TF Securities(SH:601162) Ge Long Hui·2025-07-29 06:23Core Viewpoint - Tianfeng Securities has initiated coverage on Weishi Jiajie (856.HK) with a "Buy" rating and a target price of HKD 11.52 [1] Group 1: Company Overview - Weishi Jiajie is a leading technology product channel developer and integrated service provider in the Asia-Pacific region, focusing on ICT industry solutions, particularly in enterprise systems, consumer electronics, and cloud computing [2] - The company has experienced high growth in recent years, with revenue projected to increase from 63.7 billion to 81.1 billion by 2024, representing a year-on-year growth of 20.6% [2] - The net profit attributable to the parent company is expected to grow from 830 million in 2023 to 958 million in 2024, a year-on-year increase of 14.09% [2] - The operating cash flow is projected to significantly improve to 1.659 billion in 2024, reflecting a year-on-year growth of 185% [2] Group 2: Market Trends - The demand for computing power and AI is driving growth in the Chinese ICT market, with global ICT spending expected to reach approximately USD 5.3 trillion in 2024 and grow to USD 6.9 trillion by 2028, representing a five-year CAGR of 7% [3] - The Chinese ICT market is anticipated to grow from approximately USD 626 billion in 2024 to USD 751.76 billion by 2028, with a CAGR of 6.5% [3] - The enterprise-level ICT market in China is projected to reach approximately USD 269.36 billion in 2024, with a year-on-year growth of 11.7% [3] Group 3: Regional Developments - The data center market is highly concentrated in North America, Asia, and Europe, with Southeast Asia experiencing a digital infrastructure construction boom [4] - By the end of 2024, Asia's data center installed capacity is expected to reach 22,780 MW, accounting for 44% of the global total [4] - Major global tech companies are investing heavily in Southeast Asia's data centers and computing infrastructure, positioning the region as the third-largest new computing power market globally [4] Group 4: Business Strategy - Weishi Jiajie is leveraging its strong ICT channels and financial management to rapidly expand in Southeast Asia, focusing on AI and cloud service upgrades [5] - The company's Southeast Asia business is projected to see a significant revenue increase of 74% in 2024, with net profit contributing approximately 51% [5] - Collaborations with top cloud service providers are enhancing the company's cloud business, covering over 30 intelligent computing centers in China [5] - The company is also advancing its initiatives in electric vehicle solutions and cross-border payment scenarios, which are expected to synergize with its core ICT distribution business [5] Group 5: Financial Projections - Revenue forecasts for Weishi Jiajie from 2025 to 2027 are projected at 103.7 billion, 129.63 billion, and 155.55 billion, with growth rates of approximately 28%, 25%, and 20% respectively [6] - The net profit attributable to the parent company is expected to be 1.251 billion, 1.532 billion, and 1.883 billion from 2025 to 2027, with growth rates of 30%, 22.4%, and 22.9% respectively [6] - Given the ongoing high demand for computing power and the acceleration of digital infrastructure in Southeast Asia, the current valuation is seen to have significant upside potential, with a target price of HKD 11.52 based on a PE of 12x for 2025 [6]