Maintain "Buy" rating and increase TP to HK$14.00, based on a 14.3x 2025 PE ratio. The Company’s 1H25 results were strong with EPS beating our estimates by 3.7%. Topline growth was strong, especially in the Cloud segment, with revenue having a 67.9% YoY increase, beating our estimates by 8.2%. Due to the modest beat, we adjust our forecasts up for the Company’s shareholders' net profit in 2025-2027 to HK$1,403 mn (+16.0%)/ HK$1,628 mn (+19.2%)/ HK$2,036 mn, respectively. Our current TP represents a 2.0x 2025 PB ratio and 13.9x 2025 PE ratio. Given that the Company has proven that they can begin to grow cloud revenue at a faster pace, we believe the Company is able to command the higher valuation.
　　The Company posted cloud computing revenue of HK$2,620 mn in 1H2025, representing a 67.9% YoY increase. The Cloud vendors however displayed differing growth rates, where sales of Huawei cloud, Alibaba cloud, Amazon Web Services, and VMWare grew by 29%, 156%, 293%, 295% respectively. During 1H2025, the Company won bids for projects in Pengcheng, Nantong, Shenyang, and others. In addition, the Company has strong business relations with domestic chip designers, being the only distributor of Haiguang’s CPUs and covers most of the major suppliers of Huawei’s Kunpeng. In addition, the Company has begun offering customized server software solutions for certain industries, including the medical and educational industries.
　　The Company’s expansion into South East Asia remains on track, posting revenue of HK$16,735 mn, which is a 22.5% YoY increase. Certain markets in SEA contributed to faster growth, including Thailand, Philippines, Malaysia and Indonesia, with YoY increase of 50.4%, 45.4%, 31.3% and 29.9%, respectively.
　　The HoH sequential decline in SEA revenue was due to there being an instance of non-recurring revenue in Singapore in 2H24.
　　Risks: trade friction disrupting the free flow of technology across borders.