According to a research report, BOC International has initiated coverage on ENVISION GREEN (01783) with a "Buy" rating and a target price of HK$6.90.
The report prices the stock at 20 times its forecast FY2029 price-to-earnings ratio (earnings per share of approximately HK$0.34), believing that the AI cloud business will become the company's primary profit growth engine, driving a qualitative transformation in its profit structure.
AI Cloud Becomes the Core Profit Engine
The report notes that in June 2026, ENVISION GREEN acquired interests in YV CLOUD and Shanghai Yovole Cloud Computing for a base consideration of HK$2.2 billion, formally entering the cloud computing and AI infrastructure services sector, and subsequently procured high-performance servers, initiating its transition toward a compliant AI computing power platform.
Computing power scarcity is the core logic behind the bank's view. Against the backdrop of U.S. export controls, the company, through the NVIDIA Cloud Partner (NCP) qualification held by Shanghai Yovole, has obtained a scarce compliant procurement channel. According to BOC International's channel research, the company has already been allocated more than 500 high-performance servers in its first batch, corresponding to over 4,000 GPUs, while customer orders have significantly exceeded existing computing capacity.
Domestic high-end computing power rental prices remain firm: Mysteel data shows that on-demand H100 rental rates in the Chengdu-Chongqing region reached RMB 12.90 per GPU-hour by the end of September, up approximately 19.1% month-on-month; overseas, Nebius also raised its H200 on-demand rate by 20% to US$5.40 per GPU-hour, with new contract value increasing nearly fourfold quarter-on-quarter.
Rising Rental Rates Combined with Long-Term Contracts Locked In, Roughly 3.2-Year Payback per Server
In terms of business model, the company has signed five-year GPU leasing contracts with leading cloud service providers and large model customers, with approximately 12 months of prepaid rent. Based on a single eight-GPU server procurement cost of RMB 3.5 million and a monthly rental of RMB 100,000, the simple payback period under full occupancy is approximately 3.2 years, and financial leverage can further shorten the equity payback time.
Large model company MiniMax recently participated in the company's rights issue and convertible bond subscription, which the report interprets as recognition of the company's NCP procurement capability, with cooperation between the two parties expected to extend to resource planning and cluster deployment.
In terms of earnings forecasts, BOC International expects the company's revenue for FY2027-2029 to be HK$3.849 billion, HK$6.854 billion, and HK$10.490 billion respectively, representing a three-year revenue compound growth rate of approximately 62%; net profit attributable to shareholders is projected at HK$216 million, HK$762 million, and HK$1.407 billion respectively. AI cloud server scale will increase from 531 units to 4,031 units, with AI cloud revenue reaching HK$5.085 billion in 2029, contributing 76.5% of the group's gross profit, driving the overall gross margin up from 8.0% in FY2026 to 21.5%, making AI cloud the largest source of both revenue and gross profit.
Power Battery Recycling and AI Infrastructure Recycling Broaden Profit Foundation
The report also notes that the company's Hong Kong first electric vehicle battery processing facility commenced operation in July 2026, with the Hong Kong SAR government projecting that local retired battery volume will increase from approximately 1,300 tonnes in 2026 to 6,700 tonnes by 2030. The battery recycling business is expected to generate revenue of HK$760 million in FY2029; the AI infrastructure recycling business, benefiting from the U.S. copper cable retirement wave (AT&T plans to shut down the vast majority of its copper network services by the end of 2029) and its exclusive trading cooperation with Fortune Metal Group, is projected to generate revenue of HK$4.646 billion in FY2029.
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