Chinese data center operator VNET's Q2 revenue jumps 22.1%

Overview

• VNET Q2 revenue rises 22.1% yr/yr, driven by 112.5% wholesale IDC growth

• Adjusted EBITDA increases 27.7% yr/yr, margin improves to 30.1%

• Co reports net loss due to higher interest and tax expenses

Outlook

• Company expects 2025 revenue between RMB9,150 mln and RMB9,350 mln, up 11% to 13% YoY

• VNET forecasts 2025 adjusted EBITDA of RMB2,760 mln to RMB2,820 mln

• Company aims to expand data center capacity to 10GW by 2036

Result Drivers

• WHOLESALE IDC GROWTH - Wholesale IDC business revenue grew by 112.5% yr/yr, driven by a 101MW increase in wholesale capacity in service

• RETAIL ORDERS - Secured around 4MW in retail orders during the qtr, maintaining retail revenues at RMB958.7 mln

• HYPERSCALE 2.0 - Co launched Hyperscale 2.0 framework to expand data center capacity to 10GW by 2036, aiming for greener, intelligent data centers

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the it services & consulting peer group is "buy"

• Wall Street's median 12-month price target for VNET Group Inc is $12.20, about 34.6% above its August 20 closing price of $7.98

• The stock recently traded at 260 times the next 12-month earnings vs. a P/E of 1,137 three months ago

Press Release: ID:nPn4D1VwDa