Investment Summary

SUNeVision is one of the leading carrier-neutral data center operators in Hong Kong, owned 74.04% by Sun Hung Kai Properties (16.HK). We expect to see there will be a rising demand for data center from the proliferation of Global IP traffic and cloud services, and the group has competitive advantages on both quality and capacity for its data centers. We predict the earnings growth (excluding gain on fair value) to be 16.2%/7.9% in 2018/19F, assuming PE 36x (Average forward PE plus a standard deviation). With 24.9% upside, we initiate “Buy” recommendation. (Closing price at 19 Jun 2018)

Company Background

The group mainly engaged in the provision of data center in Hong Kong. Besides, it also engages in the installation and maintenance of its satellite distribution network, fibre-optic cable, networking and security surveillance systems, and provides professional design-and-build consultancy service for wireless and broadband network projects.