AI cloud drives profit jump, Bank of China International gives Jin Jing Xinneng (01783) the first “buy” rating

The Zhitong Finance App learned that Bank of China International released a research report covering Jin Jing Xinneng (01783) for the first time, giving it a “buy” rating, with a target price of HK$6.90. The report is priced at 20 times the predicted price-earnings ratio for the 2029 fiscal year (profit of about HK$0.34 per share). It is believed that the AI cloud business will become the main engine for the company's profit growth and drive qualitative changes in the profit structure.

AI cloud becomes the core profit engine

According to the report, in June 2026, Jin Jing Xinneng acquired YV Cloud and Shanghai YoVole cloud computing interests at a base price of HK$2.2 billion, officially entered cloud computing and AI infrastructure services, then procured high-performance servers to begin the transformation to a compliant AI computing power platform.

Scarce computing power is the core logic of this line. In the context of US export controls, the company obtained scarce compliant procurement channels through the Nvidia Cloud Partner (NCP) qualification held by Yovole in Shanghai. According to Bank of China International Channel Research, the first batch of the company has been equipped with more than 500 high-performance servers, compatible with more than 4,000 GPUs, and customer orders have greatly exceeded current computing power. Domestic high-end computing power rents are strong: Mysteel data shows that the H100 pay-per-use rent in Chengdu and Chongqing reached 12.90 yuan/GPU hour at the end of September, up about 19.1% from month to month; overseas Nebius also raised the H200 on-demand rate by 20% to 5.40 US dollars/GPU hour, and the amount of new contracts signed nearly quadrupled from month to month.

Rents increased and the cumulative length was locked in, and the cost payback for a single server was about 3.2 years

In terms of business model, the company has signed five-year GPU leases with leading cloud service providers and large model customers, with prepaid rent for about 12 months. Based on the purchase cost of a single 8-card server of 3.5 million yuan and a monthly rent of 100,000 yuan, the simple payback period is about 3.2 years when the lease is full. Financial leverage can further shorten the equity payback time. MiniMax, a large model company, recently participated in the company's share allotment and convertible bond subscription. The report interpreted it as a recognition of the company's NCP procurement capabilities. The cooperation between the two sides is expected to extend to resource planning and cluster deployment.

In terms of profit forecasting, BOCI expects the company's revenue for the 2027-2029 fiscal year to be HK$3,849 million, HK$6.854 billion and HK$10.49 billion respectively, with a three-year compound revenue growth rate of about 62%; net profit to mother of HK$216 million, $762 million and HK$1,407 million, respectively. The AI cloud server scale will increase from 531 to 4031. In 2029, AI cloud revenue will reach HK$5.085 billion, contributing 76.5% of the Group's gross profit, driving the overall gross margin to rise from 8.0% in fiscal year 2026 to 21.5%. AI cloud will also become the largest source of revenue and gross profit.

Power battery recycling and AI infrastructure recycling broaden profit base

The report also pointed out that Hong Kong's first electric vehicle battery processing facility operated by the company was put into operation in July 2026, and the Hong Kong Special Administrative Region Government expects the amount of decommissioned batteries to increase from about 1,300 tons in 2026 to 6,700 tons in 2030. The revenue of the battery recycling business is expected to reach HK$760 million in fiscal year 2029; the AI infrastructure recycling business benefits from the US copper cable decommissioning wave (AT&T plans to shut down most copper grid services by the end of 2029) and exclusive trade cooperation with Fortune Metal Group. The revenue for the 2029 fiscal year is expected to reach HK$4.646 billion.