Jinwu Financial News | According to a research report by Open Source Securities, SUNEVISION (01686) has been deeply engaged in the IDC Industry in Hong Kong for 25 years, possessing the largest network interconnection services in Asia. The major Shareholder, SHK PPT, is one of the largest real estate developers in Hong Kong, and supported by SHK PPT, the company enjoys multiple advantages in land, Electrical Utilities, financing, and engineering. In terms of IDC square footage, the company's market share in Hong Kong IDC market is approximately 33% in the first half of 2024. By the end of 2024, the company will have operated eight Datacenters, with an operational IT Electrical capacity of 103MW and a utilization rate of 88%.
The firm stated that the company is entering a new cycle of capacity expansion. In 2023-2024, the company will successively complete the MEGA Gateway and MEGA IDC (Phase 1), two super-scale Datacenters, launching a new cycle of capacity deployment. MEGA IDC is the flagship new development project of the group located in Tseung Kwan O, offering approximately 1.2 million square feet of total floor area, and its design supports up to 180MW of Electrical capacity. Phase 1 of MEGA IDC is currently in operation, providing approximately 50MW of Electrical capacity. After the completion of the project, the total floor area of the company's Datacenters in Hong Kong will reach nearly 3 million square feet, and the Electrical capacity will increase to over 280MW, while some of the company's IDC still have potential for Electrical capacity expansion.
The firm continued to indicate that from the fiscal year 2020 to 2024, the company's revenue will increase from 1.719 billion HKD to 2.68 billion HKD, while the net income attributable to the parent company (excluding non-recurring items) will rise from 0.783 billion HKD to 0.907 billion HKD, with an EBITDA Margin maintained at around 70%. The gross margin related to Datacenter operations will remain at over 52%. The firm expects the company's net income attributable to the parent company for FY2025-2027 to be 1.131, 1.42, and 2.008 billion respectively. When excluding the Convertible Bonds equity, the current closing price corresponds to PEs of 14.3, 11.4, and 8.0 times, with EV/EBITDA multiples of 14.1, 11.9, and 9.3 times respectively. After accounting for Convertible Bonds equity, the current closing price corresponds to PEs of 24.6, 19.6, and 13.9 times, with EV/EBITDA multiples of 19.1, 16.0, and 12.5 times. This is the first coverage given a 'Buy' rating.
