Beneficiary of cloud localization

■ We believe Inspur International, as an one of the leading ERP software providers in China, will benefit from cloud migration and localization.
■ The Company’s cloud and non-cloud services are expected to report growth despite higher macro headwinds.
■ Inspur will remain a beneficiary of increasing localization, especially with large enterprises, which should support its operating performance.
■ We reiterate our ADD rating, with a new target price of HK$5.38 (changed from 30x 2021F P/E to SOTP – 19x 2021 P/E for non-cloud services and 6x 2021 P/S for cloud business).