J.P. Morgan launches investment report today to maintain the century interconnection overweight rating

Summary: View the latest quotes Sina science and technology news Beijing Time, June 4, JPMorgan Chase announced its investment report today to maintain the "overweight" rating of the Century interconnected stock (nasdaq:vnet). The following is a summary of the contents of the report: In our last report, we noted that the latest quotes

Beijing Time June 4 Evening News, JPMorgan released its investment report today, to maintain the century interconnection (nasdaq:vnet) "overweight" rating.

The following is a summary of the contents of the report:

As we pointed out in our last report, the century interconnection may seek new business opportunities, such as VPNs and "last mile" leases, which will boost the revenue growth of network management services and create synergies with current business. We believe that the century interconnection is likely to enter these markets through mergers and acquisitions this year.

Today, the century interconnection announced that the company and its subsidiaries have signed an agreement to invest in Sichuan April Network and its subsidiaries. Through this investment, century interconnection can extend its data transmission network to the regional "last mile" access network, thus further strengthening the company's leading position in China's Internet infrastructure market.

April Network: Sichuan April network headquartered in Chengdu, is the second largest private regional Internet service provider, the scope of business covering 11 cities in China, mainly in the southwest. April network mainly provides "last mile" cable broadband services and other value-added services. Through this investment, century interconnection will hold about 50% of the April network, thus becoming its largest shareholder.

Synergy: Investment in April networks will create potential synergies, which can save bandwidth costs. Recently, bandwidth cost savings may not be obvious, but the long-term effect is significant.

Financial impact: This transaction will significantly boost the century's interconnection revenue and EBITDA (profit before tax depreciation amortization) growth. According to us and the century interconnection estimates, although the integration of June only to start, but will bring a higher number of the impact of the rise. At present, the century interconnection itself organic rise is about 10%.

Boost Full-year Performance Expectations: We believe the deal will spur the century's internet and Wall Street to increase its full-year revenue and EBITDA forecasts for fiscal year 2014.

Valuation: We continue to maintain the "overweight" rating for the century interconnected stock. (Li Ming)