[Overseas Research Report] First Shanghai Securities Initiates Coverage on Huitongda Network (9878.HK) with “Buy” Rating and Target Price of HK$23.38

Recently, First Shanghai Securities (Hong Kong) released its inaugural in-depth research report on Huitongda Network (9878.HK), assigning at “Buy” rating and setting the company’s target price at HK$23.38, representing a 50.8% increase from the closing price on the day prior to the report’s issuance.

First Shanghai Securities (Hong Kong) analyzed Huitongda’s development from multiple perspectives, including macro market conditions, corporate strategy upgrades, and capital market initiatives. Upon review, the firm stated that Huitongda, as a leading enterprise serving China’s lower-tier markets, has ushered in upward inflection point under the empowerment of AI and other innovative technologies and models.

Focusing on its fundamentals, First Shanghai Securities (Hong Kong) believes that since the company’s strategic upgrade and proactive optimization of its business structure in 2024, Huitongda’s key management team has identified a stable, high-quality, and sustainable growth path. While strengthening its supply chain advantages to consolidate its core business foundation, the company has also established a strategic partnership in AI with Alibaba Cloud to further enhance its digitalization business. In addition, Huitongda has built its growth layout around “AI+” and “targeted county assistance” – initiatives that align closely with the “main themes” of national policies and the market – and has secured important support.

From the perspective of market environment and corporate execution, the report noted that the lower-tier markets where Huitongda operates not only exceed one trillion yuan in scale but also represent a massive market opportunity, and are highly aligned with national policy priorities. The company’s two core business pillars--smart supply chain and AI+SaaS--which it has laid out, are now simultaneously entering a rapid development phase. Meanwhile, Huitongda continues to optimize its industrial footprint and boost capital efficiency through strategic investments and acquisitions, further accelerating its high-quality growth trajectory.

From the capital market standpoint, First Shanghai Securities (Hong Kong) emphasized that Huitongda has already reached an business performance inflection point in the first half of 2025. Coupled with the company’s combined plan of “full circulation + share repurchase + dividends”, Huitongda is well-positioned to be re-admitted into the Hong Kong Stock Connect, boosting its long-term investment value.

In conclusion, First Shanghai Securities (Hong Kong) believes that under the combined drivers of revitalization of rural areas, AI empowerment, and M&A expansion, Huitongda possesses significant potential for high-quality and accelerated growth. Therefore, the inaugural in-depth report assigns the company a “Buy” rating with a target price of HK$23.38.