Are tech stocks in Hong Kong making a comeback?

Hong Kong’s tech scene got a vote of confidence this week when GF Securities gave a thumbs up to Beijing Fourth Paradigm Technology’s Class H shares. The bank kept its “buy” label alive and penciled in HK$61. 53 as a future price target. That sounds ambitious when you compare it to yesterday’s closing price of HK$28. 66—which means the shares would roughly double if the forecast plays out. Analysts on TipRanks are even more bullish overall, calling the stock a “strong buy” and pushing the average target to HK$61. 93.The company’s latest numbers, which cover the spring quarter, show it pocketed HK$1. 31 billion in revenue, up from HK$933 million a year earlier. On the profit side, however, red ink remains. The firm lost HK$33. 49 million this quarter, smaller than the HK$75. 8 million loss it posted in the same period last year. So revenue is growing nicely, but the company is still finding its footing when it comes to turning those dollars into net income. What exactly does Beijing Fourth Paradigm do? It builds machine-learning platforms that help businesses crunch big data without needing armies of data scientists. Demand for these tools has been rising as more industries look to automate decisions. Still, the path from rapid user growth to steady profits is bumpy; investors clearly like the story but worry about timing.