China's VNET prelim Q4 revenue rises on wholesale IDC strength

Overview

• China internet data center provider's preliminary Q4 revenue rose 19.6% yr/yr

• Adjusted EBITDA for preliminary Q4 increased 11.6% yr/yr

• Company posted Q4 net profit, aided by gains on subsidiary deconsolidation and fair value changes

Outlook

• VNET expects 2026 net revenues of RMB11.5 bln to RMB11.8 bln

• Company sees 2026 adj EBITDA at RMB3,550 mln to RMB3,750 mln

• VNET expects 2026 capital expenditure of RMB10 bln to RMB12 bln

Result Drivers

• WHOLESALE IDC GROWTH - Q4 revenue growth was mainly driven by a 47.1% yr/yr increase in wholesale IDC business

• AI-DRIVEN DEMAND - Co said strong AI-driven demand supported high-quality growth in Q4, per SVP Peter Zhihua Zhang

• CAPACITY EXPANSION - Sequential wholesale capacity increase in Q4 was mainly contributed by the N-OR Campus 02A data center

Company press release: ID:nPn8xgcYMa

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 $15.20, about 44.6% above its March 13 closing price of $10.51

• The stock recently traded at 218 times the next 12-month earnings vs. a P/E of 213 three months ago

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