Core Insights - VNET Group is currently viewed as a more attractive investment compared to Braze, Inc. based on valuation metrics and earnings estimate revisions [3][7] Valuation Metrics - VNET has a forward P/E ratio of 92.72, while Braze, Inc. has a significantly higher forward P/E of 145.57 [5] - The PEG ratio for VNET is 1.70, indicating a more favorable growth outlook compared to Braze's PEG ratio of 4.85 [5] - VNET's P/B ratio stands at 2.62, compared to Braze's P/B of 5.93, further highlighting VNET's relative undervaluation [6] Analyst Outlook - VNET holds a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while Braze has a Zacks Rank of 4 (Sell) [3] - The stronger estimate revision activity for VNET suggests a more favorable analyst outlook compared to Braze [7] Value Grades - VNET has been assigned a Value grade of B, while Braze has received a Value grade of F, reflecting their respective valuation attractiveness [6]

Investment Rating - The investment rating for GDS Holdings, VNET, and Montage is "Buy" [8][16][17]. Core Insights - The potential resumption of H20 GPU shipments to China is expected to positively impact the data center and public cloud sectors in China, as well as semiconductor companies in the AI supply chain [1][2]. - Nvidia's new compliant RTX PRO GPU is anticipated to accelerate customer move-in pace and increase new orders in the China data center sector [1][2]. - The availability of Nvidia's GPUs is likely to enhance AI-related public cloud services, leading to revenue growth for public cloud service providers [3]. - Montage is expected to see increased demand for its PCIe Retimer products due to the anticipated rise in AI server shipments in China [4]. Summary by Sections Data Center - If the export license for H20 shipments is granted, backlog orders from Chinese Internet and cloud service providers (CSPs) could be fulfilled quickly, potentially boosting the utilized capacity for GDS and VNET in Q3/Q4 2025 [2]. - The easing of GPU supply uncertainty may support CSPs in restoring data center order placements from Q3 2025 [2]. Public Cloud - The availability of Nvidia's GPUs is expected to help public cloud service providers secure more AI computing power, fulfilling downstream demand for model training and inferencing, which could lead to revenue upside [3]. Montage - Montage has reported a solid ramp-up of emerging products, including PCIe Retimer, which are crucial for AI servers [4]. - The resumption of H20 shipments and the availability of new compliant GPUs are likely to drive higher demand for PCIe Retimers domestically [4].

Group 1 - VNET Group's shares have increased by 62.9% in the past four weeks, closing at $9.04, with a mean price target of $13.7 indicating a potential upside of 51.6% [1][2] - The mean estimate consists of seven short-term price targets with a standard deviation of $3.3, suggesting variability in analyst predictions; the lowest estimate is $10.00 (10.6% increase), while the highest is $20.00 (121.2% increase) [2][9] - Analysts show strong agreement on VNET's ability to report better earnings, with a positive trend in earnings estimate revisions correlating with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for VNET has increased by 18.2% due to one upward revision in earnings estimates over the last 30 days, with no negative revisions [12] - VNET holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for upside [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for price movement [14]

Investment Rating - The report maintains a "Buy" rating for GDS, VNET, and SUNeVision, with target prices raised to USD42.80 for GDS, USD11.40 for VNET, and HKD10.10 for SUNeVision [4][8][29]. Core Insights - The GDS C-REIT IPO, which was 166 times oversubscribed and priced at 16.9x EV/2026 projected EBITDA, is driving a re-rating of the data center sector in China [2][8]. - The report highlights that while earnings visibility through 1H26 is well understood, additional catalysts such as new large wholesale orders and easing GPU export restrictions from the US could lead to upward revisions in earnings estimates [2][8]. - The report identifies VNET as the preferred investment due to its favorable positioning to benefit from AI demand growth in China, trading at a lower EV/2026e EBITDA multiple compared to GDS and SUNeVision [3]. Summary by Sections GDS Holdings - GDS's target price has been increased from USD34.70 to USD42.80, reflecting a 26% upside potential [4][34]. - The company is expected to maintain a net debt/adjusted EBITDA ratio below 6.5x by the end of 2025, improving from 7.2x at the end of 2024 [2]. - Revenue projections for GDS show a growth trajectory from CNY10,322 million in 2024 to CNY14,294 million by 2027, with an EBITDA margin expected to stabilize around 41.4% to 41.7% [9][10]. VNET Group - VNET's target price has been raised from USD10.40 to USD11.40, indicating a 47.1% upside potential [4][21]. - The company is projected to see revenue growth from CNY8,259 million in 2024 to CNY13,584 million by 2027, with an EBITDA margin improving from 27.5% to 31.6% over the same period [17][18]. SUNeVision - SUNeVision's target price remains at HKD10.10, with a 27.2% upside potential [4][29]. - Revenue is expected to grow from HKD2,674 million in 2024 to HKD5,387 million by 2027, with a consistent EBITDA margin around 71% [25][26].

Core Viewpoint - Century Internet (VNET) shows a mixed financial performance with revenue growth but a decline in net profit, indicating potential challenges ahead in maintaining profitability while expanding operations [1][2]. Financial Performance - As of March 31, 2025, Century Internet reported total revenue of 2.246 billion RMB, representing an 18.34% year-over-year increase [1]. - The net profit attributable to the parent company was -238 million RMB, a decrease of 27.03% compared to the previous year [1]. Business Operations - Century Internet operates over 50 data centers across more than 30 cities in China, with a base business operational capacity exceeding 480 MW and over 52,000 operational cabinets in urban areas [2]. - The company has established large-scale data center industry clusters in key regions such as Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macau, facilitating smooth data migration from first-tier to edge cities [2]. Strategic Partnerships - As a strategic partner of Microsoft, Century Internet Blue Cloud operates international-standard cloud services in China, including Microsoft Azure, Microsoft 365, Dynamics 365, and Power Platform [2]. - The company has built a solid foundation for business development for over 6,000 high-quality enterprise clients, including nearly 100 leading companies in high-growth industries [2].

Summary of Key Points from Conference Call Industry Overview - The conference call focuses on the **data center industry** in China, particularly the impact of the H20 ban and the overall market dynamics related to AI and data centers [1][3][19]. Core Insights and Arguments - **Impact of H20 Ban**: The H20 ban has not significantly affected the server and switch deployment rates of major IDC companies. For instance, Century Internet raised its full-year performance guidance due to better-than-expected deployment rates in Inner Mongolia [3][19]. - **Strong Demand for Domestic Computing Power**: Despite initial concerns following the H20 ban, the demand for domestic computing power remains robust, with several leading companies showing improved profitability in Q2 [3][12]. - **Growth in Optical Module and Switch Industries**: The optical module and switch sectors are experiencing high demand, with companies like LightSpeed and Huagong expected to achieve record revenues in Q2, indicating a strong growth momentum in the supply chain [4][19]. - **Shift in AI Investment Focus**: There is a notable shift in overseas AI investment from training to inference and application, with significant increases in demand for ASICs and inference capabilities, suggesting that domestic AIDC will benefit from global AI development [5][19]. - **REITs Performance**: The issuance of data center REITs by Century Internet and Runze was highly successful, with subscription multiples reaching 167 times, indicating strong investor confidence in data centers as quality assets in the AI era [6][7][19]. - **Price Trends and Deployment Rates**: Data center deployment rates are steadily increasing, and a price turning point is anticipated as supply-demand dynamics shift. Local governments are becoming more cautious regarding land and energy approvals, which may influence future construction [10][11][19]. Additional Important Insights - **Profitability Improvement Factors**: The improvement in data center profitability is driven by increased deployment rates and rising rental prices. If new GPU versions resolve supply issues, deployment rates could accelerate further [9][19]. - **Investment Value of Data Centers**: The stability of rental income and the potential for future rental increases enhance the investment value of data centers, particularly in first-tier cities [8][19]. - **Regional Advantages**: Ulanqab is highlighted as a significant AI computing center due to its low electricity costs and abundant resources, making it an attractive location for data center development [16][19]. - **Market Dynamics in First-tier Cities**: There is a notable increase in data center demand in first-tier cities, driven by AI inference needs, which is expected to lead to a tightening supply and potential price increases [17][19]. - **Long-term Outlook for Overseas Data Centers**: The overseas data center market remains in a high-growth phase, with strong demand continuing, suggesting that China could replicate this growth trajectory despite short-term challenges [18][19]. - **Future Catalysts for Industry Growth**: Key factors influencing future industry growth include advancements in domestic and international models, application deployment, and potential increases in capital expenditures from major internet companies [21][19].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The report highlights the strong market recognition of AIDC, with both WanGuo and RunZe REITs receiving over 100 times subscription rates, indicating high investor interest [5][6][14] - Century Internet has raised its performance guidance for the fiscal year 2025, suggesting accelerated development in the domestic AIDC industry chain [7][18] - The report emphasizes the potential of the AIDC computing power industry chain, satellite internet, and 6G as key investment directions [8][19] Summary by Sections 1. Investment Insights - WanGuo and RunZe REITs have achieved subscription multiples of 166.10 and 167.06 times respectively, with total fundraising expected to reach 24 billion and 45 billion yuan [5][6][15][16] - Century Internet has adjusted its revenue guidance for fiscal year 2025 from 9.1-9.3 billion yuan to 9.15-9.35 billion yuan, reflecting a year-on-year growth of 11-13% [7][18] 2. Market Review - The communication index decreased by 0.10% during the week of June 30 to July 4, 2025, ranking third among TMT sectors [27] 3. Communication Data Tracking - As of May 2025, the total number of 5G base stations in China reached 4.486 million, with a net increase of 235,000 stations compared to the end of 2024 [29] - The number of 5G mobile phone users reached 1.098 billion, showing a year-on-year growth of 21.3% [29] 4. Recommended Investment Targets - AIDC Infrastructure: Recommended stocks include YingweiKe, New Idea Network Group, and Baoxin Software; Beneficiary stocks include Guanghuan New Network and WanGuo Data [20] - IT Equipment: Recommended stocks include ZTE and Unisplendour; Beneficiary stocks include Inspur Information and Huakong Technology [21] - Network Equipment: Recommended stocks include Unisplendour and ZTE; Beneficiary stocks include Ruijie Networks and Yingtong Technology [22] - Cloud Computing: Beneficiary stocks include China Mobile, China Telecom, and Alibaba [25] - AI Applications: Beneficiary stocks include Guanghe Tong and Yiyuan Communication [26]

Investment Ratings - The report maintains a "Buy" rating for GDS and VNET, with target prices set at US$37/HK$36 for GDS (20% upside) and US$12 for VNET (69% upside) [1][21] Core Insights - The China data center sector is expected to benefit from deleveraging and improved order visibility, which will support share price performance in the second half of 2025 [1] - GDS is positioned to capture demand from Generative AI-driven cloud growth, while VNET aims for significant capacity expansion under its Hyperscale 2.0 strategy [18][23] Summary by Sections GDS Holdings - GDS's C-REIT offering implies a 16.9x 2026 EV/EBITDA, scheduled for listing on July 14, which supports deleveraging with approximately Rmb1.6 billion proceeds [4][8] - Revenue forecasts for GDS remain largely unchanged, with EBITDA revised down by 7% for 2025E [9] - GDS's financials show a projected revenue of Rmb11,545 million for 2025E, with an EBITDA of Rmb5,335 million [16] VNET Group - VNET has raised its guidance for 2025 revenue and EBITDA, aiming for a total data center capacity of 10GW by 2036 [21][25] - The company has added 555MW in data center capacity from 2019 to 2024 and plans to reach 1GW by 2025 [23][27] - VNET's revenue for 2025E is projected at Rmb9,316 million, with an adjusted EBITDA of Rmb2,810 million [41] Market Dynamics - Improved visibility of chip availability is expected to lead to stronger order volume and faster revenue growth for both GDS and VNET in 2026E [4] - The report anticipates that Alibaba and Tencent's capital expenditures will recover sequentially in the second half of 2025 [5] Financial Metrics - GDS's net debt/adj EBITDA ratio is projected to decline to 5.1x by 2028E due to improving EBITDA and reduced capex [13] - VNET's EBITDA margin is expected to improve to 34.0% by 2027E, reflecting operational efficiencies [41] Strategic Outlook - GDS is focusing on backlog delivery to enhance revenue growth visibility, while VNET's Hyperscale 2.0 strategy emphasizes a platform-based approach to data center operations [18][23]

Core Viewpoint - VNET Group is experiencing significant stock price movement due to strong demand for its internet data center services, particularly driven by AI applications and robust customer orders across various industries [1][2]. Company Summary - VNET Group shares increased by 7.1% to $7.08 in the last trading session, with a notable trading volume, and have gained 19.3% over the past four weeks [1]. - The company is expected to report quarterly earnings of $0.02 per share, reflecting a year-over-year decline of 66.7%, while revenues are projected to be $313.14 million, marking a 14.1% increase from the previous year [2]. - The consensus EPS estimate for VNET has remained unchanged over the last 30 days, indicating stability in earnings expectations [4]. Industry Summary - VNET Group operates within the Zacks Internet - Software industry, which includes other companies like D-Wave Quantum Inc. [4]. - D-Wave Quantum's consensus EPS estimate has also remained unchanged, with a projected EPS of -$0.07, representing a 30% increase compared to the previous year [5].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: VNET Group - VNET Group currently holds a Momentum Style Score of B, indicating potential as a solid momentum pick [3][12]. - The company has a Zacks Rank of 2 (Buy), which is associated with strong historical performance [4]. Performance Metrics - VNET shares have increased by 0.74% over the past week, while the Zacks Internet - Software industry remained flat [6]. - Over the past month, VNET's price change is 30.71%, significantly outperforming the industry's 0.69% [6]. - In the last quarter, VNET shares rose by 9.23%, and over the past year, they have gained 233.17%, compared to the S&P 500's increases of 8.73% and 13.86%, respectively [7]. Trading Volume - VNET's average 20-day trading volume is 4,162,718 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - Recent earnings estimate revisions for VNET show 2 estimates moving higher for the current fiscal year, increasing the consensus estimate from $0.07 to $0.10 [10]. - For the next fiscal year, 2 estimates have also moved upwards, with no downward revisions noted [10].