$Kingsoft Cloud(KC.US) $KINGSOFT(03888.HK) What we should really be watching now is not the FY2025 financial report—information like revenue +23%, significantly narrowed losses, and rapid growth in AI billings has already been digested by the market back in late March. There are two unresolved matters.

First, the Xiaomi related-party transaction agreement needs to be renewed before mid-year, with Goldman Sachs expecting the new revenue cap to be raised. This isn't an official company announcement, it's sell-side speculation, but the logic is sound: Xiaomi's AI investment in 2026 is on the order of 10 billion RMB, with Kingsoft Cloud being the primary contractor. The level of the new cap essentially determines how many orders can be fulfilled for the full year. The magnitude of the cap is more critical than the renewal itself.

Second, at the end of March, Lei Jun stepped down as chairman and Zou Tao took over. Short-term operations are unaffected, but the structural adjustment of the decision-making chain within the Kingsoft group is a variable for the future marketization of related-party transaction pricing. The price gap between the two markets is also worth a look: 3896 recently at HKD 8.83 has already front-run the Xiaomi AI narrative for a while; KC is still around $13.7, with about 30% upside to the sell-side consensus average of around $18. Once the renewal announcement lands, the Hong Kong and US markets are likely to converge first.

The trading logic is actually simple: waiting for the renewal announcement is more cost-effective than waiting for data points. Those holding positions needn't panic; those without positions are not advised to chase the Hong Kong stock hard, as there is still room for a relative catch-up on the US side. Any subsequent wording from Lei Jun's side regarding the pricing mechanism for related-party transactions is more important than the current market price.