Cloud Group have established an in-depth partnership in cloud services, resources sharing and others. For the purpose of further clarifying, standardizing and deepening such cooperation and establishing long-term and constructive partnership, both Parties, adhering to the principles of fairness, impartiality and integrity, unanimously agree to establish a strategic cooperative relationship and carry out all-round cooperation in potential fields in order to consolidate and expand the advantages in their respective fields, and hereby enter into the Agreement.
2. The Agreement is a framework agreement, and both Parties may execute and perform the Agreement through their respective relevant entities to implement specific service details according to actual business needs.
3. In the Agreement, the percentage of Kingsofts equity interest in Kingsoft Cloud is calculated as follows:
| The numerator is the total number of ordinary shares and American depositary receipts (ADRs) of Kingsoft Cloud held by Kingsoft as of the date of the Agreement; |
| The denominator is the total number of shares issued by Kingsoft Cloud as of the date of the Agreement, which is the total issued shares (including ordinary shares and ADRs) listed in the Register of Members of Kingsoft Cloud on the date of this Agreement. |
4. As of the date of the Agreement, the total number of ordinary shares and ADRs of Kingsoft Cloud held by Kingsoft is equivalent to 1,423,246,584 ordinary shares.
Now, THEREFORE, in accordance with the provisions of the Civil Code of the Peoples Republic of China and other relevant laws and regulations, both Parties have entered into the Agreement through friendly negotiations in order to clarify their rights and obligations. Party A and Party B are herein each referred to as a Party and collectively the Parties. The details are as follows:
Article 1 Details of Strategic Cooperation
1.1 In compliance herewith and subject to the following premises, Kingsoft undertakes to facilitate Kingsoft Group in negotiating cooperation with Kingsoft Cloud Group on the products, services and solutions listed in the Potential Areas of Cooperation as described in Section 1.2 of the Agreement as a matter of priority on equal terms and conditions:
1.1.1 Compliance with the respective applicable corporate governance documents (articles of association, shareholder agreements, etc.), applicable listing rules, transaction specifications, internal procurement/transaction processes, and public commitments made by respective entities of the Parties;
1.1.2 The prices of the services and products provided by Kingsoft Cloud Group will make full reference to the quality and prices of similar services and products provided by independent third parties in order to ensure fairness and reasonableness, in line with the principle of fair market price and will be in the best interests of the Parties hereto and their shareholders as a whole; in addition to the aforesaid fair price terms, Kingsoft Cloud Group will also make its best efforts to ensure the quality, stability and sustainability of the services and products provided to Kingsoft Group; and
1.1.3 Kingsoft Cloud Group undertakes to give priority, under the same terms and conditions, to negotiation with the corresponding entities of Kingsoft Group engaged in such business with respect to the business areas of Kingsoft Group disclosed in the annual report of Kingsoft.
1.2 | Potential areas of cooperation between the Parties include but are not limited to: |
1.2.1 products and services for cloud computing and cloud storage;
1.2.2 PaaS, SaaS and other value-added cloud services (e.g. full-stack (including IaaS, PaaS and SaaS) cloud gaming services);
1.2.3 IT system services (e.g. existing IT system services of WPS and Camelot);
1.2.4 data center rental; and
1.2.5 other possible areas of cooperation to be subsequently confirmed by the Parties.
1.3 Both Parties may reciprocally recommend their products, services and solutions to the relevant customers or partners during business operation under the same terms and conditions, in addition to the aforesaid potential areas of cooperation.
1.4 Where services and products are provided by Kingsoft to Kingsoft Cloud Group, the Parties will make full reference to the quality and price of similar services offered by independent third parties to ensure that they are fair and reasonable, in line with the principle of fair market price and will be in the best interests of both Parties hereto and their shareholders as a whole.
1.5 The Agreement is a framework agreement, and both Parties may execute and perform the Agreement through their respective concerned entities to implement specific service details according to actual business needs, provided that the performance of relevant agreements is subject to the necessary approval process in accordance with the entities applicable corporate governance documents (articles of association, shareholder agreements, etc.), listing rules, transaction norms, internal procurement/transaction procedures, and public commitments made by them. Kingsoft and its wholly-owned subsidiaries undertake to support the execution and performance of the relevant agreements to the extent that they can exercise their voting rights.
Article 2 Licensing Service
2.1 Reference is made to the Trademark Licensing Agreement and the Technology Transfer (Patent Implementation Licensing) Agreement dated December 18, 2019 (collectively, the License Agreements) among Kingsoft and Kingsoft Cloud and their respective subsidiaries. According to the License Agreements, Kingsoft has, through its subsidiaries, licensed Kingsoft Cloud to use six patents owned by Kingsoft (through its subsidiaries), including the systems and methods for synchronizing the updates of specified files on a priority basis, under a general license in accordance with the specific agreement of the relevant contract. Kingsoft Cloud is entitled to the licenses of implementing such patents and shall pay the corresponding royalties for the exploitation of such licenses. Additionally, subject to specific contractual agreements, Kingsoft has agreed to license the relevant trademarks which have applied for registration or have been registered by its Group to Kingsoft Cloud for a certain validity period.
2.2 Kingsoft undertakes to properly perform the License Agreements and not to terminate or rescind such License Agreements without agreed reasons.
Article 3 Pricing Arrangement
3.1 With respect to the details of the strategic cooperation between the Parties hereunder, the Parties shall make reference to the quality and applicable historical prices of similar services and products provided by independent third parties in terms of pricing so as to ensure that they are fair and reasonable, in line with fair market prices, determined fairly and reasonably through friendly negotiations, and will be in the best interests of the respective shareholders of the Parties as a whole. Such service fees shall be no higher than the prices on which the service provider relies to provide similar services to independent third parties, thereby ensuring that the terms and conditions are fair and reasonable.
3.2 The specific pricing arrangement and the amount of the service fees for the next three years shall be subject to the agreements to be entered into by both Parties through their respective entities in accordance with the principles set forth herein, if any, based on actual business needs.
Article 4 Anti-dilution Rights
4.1 For the purpose of strengthening the strategic cooperation between the two Parties and implementing the aforesaid strategic partnership, Kingsoft Cloud undertakes to grant Kingsoft anti-dilution rights during the term of the Agreement (as defined in Section 5.1 below), unless otherwise required for regulatory reasons. Kingsoft shall have rights to purchase a Pro Rata Share (as defined in Section 4.4 below) in the allotment and issuance of new securities (the New Securities, as defined in Section 4.5 below) of Kingsoft Cloud such that, following the completion of the relevant allotment and issuance, the percentage of Kingsofts shareholding in Kingsoft Cloud shall be no less than the percentage of Kingsofts shareholding in Kingsoft Cloud (including ordinary shares and ADRs) as of the date of the Agreement. Specifically, Kingsoft Cloud agrees that, in accordance with applicable domestic and international laws and regulations, in the event the Company proposes to undertake any allotment and issuance of New Securities in a single transaction or a series of transactions, directly or indirectly, including in both public and private offerings or placements of securities (including, without limitation, a listing on the Main Board of the Stock Exchange of Hong Kong), during the term of the Agreement, then Kingsoft Cloud undertakes that, it shall not undertake such allotment and issuance of New Securities unless Kingsoft Cloud delivers a Participation Notice (as defined below) to Kingsoft and complies with the provisions set forth in Section 4.3 of the Agreement. The Parties acknowledge that Kingsoft shall have the right to designate its affiliated entities (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, hereinafter referred to as the Hong Kong Listing Rules) to exercise such anti-dilution rights.
4.2 | Participation Notice. The Parties agree that prior to the allotment and issuance of any New Securities by Kingsoft Cloud, Kingsoft Cloud shall give to Kingsoft a written notice of its intention to issue New Securities (the Participation Notice), describing the amount and type of New Securities, the price, price range or pricing mechanism (as applicable and as practicable) and the terms upon which Kingsoft Cloud proposes to issue such New Securities, and Kingsofts Pro Rata Share (as defined below) of such New Securities (as determined in accordance with Section 4.4). Kingsoft Cloud shall provide such Participation Notice to Kingsoft without delay as applicable and practicable. Such Participation Notice shall be delivered by Kingsoft Cloud to Kingsoft no later than forty (40) days prior to the date on which Kingsoft Cloud enters into the definitive agreement with respect to the allotment and issuance of the New Securities (i.e. the Hong Kong Underwriting Agreement), unless the timing of such Notice may be otherwise agreed upon by the Parties through friendly negotiations. |
4.3 | Exercise of anti-dilution rights. The Parties agree that during the term of the Agreement (as defined in Section 5.1 hereof), Kingsoft Cloud grants anti-dilution rights to Kingsoft in connection with the allotment and issuance of New Securities of Kingsoft Cloud. The specific arrangements for the exercise of the anti-dilution rights are as follows: |
4.3.1 | The Parties agree that Kingsoft shall, upon receipt of any such Participation Notice, notify Kingsoft Cloud in writing without delay (the Exercise Notice) and state therein the quantity of New Securities to be purchased (which shall not exceed the Pro Rata Share of Kingsoft or its designated entity). Provided that the final number of New Securities issued does not exceed the quantity set forth in the Participation Notice and Kingsoft has given an Exercise Notice, Kingsoft shall irrevocably elect in writing to purchase the number of such New Securities as set forth in the Exercise Notice in accordance with the pricing mechanism and the terms and conditions thereof stipulated in the Participation Notice. Pursuant to Article 4 hereof, the price payable for subscription for any New Securities shall be equal to the price offered to and payable by all other investors participating in such offering, and such subscription shall be based on the same terms or conditions offered to and obtained by all other investors participating in such offering. |
4.3.2 | The Parties agree that in the event Kingsoft fails to deliver an Exercise Notice in writing to so elect to purchase any of its Pro Rata Share of New Securities pursuant to Section 4.3 hereof within the time limit of six (6) business days following Kingsoft Clouds Participation Notice, Kingsoft shall be deemed to have forfeited and waived any right to purchase any New Securities held on such Pro Rata Share basis under Section 4.1 hereof on that occasion. Nevertheless, it shall not be deemed to forfeit or waive any right with respect to any future issuance of New Securities under this Agreement. Where there is a practical need, Kingsoft may give written notice to Kingsoft Cloud requesting an extension of such time limit, which shall not be unreasonably withheld by Kingsoft Cloud, provided that such Exercise Notice is given no later than five (5) business days prior to Kingsoft Cloud entering into the definitive agreement with respect to the allotment and issuance of the New Securities. |
4.3.3 | The Parties agree that, notwithstanding anything to the contrary in Section 4.3 of the Agreement, any purchase by Kingsoft of its Pro Rata Share of any New Securities must be made in compliance with any applicable domestic and international laws, rules and regulations (including stock exchange rules), and any internal policies and procedures of the Parties. |
4.3.4 | If the exercise of the anti-dilution rights by Kingsoft triggers Kingsofts obligation to obtain shareholders approval under the Hong Kong Listing Rules, the Parties shall separately negotiate the exercise of Section 4.3 herein. The Parties may, upon negotiation, adjust the relevant period by agreement in order to meet the requirement for Kingsoft to obtain shareholders approval, provided that such relevant approval of independent shareholders meeting shall be obtained three (3) business days prior to Kingsoft Cloud entering into the definitive agreement with respect to the allotment and issuance of the New Securities. Failure to do so shall result in Kingsoft being deemed to have forfeited and waived any right to purchase a Pro Rata Share of the New Securities pursuant to Section 4.1 hereof. |
4.4 Pro rata share. For the purposes of the Agreement, Kingsofts Pro Rata Share shall be equal to (i) the total number of shares issued by Kingsoft Cloud immediately after the issuance of New Securities, plus any equity securities issued or issuable upon exercise of all pre-existing anti-dilution rights or other similar rights to obtain additional equity securities in connection with the issuance of the New Securities, multiplied by (ii) the percentage of equity interests (including ordinary shares and ADRs) held by Kingsoft in Kingsoft Cloud as of the date of the Agreement; less the number of shares (including ordinary shares and ADRs) held by Kingsoft in Kingsoft Cloud immediately prior to the issuance of the New Securities. For the avoidance of doubt, rounding is also required to avoid fractional shares regarding such calculations.
4.5 For the purposes of the Agreement, New Securities shall refer to any equity securities or convertible securities (including ordinary shares, ADRs or any other equity securities) sold in any transaction (including but not limited to a public offering in connection with the listing of Kingsoft Cloud on the Main Board of the Stock Exchange of Hong Kong) after the date of the Agreement, but excluding:
4.5.1 | any options, grant rights, awards, restricted shares or any other share-based awards issued or issuable under any employee equity incentive plan (the Company Equity Incentive) approved by the Board of Directors of Kingsoft Cloud (the Board), and any equity securities issuable upon exercise, vesting or conversion of any company equity awards; |
4.5.2 | any equity securities issued pursuant to the cancelation or exchange of any ADRs of Kingsoft Cloud by the holders thereof; |
4.5.3 | any equity securities issued pursuant to any acquisition of any entity through a merger, acquisition, purchase of substantially all of the assets of such entity, reorganization or similar transaction, in each case, as approved by the Board; |
4.5.4 | any equity securities issued in connection with any share split, share division, share dividend or distribution, reclassification or other similar event as approved by the Board; and |
4.5.5 | any other equity securities issued upon the conversion, exchange or exercise of any securities of Kingsoft Cloud outstanding as of the date of this Agreement or issued subsequent to the date hereof. |
4.6 The Parties acknowledge that the anti-dilution rights in this section have not been taken into consideration in the specific pricing arrangements and the determination of the maximum amount of the service fees for the next three years under the strategic cooperation framework agreement as set forth in Article 1 hereof between Kingsoft Cloud and Kingsoft. The Parties acknowledge that the service fees payable by Kingsoft Cloud Group to Kingsoft Group and the pricing arrangements hereunder shall be governed by the relevant provisions in Article 3 hereof.
Article 5 Term, Performance and Termination of the Agreement
5.1 The Parties agree that the Agreement shall take effect upon signing by the authorized representatives of the Parties. The term of the Agreement shall be valid from the date of the Agreement to December 31, 2024 (the Term). The Parties agree that they will review and decide on the renewal of the cooperation two (2) months prior to the expiry of the Term.
5.2 The Parties agree that they will explore additional procurement and partnership models in potential areas of cooperation during the Term of the Agreement, and negotiate and implement the details of the cooperation subject to applicable corporate governance documents (articles of association, shareholder agreements, etc.), listing rules, transaction norms, internal procurement/transaction procedures, and public commitments made by them.
5.3 The Parties agree that during the cooperation period, both Parties may hold communication meetings regularly or irregularly and establish a good communication mechanism to ensure timeliness of service and continuous improvement and optimization of business.
5.4 The Parties agree that if any provision under the Agreement is ruled to be, or is deemed by the applicable entitys regulatory authorities (including, without limitation, any government body, any applicable stock exchange (including those in connection with IPO)) to be, inconsistent with the laws, regulations and listing requirements or rules governing such applicable entity (Regulatory Reasons), the Parties shall amend the provision of the Agreement through negotiations to ensure its compliance with the requirements of the regulatory authorities. If some terms of the Agreement are terminated for any Regulatory Reason (e.g., Article 4 Anti-Dilution Rights), the Parties shall resolve the performance of the other terms of the Agreement through separate negotiations.
5.5 The Parties agree that if either Party breaches any provision of the Agreement (the Breaching Party), the other Party (the Non-breaching Party) may notify the Breaching Party in writing that it has committed a breach and require the Breaching Party to make remedies within a specified reasonable period of time. If the Breaching Party fails to remedy such breach within the aforementioned period, the Non-breaching Party shall be entitled to terminate the Agreement immediately. The Non-breaching Party reserves the right to recover compensation and any other legally permissible claims against the Breaching Party.
Article 6 Representations and Warranties of the Parties
6.1 Both Parties are duly incorporated and validly existing under the laws of the place of incorporation.
6.2 The Parties hold the necessary licenses, permits, registrations, certificates, and other qualifications and approvals, whether domestic or overseas, to provide the services hereunder.
6.3 The Parties have taken all required actions and (except as otherwise expressly provided herein) obtained all consents, approvals, authorizations and permits necessary to enter into the Agreement. The execution of the Agreement shall not violate (i) the articles of association of the Parties, (ii) any other agreements or obligations of the Parties, or (iii) any laws, regulations or ordinances in force of the PRC or other relevant jurisdictions. Their representatives who sign the Agreement have been fully authorized to sign the Agreement.
6.4 The Parties undertake to comply with the applicable listing rules and other requirements of the applicable entities regulatory authorities, as well as the applicable laws and regulations both within and outside China as amended and updated from time to time for the purpose of the transactions hereunder.
6.5 One Party undertakes to the other Party to provide sufficient information and reasonable assistance to the other Party and the independent non-executive directors of the other Party and/or the independent financial adviser, auditor and legal adviser appointed by the other Party in order to ensure that the other Party is able to make the relevant filings and disclosures (if required) in respect of the transactions hereunder in accordance with the applicable laws and regulations both within and outside China, applicable listing rules, and other requirements of the applicable entities regulatory authorities.
Article 7 Force Majeure
7.1 In the event that either Party fails to perform its obligations hereunder in whole or in part due to a force majeure event, performance of such obligations shall be suspended for the period of time during which the force majeure event hinders its performance. A force majeure event shall mean any event which is beyond the reasonable control of the affected Party, could not have been foreseen or, if foreseen, could not have been avoided or overcome by such Party, and occurs after the date of the Agreement and makes performance of the Agreement in whole or in part by such Party objectively impossible or impracticable (including, but not limited to, failure to perform at a reasonable cost). Such events include, but are not limited to, floods, fires, droughts, windstorms, earthquakes and other natural disasters, traffic accidents, strikes, turmoil, riots, and wars (regardless of whether war is declared), and acts and omissions of government authorities.
7.2 The Party claiming to be affected by the force majeure event shall notify the other Party of the occurrence of the force majeure event in writing within the shortest possible time and provide the other Party with appropriate evidence of such force majeure event and its duration by courier, registered mail or facsimile within fifteen days of the occurrence of such force majeure event. The Party claiming that a force majeure event makes its performance of the Agreement objectively impossible or impractical shall be obligated to make all reasonable efforts to eliminate or mitigate the effects of such force majeure event.
7.3 In the event of a force majeure event, the Parties shall promptly decide how to implement the Agreement through friendly negotiations. Upon termination or elimination of the force majeure event or its effects, the Parties shall immediately resume performance of their respective obligations hereunder.
Article 8 Information Disclosure and Confidentiality
8.1 Neither Party shall make any disclosure of information (including but not limited to announcements, notices and circulars) in connection with the matters hereof without the prior written consent of the other Party, except where such disclosure is made in accordance with the laws of the PRC or the regulations of the China Securities Regulatory Commission, the Stock Exchange of Hong Kong, the Securities and Futures Commission of Hong Kong or any other relevant regulations.
8.2 Both Parties shall be obligated to keep confidential any trade secrets of the other Party known hereunder, and shall not disclose them to any third party without the written consent of the other Party, except as required by laws and regulations or by the stock exchanges where the shares of both Parties and their affiliates are listed or by relevant laws and regulations. Either Party violating the provisions of this Article shall fully compensate the other Party for all direct and indirect losses incurred therefrom.
8.3 Upon termination of the Agreement, the Parties shall continue to be bound by the confidentiality obligations under this Article.
Article 9 Notice
9.1 Notices or other communications made by a Party pursuant to the Agreement shall be in writing and in the Chinese language, and shall be delivered by hand or registered mail to the address designated by the other Party. The date on which the notice is deemed to have been validly made shall be determined in accordance with the following provisions:
9.1.1 A notice delivered by hand shall be deemed to be effective on the date it is signed for by the person designated by the other Party delivered to by hand;
9.1.2 Notices sent by registered mail shall be deemed valid on the fifth (5th) day (or the next business day if the last day falls on a Saturday, Sunday or legal holiday) after postage is paid (as determined by the postmark date).
9.1.3 The mailing addresses of both Parties are as follows:
Party A: Kingsoft Cloud Holdings Limited
Contact: Wang Yi
Address: Building E, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC
Party B: Kingsoft Corporation Limited
Contact: Peng Bo
Address: Building D, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC
9.2 If one Party changes its mailing address, it shall notify the other Party in writing of such change without delay as provided in this Article.
Article 10 Applicable Laws and Dispute Resolution
10.1 The Agreement shall be governed by and construed in accordance with the laws of the PRC.
10.2 Any dispute arising out of or in connection with the Agreement shall be resolved by the Parties at their own discretion through friendly negotiations. If no mutually acceptable conclusion is reached upon negotiations within thirty (30) days, either Party may file an application with the Shanghai International Economic and Trade Arbitration Commission (SIETAC). According to the arbitration rules of the Commission, the arbitration proceeding shall take place in Shanghai in Chinese. The arbitral award shall be final and binding on both Parties.
Article 11 Miscellaneous
11.1 The Parties agree to separately bear all relevant costs and expenses arising from the execution hereof in accordance with the relevant Chinese laws. In the absence of legal provisions, such costs and expenses shall be shared equally between both Parties.
11.2 Except with the prior written consent of one Party hereto, the other Party hereto is prohibited from assigning its rights and obligations hereunder.
11.3 The Agreement and the related documents referred to herein shall constitute the entire agreement and understanding between the Parties with respect to all matters stated herein, and shall supersede all prior agreements, contracts, understandings and communications, whether oral or written, between the Parties with respect to all matters described herein.
11.4 Unless otherwise provided, one Partys failure to exercise or delay in exercising its rights, powers or privileges hereunder shall not constitute a waiver of such rights, powers or privileges. Any single or partial exercise of such rights, powers, or privileges shall not preclude the exercise of any other rights, powers, or privileges by such Party.
11.5 The Appendices hereto, if any, are an integral part of the Agreement and shall be as equally binding as the Agreement.
11.6 The Agreement is made in two originals, one for each Party, and both have the same legal effect.
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Party A:
Kingsoft Cloud Holdings Limited
Authorized representative (Signature):
The signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Kingsoft and Kingsoft Cloud
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Party B:
Kingsoft Corporation Limited
Authorized representative (Signature):
The signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Kingsoft and Kingsoft Cloud
Exhibit 4.25
STRATEGIC COOPERATION AND ANTI-DILUTION FRAMEWORK AGREEMENT
BETWEEN XIAOMI CORPORATION AND KINGSOFT CLOUD
This Strategic Cooperation and Anti-Dilution Framework Agreement (the Agreement) dated January 29, 2022, is made and entered into by and between the following parties in the Peoples Republic of China (PRC, for the purpose of the Agreement, excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan):
Party A |
: | Kingsoft Cloud Holdings Limited (NASDAQ Stock Code: KC, hereinafter referred to as Kingsoft Cloud. Kingsoft Cloud, the subsidiaries included in its consolidated financial statements, and affiliated entities, collectively referred to as Kingsoft Cloud Group) | ||||
Address |
: | Building E, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC | ||||
Party B |
: | Xiaomi Corporation (HKEX Stock Code: 01810, hereinafter referred to as Xiaomi; Xiaomi, the subsidiaries included in its consolidated financial statements, and affiliated entities, collectively referred to as Xiaomi Corporation) | ||||
Address |
: | Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC |
WHEREAS:
1. Xiaomi Corporation and Kingsoft Cloud Group have established an in-depth partnership in cloud services, resources sharing and others. For the purpose of further clarifying, standardizing and deepening such cooperation and establishing long-term and constructive partnership, both Parties, adhering to the principles of fairness, impartiality and integrity, unanimously agree to establish a strategic cooperative relationship and carry out all-round cooperation in potential fields in order to consolidate and expand the advantages in their respective fields, and hereby enter into the Agreement.
2. The Agreement is a framework agreement, and both Parties may execute and perform the Agreement through their respective relevant entities to implement specific service details according to actual business needs.
3. In the Agreement, the percentage of Xiaomis equity interest in Kingsoft Cloud is calculated as follows:
| The numerator is the total number of ordinary shares and American depositary receipts (ADRs) of Kingsoft Cloud held by Xiaomi as of the date of the Agreement; |
| The denominator is the total number of shares issued by Kingsoft Cloud as of the date of the Agreement, which is the total issued shares (including ordinary shares and ADRs) listed in the Register of Members of Kingsoft Cloud on the date of this Agreement. |
4. As of the date of the Agreement, the total number of ordinary shares and ADRs of Kingsoft Cloud held by Xiaomi is equivalent to 449,701,000 ordinary shares.
Now, THEREFORE, in accordance with the provisions of the Civil Code of the Peoples Republic of China and other relevant laws and regulations, both Parties have entered into the Agreement through friendly negotiations in order to clarify their rights and obligations. Party A and Party B are herein each referred to as a Party and collectively the Parties. The details are as follows:
Article 1 Details of Strategic Cooperation
1.1 Purchase of products, services and solutions
1.1.1 In light of the principle of fairness, impartiality and integrity, both Parties unanimously agree to establish a strategic partnership with respect to the cloud business. On the premise of complying with listing rules of the places where the relevant securities are listed, the respective applicable corporate governance documents (articles of association, shareholder agreements, etc.), transaction norms, internal procurement/transaction processes of the Parties, Xiaomi Corporation gives priority to the products, services and solutions provided by Kingsoft Cloud Group when purchasing cloud and relevant information system products, services and solutions. Both Parties acknowledge that Xiaomi Corporation will make purchases according to the Purchase Contract subsequently signed by both Parties, where the prices will be fully referred to the quality and prices of similar services and products provided by independent third parties, and shall be fair and reasonable, and in line with the fair market prices.
1.1.2 The potential priority areas of cooperation between the Parties shall include, without limitation to:
(1) Products and services for cloud computing and cloud storage:
(a) Kingsoft Cloud Group will give priority to Xiaomi Corporation in offering cloud storage and cloud computing services, exert its best commercial efforts to guarantee the steadiness and sustainability of the service, and provide the service at a reasonable rate determined in the following manners:
(i) based on the methods of determining fair market price in the cloud storage and cloud computing industry;
(ii) based on the total cost incurred in connection with provision of such service plus a reasonable profit; and
(iii) By full reference to the price and/or reasonable profit of independent third parties.
(b) Subject to Kingsoft Cloud Group providing the cloud storage and cloud computing services at a reasonable price to Xiaomi Corporation, Xiaomi Corporation shall give priority to purchasing services from Kingsoft Cloud and shall guarantee that 70% of the cloud storage and cloud computing services used in its MIUI image storage business is from Kingsoft Cloud.
(2) Information system service (IT service) (ERP and non-ERP service);
(3) Cloud products and services related to IoT business;
(4) Cloud products and services related to overseas business;
(5) Cloud products and services related to Xiaomi automobiles business, and
(6) Other possible areas of cooperation to be subsequently confirmed by the Parties.
1.2 Resources sharing
1.2.1 The Parties agree to make full use of the advantageous resources of both Parties and prioritize to cooperate with the other Party under the same terms and conditions.
1.2.2 Potential areas of cooperation between the Parties include but are not limited to:
(1) Integration of solutions: Xiaomi Corporation and Kingsoft Cloud Group shall, reserve certain business development and technical resources to form an integrated solution for integrating the enterprise service capacity of the Parties, and to conduct substantial discussion, analysis and development on the joint development and contract execution with corporate clients;
(2) Client referral: Xiaomi Corporation shall, when referring to any cloud and related information technology products, services and solutions to its customers and partners in its ecological chain, give priority to the products, services and solutions of Kingsoft Could Group under the same conditions, and vice versa; and
(3) Sharing other resources.
1.2.3 The Parties shall, based on this Agreement, explore more cooperation models in the cloud industry, enter into further negotiations on the details of implementation, and enter into specific implementation agreements separately based on the cooperation details set forth above. The execution of specific implementation agreements entered into between the Parties shall be subject to the applicable provisions of the listing rules of the place where the relevant securities are listed, and the necessary approval process in accordance with the entities applicable corporate governance documents (articles of association, shareholder agreements, etc.), listing rules, transaction norms, internal procurement/transaction procedures.
1.2.4 Xiaomi Corporation undertakes to support the execution and performance of the relevant agreements to the extent that it can exercise its voting right.
Article 2 Pricing Arrangement
2.1 With respect to the details of the strategic cooperation between the Parties hereunder, the Parties shall make reference to the quality of similar services and products provided by independent third parties and applicable historical prices in terms of pricing so as to ensure that they are fair and reasonable, in line with fair market prices, determined fairly and reasonably through friendly negotiations, and will be in the best interests of the respective shareholders of the Xiaomi Corporation and Kingsoft Cloud Group. Such product prices and service fees shall be no higher than the prices on which the service provider relies to provide similar services to independent third parties, thereby ensuring that the terms and conditions are fair and reasonable.
2.2 The specific pricing arrangement and the amount of the service fees for the next three years shall be subject to the agreements that may be entered into by both Parties through their respective entities in accordance with the principles set forth herein, if any, based on actual business needs.
Article 3 Anti-dilution Rights
3.1 For the purpose of strengthening the strategic cooperation between the two Parties and implementing the aforesaid strategic partnership, Kingsoft Cloud undertakes to grant Xiaomi Corporation anti-dilution rights during the term of the Agreement (as defined in Section 4.1 below), unless otherwise required for regulatory reasons. Xiaomi shall have rights to purchase a Pro Rata Share (as defined in Section 3.4 below) in the allotment and issuance of New Securities (as defined in Section 3.5 below) of Kingsoft Cloud such that, following the completion of the relevant allotment and issuance, the percentage of Xiaomis shareholding in Kingsoft Cloud shall be no less than the percentage of Xiaomis shareholding in Kingsoft Cloud (including ordinary shares and ordinary shares equivalent to ADRs) as of the date of the Agreement. Specifically, Kingsoft Cloud agrees that, in accordance with applicable domestic and international laws and regulations, in the event the Company proposes to undertake any allotment and issuance of New Securities in a single transaction or a series of transactions, directly or indirectly, including in both public and private offerings or placements of securities (including, without limitation, a listing on the Main Board of the Stock Exchange of Hong Kong), during the term of the Agreement, then Kingsoft Cloud undertakes that, it shall not undertake such allotment and issuance of New Securities unless Kingsoft Cloud delivers a Participation Notice (as defined below) to Xiaomi and complies with the provisions set forth in Section 3.3 of the Agreement. The Parties acknowledge that Xiaomi shall have the right to designate its affiliated entities (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, hereinafter referred to as the Hong Kong Listing Rules) to exercise such anti-dilution rights.
3.2 Participation Notice. The Parties agree that prior to the allotment and issuance of any New Securities by Kingsoft Cloud, Kingsoft Cloud shall notify Xiaomi in writing of its proposed offering of New Securities (the Participation Notice), describing the amount and type of New Securities, the price, price range or pricing mechanism (as applicable and as practicable) and the terms upon which Kingsoft Cloud proposes to issue such New Securities, and Xiaomis Pro Rata Share (as defined below) of such New Securities (as determined in accordance with Section 3.4). Kingsoft Cloud shall provide such Participation Notice to Xiaomi without delay as applicable and practicable. Such Participation Notice shall be delivered by Kingsoft Cloud to Xiaomi no later than forty (40) days prior to the date on which Kingsoft Cloud enters into the definitive agreement with respect to the allotment and issuance of the New Securities (i.e. the Hong Kong Underwriting Agreement), unless the timing of such Notice may be otherwise agreed upon by the Parties through friendly negotiations.
3.3 Exercise of anti-dilution rights. The Parties agree that during the term of the Agreement (as defined in Section 4.1 hereof), Kingsoft Cloud grants anti-dilution rights to Xiaomi in connection with the allotment and issuance of New Securities of Kingsoft Cloud. The specific arrangements for the exercise of the anti-dilution rights are as follows:
3.3.1 The Parties agree that Xiaomi shall, upon receipt of any such Participation Notice, notify Kingsoft Cloud in writing without delay (the Exercise Notice) and state therein the quantity of New Securities to be purchased (which shall not exceed the Pro Rata Share of Xiaomi or its designated entity). Provided that the final number of New Securities issued does not exceed the quantity set forth in the Participation Notice and Xiaomi has given an Exercise Notice, Xiaomi (or the entity it designates) shall irrevocably elect in writing to purchase the number of such New Securities as set forth in the Exercise Notice in accordance with the pricing mechanism and the terms and conditions thereof stipulated in the Participation Notice. Pursuant to Article 3 hereof, the price payable for subscription for any New Securities shall be equal to the price offered to and payable by all other investors participating in such offering, and such subscription shall be based on the same terms or conditions offered to and obtained by all other investors participating in such offering.
3.3.2 The Parties agree that in the event Xiaomi fails to deliver an Exercise Notice in writing to so elect to purchase any of its Pro Rata Share of New Securities pursuant to Section 3.3 hereof within the time limit of six (6) business days following Kingsoft Clouds Participation Notice, Xiaomi shall be deemed to have forfeited and waived any right to purchase any New Securities held on such Pro Rata Share basis under Section 3.1 hereof on that occasion. Nevertheless, it shall not be deemed to forfeit or waive any right with respect to any future issuance of New Securities under this Agreement. Where there is a practical need, Xiaomi may give a written notice to Kingsoft Cloud requesting an extension of such time limit, which shall not be unreasonably withheld by Kingsoft Cloud, provided that such Exercise Notice is given no later than five (5) business days prior to Kingsoft Cloud entering into the definitive agreement with respect to the allotment and issuance of the New Securities.
3.3.3 The Parties agree that, notwithstanding anything to the contrary in Section 4.3 of the Agreement, any purchase by Xiaomi of its Pro Rata Share of any New Securities must be made in compliance with any applicable domestic and international laws, rules and regulations (including stock exchange rules), and any internal policies and procedures of the Parties.
3.3.4 If the exercise of the anti-dilution rights by Xiaomi triggers Xiaomis obligation to obtain shareholders approval under the Hong Kong Listing Rules, the Parties shall separately negotiate the exercise of Section 3.3 herein. The Parties may, upon negotiation, adjust the relevant period by agreement in order to meet the requirement for Xiaomi to obtain shareholders approval, provided that such relevant approval of independent shareholders meeting must be obtained three (3) business days prior to Kingsoft Cloud entering into the definitive agreement with respect to the allotment and issuance of the New Securities. Failure to do so shall result in Xiaomi being deemed to have forfeited and waived any right to purchase a pro rata share of the New Securities pursuant to Section 3.1 hereof.
3.4 Pro rata share. For the purposes of the Agreement, Xiaomis Pro Rata Share shall be equal to (i) the total number of shares issued by Kingsoft Cloud immediately after the issuance of New Securities, plus any equity securities issued or issuable upon exercise of all pre-existing anti-dilution rights or other similar rights to obtain additional equity securities in connection with the issuance of the New Securities, multiplied by (ii) the percentage of equity interests (including ordinary shares and ADRs) held by Xiaomi in Kingsoft Cloud as of the date of the Agreement; less the number of shares (including ordinary shares and ADRs) held by Xiaomi in Kingsoft Cloud immediately prior to the issuance of the New Securities. For the avoidance of doubt, rounding is also required to avoid fractional shares regarding such calculations.
3.5 For the purposes of the Agreement, New Securities shall refer to any equity securities or convertible securities (including ordinary shares, ADRs or any other equity securities) sold in any transaction (including but not limited to a public offering in connection with the listing of Kingsoft Cloud on the Main Board of the Stock Exchange of Hong Kong) after the date of the Agreement, but excluding:
3.5.1 any options, grant rights, awards, restricted shares or any other share-based awards issued or issuable under any employee equity incentive plan (the Company Equity Incentive) approved by the Board of Directors of Kingsoft Cloud (the Board), and any equity securities issuable upon exercise, vesting or conversion of any company equity awards;
3.5.2 any equity securities issued pursuant to the cancelation or exchange of any ADRs of Kingsoft Cloud by the holders thereof;
3.5.3 any equity securities issued pursuant to any acquisition of any entity through a merger, acquisition, purchase of substantially all of the assets of such entity, reorganization or similar transaction, in each case, as approved by the Board;
3.5.4 any equity securities issued in connection with any share split, share division, share dividend or distribution, reclassification or other similar event as approved by the Board; and
3.5.5 any other equity securities issued upon the conversion, exchange or exercise of any securities of Kingsoft Cloud outstanding as of the date of this Agreement or issued subsequent to the date hereof.
3.6 The Parties acknowledge that the anti-dilution rights in this section have not been taken into consideration in the specific pricing arrangements and the determination of the maximum amount of the service fees for the next three years under the Strategic Cooperation Framework Agreement as set forth in Article 1 hereof between Kingsoft Cloud and Xiaomi Corporation. The Parties acknowledge that the service fees payable by Kingsoft Cloud Group to Xiaomi Corporation and the pricing arrangements hereunder shall be governed by the relevant provisions in Article 2 hereof.
Article 4 Term, Performance and Termination of the Agreement
4.1 The Parties agree that the Agreement shall take effect upon signing by the authorized representatives of the Parties. The term of the Agreement shall be valid from effective date to December 31, 2024 (the Term). Subject to the Agreement complying with relevant laws and regulations and listing rules, the Parties will review and decide on the renewal of the cooperation two (2) months prior to the expiry of the Term. The Agreement may be renewed for three (3) years upon agreement between the Parties and subject to relevant approval procedures.
4.2 The Parties agree that they will explore additional procurement and partnership models in potential areas of cooperation during the Term of the Agreement, and negotiate and implement the details of the cooperation subject to applicable corporate governance documents (articles of association, shareholder agreements, etc.), listing rules, transaction norms, and internal procurement/transaction procedures.
4.3 The Parties agree that during the cooperation period, both Parties may hold communication meetings regularly or irregularly and establish a good communication mechanism to ensure timeliness of service and continuous improvement and optimization of business.
4.4 The Parties agree that if any provision under the Agreement is ruled to be, or is deemed by the applicable entitys regulatory authorities (including, without limitation, any government body, any applicable stock exchange (including those in connection with IPO)) to be, inconsistent with the laws, regulations and listing requirements or rules governing such applicable entity (Regulatory Reasons), the Parties shall amend the provision of the Agreement through negotiations to ensure its compliance with the requirements of the regulatory authorities. If some terms of the Agreement are terminated for any Regulatory Reason (e.g., Article 3 Anti-Dilution Rights), the Parties shall resolve with respect to the other terms of the Agreement through separate negotiation.
4.5 The Parties agree that if either Party breaches any provision of the Agreement (the Breaching Party), the other Party (the Non-breaching Party) may notify the Breaching Party in writing that it has committed a breach and require the Breaching Party to make remedies within a specified reasonable period of time. If the Breaching Party fails to remedy such breach within the aforementioned period, the Non-breaching Party is entitled to terminate the Agreement immediately. The Non-breaching Party reserves the right to recover compensation and any other legally permissible claims against the Breaching Party.
4.6 The Parties agree that, termination of this Agreement shall be without prejudice to the rights or obligations of either Party already accrued pursuant to this Agreement.
Article 5 Representations and Warranties of the Parties
5.1 Both Parties are duly incorporated and validly existing under the laws of the place of incorporation.
5.2 The Parties hold the necessary licenses, permits, registrations, certificates, and other qualifications and approvals, whether domestic or overseas, to provide the services hereunder.
5.3 The Parties have taken all required actions and (except as otherwise expressly provided herein) obtained all consents, approvals, authorizations and permits necessary to enter into the Agreement. The execution of the Agreement shall not violate (i) the articles of association of the Parties, (ii) any other agreements or obligations of the Parties, or (iii) any laws, regulations or ordinances in force of the PRC or other relevant jurisdictions. Their representatives who sign the Agreement have been fully authorized to sign the Agreement.
5.4 The Parties undertake to comply with the applicable listing rules and other requirements of the applicable entities regulatory authorities, as well as the applicable laws and regulations both within and outside China as amended and updated from time to time for the purpose of the transactions hereunder.
5.5 Each Party undertakes to procure its subsidiaries to enter into specific implementation agreements with the other Party or its subsidiaries pursuant to this Agreement, and to procure its subsidiaries to take or do any act or thing or refrain from conducting anything as necessary for them to properly perform their obligations hereunder.
5.6 One Party undertakes to the other Party to provide sufficient information and reasonable assistance to the other Party and the independent non-executive directors of the other Party and/or the independent financial adviser, auditor and legal adviser appointed by the other Party in order to ensure that the other Party is able to make the relevant filings and disclosures (if required) in respect of the transactions hereunder in accordance with the applicable laws and regulations both within and outside China, applicable listing rules, and other requirements of the applicable entities regulatory authorities.
Article 6 Force Majeure
6.1 In the event that either Party fails to perform its obligations hereunder in whole or in part due to a force majeure event, performance of such obligations shall be suspended for the period of time during which the force majeure event hinders its performance. A force majeure event shall mean any event which is beyond the reasonable control of the affected Party, could not have been foreseen or, if foreseen, could not have been avoided or overcome by such Party, and occurs after the date of the Agreement and makes performance of the Agreement in whole or in part by such Party objectively impossible or impracticable (including, but not limited to, failure to perform at a reasonable cost). Such events include, but are not limited to, floods, fires, droughts, windstorms, earthquakes and other natural disasters, traffic accidents, strikes, turmoil, riots, and wars (regardless of whether war is declared), and acts and omissions of government authorities.
6.2 The Party claiming to be affected by the force majeure event shall notify the other Party of the occurrence of the force majeure event in writing within the shortest possible time and provide the other Party with appropriate evidence of such force majeure event and its duration by courier, registered mail or facsimile within fifteen days of the occurrence of such force majeure event. The Party claiming that a force majeure event makes its performance of the Agreement objectively impossible or impractical shall be obligated to make all reasonable efforts to eliminate or mitigate the effects of such force majeure event.
6.3 In the event of a force majeure event, the Parties shall promptly decide how to implement the Agreement through friendly negotiations. Upon termination or elimination of the force majeure event or its effects, the Parties shall immediately resume performance of their respective obligations hereunder.
Article 7 Information Disclosure and Confidentiality
7.1 Neither Party shall make any disclosure of information (including but not limited to announcements, notices and circulars) in connection with the matters hereof without the prior written consent of the other Party, except where such disclosure is made in accordance with the laws of the PRC or the regulations of the China Securities Regulatory Commission, the Stock Exchange of Hong Kong, the Securities and Futures Commission of Hong Kong or any other relevant regulations.
7.2 Both Parties shall be obligated to keep confidential any trade secrets of the other Party known hereunder, and shall not disclose them to any third party without the written consent of the other Party, except as required by laws and regulations or by the stock exchanges where the shares of both Parties and their affiliates are listed or by relevant laws and regulations. Either Party violating the provisions of this Article shall fully compensate the other Party for all direct and indirect losses incurred therefrom.
7.3 Upon termination of the Agreement, the Parties shall continue to be bound by the confidentiality obligations under this Article.
Article 8 Notice
8.1 Notices or other communications made by a Party pursuant to the Agreement shall be in writing and in the Chinese language, and shall be delivered by hand or registered mail to the address designated by the other Party. The date on which the notice is deemed to have been validly made shall be determined in accordance with the following provisions:
8.1.1 A notice delivered by hand shall be deemed effective on the date it is signed for by the person designated by the other Party delivered to by hand;
8.1.2 Notices sent by registered mail shall be deemed valid on the fifth (5th) day (or the next business day if the last day falls on a Saturday, Sunday or legal holiday) after postage is paid (as determined by the postmark date);
8.1.3 The mailing addresses of both Parties are as follows:
Party A: Kingsoft Cloud Holdings Limited
Contact: Wang Yi
Address: Building E, Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC
Party B: Xiaomi
Contact: Liu Zhen
Address: Xiaomi Science and Technology Park, An Ning Zhuang Road, Haidian District, Beijing, the PRC
8.2 If one Party changes its mailing address, it shall notify the other Party in writing of such change without delay as provided in this Article.
Article 9 Applicable Laws and Dispute Resolution
9.1 The Agreement shall be governed by and construed in accordance with the laws of the PRC.
9.2 Any dispute arising out of or in connection with the Agreement shall be resolved by the Parties at their own discretion through friendly negotiations. If no mutually acceptable conclusion is reached upon negotiations within thirty (30) days, either Party may file an application with the Beijing Arbitration Commission. According to the arbitration rules of the Commission, the arbitration proceeding shall take place in Beijing in Chinese. The arbitral award shall be final and binding on both Parties.
Article 10 Miscellaneous
10.1 The Parties agree to separately bear all relevant costs and expenses arising from the execution of the Agreement in accordance with the relevant Chinese laws. In the absence of legal provisions, such costs and expenses shall be shared equally between both Parties.
10.2 Except with the prior written consent of one Party hereto, the other Party hereto is prohibited from assigning its rights and obligations hereunder.
10.3 The Agreement and the related documents referred to herein shall constitute the entire agreement and understanding between the Parties with respect to all matters stated herein, and shall supersede all prior agreements, contracts, understandings and communications, whether oral or written, between the Parties with respect to all matters described herein.
10.4 Unless otherwise provided, one Partys failure to exercise or delay in exercising its rights, powers or privileges hereunder shall not constitute a waiver of such rights, powers or privileges. Any single or partial exercise of such rights, powers, or privileges shall not preclude the exercise of any other rights, powers, or privileges by such Party.
10.5 The Appendices hereto, if any, are an integral part of the Agreement and shall be as equally binding as the Agreement.
10.6 The Agreement is made in two originals, one for each Party, and both have the same legal effect.
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(This page is intentionally left blank as the signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Xiaomi Corporation and Kingsoft Cloud)
Party A:
Kingsoft Cloud Holdings Limited
Authorized representative (Signature):
The signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Xiaomi Corporation and Kingsoft Cloud
(This page is intentionally left blank as the signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Xiaomi Corporation and Kingsoft Cloud)
Party B:
Xiaomi Corporation
Authorized representative (Signature):
The signature and seal page of the Strategic Cooperation and Anti-Dilution Framework Agreement between Xiaomi Corporation and Kingsoft Cloud
Exhibit 8.1
List of Significant Subsidiaries, VIE and Subsidiaries of VIE of the Registrant
Entity Subsidiaries |
Place of incorporation | |
Kingsoft Cloud Corporation Limited | Hong Kong | |
Kingsoft Cloud (Tianjin) Technology Development Co., Ltd. | PRC | |
Wuhan Kingsoft Cloud Information Technology Co., Ltd. | PRC | |
Beijing Kingsoft Cloud Technology Co., Ltd. | PRC | |
Beijing Yunxiang Zhisheng Technology Co., Ltd. | PRC | |
Camelot Technology Co., Ltd. | PRC | |
VIEs |
Place of incorporation | |
Zhuhai Kingsoft Cloud Technology Co., Ltd. | PRC | |
Kingsoft Cloud (Beijing) Information Technology Co., Ltd. | PRC | |
Subsidiaries of VIEs |
Place of incorporation | |
Beijing Kingsoft Cloud Network Technology Co., Ltd. | PRC | |
Beijing Jinxun Ruibo Network Technology Co., Ltd. | PRC | |
Nanjing Qianyi Shixun Information Technology Co., Ltd. | PRC |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Yulin Wang, certify that:
1. | I have reviewed this annual report on Form 20-F of Kingsoft Cloud Holdings Limited (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting |
Date: May 2, 2022 | ||
By: | /s/ Yulin Wang | |
Name: Yulin Wang | ||
Title: Director, Chief Executive Officer |
Exhibit 12.2
Certification by the Principal Accounting Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Haijian He, certify that:
1. | I have reviewed this annual report on Form 20-F of Kingsoft Cloud Holdings Limited (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principle; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
Date: May 2, 2022 | ||
By: | /s/ Haijian He | |
Name: Haijian He | ||
Title: Chief Financial Officer |
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Kingsoft Cloud Holdings Limited (the Company) on Form 20-F for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Yulin Wang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 2, 2022 | ||
By: | /s/ Yulin Wang | |
Name: Yulin Wang | ||
Title: Director, Chief Executive Officer |
Exhibit 13.2
Certification by the Principal Accounting Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Kingsoft Cloud Holdings Limited (the Company) on Form 20-F for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Haijian He, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 2, 2022 | ||
By: | /s/ Haijian He | |
Name: Haijian He | ||
Title: Chief Financial Officer |
Exhibit 15.1
FANGDA PARTNERS
北京 Beijing·上海 Shanghai·广州 Guangzhou·深圳 Shenzhen·香港 Hong Kong
http://www.fangdalaw.com
中国北京市朝阳区光华路1号 | 电子邮件 E-mail: email@fangdalaw.com | |
嘉里中心北楼27楼 | 电 话 Tel.: 86-10-5769-5600 | |
邮政编码:100020 | 传 真 Fax: 86-10-5769-5788 |
27/F, North Tower, Kerry Center
No. 1, Guanghua Road, Chaoyang District
Beijing 100020, PRC
Kingsoft Cloud Holdings Limited
Building E, Xiaomi Science and Technology Park, No. 33 Xierqi Middle Road,
Haidian District
Beijing, 100085, the Peoples Republic of China
May 2, 2022
Dear Sirs,
We consent to the references to our firm under Item 4. Information on the Company4.C. Organizational StructureContractual Arrangements with Our VIEs and Their Respective Shareholders and Item 10.EAdditional InformationTaxationPeoples Republic of China Taxation, in Annual Report on Form 20-F of Kingsoft Cloud Holdings Limited for the fiscal year ended December 31, 2021 (the Annual Report), which is filed with the Securities and Exchange Commission (the SEC) on the date hereof. We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully,
/s/ Fangda Partners
Exhibit 15.2
Our ref RDS/765236-000002/23311392v1
Kingsoft Cloud Holdings Limited
Building E, Xiaomi Science and Technology Park
No. 33 Xierqi Middle Road
Haidian District, Beijing
100085, the Peoples Republic of China
May 2, 2022
Dear Sir or Madam
Kingsoft Cloud Holdings Limited
We have acted as legal advisers as to the laws of the Cayman Islands to Kingsoft Cloud Holdings Limited, an exempted limited liability company incorporated in the Cayman Islands (the Company), in connection with the filing by the Company with the United States Securities and Exchange Commission (the SEC) of an annual report on Form 20-F for the year ended 31 December 2021 (the Annual Report).
We hereby consent to the reference of our name under the heading under the heading Item 10.B. Additional InformationMemorandum and Articles of Association and Item 10.E. Additional InformationTaxationCayman Islands Taxation in the Form 20-F.
We consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Exhibit 15.3
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements:
(1) | Registration statement (Form S-8 No. 333-239769) pertaining to the 2013 Share Option Scheme and the 2013 Share Award Scheme of Kingsoft Cloud Holdings Limited, and |
(2) | Registration statement (Form F-3 No. 333-260181) of Kingsoft Cloud Holdings Limited; |
of our reports dated May 2, 2022, with respect to the consolidated financial statements of Kingsoft Cloud Holdings Limited and the effectiveness of the internal control over financial reporting of Kingsoft Cloud Holdings Limited included in this Annual Report (Form 20-F) of Kingsoft Cloud Holdings Limited for the year ended December 31, 2021.
/s/ Ernst & Young Hua Ming LLP
Beijing, the Peoples Republic of China
May 2, 2022