重大订单提升增长能见度；晋升为首选推荐

Tom TangEquity Analyst Yang Liu +852 3963-1860Equity Analyst Major Order Enhances GrowthVisibility; Move to Top PickWHAT'S CHANGED Yang.Liu@morganstanley.comGary YuEquity Analyst +852 2239-1911 Gary.Yu@morganstanley.comVNET Group Inc (VNET.o, VNET US) VNET Group Inc (VNET.0) Top Pick Added VNET.O Top Pick capacity ramp up; introducing a new shareholder also dismissedone major concern. Move to top pick with PT of US$16. IndustryViewIn-LinePrice targetUSS16.00Up/downside to price target (%)61Shr price, close (May 26, 2026)US$9.92Sh out, dil, curr (mn)271Mkt cap, curr (mn)US$2,688EV, curr (mn)US$5,143Avg daily trading value (mn)US$56.89Fiscal Year Ending12/2512/26e12/27e12/28e the orders in 1H25 are delivered, move-in slowed in 1H26, but should start toreaccelerate in 2H26 as VNET starts to deliver large order wins since 4Q25.1Q27should see even faster move-ins. We expect 2Q26 revenue and EBITDA to stayLargely stable on QoQ basis with run-rate tracking within full-year guidance. LargeMoUs also add visibility to future contract and EBITDA ramp up hyperscaler, VNET expressed confidence in winning more orders from anotherhyperscaler's recent tender. We also expect this to be a few hundred MW Level oforder if VNET manages to finalize it. High-quality resources remain the key forsecuring new orders in our view. VNET sees pricing staying largely stable at themoment and thinks price could have upside if supply stays tight for longer. Expanding new resources: VNET current has ~1GW of short-and long-termresources on hand, which we think are partially locked in by large customersthrough MoUs or early agreements, which serve as a foundation for future contractconversions. On top of that, VNET is also actively looking for more GW scalecampus within Inner Mongolia and Yangtze Delta as well as potentially expandinginto another two to three new nodes within the East Data West Compute zones. Collaborationwithnew strategic investor:The final settlement will happen in2H26 as SDHG is still subject to shareholder vote, which will be held in July. Thatsaid, VNET believes that it has few areas of collaboration with the new investorssuch as energy storage and joint R&D as well as leverage on CATL's supply-chainexpertise. VNET's future datacenter delivery is also important for CATL toimplement some of their newproduct/solutions. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a resultinvestors should be aware that the firm may have a conflict ofinterest that could affect theobjectivity of Morgan StanleyResearch.Investors should consider Morgan StanleyResearch as only a singlefactor in making their investmentdecision. PTunchanged; elevate to TopPick: Our PT remains US$16, implying a 14x EV/EBITDA, which is in line with its latest private REIT valuation. We elevate VNET totop pick as: 1) shareholder issue largely resolved after introducing CATL's affiliate; 2)large MOUs add more visibility; and 3) early mover with premium resources. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company,public appearancesand trading securities held by a research analyst account. What's Changed incorporating the results and our adjusted EBITDA move slightly, by 0.3%, 0.9% and 0.5%,respectively, over the same period.Our EPS increase 10.8% for 2026E off a low base andfall by12.9% in 2027E and 10.9% in 2028E owing to higher capex and interest payments.Exhibit1:VNET:Earnings estimate revisions OurPTstill impliesa14x2026EEV/EBITDA Financial Summary Strong delivery in the current year should Base case, 10-year discounted cash flow (DCF) model. Our assumption of weighted average help VNET achieve 2026 EBITDA growth of23%,weestimate.Future new orders on the strength ofdomestic chip expansion should help the cost of capital (WACC) is 8.7%, with a 4.0% cost of debt, 14.0% cost of equity and 50% debtweighting. We assume a terminal growth rate (TGR) of 3%.USS15.92 stock re-rate.We rate the stock OW because we seemore valuation upside with 25% EBITDA Source: Refinitiv, Morgan Stanley Research growth and compared to its targeted privateREIT valuation of14x. Secular Growth:PositiveView descriptions of Risk Rewards Themes here US$7.80 US$16.00 US$25.30 BASE CASE BEAR CASE 11x2026e bear-case EV/EBITDADelayed capacity expansion: 14x2026e base-case EV/EBITDACapacity expansion as planned: Newwholesale capacity in service:450MW,400MW and 350MW in 2025-27E,respectively, New wholesale capacity in service: 400MW,350MW and 300MW in 2025-27E,respectively. New wholesale capacity in service: 350MW,300MW and 250MW in 2025-27E,respectively. Wholesale ramp-up utilization rate: 35-45%in 2025-27E. Wholesale utilization rate: 2