Reason:

Xinyi Network (01686) has been actively expanding its scale in recent years. Currently, it is developing TKOTL131, a new data center project in Tseung Kwan O, which will provide a floor area of about 1.2 million square meters, and has already begun preliminary construction work. The development project, which is close to the existing MegaPlus↓, is expected to show operational and cost cooperation benefits; after full completion, the group will occupy a floor area of about 1.7 million square meters in Tseung Kwan O and become Hong Kong's main data center. As for the data centre project at TWTL 428, a new site in Tsuen Si, groundwork is currently underway, and it is planned to be completed in stages in 2022.

As of the mid-term end of December 2019, the group's revenue increased 12% year-on-year to 819 million yuan, but net profit fell 04% to 409 million yuan. During the period, operating profit increased 8.9% to 401 million yuan ↓ EBITDA increased 103 million yuan to 565 million yuan. Among them, the EBITDA for data center operations increased 22% year over year. At the end of last year, the group held 495 million yuan in cash. Bank loans and shareholder loans were 5.829 billion yuan and 3.3 billion yuan respectively, and the year-end debt ratio reached 220%; if long-term unsecured shareholder loans were eliminated, the debt ratio would be 136%.

In terms of trend, there has been a decline since mid-February. Currently, it has fallen below all major average lines, and the MACD bear gap has widened. However, the STC%K line has risen above the %D line until it is absorbed by 4.2 yuan lower. The rebound resistance is 5.2 yuan, and it continues to be held without falling below 4 yuan