STAR-listed UCloud to increase investment

UCloud, the first listed cloud infrastructure firm on the Chinese mainland, is to increase its investment in data centers and its ecosystem as it seeks opportunities in the digital transformation wave, the STAR-listed firm said on Friday. 

Shanghai-based UCloud will focus on 10 industries, including e-government and cloud games. 

The pandemic and government policies, which support intelligent infrastructure construction and boost digital consumption, have pushed organizations to speed up the adoption of cloud services, the company said.

“Firms and governments are speeding up cloud infrastructure and service adoption during the pandemic,” Ji Xinhua, UCloud’s chief executive, told a conference in Shanghai, the company’s first offline event since its debut on the STAR Market in January. 

UCloud, founded in 2012, closed at 67.2 yuan (US$10) on Friday with a market value of 26.7 billion yuan.

The STAR listing allows UCloud to increase investment in research and its ecosystem, including building data centers in Inner Mongolia and Shanghai, which are expected to start operations in 2021.

In the second quarter, cloud infrastructure spending reached a record US$4.3 billion in China, growing 70 percent year on year. Fueled by COVID-19 response demand and government stimulus measures, enterprises are investing more in cloud services, according to Canalys.

Ji said UCloud faced challenges in improving profit margins  as an independent cloud service provider, compared with giants such as Alibaba and Huawei. It has to develop its own ecosystem with partners.  

The company said it would be supporting 1,000 SMEs in the future. Meanwhile, it will join 120 core tech partners, 20 digital consulting firms and 500 distributors to offer users improved cloud services.

It is also seeking business expansion in overseas markets including Singapore, Vietnam, Indonesia and Africa.