China Securities Co., Ltd.: First "buy" rating given to VSTECS (00856) as Southeast Asian expansion leads to secondary growth.

China Securities Co., Ltd. released a research report stating that it is initiating coverage on VSTECS (00856) for the first time, giving it a "buy" rating. It is expected that the company's total revenue in 2025 and 2026 will be HK$102.9 billion and HK$116.462 billion, with year-on-year growth of 15.5% and 13.2% respectively. The growth rate of enterprise system revenue will be 18.5% and 17.0%, consumer electronics revenue will be 6.0% and 5.5%, and cloud computing revenue will be 55% and 18% respectively. It is projected that the company's net profit attributable to shareholders in 2025 and 2026 will be HK$1.286 billion and HK$1.482 billion, with year-on-year growth of 22.24% and 15.28%. The report states that the size of China's information technology and creativity market continues to steadily grow, with the potential for future growth to accelerate further. The iterative upgrade of large-scale technology continues to drive the expansion of the AI market; the edge AI market also maintains high-speed growth, with diverse application scenarios continuously expanding market potential. In addition, the cloud computing market, worth billions, is accelerating its expansion, with AIIaaS becoming a major driving force. The IT distribution market in China is maintaining a steady growth trend, while the rapid economic growth in Southeast Asia is attracting global technology giants to actively expand into this market. The firm pointed out that the AI wave is driving the company's cloud computing business explosion, with Southeast Asia leading the second wave of growth. Leveraging a vast channel network, the company has successfully built competitive barriers; meanwhile, the synergistic layout of consumer electronics and financial technology continues to release business synergies. The company has comprehensively laid out the AI industry chain, covering all aspects of upstream and downstream links, deeply grasping new opportunities in the development of the AI industry. Among them, the information technology and creativity sector has become an important growth engine due to the "domestic substitution" trend; the company has also strengthened the full lifecycle service and management of cloud business to create new momentum for performance growth, with its subsidiary Jiadexing as a comprehensive cloud management expert with a wide range of business coverage. The continuous release of the growth dividend in Southeast Asia's computing power demand is leading the company to open up second-wave growth. Currently, the growth dividend in Southeast Asia's computing power demand is gradually being realized, and the company has a significant profit advantage on the profit side in this region; it will continue to grasp opportunities in the Southeast Asian market in the future and help Chinese brands expand internationally.