20250324-招银国际-伟仕佳杰-00856.HK-Strong_FY24_results__benefiting_from_the_robust_AI_demand_5页_985kb

VSTECS (856 HK) Summary

Core Content

VSTECS (856 HK) reported strong FY24 financial results, with total revenue increasing by 21% YoY to HK$89.1bn, exceeding both the analyst's and Bloomberg's consensus estimates. Net profit also rose by 14% YoY to HK$1.05bn, surpassing the consensus by 10%. The company's growth is attributed to robust demand for AI solutions and strong performance in the South East Asian market, which contributed HK$30.7bn in revenue, representing 34% of total revenue. Revenue from North Asia accounted for 66% of total revenue.

Main Points

• Strong FY24 Performance:

  • Total revenue: HK$89.1bn (+21% YoY)
  • Net profit: HK$1.05bn (+14% YoY)
  • Revenue beat: 7/8% above the consensus estimate

• Market Growth:

  • South East Asia revenue: HK$30.7bn (+74% YoY)
  • North Asia revenue: HK$58.4bn (+4% YoY)
  • Enterprise systems/consumer electronics/cloud computing revenue: HK$52.3/32.8/3.9bn (+30%/+8%/+28% YoY)

• AI and Cloud Computing Growth:

  • AI and cloud computing revenue: HK$7.7bn (+35% YoY)
  • These businesses accounted for 0.9% of total revenue

• Strategic Initiatives:

  • Deepening partnerships with leading cloud platforms (Alibaba, Huawei, AWS)
  • Expanding into lower-tier cities and localizing database products
  • Increasing R&D spending in the AI field by over 50%
  • Expanding DeepSeek service offerings to over 30 data centres

• Earnings Growth Outlook:

  • Management expects 15-20% earnings growth over FY25-27E
  • Revised net profit forecasts: HK$1.32bn (FY25E), HK$1.52bn (FY26E), HK$1.73bn (FY27E)

• Valuation and Target Price:

  • Target price: HK$7.60 (up from HK$7.20)
  • Based on 8x FY25E P/E, which is lower than the average P/E of peers (12x)
  • Current price: HK$6.08, with upside potential of 25%

Key Financial Metrics

Business Forecasts Update

Shareholding and Performance

• Shareholding Structure:

  • Li Jialin & Liu Li: 41.6%
  • Shenzhen Investment: 17.6%

• Share Performance:

  • 1-mth: -26.8%
  • 3-mth: +16.9%
  • 6-mth: +46.5%

• Stock Data:

  • Market Cap: HK$8,452.5 mn
  • 52w High/Low: HK$8.31/HK$4.04

Analyst Recommendations

• Rating: BUY (Maintain)
• Target Price: HK$7.60
• Previous Target Price: HK$7.20
• Upside/Downside: 25.0%

Profitability and Liquidity

Valuation Comparison

Analyst Certification and Disclaimers

• The analyst certifies that the views expressed reflect personal opinions and are not influenced by compensation.
• The analyst and associates have not traded in the stock covered in the report within 30 days prior to the report's issue.
• No liability is accepted for losses incurred from reliance on the report.
• The report is for informational purposes only and not investment advice.
• The value of investments is uncertain and may fluctuate.

CMBIGM Ratings

• BUY: Potential return of over 15% over next 12 months
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over next 12 months
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark over next 12 months
• HOLD: Potential return of +15% to -10% over next 12 months
• SELL: Potential loss of over 10% over next 12 months
• NOT RATED: Stock is not rated by CMBIGM

Important Disclosures

• There are risks involved in trading securities.
• The report is not tailored to individual investors.
• Past performance is not indicative of future results.
• The report is for the use of intended recipients only and cannot be reproduced or distributed without prior written consent.
• CMBIGM may have conflicts of interest and is not liable for any loss or damage from reliance on the report.