转型创造增值：VNET集团首次覆盖给予买入评级

Initiation of Coverage AsiaChina TelecommunicationsTelecommunications Transformation generates value-add -Initiate at BUY Valuation & Risks Peter Milliken, CFAResearch Analyst+852-2203 6190 Transformation generating value VNET is one of China's leading carrier-neutral data center operators, serving morethan 7,000 enterprise customers through a combination of retail colocation,wholesale hyperscale data centers, cloud services, and enterprise networking.While historically driven by retail IDC services, the company is now undergoing asignificant business mix shift toward becoming a hyperscale-focused data centerdeveloper benefiting from AI and cloud demand. Strong bookings, a deep development pipeline, rising utilization, improvingmargins, and access to capital underpin forecasts for sustained strong growththrough at least 2028. Management is targeting a 10GW build out. We assume onlyhalf of that build, but this still would represent a transformative increase in scale andearnings power. Demand has accelerated as AI and cloud customers resume capacity expansionfollowing improved chip availability. VNET has materially outperformed peers inbookings, securing 517MW YTD compared with GDS's 334MW, including a510MW order from ByteDance. These projects are expected to be deliveredbetween 2H26 and 1H28 and should drive a meaningful acceleration in revenue andEBITDA, particularly from 2027 onward as utilization ramps. VNET also possesses substantial development optionality. The company has over1GW of reserved wholesale capacity, primarily in Ulanqab, where constructioncosts are lower while economics remain attractive. Management is targetingfurther expansion across Inner Mongolia and key "East Data, West Compute"locations. Funding appears manageable despite an aggressive RMB10-12bn annual capexprogram. The successful monetization of mature data centers at 13-14x EV/EBITDAthrough REIT listing provides an important source of capital and could support aself-reinforcing development model. Assets with a value of RMB6.4bn have been70% sold down YTD through such channels. The recent acquisition of a major stake by a CATL affiliate removes a shareholderoverhangand strengthens confidence in VNET's strategic direction.Whilepotentialoperating synergies remain uncertain,CATL's involvement could 7 July 2026TelecommunicationsVNET Group enhance financing access, energy-storage expertise, and support future overseasexpansion. Our estimates do not account for the potential value add from the company'sdevelopment model, yet we still estimate the company's stock to be worthUSD12.50 per share based on our DCF estimate, helped by its ramp up. We are alsoattracted to its wide discount to peer multiples. We therefore initiate with BUY. Keydownside risks include: 1) With high growth in both industry supply and demandthis is a risk of oversupply and/or demand slowdown, and 2) Execution and fundingrisks surrounding its plans for a rapid build out. 7 July 2026TelecommunicationsVNET Group Table Of Contents Company highlights ........................................................... 4From retail to wholesale .................................................................................... 4Diversified capital access to fund capex............................................................9Strategic investor change and synergies.........................................................10Industry trends.................................................................12Demand: cloud & AI capex fueling the up-cycle..............................................12Supply: market, pricing, and competition........................................................13Policy: national layout and controls ................................................................. 15Valuation and risks ........................................................... 18DCF..................................................................................................................18Multiples and comps ....................................................................................... 18Key risks...........................................................................................................22Acknowledgment ............................................................................................ 23 Company highlights From retail to wholesale VNET is a leading carrier-neutral data center service provider in China. It operatesone of the largest third-party IDC networks domestically, concentrated around Tier-1 cities, and serves a diversified base of over 7,000 enterprise customers. The company provides managed hosting services (IDC), which includes colocation,inter-connectivity, and other value-added services, as well as cloud and businessVPN services (non-IDC). We summarize its business segments below: nWholesale IDC: ~40% of 1Q26 net revenues; providing large-scale,customized data center sites for cloud hyperscalers. Introduced in 201