We maintain the investment rating as "Buy" and raise TP to HK$29.20.
　　We forecast FY23-FY25 EPS to be RMB2.058/ RMB2.390/ RMB2.783, respectively. Considering future performance growth rate and historical valuation level, we give a 12.5x 2023 PER, corresponding to TP of HK$29.20 and maintain the investment rating as "Buy".
　　We expect the Company's business in the telecom network side to grow steadily in 2023. The Company’s FY22 results were in line with our expectations. 5G base station construction volume in China in 2023 will be similar to that in 2022. At present, the penetration rate of gigabit optical networks is less than 20%, and we expect the construction of gigabit optical networks to climb rapidly, which will provide growth opportunities for the Company's business in optical network equipment.
　　We expect development of businesses in the second curve to exceed market expectations. Under the background of new infrastructure, the "Eastern Data and Western Computing" initiative, as well as carbon peaking and carbon neutrality, the Company is quickly developing its second curve layout in servers and storage, 5G industry applications, terminals, digital energy, automotive electronics, etc., and strengthen cooperation with leading companies in various industries by extending its own ICT technology capabilities. As new focus on investments by telecom operators and a significant infrastructure for the construction of digital China is taking place, investment in computing power networks is expected to continue to grow strongly this year. Thus, we expect shipments of servers and storage in 2023 to telecom operators to still be strong.
　　Catalysts: Faster-than-expected growth within its different business areas in the second curve; acceleration of gigabit optical network.
　　Risk warning: Risk of Sino-US trade friction; weaker-than-expected demand from government and corporate customers.