Investment Rating - The report assigns a target price of HKD 28.00 for the company, indicating a positive outlook for the stock [1]. Core Insights - The company reported strong financial performance for Q1 2025, with net revenue increasing by 12% year-on-year to RMB 2.72 billion, and a net profit of RMB 764 million, a turnaround from a net loss of RMB 345 million in the same period last year. This improvement was significantly aided by a one-time gain of RMB 1.06 billion from China's first data center asset-backed securities (ABS) transaction [1][2]. - Adjusted EBITDA grew by 16.1% to RMB 1.32 billion, with a profit margin increase of 1.7 percentage points to 48.6%. The results reflect a steady increase in data center utilization and improved cost efficiency, although the net profit growth was partly driven by non-recurring income [1]. - The total contracted and pre-contracted area increased by 6.7% year-on-year to 649,561 square meters, while the actual utilized area rose by 14.6% to 462,423 square meters. The operational data center utilization rate improved by 2.3 percentage points to 75.7%, indicating strong market demand, particularly from large-scale customers and AI-related deployments [1][2]. Summary by Sections Financial Performance - The company achieved a net profit of RMB 764 million in Q1 2025, compared to a net loss of RMB 345 million in the previous year, primarily due to a one-time gain from ABS transactions [1]. - Adjusted EBITDA increased by 16.1% to RMB 1.32 billion, with a profit margin of 48.6% [1]. Operational Metrics - Total contracted and pre-contracted area grew by 6.7% to 649,561 square meters, while actual utilized area increased by 14.6% to 462,423 square meters [1]. - Data center utilization rate improved to 75.7%, reflecting strong demand in first-tier cities [1][2]. Future Outlook - The management maintains a full-year revenue guidance of RMB 11.29 billion to RMB 11.59 billion and adjusted EBITDA guidance of RMB 5.19 billion to RMB 5.39 billion [2]. - The company is well-positioned in the growing Chinese data center market and is expanding internationally through partnerships, having secured 530 MW of capacity [2].