VNET(US:VNET) Zhi Tong Cai Jing·2025-10-08 05:23Core Viewpoint - Goldman Sachs has included CenturyLink (VNET.US) in its "Strong Buy" list for the Asia-Pacific region, making it the only IDC company on this list, highlighting its transition from traditional retail IDC operations to high-growth wholesale IDC operations, benefiting from increasing AI investments [1][2] Group 1: Company Transformation and Growth Potential - CenturyLink is expected to derive approximately 75% of its revenue from IDC business and 25% from cloud computing and value-added services by 2025 [1] - Goldman Sachs forecasts a compound annual growth rate (CAGR) of 52%-55% for CenturyLink's wholesale IDC business revenue and EBITDA from 2024 to 2027 [1] - The overall EBITDA margin for the company is projected to increase from 29.4% in 2024 to 33.3% in 2027 [1] Group 2: Market Dynamics and Order Growth - Due to the rapid growth in AI demand and reduced reliance on foreign chips, CenturyLink's new order volume is expected to significantly increase by the end of 2025 or early 2026, supported by its quick delivery capabilities for AI hyperscale clients [2] - If NVIDIA's Blackwell architecture-based chips for China receive approval, CenturyLink's new order volume in 2026 could be even stronger [1] Group 3: Valuation and Price Target - CenturyLink's current stock price corresponds to a forward EV/EBITDA of about 10 times for the next 12 months, with a projected EBITDA CAGR of 23% from 2024 to 2027 [2] - As new orders materialize and the contribution of wholesale IDC business to revenue and EBITDA increases, there is potential for further valuation recovery, with a target price of $13 based on a 12 times forward EV/EBITDA for 2026 [2]