HK Stock Market Move | VSTECS (00856) further increased by nearly 5%, first quarter financial performance in line with guidance, institutions say the company has enormous potential for valuation enhancement.

VSTECS (00856) rose nearly 5%, rising by 4.88% to HK$7.52 as of the time of writing with a turnover of HK$80.64 million. On the news front, VSTECS previously announced unaudited financial data for the first quarter of this year, showing a 16% to 17% year-on-year increase in revenue, a 20% to 21% increase in gross profit, and a significant 28% to 29% year-on-year increase in net profit. GUOTAI JUNAN I indicated that the first-quarter financial performance is in line with management guidance, with revenue growth in the next three years expected to be between 15-20%, mainly driven by high-profit margin businesses. Ping An Securities (Hong Kong) report noted that VSTECS is a leading technology product solutions and IT service platform in the Asia-Pacific region. The company has established deep cooperation with top cloud vendors such as Alibaba Cloud, Huawei Cloud, and AWS, and is expected to benefit from the rapid development of the overall cloud computing industry in the future. As one of the largest cloud service providers in China, the company holds a leading position in the cloud service market, with its subsidiary CloudStar focusing on AI continuously improving profitability. In terms of valuation, the company is significantly lower than its peers, and we believe that with the rapid development of the company's cloud computing business in the future, there is huge potential for valuation to increase.