BOCOM INTL: Maintains "buy" rating on SUNEVISION (01686) with target price raised to HK$5.22.

BOCOM INTL released a research report stating that they maintain a "buy" rating for SUNEVISION (01686), given the strong demand for generative artificial intelligence in data centers. They expect that New Era Network's performance has potential for increase in utilization, power consumption, and pricing. They have raised their EBITDA forecasts for the fiscal years 2025/26/27 by 2.6%/6.6%/3.7% to 2.208 billion HKD/2.542 billion HKD/2.860 billion HKD, and the target price has been raised from 4.50 HKD to 5.22 HKD. Key points from BOCOM INTL are as follows: - They expect stable growth in the first half of the fiscal year 2025. - The bank predicts that the company's revenue will achieve high single-digit year-on-year growth, while EBITDA will achieve low double-digit year-on-year growth, mainly due to: 1) Contribution of the MEGAIDC project coming into operation; 2) Improvements in the utilization rates of existing and new data centers; and 3) Price rises and increased power usage in existing projects. - MEGAIDC will be a key driver in the future. - Interest expenses will peak, driving net profit growth. - Although the Federal Reserve has started its interest rate reduction path, HIBOR has remained at a high level since the fourth quarter of 2024. The bank expects interest rates to gradually decrease in 2025, leading to a moderate decrease in interest expenses, which could push net profit growth faster. They estimate that net profit in the first half of the fiscal year 2025 will grow by over 20% year-on-year, in addition to the growth of the business itself.